20040909Amended Interlocutory Order No 29588.pdf

Office of the Secretary
Service Date
September 9, 2004
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
VISTA CORPORATION FOR THE
AUTHORITY TO INCREASE ITS RATES AND )
CHARGES FOR ELECTRIC AND NATURAL
GAS SERVICE TO ELECTRIC AND NATURAL
GAS CUSTOMERS IN THE ST ATE OF IDAHO.
CASE NO. AVU-O4-
A VU -O4-
AMENDED
INTERLOCUTORY
ORDER NO. 29588
On February 6, 2004, Avista Corporation dba Avista Utilities (Avista; Company)
filed an Application with the Idaho Public Utilities Commission (Commission) for authority to
increase its rates and charges for electric and natural gas service in the State of Idaho. The
Company in northern Idaho serves approximately 109 315 electric customers and 61 799 natural
gas customers. The Company s original request of $35.2 million or a 24.1 % increase in electric
revenue was revised at hearing to $31.1 million or 21.2%. The Company s original request of
$4.754 million or a 9.16% increase in natural gas revenue was revised at hearing to $4.06 million
or 7.8%. A proposed reduction in the Company s current Power Cost Adjustment (PCA)
surcharge rate was also requested. The net amount of actual increase varies by class of customer
and usage.
A technical hearing in Case Nos. A VU-04-1 and A VU-04-1 was held in Boise
Idaho the week of July 19 2004. The following parties appeared by and through their respective
counsel of record:
A vista Corporation
Brad M. Purdy, Esq.
Scott D. Woodbury, Esq.
Lisa Nordstrom, Esq.
Public testimony hearings were held in Kellogg and Sandpoint on July 26, 2004 and Lewiston on
July 27 2004. A continued technical hearing was held in Boise on August 16 2004.
On September 9 , 2004, the Commission issued Interlocutory Order No. 29588, an
abbreviated Order identifying approved rate base, revenue requirement and resultant rates. The
Potlatch Corporation
Coeur Silver Valley, Inc.
Community Action Partnership
Association of Idaho (CAP AI)
David S. Meyer, Esq.
Conley E. Ward, Esq.
Charles L. A. Cox, Esq.
Commission Staff
AMENDED INTERLOCUTORY
ORDER NO. 29588
Commission s Order also directed a change in the Company s PCA deferral account balance and
authorized an extended PCA recovery period.
Interlocutory Order No. 29588 having previously issued earlier this date
September 9, 2004 and the Commission having since determined that additional language should
be added pertaining to capital structure, authorized return on equity and overall rate of return;
and the Commission further finding that an error in calculation of the electric rates necessitated a
change in electric order language and rates, the Commission hereby issues Amended
Interlocutory Order No. 29588. It is the Commission s intention that Amended Interlocutory
Order No. 29588 be a substitute and replacement of the prior Interlocutory Order No. 29588.
is the Commission s intention to issue a final Order with detailed reasoning within 30 days.
Commission Findings
The Commission has reviewed the filings of record in Case Nos. A VU-04-1 and
A VU-04-1 including the Prehearing Memorandum filed by Potlatch, the transcript of technical
proceedings, the transcript of public testimony and filed public comments, and the Petition for
Intervenor Funding filed by CAP AI.
Avista Utilities - Electric and Gas
The Commission approves a normalized 12 month test year ending December 31
2002 based on an average of monthly averages rate base for A vista Utilities. We approve an
embedded capital structure for Avista at December 31, 2003 consisting of 50.08% debt, 5.
trust preferred securities 1.76% preferred stock and 42.59% common equity. We accept an
embedded cost of debt of 8.68%, embedded cost of 6.15% for trust preferred securities and
embedded preferred stock cost of7.35%. We approve a return on common equity of 10.4% and
an overall weighted cost of capital and rate of return of 9.25%.
Electric:
Regarding the Company electric operations, the Commission approves the
following for rate base and revenue requirement. We also make ultimate findings regarding
deferred PCA issues, Intervenor Funding and authorized changes in electric rates.
Rate Base
The Commission approves an electric pro forma rate base of$424 114 000.
AMEND ED INTERLOCUTORY
ORDER NO. 29588
Revenue Requirement
Current revenue recovered in electric base rates is $146 248 000. The Commission in
this case approves a base revenue requirement of $170 964 195 , an increase in electric base rates
of $24 716 195 or 16.90%. The resultant average cents per kilowatt hour for base rates is 5.47
cents.
Power Cost Adjustment (PCA)
With respect to PCA issues deferred to this rate case in Order No. 29377 regarding
Coyote Springs 2 (CS2), the Commission notes an audited PCA account balance May 31 2004
of $26 261 334 (reference Case No. A VU-04-3), disallows CS2 Deal B losses of $6,496 669
and disallows $4 771 550 of Deal A losses for a net PCA account balance total of $14 993 115.
The Commission approves the Company proposal to recover the remaining PCA deferral balance
over a two-year period. The resultant annual PCA recovery is $7 496 558 , subject to annual
PCA review and adjustment. The Commission authorizes a future change in the current uniform
percentage recovery method to a recovery method based on energy consumption.
The Commission in this Order also approves the assignment and recovery from the
residential class through the PCA of authorized CAP AI intervenor funding in the amount of
$12 622.75.
Electric Rates
The electric rates we approve as just and reasonable are set out in attached Schedule
A (Electric). Idaho Code ~ 61-502. Base electric rates increase by $24 716 000 while PCA rates
decrease by $20 337 000 and the Energy Efficiency Rider decreases by $1 197 000. The result is
a net increase of $3 182 000 or 1.9%. The authorized revenue to be recovered in rates as set out
below including residential exchange credit, Centralia credit, PCA surcharge and DSM rider is
$175 029,459 for a total average rate of 5.60 cents or 1.9%. We establish a separate rate
schedule for Potlatch. The proposed increase for an electric residential customer using an
average of941 kWhs per month is $4., or a 7.1 % increase in their electric bill.
Intervenor Funding
The Commission approves CAP AI's Petition for Intervenor Funding in the requested
amount of$12 622.75. Reference Idaho Code ~ 61-617A. Our award is based on a finding that
CAP AI's participation materially contributed to the Commission s decision, the costs of
intervention are reasonable and would be a significant financial hardship for CAP AI if no award
AMEND ED INTERLOCUTORY
ORDER NO. 29588
is given, the recommendations made by CAP AI differed materially from Staff s case, and the
CAP AI's participation addressed issues of concern to residential and low income customers.
The award is to be recovered from residential customers through the Company PCA
mechanism.
Natural Gas:
Regarding A vista s natural gas operations the Commission approves the following for
rate base and revenue requirement. We also make ultimate findings regarding natural gas rate
base and authorized changes in natural gas rates.
Rate Base
The Commission approves a pro forma rate base of$59 653 000.
Revenue Requirement
The Commission approves additional natural gas revenues of $3 311 000 for a total
revenue requirement of $55 230 000, a 6.38% revenue increase.
Cost of Gas in Base Rates
The Commission adopts A vista s proposal to add the current PGA weighted average
cost of gas (W ACOG) adjustment of $0.27186/therm to base rates to produce a total base rate
gas cost of $0.44989/therm.
Natural Gas Rates
The natural gas rates the Commission approves as just and reasonable are those set
forth in attached Schedule B (Gas). Idaho Code ~ 61-502. The base rates we approve in this
case are the fixed base rates incorporated in the Company s PGA adjustment authorized
simultaneously in Order No. 29590, Case No. A VU-04-2. The proposed increase for a natural
gas residential customer using an average of 73 therms of gas per month will be $12.84 per
month, or 21.39%.
CONCLUSIONS OF LAW
The Public Utilities Commission has jurisdiction over A vista Corporation dba A vista
Utilities and its Application in Case Nos. A VU-04-1 and A VU-04-1 pursuant to Idaho
Code, Title 61 and the Commission s Rules of Procedure, IDAPA 31.01.01.000 et seq.
AMEND ED INTERLOCUTORY
ORDER NO. 29588
ORDER
In consideration of the foregoing and as more particularly described above, IT
HEREBY ORDERED that Avista Utilities file tariffs in conformance with this Amended
Interlocutory Order No. 29588 to be effective on September 9, 2004, for service rendered on and
after that date.
IT IS FURTHER ORDERED that Community Action Partnership Association of
Idaho is awarded intervenor funding in the amount of$12 622.75.
THIS IS AN INTERLOCUTORY ORDER, not a final and appealable Order of the
Commission. The period of reconsideration will not begin until the final Order is issued.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
q '
j--AJ
day of September 2004.
())~lv LJ
MARSHA H. SMITH, COMMISSIONER
SEN, COMMISSIONER
ATTEST:
th (2:s ?f' ~ a"v VJUJJ
Barbara Barrows
Assistant Commission Secretary
bls/O:A VUE0401 A VUG0401 sw4
AMEND ED INTERLOCUTORY
ORDER NO. 29588
Present Rates
Basic Charge
First 600 kWhs
All over 600 kWhs
PCA Rate 0 - 600 kWh
All over 600 kWh
Energy Efficiency Rider
Present Rates
Basic Charge
Energy Charge
Demand Charge:
20 kW or less
Over 20 kW
PCA Rate
Energy Efficiency Rider
Present Rates
Energy Charge
A VISTA UTILITIES
A VU-O4-
Present and Commission Ordered Electric Rates
Residential Service - Schedule
Commission Ordered Rates
$4.00 Basic Charge $4.
555 rt/kWh
303 rt/kWh
717 rt/kWh
6.487 rt/kWh
First 600 kWhs
All over 600 kWhs
PCA Rate 286 rt/kWh939 rt/kWh
092 rt/kWh104 rt/kWh Energy Efficiency Rider
General Service - Schedule
Commission Ordered Rates
Basic Charge
081 rt/kWh
$6.$6.
564 rt/kWh First 3650 kWh
All Over 3650 kWh
148 rt/kWh
076 rt/kWh
no charge
$3.50/kW
Demand Charge:
20 kW or less
Over 20 kW
no charge
$3.50/kW
335 rt/kWh
095 rt/kWh
391 rt/kWh PCA Rate140 rt/kWh Energy Efficiency Rider
Larae General Service - Schedule
Commission Ordered Rates
First 250 000 kWh 4.688 rt/kWh
All Over 250 000 kWh 3.985 rt/kWh
996 rt/kWh
Demand Charge:Demand Charge:
50 kW or less $225.50 kW or less $250.
Over 50 kW $2.75/kW Over 50 kW $3.00/kW
Primary Voltage Discount 20rt/kW Primary Voltage Discount 20rt/kW
011 rt/kWh PCA Rate100 rt/kWh Energy Efficiency Rider
Extra Larae General Service - Schedule 25Present Rates Commission Ordered Rates874 rt/kWh First 500 000 kWh 3.862 rt/kWh
All Over 500 000 kWh 3.259 rt/kWh
PCA Rate
Energy Efficiency Rider
Energy Charge
Demand Charge:
000 kva or less
Over 3 000 kva
Primary Voltage Discount
Annual Minimum
PCA Rate
Energy Efficiency Rider
Rates Exhibit 9/9/2004 KDH
256 rt/kWh
073 rt/kWh
500.
$2.25/kva
Demand Charge:
000 kva or less
Over 3 000 kva
000.
$2.75/kva
20rt/kva Primary Voltage Discount 20rt/kva
$406 140 $502 670Annual Minimum
607 rt/kWh
068 rt/kWh
181 rt/kWh
052 rt/kWh
SCHEDULE A (Electric)
AMENDED INTERLOCUTORY
ORDER NO. 29588
CASE NOS. AVU-04-
AVU-04-
PCA Rate
Energy Efficiency Rider
VISTA UTILITIES
AVU-O4-
Present and Commission Ordered Electric Rates
Present Rates
Potlatch - Schedule 25P
First 3650 kWh
874 rt/kWh Energy Charge 333 rt/kWh
Demand Charge:
500.000 kva or less 000.
$2.25/kva Over 3 000 kva $2.7 5/kva
20rt/kva Primary Voltage Discount 20rt/kva
$406 140 Annual Minimum $474 630
Energy Charge
Demand Charge:
000 kva or less
Over 3 000 kva
Primary Voltage Discount
Annual Minimum
PCA Rate
Energy Efficiency Rider
Present Rates
607 rt/kWh PCA Rate068 rt/kWh Energy Efficiency Rider
Pumpina Service - Schedule
Commission Ordered Rates
Basic Charge
163 rt/kWh
046 rt/kWh
Basic Charge $6.$6.
First 85 kWh/kW
Next 80 kWh/kW
All additional kWhs
716 rt/kWh
716 rt/kWh
548 rt/kWh
First 85 kWh/kW
Next 80 kWh/kW
All additional kWhs
6.440 rt/kWh
6.440 rt/kWh
5.4 7 4 rt/kWh
PCA Rate 0.888 rt/kWh PCA Rate 0.265 rt/kWh
Energy Efficiency Rider 0.102 rt/kWh Energy Efficiency Rider 0.076 rt/kWh
Street and Area Liahts - Schedules 41-Present Rates Commission Ordered Rates
Base Rates Various Base Rate Increase 20.19%
PCA Surcharge 19.37%PCA Surcharge 385%
Energy Efficiency Rider 95%Energy Efficiency Rider 25%
Rates Exhibit 9/9/2004 KDH
SCHEDULE A (Electric)
AMENDED INTERLOCUTORY
ORDER NO. 29588
CASE NOS. AVU-04-
A VU-04-
VISTA UTI UTI
AVU-04-
Present and Commission Ordered Natural Gas Rates
Present Rates
General Service - Schedule 101
Commission Ordered Rates
$3.28 Basic Charge $3.Basic Charge
All Therms 74.197 ct/Therm All Therms 80.050 ct/Therm
Present Rates
Large General Service - Schedule 111
Commission Ordered Rates
1 st 200 Therms
Next 800 Therms
Over 1 ,000 Therms
75.836rt/Therm
74.197 rt/Therm
64.975rt/Therm
1 st 200 Therms
Next 800 Therms
Over f OOO Therms
78.301 rt/Therm
76.481 rt/Therm
66.239rt/Therm.
Minimum - $97.30/Month
plus 27.186rt/Therm
Minimum - $156.60/Month
Present Rates
Larae General Service - Schedule 121
Commission Ordered Rates
1 st 500 Therms
Next 500 Therms
Next 9 000 Therms
Over 1 0 000 Therms
74.852rtlTherm
74. 197ct/Therm
- 64.975rt/Therm
63.284rt/Therm
1 st 500 Therms
Next 500 Therms
Next 9 000 Therms
Over 10,000 Therms
77.209rt/Therm
76.481 rt/Therm
66.239rt/Therm.
64.361 rt/Therm
Minimum - $238.33/Month
plus 27 .18~rt/Therm
Minimum - $386.05/Month
Present Rates
Interruptible Service - Schedule 131
Commission Ordered Rates
All Therms 55.724rt/Therm All Therms 56.586rt/Therm
Present Rates
Transportation Service - Schedule 146
Commission Ordered Rates
Basic Charge $0.Basic Charge $200 Month
All Therms 10.574rt/Therm All Therms 10.960rt/Therm
1 Includes Purchase Gas Adjustment Schedule 150/Exciudes all other rate adjustments2 Does not include Schedule 150 or any other rate adjustment.
. .
Rates Exhibitxls tabRate Exh 9(7/2004 MJF
SCHEDULE B (Natural Gas)
AMENDED INTERLOCUTORY
ORDER NO. 29588
CASE NOS. A VU-O4-
A VU-O4-