HomeMy WebLinkAbout20040206Wilson Exhibit.pdfDAVID J. MEYER
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
A VISTA CORPORATION
O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: (509) 495-4316
FACSIMILE: (509) 495-4361
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICA nON
OF A VISTA CORPORA nON FOR THE
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC AND
NATURAL GAS SERVICE TO ELECTRIC AND
NATURAL GAS CUSTOMERS IN THE STATEOF IDAHO
CASE NO. AVU-04-
CASE NO. AVU-04-
EXHIBIT NO.
DR. WILLIAM T. WILSON
SENIOR ECONOMIST
ERNST & YOUNG, LLP
FOR A VISTA CORPOR T A TION
(ELECTRIC AND NATURAL GAS)
00%
00%
00%
00%
00%
1.00%
Standard Deviation of Returns
00%
1991 1992 1993 1994
(:,
1'""'1',1CA Included
-CA Excluded
91-98 Average
"'*" '
99-02 Average
(excl. CA)
--'
99-02 Average
(incl. CA)
Sources: Platt's PowerDat database, FERC Form 1 , SEC filings and Ernst & Young analysis
-;I
Ti,
...
1(.,1'
f;"';
1995 1996 1997 1998 1999 2000 2001 2002
Exhibit No.Page 1 of 8
W. Wilson
A vista Corporation
Average Average
Year of Returns of Returns
(CA included)(CA excluded)
1991 72%
1992 8.36%
1993 8.39%
1994 29%
1995 71%
1996 8.38%
1997 06%
1998 32%
1999 76%
2000 06%59%
2001 68%8.48%
2002 66%60%
Averages
1991 - 1998 8.40%
1999 - 2002 61%(excluding CA)
1999 - 2002 8.54%(including CA)
Sources: Platt's PowerDat database, FERC Form 1 , SEC filings and Ernst & Young analysis.
Exhibit No.Page 2 of 8
W. Wilson
A vista Corporation
13.00%
12.75%
12.50%
12.25%
12.00%
11.75%
11.50%
11.25%
11.00%
10.75%
10.50%
10.25%
10.00%
75%
50%
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00%
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00%
Average Allowed Returns
!it""
;, "
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~Af;,~'I\'!'
"""
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Sources: Regulatory Research Associates data and Ernst & Young analysis
Exhibit No.
W. Wilson
A vista Corporation
Page 3 of 8
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1999 2000 2001 2002
ES5J Sharpe Ratio
91-98 Average
"'*" '
99-02 Average
-- '
91-02 Average
Sources: Regulatory Research Associates data, Platt's PowerDat database, FERC Form 1
SEC filings and Ernst & Young analysis
i\~
1991 1992 199819931994199519961997
Exhibit No.Page 5 of 8
W, Wilson
A vista Corporation
Allowed Return - Return on Ratebase allowed by the State commission as documented by
Regulatory Research Associates.
Test year utilized - Binary variable indicating whether the utility's state commission utilizes
a forecast test year period or an historical test year period.
Regulatory jurisdiction - Binary variable indicating whether or not the electric utility
operating company is under the jurisdiction of more than one state regulatory authority,
Electric utility operating companies that are part of a holding company structure and have
sister" companies regulated in other jurisdictions are considered multi-state for the purpose
of this analysis,
Plant newness - Calculated as Net Plant divided by Gross Plant.
Load factor - Calculated as Net Retail MWh Sold / (Peak Load * 8760)
Fuel concentration - Calculated as MWh generated from the single largest fuel divided by
Net Retail Sales, up to 100%,
Bad debt - Calculated as Allowance for Doubtful Accounts / Retail Sales Dollars
Retail load growth - Calculated as the year-over-year change in retail load,
Retail rate - Average retail rate as documented in Platt's PowerDat industry database,
Vertical integration - Binary variable indicating whether or not the regulated electric
operating company is engaged in energy production and delivery or just energy delivery,
Purchased Power - Calculated as total purchased power divided by total revenue,
Weather - Measured as the total annual cooling degree days within the state of primary
operations.
Exhibit No.Page 6 of 8
W, Wilson
A vista Corporation
Variable
Intercept (constant)
Allowed Return
Test Year
Load Growth
Load Factor
Bad Debt
Fuel Cost as a % of Revenue
Fuel Concentration
Purchased Power as a % of Revenue
Regulatory Jurisdiction
Retail Rate
Vertical Integration
Weather
P-value
019
000
148
092
201
017
000
001
000
057
006
005
112
Exhibit No, 4 Page 7 of 8
W, Wilson
A vista Corporation
00%
75%
Difference of Max-Min ROE Decisions
50%
25%
00%
1.75%
1.50%
1.25%
1.00%
75%
50%
25%
00%
:~1
, ~,:,..~~
?~V
)~~"'~
~it
"',"
t~~:
. .
it"'~
G:!I Difference of
Max-Min
Average
Sources: Regulatory Research Associates data and Ernst & Young analysis
~.' ,
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Exhibit No, 4
W, Wilson
A vista Corporation
Page 8 of 8