dangraves.pdf

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AVU-E-01-11
08/28/01 STAFF
Q.Please state your name and business address
for
the record.
A.My name is Dan Graves. My business address
is 472 West Washington Street, Boise, Idaho.
Q.By whom are you employed and in what
capacity?
A.I am employed by the Idaho Public Utilities
Commission as a Utilities Compliance Investigator.
Q.What is your educational and professional
background?
A.I received a Bachelor of Science Degree in
Management from Tarkio College in 1987 and a Master of
Public Administration from the University of Missouri
in 1990. I attended the NARUC Management Analyst
Training, September 1987, the NARUC Basic Training for
Management Analysts, June 1988, and the NARUC
Regulatory Studies Program, August 1991. The Missouri
Public Service Commission from 1987 to 1992 employed me
as a Management Services Specialist for four years and
Assistant to the Chairman for one year. I have been in
my current position of Utilities Compliance
Investigator since December 2000.
Q.What is the purpose of your testimony in this
proceeding?
A.The purpose of my testimony is to discuss my
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AVU-E-01-11
08/28/01 STAFF
findings from a review of Avista Corporation dba Avista
Utilities’(Avista)public notices, and address Avista’s
compliance with the Idaho Public Utilities Commission’s
(Commission) Utility Customer Relations Rules (UCRR),
IDAPA 31.21.0100, et seq., and Utility Customer
Information Rules (UCIR), IDAPA 31.21.02000, et seq. I
will summarize the written comments filed with the
Commission by customers after Avista announced its
request for a rate increase. I will describe briefly a
number of Demand Side Management (DSM) programs
initiated by Avista to encourage and promote energy
conservation among its customers. Finally, I will
discuss Avista’s efforts to mitigate the impact of rate
increases on customers.
Q.Has the Company complied with Utility
Customer Information Rules (UCIR) with regard to
customer notice of the requested rate increase?
A.The customer notice was presented to
customers in the form of a bill stuffer, and was mailed
out in the normal billing cycles beginning July 20 and
ending August 20, 2001. The press release was included
when Avista filed its Application on July 18, 2001.
Both documents met the requirements of Rule 102 of the
Commission’s UCIR.
Q.You’ve read the written comments submitted by
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AVU-E-01-11
08/28/01 STAFF
customers after they learned of Avista’s proposed rate
increase. What concerns were expressed by customers?
A.As of August 24, 2001, the Commission
received nine (9) written comments from customers
opposed to the rate increase. In addition, the
Consumer Assistance Staff received two (2) telephone
calls from customers opposing Avista’s request to
increase rates. The majority of the persons commenting
blame Avista management for making poor financial
decisions, thus precipitating the need to increase
rates again. Others expressed deep concern for the
economic impact another rate increase will have on an
already depressed economy in northern Idaho. They
expressed fear of more businesses cutting back,
reducing employees and in some cases, actually being
forced out of business, further contributing to the
decline of the local economy. At least two of the
comments were from elderly customers with fixed incomes
who were concerned that they could not absorb another
energy rate increase.
Q.Customers experienced unseasonably cold
weather during the past heating season. How were
Avista’s low income and elderly customers on fixed
incomes able to cope with the high energy bills?
A.During this past heating season 2,359 of
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AVU-E-01-11
08/28/01 STAFF
Avista’s electric and gas customers in Idaho received a
total of $472,122.00 in financial assistance through
programs such as LIHEAP and Project Share. This is a
significant increase over the same period last year,
when 1,815 customers received financial assistance
totaling $303,291.00. The LIHEAP energy assistance
program requires that customers qualify under federal
income guidelines. Assistance amounts to a one-time
payment made directly to Avista. The Project Share
program is funded by donations and is available on a
case-by-case basis in emergency situations. Applicants
need only to contact organizations like the Salvation
Army, American Red Cross or a local Community Action
Agency to apply for assistance. In addition, county
welfare benefits are often available, but recipients
may be asked to pay back a portion or all of the
assistance they receive.
Q.As a result of the increase in financial
assistance received by Avista’s low income customers,
were the number of service disconnections reduced this
year over last year?
A.No, in fact the number of disconnects
increased. However, without the increase in financial
assistance the actual number of disconnects may have
been
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AVU-E-01-11
08/28/01 STAFF
much greater. Avista mailed 25,421 disconnection
notices
and 20,306 twenty-four hour notices during the months
of
March, April and May following the winter Moratorium.
Some customers received more than one notice during
this
time frame. As a result, 2,133 customers were
disconnected between March and May 2001. Of the 2,133
customers disconnected, 114 were gas-only customers,
1,141 electric-only customers and 878 combination gas
and electric customers. During the same period last
year, the Company mailed 32,241 disconnection notices
and 26,386 twenty-four hour notices that resulted in
2,047 customers being disconnected. Of those 2,047
customers, 90 were gas-only customers, 1098 electric-
only customers and 859 combination gas and electric
customers. The number of mailed notices decreased
because in July 2000, Avista increased the threshold
amount that triggers the sending of a notice to
$100.00, up from $50.00, the threshold amount specified
in the Commission’s Rule 310.01 of the Utility Customer
Relations Rules.
Q.Are there other customer assistance programs
sponsored by Avista?
A.Yes, other programs supported by Avista
include a program called “CARES”, which assists elderly
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AVU-E-01-11
08/28/01 STAFF
and disabled customers, and the Company’s level pay
program, referred to as “Comfort Level Billing” or
“CLB”. In the CARES program the Company uses two full-
time employees to help customers obtain information on
energy assistance funds and help provide special
payment arrangements.
Currently, there are 531 customers in Idaho listed as
“CARES” accounts.
Q.How many of Avista’s customers chose to
participate in CLB and when can they expect their
payments to be adjusted if rates are increased?
A.Currently, 13,731 customers participate in
CLB. The CLB payment amount is computed based on the
average of the most recent twelve months of billing
history for the customer’s address. This year, due to
the close proximity of the filing for the PGA and the
PCA, Avista plans to adjust both at the same time to
minimize the number of times customers on CLB have
their plan amount changed. The adjustment is planned
for a date following the Commission’s decision on the
PCA.
Q.Avista has a number of Demand Side Management
(DSM) rebate programs to encourage and promote
efficient energy use by its customers. Could you
describe briefly those programs?
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AVU-E-01-11
08/28/01 STAFF
A.Yes, Avista offers a number of programs
designed to promote conservation. Generally, the
programs include rebates and energy buy-back programs.
In Staff Exhibit No. 103, I have provided a brief
description of the different rebate programs offered by
the Company. In addition, Company-wide, Avista mailed
1.8 million $6.00 off coupons to residential customers
for purchasing florescent light bulbs. Each customer
was
sent two coupons. To date a total of 172,000 coupons
have been redeemed; Idaho customers redeemed
approximately 51,600 coupons, 30% of the total. Avista
offered a similar program for their commercial
customers. It was a temporary program and ended July
31, 2001. Participants in the commercial program could
receive a rebate of up to $10.00 for each florescent
light bulb purchased. To date approximately 123,880
compact florescent bulbs have been purchased Company-
wide.
Q.In addition to the rebate programs, Avista
has a number of Energy Buy-Back programs. Please
describe these programs?
A.Currently, Avista has three Energy Buy-Back
programs: one for residential, commercial, and
industrial customers; one for irrigation customers; and
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AVU-E-01-11
08/28/01 STAFF
one for high-use industrial customers. In June 2001,
the Commission approved a new Schedule 92, All Customer
Electric Energy Buy-Back program. The program was
designed to encourage electric conservation by
providing a financial incentive for energy savings in
excess of 5% of the customer’s prior year’s usage. The
program applies to all metered customers who have lived
at the same address, or who have had the same place of
business for the past twelve consecutive months.
Customers who
participate and reduce their usage by over 5% as
compared
to the same month in the prior year receive a bill
credit each month of five cents for each kilowatt saved
in excess of the 5% threshold. As of July 31, 2001,
Avista has credited customers’ bills in the amount of
$1,255,831.00.
On December 12, 2000, the Commission approved
Rule 26, which allows industrial customers supplied
through one-meter installation for a demand of not less
than 3000 Kva to voluntarily reduce loads in exchange
for a bill credit. The buy-back rate was to be based
on the power values in the wholesale market. At the
time of approval, the Company anticipated that the
credit amount offered to customers would be
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AVU-E-01-11
08/28/01 STAFF
approximately half of the wholesale market rate.
During the first period that the program was offered,
December 14 to December 22, 2000, three customers
participated. A total of 613 MWh were purchased by
Avista from those customers and $134,900 was credited.
Avista did not extend power buy-back offers during the
months of January or February 2001 due to a combination
of sufficient system resources and pre-purchased power
as well as lower indexed prices than those experienced
in previous months. Avista has not filed any
additional reports to indicate there were any offers
made since then.
On April 5, 2001, the Commission approved the
third buy-back program. That program provided Avista’s
Schedules 31 and 32 irrigation customers who used at
least 50,000 kWh during at least one previous
irrigation season, the option to sell power back to the
Company by reducing their historical consumption. To
be eligible, irrigation customers had to agree to
reduce their energy consumption by a minimum of 50,000
kWh from May to September 2001. Those customers saving
50,000 kWh or more were to be paid 10 cents per kWh
saved. Those customers saving from 25,000 kWh to
50,000 kWh were to be paid 5 cents per kWh. Finally,
those customers not saving at least 25,000 kWh would
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AVU-E-01-11
08/28/01 STAFF
not receive any compensation from the Company. After
October 31, 2001, Avista will verify each participating
irrigation customer’s actual energy savings and then
make payments to them.
Q.Based on your findings regarding DSM, do you
think the Company has been successful in their efforts
to encourage and promote energy efficiency and
conservation?
A.The programs initiated by Avista are
relatively new programs and at this point it is
premature to judge their overall effectiveness.
However, the Company has emphasized the importance of
energy conservation and appears to be making a good
effort to promote reduced energy consumption by
offering these programs to its
customers.
Q.In your opinion, has Avista responded
appropriately in helping to mitigate the impact of
recent rate increases on customers?
A.Avista has demonstrated their concern for how
recent PGA and PCA increases and unseasonably cold
weather during the last heating season have impacted
customers. The Company has reinstituted DSM programs,
increased the disconnect notice threshold, and
continued the CARES program for the elderly and the CLB
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AVU-E-01-11
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program. In addition, this year at the Commission’s
request, Avista agreed to extend the winter Moratorium
through March for some Avista customers who had made an
effort to pay at least a portion of their bill during
the winter and did not have a balance of over $400.00
as of March 31, 2001. Avista also contributed a total
of $75,000.00 to twenty-nine different agencies
throughout their service territory with the stipulation
that the recipient must be an Avista customer and meet
the federal low income guidelines. As a direct result
of these programs and a 30% increase in financial
assistance, there was only a 4% increase in the actual
number of customers being disconnected this year over
last year. I believe that Avista has made a
substantive effort to promote energy conservation and
provide assistance to its
customers. I anticipate the Company will continue to
do
so in the future.
Q.Does this conclude your direct testimony in
this proceeding?
A.Yes, it does.