20030121_366.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
CO MMISSI 0 NER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL STAFF
COMMISSION STAFF
FROM:KEITH HESSING
DATE:JANUARY 15, 2003
RE:A VISTA UTILITIES' APPLICATION TO REDUCE THE BP A CREDIT;
TARIFF ADVICE E-02-07.
On December 27 2002, Avista Utilities filed a request with the Commission to reduce
the credit currently available to residential and farm customers. The credit, contained in
Schedule 59 of Avista s Tariff, is a pass through to customers of benefits that BPA provides to
Avista under the Northwest Power Act. Avista proposes that the credit be reduced from 0.347
t/kWh to 0.252 t/kWh from February 1 2003 through September 30 2003. The credit would
return to its normal level after September 30 2003. Under the attached contract the unrefunded
credit amount would be returned to A vista customers with interest during the period October 1
2006 through September 30 2011.
Although the utility s filing does not state a reason for requesting a reduction in the
credit, it is common knowledge that BP A is facing a short-term financial shortfall. Ifthe credit
were not reduced through the deferral, it is likely that it would be reduced through
implementation of a BP A safety net CRAC rate increase, which would reduce the credit without
the opportunity to receive reimbursement for the reduction at a future date.
STAFF RECOMMENDATION
Staff recommends that the new tariffed rate be approved. Staff believes that the rate
proposed by the Company accurately reflects the credit agreement reached with BP A.
i:udmemos/avutaO207dm
DECISION MEMORANDUM JANUARY 15 2003