200405031st Response of Avista to Potlatch.pdf

Avista Corp.
1411EastMission POBox3727
Spokane. Washington 99220-3727
Telephone [phone]
Toll Free 800-727-9170
RECEIVED (XJFILED 0 ~~~'iI'STA.
znn~ HA Y - 3 AM fO: 03 Corp.
i F'UBlI('UTILITIES COMMISSION
April 30, 2004
Conley E. Ward
GIVENS PURSLEY LLP
601 W. Bannock Street
PO Box 2720
Boise, ill 83701-2720
Re:First Production Request of Potlatch Corporation
in Case Nos. A VU-04-01 and A VU-04-
Mr. Ward
I have attached one copy of Avista s response to Potlatch Data Request No. (s) 16, 17, 18
and 19.
If you have any questions, please call me at [phone] or Don Falkner at (509) 495-
4326.
~erelY,
'v t; ~Mike Fink
Rate Analyst
Enclosures
fcc:
IPUC
VISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.
Idaho
A VU-O4-01 / A VU-O4-
Potlatch
Data Request
DATE PREPARED:
WITNESS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
04/2612004
Knox
Tara Knox
Rates
[phone]
REQUEST:
Please itemize the variations between A vista s proposed cost of service study and that approved
by the Idaho Public Utilities Commission in the last Avista general rate case. For each variation
explain Avista s rationale for the proposed change.
RESPONSE:
Other than variations due to updated information for the more recent test year, the only variation
between Avista s proposed electric cost of service study and that approved by the Idaho Public
Utilities Commission in the last A vista general rate case is the derivation of the common cost
allocator. This is explained in my testimony beginning on Page 6, Line 12 as follows:
Q. Does the Company s electric Base Case cost of service study
follow the methodology filed in the Company s last electric general rate case
in Idaho?
A. The methodology is the same as the cost of service study filed in Case
No. WWP-98-11 with one modification.
Q. Please explain this modification.
A. Administrative and general costs that cannot be directly assigned to
production, transmission, distribution, or customer relation s functions are left in
the common cost category. In Avista s 1998 case these common costs were
allocated to customer groups by a 60% customer-40% energy allocation factor. In
this case the allocation factor for these common costs has been modified to reflect
a four-factor allocation based on direct O&M, direct labor, net direct plant, and
number of customers. With this change the same four-factor allocation used on
common costs at the utility and jurisdictional levels is now also applied at the
customer group level.
Q. Why did you choose to make this modification?
A. As I was replicating the methodology from WWP-98-11 to prepare
the cost studies for this case, I considered the need to update the common cost
allocator. The four-factor allocator is accepted in all of the Company
jurisdictions for determining the appropriate sharing of common costs for results
of operations. It is primarily based on other costs within the study, and reflects a
variety of relationships rather than being solely dependent on a single comparison.
The four-factor provides a balanced approach that I consider more appropriate
than the factor used in the last case.
VISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.
Idaho
A VU-O4-01 / A VU-O4-
Potlatch
Data Request
DATE PREPARED:
WITNESS:
RESPONDER:
D EP AR TMENT:
TELEPHONE:
04/2612004
Knox
Tara Knox
Rates
[phone]
REQUEST:
Please explain in detail Avista s rationale for not treating Potlatch's Lewiston plant as a unique
customer class for cost of service purposes.
RESPONSE:
The Company did treat Potlatch's Lewiston plant separately. Their Lewiston plant is shown on
the electric cost of service study as a unique customer class. It is identified in the cost of service
study as "Potlatch Extra Large General Service Schedule 25P.
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.
REQUEST:
VISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
Idaho
A VU-O4-01 / A VU-O4-
Potlatch
Data Request
DATE PREPARED:
WITNESS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
0412612004
Knox
Tara Knox
Rates
[phone]
Please provide the results of Avista s cost of service study with Potlatch's Lewiston load treated
as a separate class.
RESPONSE:
Please see the Company s response to Staff Data Request No. 17.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.
Idaho
A VU-O4-01 / A VU-O4-
Potlatch
Data Request
DATE PREPARED:
WITNESS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
04129/2004
Brian Hirschkorn
Randy Barcus
Bdgt/Forcasting & Analysis
[phone]
REQUEST:
If Avista has calculated or estimated the demand elasticity coefficient on its system, or any
geographic portion or customer class of its system, within the last ten years, please provide
copies of such calculation(s) or estimate(s), together with all supporting studies and work papers.
RESPONSE:
The Company has neither calculated nor estimated the demand elasticity coefficient for its
system or geographic sub-area during the last ten years.
The Company does consider the impacts of price elasticity in the context of load forecasting.
Avista applies elasticity impacts only to it's smaller usage customers , namely residential and
small commercial classes. The present assumption of price elasticity for residential customers is
15. The estimate for small commercial customers is -10. These estimates are applied over
a three-year time distribution, with halfthe impact the first year, one third the second year, and
one-sixth the third year.