20190716_CK1jo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
LEGAL
FROM:CASSANDRA KOERNER
DATE:JULY 11,2019
RE:TARIFF REVISION SCHEDULE 190A -NATURAL GAS EFFICIENCY
PROGRAMS
BACKGROUND
On June 18,2019,Avista Corp.("Company")filed a proposed Tariff Revision to
Schedule 190A-the Company's Natural Gas Energy Efficiency Programs.The Company has
requested an effective date of August 1,2019.
Avista proposes to remove the $3.00 per therm incentive level and 70%incremental cost
incentive cap for residential energy efficiencymeasures established in the tariff.The Company
stated that the caps are restricting the performance of many of its residential program offerings
and preventing throughputwhich could lead to improved portfolio performance.
Avista presented the proposed changes to its Energy Assistance Advisory Group
("Advisory Group")on May 17,2019.The Company believes these modifications to the tariff
language could help the Company program adapt to changes in market conditions more quickly,
thus maximizing program acquisition and cost-effectiveness.While it is possible to update these
elements of the tariff as program needs change,Avista believes that process can be burdensome
to both the Company and Staff.Instead,Avista recommends that the caps be lifted to allow the
Company to focus on program cost-effectiveness without constraints in order to adaptively
manage energy efficiency programs.Avista also noted that other regional utilities do not have
similar caps in their tariffs.
DECISION MEMORANDUM l JULY l1,2019
STAFF ANALYSIS
Staff reviewed the Company's proposed changes to the tariff with the Energy Efficiency
Planning team and discussed this issue at the Advisory Group meeting.If conducted prudently,
Staff believes this methodology could increase Avista's acquisition of cost-effective energy
efficiency.
Although Staff supports the modification,Staff also believes that the $3.00 per therm
incentive level and 70%incremental cost incentive cost cap should remain in the Company's
policy documents as an internal checkpoint when determining appropriateincentive levels.The
Company agreed to maintain this control by implementing a formal process to document
exceptions to the cap,includingthe reasoning for exceeding the cap and a comparison of cost-
effectiveness with and without the cap.The process would also include discussing with the
Advisory Group when the cap is exceeded,identify where the records would be maintained,and
determine how Commission Staff could access them through discovery or informal requests.
Staff believes these modifications will increase the Company's ability to acquire more
cost-effective energy efficiency,which lower system costs.The cost-effectiveness of individual
programs will continue to be assessed during prudency determinations.
STAFF RECOMMENDATION
Staff recommends that the Commission approve the Company's requested modification
to Natural Gas Service Schedule 190A with an effective date of August 1,2019.
COMMISSION DECISION
Does the Commission wish to approve the Company's proposed modifications to Natural
Gas Service Schedule 190A,with an effective date of August 1,2019?
ky Cassandra L.Koerner
Udmemos/Avista Tariff Advice 190
DECISION MEMORANDUM 2 JULY l1,2019