avu-e-02-7a.pdf

~:;
t7" (' I \/ r- 'LI..tCl" t.
...JF!LED
M? fr,r:
':! ';? "
"'".. ;'-1',;,-, V' Kelly O. Norwood
Vice-President Rates and Regulation
A vista Corporation
1411 E. Mission Avenue
P. O. Box 3727
Spokane, Washington 99220
Phone: [phone], Fax: [phone]
/Dtd'. i
UT!LIT i!:~S-- COiH'1I SSIOi't
~'_",~~.._., , , - ,..~,' .
"" .~"'~C.....'
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MA TIER OF THE APPLICATION OF
A VISTA CORPORATION FOR A MODIFICATION)
TO THE RESIDENTIAL AND SMALL FARM
ENERGY RATE ADJUSTMENT CREDIT
CASE NO. A VU-02D
I. INTRODUCTION
A vista Corporation doing business as A vista Utilities (hereinafter A vista or Company), at
1411 East Mission Avenue, Spokane, Washington, respectfully petitions the Commission for an
order approving a modification to the residential and farm energy rate adjustment credit. A vista
proposes that the credit be modified from 0.3371t per kilowatt-hour to 0.3471t per kilowatt-hour
effective October 12, 2002. 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 A vista and the Bonneville Power
Administration (BPA). The proposed rate credit of 0.3471t per kilowatt-hour is based on estimated
benefits for the second Contract Year of the ten-year Agreement which covers the period October
2002 through September 30 2003 , as well as an estimated true-up for the first contract year.
Communications in reference to this Application should be addressed to:
APPLICATION FOR MODIFICATION OF RESIDENTIAL RATE CREDIT PAGE 1
Kelly O. Norwood
Vice-President Rates and Regulation
A vista Corporation
1411 E. Mission Avenue
O. Box 3727
Spokane, Washington 99220
Phone: [phone]
Fax: [phone]
David J. Meyer
Senior Vice-President and General Counsel
A vista Corporation
1411 E. Mission Avenue
O. Box 3727
Spokane, Washington 99220
Phone: [phone]
Fax: [phone]
II. BPA RESIDENTIAL EXCHANGE SETTLEMENT CREDIT
In its Settlement Agreement with BPA, Avista received rights to 90 aMW of benefits from
the federal hydropower system beginning October 1 , 2001. The benefits related to this Settlement
are to be shared among A vista s residential and small farm customers. Through this filing the
Company is requesting that the Commission approve a modification to the residential and small farm
energy rate adjustment credit to pass through the estimated benefits to be derived from the
Settlement Agreement for the second Contract Year under the Agreement, October 1 , 2002 through
September 30, 2003, as well as an estimated true-up for the first contract year. The true-up is an
estimate at this point in time, since actual information is only available through July 2002. The
proposed credit is 0.3471t per kilowatt-hour as reflected on Third Revision Schedule 59.
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 A vista and BP A 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
2011.
III. EXPLANATION OF BENEFITS
The benefits from the Settlement Agreement with BP A consist of a monetary benefit and a
firm power sale benefit.
APPLICATION FOR MODIFICATION OF RESIDENTIAL RATE CREDIT PAGE 2
Monetary Benefit:Avista receives 42 aMW (29 aMW Washington, 13 aMW Idaho) of the
90 aMW of benefits in the form of a monetary benefit. The Monetary Benefit monthly payment
amounts are determined by taking the difference between BPA's Forward Flat-Block Price Forecast
($38/MWh) and the RL Rate at 100 percent load factor ($ 19.71/MWh) times the annual amount of
energy. The energy amount of the Monetary Benefit is fixed for the first five years of the contract
October 2001 through September 2006. BPA shall , no later than October 1 , 2005, notify Avista of
the amount of Monetary Benefit expressed in annual aMW , for which payments will be made to
Avista during the period October 2006 through September 2011.
Firm Power Sale Benefit:The Settlement Agreement provides for A vista to receive 48 aMW
(33 aMW Washington, 15 aMW Idaho) of firm power benefits. The Company elected in September
2001 to terminate the Firm Power Sale Agreement and convert it to Monetary Benefit for the first
five contract years. The additional Monetary Benefit, due to the conversion, is shown on line 20 of
Attachment 1. The total benefit amount from the Residential Exchange Settlement is shown on
Attachment 1 at line 22 and amounts to $3 310 988.
Actual benefits credited to customers are different than the actual benefits received from
BP A under the agreement due to differences in actual and estimated retail loads. Also , BP A has a
Cost Recovery Adjustment Clause (CRAC) that has three components: "load-based" CRAC
financial-based" CRAC, and "safety-net" CRAC. The initial 42 aMW of Monetary Benefit is
subject only to the safety-net component of the CRAC. If the safety-net component of the CRAC
triggers, the amount of benefit received from BP A is reduced. Furthermore, BP A has determined
that a terminated Firm Power Sale Agreement converted to Monetary Benefit, as is the case with
A vista, is subject to the load-based and financial-based CRACs, in addition to the safety-net CRAc.
APPLICATION FOR MODIFICATION OF RESIDENTIAL RATE CREDIT PAGE 3
A vista is proposing a true-up adjustment in this filing to true-up the estimated difference between
the benefits credited to customers and the actual benefits received from BP A during the first contract
year, October 1 , 2001 through September 30,2002.
IV. ENERGY RATE ADJUSTMENT CREDIT
The Company proposes to pass through the estimated second contract year benefit and first
contract year true-up amounts on a uniform cents per kilowatt-hour basis to all qualifying customers
served under Schedules 1, 12 32 and 48. For residential and small farm area lighting customers
served under Schedule 48, the proposed credit is applied on a uniform cents per kilowatt-hour basis
to the energy usages of the various lights covered under that rate schedule. The calculation of the
proposed rate credit is shown on page 1 of Attachment 2. As shown on page 2 of Attachment 2, the
resulting decrease for a residential customer using 1 000 kilowatt-hours per month would be 5.54%
or $3.47 per month. The percentage decrease for a customer using 600 kWh per month would be
62%, or $2.08 per month. The decrease for a customer using 1,400 kWh per month would be
50%, or $4.86 per month.
The rate credit is set forth on proposed Third Revision Schedule 59 - Residential and Farm
Energy Rate Adjustment. The Company proposes an effective date of October 12 2002, which is
twelve months from the date that the rate credit was initiated on October 12, 2001. The revenue
reduction amount for the energy rate adjustment credit reflects a conversion factor for revenue
related expense items. The conversion factor items utilized are from the same calculations
authorized in the Company s most recent Idaho general case, updated for actuals through December
2001 , as filed with the Commission.
V. SUMMARY
APPLICATION FOR MODIFICATION OF RESIDENTIAL RATE CREDIT PAGE 4
The Company respectfully requests that the Commission issue an order approving a
residential and farm energy rate adjustment credit of 0.3471t per kilowatt-hour effective October 12
2002.
Dated at Spokane, Washington this 29th day of August 2002.
AVISTA CORPORATION
BY dM~
Kelly O. N wood
Vice-President Rates and Regulation
APPLICATION FOR MODIFICATION OF RESIDENTIAL RATE CREDIT PAGE 5
VERIFICATION
STATE OF WASHINGTON)
County of Spokane
Kelly O. Norwood, being first duly sworn on oath, deposes and says: That he is the
Vice-President Rates and Regulation of A vista Corporation and makes this verification for and on
behalf of said corporation, being thereto duly authorized;
That he has read the foregoing Application, knows the contents thereof, and believes the
same to be true.
c;t1.,LJ ~/vt
SIGNED AND SWORN to before me this 29th day of August 2001 , by Kelly O. Norwood.
~\\\\UlII"",~
~\;
~"f O~~
~~.
.:5$ion"
:~~~
s ') '
~' ~~.
.:::0 o
~ .'~ ('
OTAR".. "'
\ '
S ~I , PU8L\c;.;.A . ..A
.;.;;: .~?;;.~~ .....~
0. .
""~
L'o-.
-..
1'.
'."'"",~,
'/11 'F WA$~\\"III'"",,\\~
NOT AR Y P LIC in and for the State of
Washington, residing at Spokane.
Commission Expires::) /:2 :2/0
APPLICATION FOR MODIFICATION OF RESIDENTIAL RATE CREDIT PAGE 6
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. A VU-02-
ATTACHMENT NO.
A
v
i
s
t
a

C
o
r
p
.
Es
t
i
m
a
t
e
d

R
e
s
i
d
e
n
t
i
a
l

E
x
c
h
a
n
g
e

B
e
n
e
f
i
t
s

-

O
c
t

0
2

t
h
r
u

S
e
p

LB

C
R
A
C

=

3
1
.
88
%

O
c
t

0
2
-
Ma
r

0
3
,

3
7
%

A
p
r

0
3

-

S
e
p

0
3
,
F
B

C
R
A
C

=

1
1
%
ID
A
H
O
Li
n
e
No
,
To
t
a
l
Oc
t
-
No
v
-
De
c
-
Ja
n
-
Fe
b
-
Ma
r
-
Ap
r
-
Ma
y
-
Ju
n
-
Ju
l
-
Au
g
-
Se
p
-
HL

H
o
u
r
s
43
2
40
0
40
0
41
6
38
4
41
6
41
6
41
6
40
0
41
6
43
2
38
4
LL

H
o
u
r
s
31
3
32
0
34
4
32
8
28
8
32
8
30
3
32
8
32
0
32
8
31
2
33
6
To
t
a
l

H
o
u
r
s
74
5
72
0
74
4
74
4
67
2
74
4
71
9
74
4
72
0
74
4
74
4
72
0
Mo
n
e
t
a
r
y

B
e
n
e
f
i
t
En
e
r
g
y
68
5
36
0
67
2
67
2
73
6
67
2
34
7
67
2
36
0
67
2
67
2
36
0
Fo
r
w
a
r
d

B
l
o
c
k

R
a
t
e
$3
8
.
0
0
$3
8
.
$3
8
,
$3
8
.
0
0
$3
8
.
0
0
$3
8
.
0
0
$3
8
,
$3
8
,
$3
8
,
$3
8
.
0
0
$3
8
,
$3
8
.
An
n
u
a
l

B
a
s
e

R
L

R
a
t
e
$1
9
,
$1
9
.
$1
9
.
$1
9
,
$1
9
,
$1
9
,
$1
9
,
$1
9
,
$1
9
.
$1
9
,
$1
9
,
$1
9
.
Di
f
f
e
r
e
n
c
e
$1
8
.
2
9
$1
8
.
$1
8
,
$1
8
,
$1
8
.
2
9
$1
8
,
$1
8
,
$1
8
,
$1
8
.
$1
8
,
$1
8
.
$1
8
.
To
t
a
l

B
e
n
e
f
i
t
08
3
21
2
$1
7
7
16
8
$1
7
1
22
3
$1
7
6
,
93
0
$1
7
6
93
0
$1
5
9
80
8
$1
7
6
93
0
$1
7
0
98
5
$1
7
6
93
0

$
1
7
1
22
3
$1
7
6
93
0
$1
7
6
93
0
$1
7
1
22
3
Mo
n
t
h
l
y

A
v
e
r
a
g
e

B
e
n
e
f
i
t
$1
7
3
,
60
1
$1
7
3
60
1
$1
7
3
,
60
1
$1
7
3
,
60
1
$1
7
3
60
1
$1
7
3
60
1
$1
7
3
,
60
1
$1
7
3
60
1
$1
7
3
,
60
1
$1
7
3
,
60
1
$1
7
3
,
60
1
$1
7
3
60
1
$1
7
3
,
60
1
Fi
r
m

P
o
w
e
r

S
a
l
e

B
e
n
e
f
i
t

-

M
o
n
e
t
i
z
e
d
HL
H

E
n
e
r
g
y
6,4
8
0
00
0
00
0
24
0
76
0
24
0
24
0
24
0
00
0
24
0
48
0
76
0
LL
H

E
n
e
r
g
y
69
5
80
0
16
0
92
0
32
0
92
0
54
5
92
0
80
0
92
0
68
0
04
0
To
t
a
l

E
n
e
r
g
y
17
5
80
0
16
0
16
0
08
0
16
0
78
5
16
0
80
0
16
0
16
0
80
0
Ad
j
u
s
t
e
d

R
L

R
a
t
e

d
u
e

t
o

C
R
A
C
$2
3
,
$3
3
,
$3
3
.
$2
9
.
$2
7
,
$2
4
.
$1
9
.
$1
8
.
4
4
$2
2
,
$3
2
.
$4
3
,
$3
5
.
Fo
r
w
a
r
d

B
l
o
c
k

R
a
t
e
$3
8
,
$3
8
.
0
0
$3
8
.
$3
8
.
$3
8
,
$3
8
,
$3
8
,
$3
8
,
$3
8
,
$3
8
.
$3
8
.
0
0
$3
8
.
Di
f
f
e
r
e
n
c
e

(
F
o
r
w
a
r
d

B
l
o
c
k

-

A
d
j

R
L
)
$1
1
,
$1
4
,
$4
,
$4
,
$8
.
$1
0
.
4
7
$1
3
.
$1
8
.
$1
9
.
$1
5
,
$5
.
$5
,
$2
,
To
t
a
l

B
e
n
e
f
i
t
22
7
77
7
$1
5
7
40
3
$5
0
,
83
1
$5
2
33
6
$9
9
00
3
$1
0
5
51
6
$1
5
4
74
3
$1
9
6
59
1
$2
1
8
28
4

$
1
6
2
07
1
$6
6
,
07
4
$5
8
,
47
7
$2
3
,
40
1
Mo
n
t
h
l
y

A
v
e
r
a
g
e

B
e
n
e
f
i
t
$1
0
2
31
5
$1
0
2
31
5
$1
0
2
31
5
$1
0
2
31
5
$1
0
2
31
5
$1
0
2
31
5
$1
0
2
31
5
$1
0
2
,
31
5
$1
0
2
31
5

$
1
0
2
,
31
5
$1
0
2
31
5
$1
0
2
31
5
$1
0
2
31
5
$3
,
31
0
98
8

I
22

T
o
t
a
l

B
e
n
e
f
i
t
s

O
c
t

0
2

-

S
e
p

0
3
$3
3
1

,
00
4
$2
2
4
43
2
$2
2
5
93
7
$2
7
2
60
4
$2
7
9
11
7
$3
2
8
34
4
$3
7
0
,
19
2
$3
9
1
88
5

$
3
3
5
67
2
$2
3
9
67
5
$1
1
5
12
4
$1
9
7
00
2
23

T
o
t
a
l

M
o
n
t
h
l
y

A
v
e
r
a
g
e

B
e
n
e
f
i
t
$2
7
5
,
91
6
$2
7
5
,
91
6
$2
7
5
,
91
6
$2
7
5
91
6
$2
7
5
91
6
$2
7
5
,
91
6
$2
7
5
91
6
$2
7
5
91
6
$2
7
5
91
6

$
2
7
5
91
6
$2
7
5
,
91
6
$2
7
5
,
91
6
$2
7
5
,
91
6
Fi
n
a
l

R
e
s

E
x
c
h

B
e
n
e
f
i
t

W
k
s

O
c
t

0
2

Se
p

0
3
.
xl
s

/
D
-
Ma
n
Att
a
c
h
m
e
n
t

Pa
g
e
1
o
f
1
"'0
tI
j
""
"
'
--
3
tI
j
""
"
'
""
"
'
AVISTA CORPORATION
Proposed Rate Adjustment
Residential Exchange Program
State of Idaho
Twelve Months Endinq September..3Q.. 2003
10/02-9/03 Rate Annual
Forecast Adjustment Revenue
Schedule kWhs er kWh Reduction
994 503,546 $0.00347 $3,453,669
607 073 $0.00347 43,781
052 513 $0.00347 546
572 777 -$0.00347 26,298
1 ,442 232 -$0.00347 009
Total 021,178,141 -$3,546,304
Estimated residential exchange benefit 10/02-9/03
Estimated true-up of benefit pass through
Total
Revenue related expense conversion factor
Grossed-up revenue credit
Estimated exchange load per above
Rate adjustment per kWh
$3,310,988
$213,545
$3,524 533
993861
-$3,546,304
021 178,141
$0.00347
Attachment 2
Page 1 of 2
AVISTA CORPORATION
Effect on Residential Bills
Residential Exchange Program
State of Idaho
Twelve Months Endin tember 30 2003
$0.00347
Current Current Exchange
Rates Bill Credit Reduction
600 kWh
Basic charge $4.$4.
First 600 kWh $0.05507 33.
Over 600 kWh $0.06408
$37.$2.62%
1 .000 kWh
Basic charge $4.$4.
First 600 kWh $0.05507 33.
Over 600 kWh $0.06408 25.
$62.$3.47 54%
1.400 kWh
Basic charge $4.$4.
First 600 kWh $0.05507 33.
Over 600 kWh $0.06408 51.
$88.$4.50%
Rates effective October 12, 2001 including effect of Schedules 65, 66 and 91.
Attachment 2
Page 2 of 2
~'iI'STA~
Corp.
News Release
Contact:Media: Catherine Markson [phone] catherine.markson (g) avistacorp.com
FOR RELEASE:
August 30, 2002
9 a.m. PDT
A vista Asks to Pass Along Additional Benefits from BP A Agreement
If approved, the current annual rate reduction for average
residential and small-farm customers would increase to over $40
Spokane, Wash.: Avista Corp. (NYSE:A VA) filed a request today with the Idaho and Washington
public utility commissions to pass along an increase in benefits currently being enjoyed by its residential
and small-farm customers resulting from an agreement with the Bonneville Power Administration
(BP A).
The agreement that became effective Oct. 1 2001 , and runs through Sept. 30 2011 , aims to share
the benefits from federal hydroelectric projects in the Northwest with qualifying electric customers. The
actual credit passed along to customers is adjusted periodically to reflect the actual benefits from the
agreement with BP A. A vista has asked that the changes , in the form of a rate decrease, go into effect on
Oct. 1 2002, in Washington, and Oct. 12 2002, in Idaho. Overall, the annual benefit to A vista
customers is about $8.3 million in Washington and $3.5 million in Idaho.
If approved, customers' bills in Washington will be 6.4 percent lower than without the credit. In
Idaho, the rate reduction would be about 5.5 percent. For residential customers in Washington using
000 kilowatt-hours of electricity, bills will decrease an additional 29 cents for a total decrease of $3.
per month. In Idaho, bills will decrease 10 cents more for a total of $3.47 per month.
Avista serves 279 000 residential and small-farm electric customers in Washington and Idaho.
This filing is subject to public review and approval by the Washington Utilities and
Transportation Commission and the Idaho Public Utilities Commission. Copies of the Avista
application are available in the company s offices, the offices of the state utility commissions and on the
web at www.avistautiJities.com under "Energy Prices.
- more -
page 2 A vista Asks to Pass Along Additional Benefits from BP A Agreement
A vista Corp. is an energy company involved in the production, transmission and distribution of
energy as well as other energy-related businesses. A vista Utilities is a company operating division that
provides electric and natural gas service to customers in four western states. A vista s non-regulated
affiliates include A vista Advantage, A vista Labs and A vista Energy. A vista Corp.' s stock is traded under
the ticker symbol "AVA" and its Internet address is www.avistacorp.com.
A vista Corp. and the A vista Corp. logo are trademarks of A vista Corporation. All other
trademarks mentioned in this document are the property of their respective owners.
- 0259 -