28835.pdf

Office of the Secretary
Service Date
August 24, 2001
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION
OF AVISTA CORPORATION DBA AVISTA
UTILITIES—WASHINGTON WATER
POWER DIVISION (IDAHO) FOR
AUTHORITY TO IMPLEMENT A
RESIDENTIAL AND SMALL FARM
ENERGY RATE ADJUSTMENT CREDIT.
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CASE NO. AVU-E-01-13

NOTICE OF APPLICATION

NOTICE OF MODIFIED PROCEDURE

NOTICE OF COMMENT/PROTEST
DEADLINE

ORDER NO. 28835

YOU ARE HEREBY NOTIFIED that on August 16, 2001, Avista Corporation dba
Avista Utilities—Washington Water Power Division (Idaho) filed an Application with the Idaho
Public Utilities Commission (Commission) requesting authority to implement a Schedule 59
residential and farm energy adjustment credit of 0.439¢ per kilowatt hour. The purpose of the
energy rate adjustment credit is to pass through to qualifying electric residential and small farm
customers the estimated benefits to be derived under the Residential Exchange Settlement
Agreement between Avista and the Bonneville Power Administration (BPA) for the contract year
October 1, 2001 through September 30, 2002. In its Settlement Agreement with BPA, Avista
received system rights to 90 aMW of benefits from the federal hydro power system beginning
October 1, 2001. The Company acknowledges and thanks the Idaho Commission and the
Commission’s Staff for the role they played in the Settlement Agreement negotiations.
The Northwest Regional Power Act establishes a Residential Exchange Program to
provide benefits to residential and small farm consumers of Pacific Northwest Utilities. The
Settlement Agreement between Avista and BPA settles the parties’ rights and obligations for the
Residential Exchange Program for the ten-year term of the Agreement, October 1, 2001 through
September 30, 2012. The proposed rate credit will be adjusted periodically over the 10-year
term to match the actual benefits from the Exchange Agreement.

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 28835 1
Explanation of Benefits
The benefits from the Exchange Agreement consist of three components: a monetary
benefit, a firm power sale benefit, and a firm power reduction benefit. A description of the
benefits is set forth in the Company’s Application. The total benefit amount may vary based on
the Company’s election of options. The actual benefits credited to customers in the first year
will be different than the actual benefits received from BPA under the Agreement due to
differences in actual and estimated retail loads, and/or market price of power and BPA’s
Residential Load Firm Power rate. Therefore, Avista is proposing a true-up mechanism to true-
up the difference over time between the benefits credited to customers and the actual benefits
received from BPA.
Accounting, Interest, True-up
Benefits derived as a result of the Settlement Agreement will be deferred to Account
254—Other Regulatory Liabilities. A separate subaccount will be used to distinguish the
residential exchange from other items that may be included in Account 254. The payment
amounts to Avista will be directly credited to Account 254. The payment amounts include the
monetary benefit, the firm reduction benefit and the cash payment for power Avista chooses not
to take. Charges for wheeling and losses will be debited to Account 254. The payment for
power deliveries taken will be charged to Account 555—Purchased Power Expense. The benefit
for residential and small farm customers associated with the power deliveries taken will be the
difference between the Mid-C price and the amount paid to BPA for the power. The benefit
connected with power deliveries taken will be accounted for by debiting Account 557—Other
Power Supply Expense and Crediting Account 254. The result being that the charges to Account
555 and Account 557 will reflect a purchase power expense amount equivalent to having
purchased power at the average Mid-C price for the month. Charges to Account 555 and
Account 557 will be included in the calculation of the deferral of power costs under the PCA
mechanism.
Account 254 will be amortized by debiting Account 254 and crediting Account
407.4—Regulatory Credits by an amount equal to the amount of revenue credit passed through
to customers during the month. Deferred federal income taxes will be recorded. Interest will be
calculated on the balance of Account 254 in similar fashion to the calculation of interest on PCA

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 28835 2
balances. It is expected that the rate credit will be revised on an annual basis and may be revised
more often, if necessary, depending how close actual results compare to estimates. A balance in
Account 254 will reflect the difference between actual benefits and the amount of credit passed
on to residential and small farm customers. The balance in Account 254 will be part of the
calculation of any revision to the rate credit.
Energy Rate Adjustment Credit
The Company proposes to pass through the estimated benefit amount on a uniform
cents per kilowatt hour basis to all qualifying customers served under Schedules 1, 12, 22, 32
and 48. The percentage reductions applicable to the individual rate schedules are as follows:
Schedule 1
Schedule 12
Schedule 22
Schedule 32
Schedule 48
Residential Service
Residential and Farm General Service
Residential and Farm Large General Service
Residential and Farm Pumping Service
Residential and Farm Area Lighting
-8.02%
-5.78%
-8.77%
-7.82%
-3.04%

Actual percentage reductions may vary according to factors contained in certain rate schedules.
The overall reduction in revenue amounts to approximately $4.5 million or about 8% for the
group of qualifying residential and small farm customers as a whole. The resulting decrease for
a residential customer using 1,000 kWh per month would be 7.96% or $4.39 per month.
The Company is proposing that the Schedule 59 rate credits be effective coincident
with the date that the new rates covering the Company’s proposed Power Cost Adjustment
surcharge become effective. Reference Case No. AVU-E-01-11. The Company in that case has
requested an effective date of September 15, 2001, for the PCA Schedule 66 adjustment. Having
the same effective date, the Company states, will avoid residential and small farm customers
from having a rate increase followed by a rate reduction.
The revenue reduction amount for the energy rate adjustment credit reflects a
conversion factor for revenue-related expense items. The conversion items utilized were from
the same calculations authorized in the Company’s most recent Idaho general case, updated for
actuals through December 31, 2000, as filed with the Commission.
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the filings of
record in Case No. AVU-E-01-13. The Commission has preliminarily determined that the public
interest regarding the proposed Schedule 59 Residential and Farm Energy Rate Adjustment—

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 28835 3
Idaho revision may not require a hearing to consider the issues presented and that the issues
raised by the Application 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 may 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 Commission finds it reasonable to process
the Company’s Application in Case No. AVU-E-01-13 in an expedited manner. The deadline
for filing written comments or protests with respect to the Application and the Commission’s
use of Modified Procedure in Case No. AVU-E-01-13 is Thursday, September 13, 2001.
Persons desiring a hearing must specifically request a hearing in their written protests or
comments.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the deadline, the Commission will consider the issue on its merits and enter its
Order without a formal hearing. If comments or protests are filed within the deadline, the
Commission will consider them and in its discretion may set the matter for hearing or may
decide the matter and issue its Order based on the written positions before it. Reference IDAPA
31.01.01.204.
YOU ARE FURTHER NOTIFIED that written comments concerning Case
No. AVU-E-01-13 should be mailed to the Commission and the Company at the addresses
reflected below.

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 28835 4
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
THOMAS D DUKICH, DIRECTOR
RATES & TARIFF ADMINISTRATION
AVISTA CORPORATION
1411 E. MISSION AVENUE
PO BOX 3727
SPOKANE, WA 99220

DAVID MEYER, ESQ.
SENIOR VP AND GENERAL COUNSEL
AVISTA CORPORATION
1411 E. MISSION AVENUE
PO BOX 3727
SPOKANE, WA 99220

All comments should contain the case caption and case number shown on the first page of this
document.
YOU ARE FURTHER NOTIFIED that the Application and related attachments in
Case No. AVU-E-01-13 can be reviewed at the Commission’s office and at the Idaho offices of
Avista during regular business hours. The Company’s Application can also be viewed at the
Commission’s internet web page file room: www.puc.state.id.us.
O R D E R
IT IS HEREBY ORDERED and the Commission does hereby adopt the procedure
and scheduling set forth above.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
_______ day of August 2001.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 28835 5
vld/O:AVU-E-01-13_sw

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 28835 6