avug992.swm.doc

SCOTT WOODBURY
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 1895

Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983

Attorney for the Commission Staff

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF AVISTA CORPORATION DBA AVISTA UTILITIES - WASHINGTON WATER POWER DIVISION FOR AN ORDER APPROVING A CHANGE IN NATURAL GAS RATES AND CHARGES.
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CASE NO. AVU-G-99-2

COMMENTS OF THE COMMISSION STAFF

COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its Attorney of record, Scott Woodbury, Deputy Attorney General, and in response to the Notice of Application, Notice of Modified Procedure and Notice of Comment/Protest Deadline issued on October 4, 1999, submits the following comments.
Staff has reviewed the filing made by Avista Corporation d.b.a. Avista Utilities –Washington Water Power Division (Avista; Company) in this case and audited the information provided. The combined effect of all changes will be an 8.58% increase in annual revenue totaling $2,708,000. The Company has requested that new rates take effect on November 1, 1999. Staff recommends that the Company’s Application be approved.

Schedule 155 – Temporary Adjustments
Schedule 155 is used by the Company to pass through any under- or over-collection of gas costs since the last tracker was approved. Schedule 155 rates currently in effect provide an increase of $.01327 per therm for firm gas sold under Schedules 101, 111 and 121. As of June 30, 1998, there is a balance of $2,336,465 owed to the Company. The balance is made up of $1,150,993 which is the previous year’s unamortized balance and $1,185,472 which is caused by the difference in the estimated weighted average cost of gas (WACOG) per therm ($.01327) used to set rates in Case No. WWP-G-98-3 compared to the actual WACOG per therm ($.019308) in the 1998/1999 tracker year. The Company proposes to amortize and recover the $2,336,465 owed to the Company through a $.03154 therm Schedule 155 charge to customers served under Schedules 101, 111, and 121. This results in an increase in the Schedule 155 rate to these customers of $.01827.
The Company also proposes that amounts to be credited or charged to transportation and interruptible customers, plus interest that has accumulated since June 30, be reflected through a one-time billing credit or charge. Amounts to be credited or charged to customers net of interest from June 30 are:
Coeur d’ Alene Asphalt $1,088)
Crown Pacific 12,658
Hughes Greenhouse (33)
Idaho Asphalt (189)
Imsamet 0
Interstate Asphalt 8,508
Kootenay Medical (224)
Lignetics 182
Louisiana Pacific (Chilco) (32)
Louisiana Pacific (Sandpoint) 2,345
Potlatch (3,462)
St. Joseph 11,766
University of Idaho 10,561
$40,992

Schedule 150 – Permanent Gas Cost Changes
Schedule 150 is used by the Company to reflect continuing changes in the cost of purchasing and transporting gas for customers. Company workpapers show the current estimated WACOG has increased by $.01784 from $.15953 to $.17737 per therm. For firm gas customers, there is also an increase in demand-related costs of $.00401 per therm. To reflect these changes, the Company proposes to increase rates $.02185 for firm gas Schedules 101 through 122, to increase rates $.01784 for interruptible Schedules 131 and 132, and no change for transportation Schedule 146. The Company proposes no change to the TF-1 Demand.

Gas Cost
Increasing natural gas prices appear to be a trend in the Northwest. A major factor has been the addition of new pipeline capacity from British Columbia and Alberta, Canada, to gas markets in the Chicago area. Gas from those Canadian provinces had essentially been locked into the Northwest and California markets, which gave the region and therefore the Company a price advantage. Now, the Canadian suppliers can sell their product in the more lucrative Midwest and eastern U.S. markets. Other factors in the higher prices are an increase in oil prices and expectations of a colder winter heating season. It appears that the Northwest gas supply/demand balance has tightened in comparison with prior years.
In the last tracker for the Company, Staff pointed out that the delay in filing the tracker (June closing with October filing and December 1 proposed effective date) caused the Company to miss part of the heating season and caused the customer to pay additional interest on the amount deferred. The Company has improved by making a September 15, 1999 filing and asked for a November 1 effective date. Staff continues to believe that with a June 30 closing, the Company should be able to make a July or August filing and have new rates in effect by September 1 for the heating year. This would protect the consumer from additional interest charges caused by the Company’s late filing.

Staff Recommendation
Staff recommends that the Company file the next tracker in a more timely manner in order to have the new rates in place before the heating season. This will prevent an increased lag time in collection or refund of gas costs. Staff recommends approval of rates as filed by the Company.

Dated at Boise, Idaho, this day of October 1999.

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Scott Woodbury
Deputy Attorney General
Technical Staff: Madonna Faunce

SW:MF:gdk:i/umisc/comments/avug992.swm

STAFF COMMENTS 3 OCTOBER 21, 1999