20161107_5117.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: BRANDON KARPERN
DEPUTY ATTORNEY GENERAL

DATE: NOVEMBER 3, 2016

SUBJECT: AVISTA GENERAL RATE CASE, CASE NO. AVU-E-16-03

On May 26, 2016, Avista Corporation dba Avista Utilities filed an Application
seeking authority to increase its electric base rates by $15.4 million (6.3%) in Idaho. On June 7,
2016, the Commission issued a Notice of Application and Notice of Intervention Deadline.
Clearwater Paper Corporation, Idaho Forest Group, Snake River Alliance, and Community
Action Partnership Association of Idaho petitioned for and were granted intervention. The
Commission also set deadlines for the parties to file testimony and exhibits, and scheduled public
workshops, and a technical hearing.
On October 14, 2016, Staff filed a Motion notifying the Commission that the parties
have reached a settlement and requesting an amendment to the procedural schedule. The
Commission granted that Motion and vacated the pending comment deadlines. On October 24,
2016, the Company and Staff jointly moved the Commission to further amend the case schedule,
and ultimately approve the Stipulation and Settlement that has been entered into by all parties.
This Motion is now before the Commission.
PROPOSED SETTLEMENT
The parties represent that the Stipulation and Settlement in whole is in the public
interest and is fair, just and reasonable. The parties acknowledge that the Commission is not
bound by these representations and that the Commission will independently review the proposed
settlement to decide whether to approve it, reject it, or state conditions under which to accept it.
By way of summary, the Stipulation and Settlement proposes to fully resolve the case as follows:

DECISION MEMORANDUM 2
1. Overview of Settlement and Revenue Requirement
Avista would revise its tariff schedules to recover $6.25 million in additional annual
revenue, or about a 2.6% increase, effective January 1, 2016.
2. Capital Structure and Cost of Capital
Avista’s capital structure and weighted average cost of capital (rate of return) would
be:

3. Percentage Increase by Service Schedule
Avista’s base rates and billing rates would increase overall by about 2.5% by
schedule, as reflected below:
Resulting Percentage Increase by Electric Service Schedule

4. Collaboration on Low Income Issues
The Company and interested parties have agreed to meet and confer prior to the
Company’s next general rate case to assess the Company’s low-income programs and explore
different options to improve those programs.

Component

Capital
Structure

Cost
Weighted
Average Cost
of Capital
DECISION MEMORANDUM 3
STAFF RECOMMENDATION
Staff recommends that the Commission issue an Order that adopts the following
schedule:
DATE ACTIVITY
COMMISSION DECISION
Does the Commission wish to issue an Order that adopts the recommended schedule
as described above?

M:AVU-E-16-03_bk3