20170814_Daphne2.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

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

FROM: DAPHNE HUANG
DEPUTY ATTORNEY GENERAL

DATE: AUGUST 8, 2017

SUBJECT: AVISTA’S APPLICATION TO INCREASE ITS ENERGY EFFICIENCY
RIDER ADJUSTMENT SCHEDULE 91, CASE NO. AVU-E-17-06

On August 2, 2017, Avista Corporation applied to the Commission to increase its
“Energy Efficiency Rider” in tariff Schedule 91 (tariff rider), which would increase electric
customers’ rates by 1.6%. The funds collected by the tariff rider “are used to maintain and
operate programs to encourage customers to use electricity and natural gas efficiently.” Order
No. 32278 at 1. The tariff rider is designed to recover Company costs associated with providing
electric efficiency services to customers, Order No. 30918 at 1, and to “match future revenue
with budgeted [energy efficiency] expenditures,” Application at 1. The Company states that the
purpose of this filing is to “establish tariff riders that are sufficient to fund the following twelve
months of [Demand Side Management (DSM) programs] as well as amortize any tariff rider
imbalance, thus minimizing the amount of future under- or over-collections.” Id. Avista asks
that its Application be processed by Modified Procedure, and requests an effective date of
October 1, 2017.
THE APPLICATION
A. The Rider Programs
The (Schedule 91) tariff rider funds DSM programs described in Avista’s Schedule
90, and is applied only to electric efficiency service (as opposed to natural gas programs which
are funded through Schedule 191). Id. at 3; see Order No. 32650 at 1. Schedule 90 includes
about 30 programs that provide rebates for residential and non-residential energy efficiency
measures, such as appliance, HVAC, lighting, maintenance, weatherization and sustainable
DECISION MEMORANDUM 2
building measures; and conversion from electric to natural gas space and water heating.
Application at 3-4.
The Company also helps fund programs through the Northwest Energy Efficiency
Alliance (NEEA), which promotes market transformation for energy efficiency through a
regional approach. Id. at 4. In addition, the Company provided about $750,000 for low-income
weatherization in 2016 through a program administered by the Community Action Partnership
Association of Idaho. Id.
In determining the cost-effectiveness of its DSM programs, the Company applies tests
including the Total Resource Cost (TRC) test and the Utility Cost Test (UCT). Id. at 5. The
TRC measures the net costs of a program based on the total costs of the program, including the
participants’ and utility’s costs. Id., n. 1. The UCT measures the net costs of a program based
on the costs incurred by the program administrator (including incentive costs) and excluding any
net costs incurred by the participant. Id.
B. The Proposed Increase
The Company reports that, as of June 30, 2017, the tariff rider account was
underfunded by about $9.7 million. Id. at 2. According to the Company, this underfunded
amount was primarily due to the Company’s “nonresidential T-LED market transformation”
lighting incentive program exceeding budget by $9 million. Id.
The Company reports that its “forecasted expenditures aligned closely with the actual
tariff rider revenues throughout 2016,” but that “actual expenditures began trending upwards in
April,” with a significant steady increase from September through the end of the year. Id. at 2-3.
However, the Company reports that “actual energy savings matched the upward trend in
expenditures and the Company exceeded its annual energy savings goal by 32,630,677 kWhs.”
Id. at 3. The Company proposes “to increase rates collected in Schedule 91 (the tariff rider) to
bring the forecasted tariff balance close to $0 by September 30, 2020, [and] provide an
appropriate level of funding for ongoing DSM operations.” Id.
The Company estimates its proposal would result in “an annual [revenue] increase of
approximately $3.9 million,” and would result in a $1.37 (or 1.6%) increase to the average
monthly bill of residential electric customers using 910 kWh. Id. at 5.
The following table shows the proposed increase to the tariff rider for various
customer classes:
DECISION MEMORANDUM 3

SCHEDULE
EXISTING
RATE
PROPOSED
RATE
–
–
–
–
–
–
Attachment B to Application.
With its Application, Avista submitted a proposed customer notice, to be posted on its
website and included as a bill insert, and copies of the current and proposed Schedule 91 tariff
sheets.
STAFF RECOMMENDATION
Staff agrees with the Company’s recommendation to process the case by Modified
Procedure. Avista has informed Staff it does not intend to file a reply in this case. Staff
proposes a comment deadline of September 14, 2017.
COMMISSION DECISION
Does the Commission wish to process this case under Modified Procedure with a
comment deadline of September 14, 2017?

M:AVU-E-17-06_djh