20060925_1677.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
CO MMISSI 0 NER SMITH
CO MMISSI 0 NER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:SCOTT WOODBURY
DATE:SEPTEMBER 19, 2006
SUBJECT:CASE NO. A VU-06-9 (A vista)
RESIDENTIAL AND FARM ENERGY RATE ADJUSTMENT CREDIT
On September 14, 2006, Avista Corporation dba Avista Utilities (Avista; Company)
filed an Application with the Idaho Public Utilities Commission (Commission) requesting
approval of a proposed modification to the residential and farm energy rate adjustment credit.
Tariff Schedule 59. Avista proposes that the credit be increased from the existing 0.412~ per
kilowatt hour (kWh) to 0.459~ per kWh effective November 1 , 2006. As reflected in the
Application, the purpose of the energy rate adjustment credit is to pass through to qualifying
electric residential and small farm customers the estimated benefits to be derived under the
Residential Exchange Settlement Agreement (Agreement) between A vista and Bonneville Power
Administration (BP A). The increase in the rate credit is due to increased benefits A vista will
receive during the second five-year period (2006-2011) of the 10-year agreement with BP
(2001-2011). Under the Agreement, the base calculator for Avista s customer benefits was set at
98 MW for the first five-year period and 149 MW for the second five-year period, which results
in higher benefits during the second five-year period. The proposed rate credit is a uniform cents
per kWh decrease of 0.459~ and would apply to residential and small farm customers served
under Schedules 1 , 12, 22, 32, and 48. For residential and small farm area lighting customers
served under Schedule 48 , the proposed credit is applied on a uniform cents per kWh basis to the
energy usages of the various lights covered under that rate schedule.
The proposed increase in the rate credit would result in an overall reduction in annual
revenue of approximately $552 000. For residential customers using 1 000 kilowatt hours per
DECISION MEMORANDUM
month the new credit would be $4.59 per month or $0.47 more than the existing credit of $4.12
per month. With the new higher credit in place, residential customers ' bills will be about 0.75%
lower than they were before the increase in rate credit. The proposed credit passes through the
expected level of benefits to be received from BP A during the period November 1 , 2006 through
October 31 , 2007, adjusted for the projected, over-refunded balance at October 31 , 2006.
COMMISSION DECISION
A vista requests that its proposed change in the BP A residential exchange rate credit
be processed pursuant to Modified Procedure, i., by written submission rather than by hearing.
Reference Commission Rules of Procedure, IDAPA 31.01.01.201-204. Staff concurs in the
recommended procedure. Does the Commission agree that Modified Procedure is appropriate in
Case No. A VU-06-
Scott Woodbury
blslM:A VU-O6-09 sw
DECISION MEMORANDUM