Scheduling Notice.pdf

Office of the Secretary
Service Date
December 14, 2000
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF PROPOSED CHANGES
AND ADJUSTMENTS TO THE POWER COST
ADJUSTMENT (PCA) METHODOLOGY OF
AVISTA CORPORATION (REFERENCE
ORDER NO. 28402).
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CASE NO. AVU-E-00-6

NOTICE OF MODIFIED
PROCEDURE

NOTICE OF COMMENT/
PROTEST DEADLINE

ORDER NO. 28582

The Idaho Public Utilities Commission (Commission) in Order No. 28402 in Case
No. AVU-E-00-2, directed that a new docket (Case No. AVU-E-00-6) be established to examine
proposed changes and adjustments to the Power Cost Adjustment Methodology of Avista
Corporation dba Avista Utilities—Washington Water Power Division (Idaho). The identified
scope of inquiry pertains to the following generation resources: Rathdrum, Kettle Falls and
Centralia—specifically exploring the manner (actual or dispatchable and the timing of the
adjustment) in which Rathdrum (which is now included in the Company’s normalized base
power supply costs—reference Order No. 28097, Case No. WWP-E-98-11) should be included
as a resource in the PCA methodology; and whether given alleged fuel supply limitations, Kettle
Falls and Centralia should continue to be included as dispatchable resources in the PCA
methodology.
On June 13, 2000, the Idaho Public Utilities Commission (Commission) in Order
No. 28409 initiated Case No. AVU-E-00-6 to examine proposed changes and adjustments to the
PCA methodology of Avista Corporation dba Avista Utilities. The public and interested parties
were apprised of the opportunity to formally intervene (IDAPA 31.01.01.072-073) or submit
written comments. Also provided was the opportunity for formal discovery (IDAPA
31.01.01.221-234). By Order No. 28453, Avista and Commission Staff were directed to file
initial statements of position by August 4, 2000. On October 30, 2000, Avista filed an

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ORDER NO. 28582 1
Agreement reflecting changes to its initial position. The filed statements and Agreement can be
summarized as follows:
Avista
Avista in its initial statement of position proposed the following modifications to the
PCA:
1. The Rathdrum Turbine would be included in the PCA based on “actual”
generation and “actual” fuel costs on a prospective basis beginning
September 1, 2000.

2. There would be no adjustments to the PCA balancing account related to
the Rathdrum turbine, Centralia or Kettle Falls for the period prior to
September 1, 2000.

3. Centralia would be included in the PCA based on “authorized”
generation and “authorized” fuel costs.

4. Colstrip and Kettle Falls would be included in the PCA to track 90% of
the difference between “actual” and “authorized” generation and fuel
costs beginning September 1, 2000.

5. The trigger for the PCA balancing account would be increased from $2.2
million to $3.0 million effective September 1, 2000.

Should the Company and Staff have differences regarding proposed PCA modifications, the
Company noted its intention to continue discussions with Staff to attempt to resolve any
differences.
Staff
Staff in its initial statement of position states that changes need to be made to the
PCA on a going-forward basis to make the PCA more representative of actual Company
operations. Staff proposes the following modifications to the PCA:
1. Include the Rathdrum generating station at actual generation and actual
fuel costs.

2. Centralia should no longer be dispatched in the PCA model but should
be included at normalized levels.

3. The PCA trigger should be reset to $3 million, which is approximately
2.5% of today’s Idaho jurisdictional revenue requirement.

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ORDER NO. 28582 2

Staff’s initial position is that there should be no change in the PCA operation of Kettle Falls or
Colstrip generating stations.
Agreement
Based on discussions following the filing of its initial statement of position, the
Company on October 30, 2000, filed an Agreement reflecting changes to its initial position
recommendations. As reflected in the Agreement, the Company has adopted the changes
recommended by Staff. Avista now recommends the following changes to its PCA:
1. Prospective inclusion of Rathdrum turbine in the PCA.
The Rathdrum turbine shall be included in the PCA based on “actual” generation and
“actual” fuel costs beginning November 1, 2000. The first PCA entry to reflect this change will
occur in the December 2000 PCA Journal, which will be based on actual information for
November 2000. There will be no adjustments to historical PCA entries related to the Rathdrum
turbine.
2. Centralia
The Centralia steam generating plant shall be included as a PCA resource based on
fixed levels of “authorized” generation and “authorized” fuel costs established in the Company’s
last general rate case, as has been reflected in the PCA beginning in May 2000 when the plant
was sold.
3. Colstrip and Kettle Falls
No modification shall be made to the PCA for Colstrip and Kettle Falls at the present
time. These two plants are included in the PCA based on economic dispatch using the
incremental operating cost established in the last rate case (authorized incremental operating
cost) and the actual short-term market price. If the authorized incremental operating cost is less
than the PCA market price, then the units are run in the PCA at the equivalent availability factor
established for the plants in the last rate case. Any change in fuel costs is established using the
authorized unit price per ton for fuel established in the last rate case.
4. Balance Account Trigger
The trigger amount for rebates and surcharges shall be increased from $2.2 million to
$3.0 million effective with PCA journal entries beginning in December 2000. The trigger

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ORDER NO. 28582 3
amount was intended to be about 2.5% of revenues. Based on current revenues of roughly $119
million, a 2.5% trigger should be $3.0 million.

The Company and Staff being in agreement, it is jointly recommended that the PCA
be so modified.
COMMISSION FINDINGS
The Commission has reviewed the filings of record, initial statements of position and subsequent
Company agreement in AVU-E-00-06. We find it reasonable to solicit public comment on the
proposed changes to Avista’s PCA methodology.
YOU ARE HEREBY NOTIFIED that the Commission after reviewing the filings of
record in Case No. AVU-E-00-06 has preliminarily determined that the public interest may not
require a hearing to consider the issues presented, and that the proposed changes to Avista’s
Power Cost Adjustment Methodology may be processed under Modified Procedure, i.e., by
written submission rather than by hearing. Reference Commission Rules of Procedure, IDAPA
31.01.01.201-204.
YOU ARE FURTHER NOTIFIED that the Commission will not hold a hearing in
this proceeding unless it receives written protests or comments opposing the use of Modified
Procedure and stating why Modified Procedure should not be used. Reference IDAPA
31.01.01.203.
YOU ARE FURTHER NOTIFIED that the deadline for filing written comments or
protests with respect to the proposed changes to Avista’s PCA methodology and the use of
Modified Procedure in Case No. AVU-E-00-06 is Wednesday, December 27, 2000. Persons
desiring a hearing must specifically request a hearing in their written protests or comments.
YOU ARE FURTHER NOTIFIED that if no protests or comments are received
within the deadline, the Commission may consider the matter and issue its Order without a
hearing. If comments or protests are filed within the deadline, the Commission will consider
them and may set the matter for hearing or may decide the matter and issue its Order on the basis
of the written positions before it. Reference IDAPA 31.01.204.

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ORDER NO. 28582 4
YOU ARE FURTHER NOTIFIED that written comments concerning this docket
must be mailed to the Idaho Public Utilities Commission and Avista Corporation dba Avista
Utilities—Washington Water Power Division (Idaho) at the following addresses:
COMMISSION SECRETARY
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
Street Address for Express Mail:
472 W WASHINGTON ST
BOISE, ID 83702-5983
BILL JOHNSON
KELLY NORWOOD
AVISTA CORPORATION
1411 E MISSION
PO BOX 3727
SPOKANE, WA 99220-3727

All comments filed should contain the case caption and case number shown on the first page of
this document.
YOU ARE FURTHER NOTIFIED that the filings of record in Case
No. AVU-E-00-06 can be reviewed at the Commission’s office and at the Idaho offices of Avista
Corporation during regular business hours.
O R D E R
In consideration of the foregoing and as more particularly described above in our
findings, IT IS HEREBY ORDERED and the Commission does hereby adopt the foregoing
procedure and scheduling in Case No. AVU-E-00-06.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code § 61-626.

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ORDER NO. 28582 5

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ORDER NO. 28582 6
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of December 2000.

DENNIS S. HANSEN, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

PAUL KJELLANDER, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

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