20041101Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:SCOTT WOODBURY
DATE:OCTOBER 20, 2004
RE:CASE NO. A VU-04-4 (Avista)
SCHED ULE 59 BP A RESIDENTIAL AND SMALL FARM ENERGY RATE
ADJUSTMENT CREDIT
On October 1 , 2004, Avista Corp. dba Avista Utilities (Avista; Company) filed an
Application with the Idaho Public Utilities Commission (Commission) requesting approval of a
change to the Company s Schedule 59 Residential and Farm Energy Rate Adjustment tariff.
A vista requests authority to increase the residential and farm energy rate adjustment credit from
0.252~ per kWh to 0.412~ per kWh for an effective date of November 1 2004.
As a northwest regional utility, A vista is entitled to participate in the Residential
Exchange Program (REP) that extends the benefits of the Columbia River Federal Power
Program to residential and small farm consumers served by investor-owned utilities in the
region. Section 5c of the Northwest Power Act, 16 D.C. 9 839(c). The REP is administered by
the Bonneville Power Administration (BP A). A Residential Exchange Settlement Agreement
between Avista and BPA settled 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.
A vista uses the energy rate adjustment credit to pass onto its qualifying residential and small
farm customers the estimated residential exchange benefits it receives from BP A. The proposed
rate credit of 0.412~ per kWh is designed to pass through the projected balance of accumulated
benefits at October 31 , 2004, as well as the expected level of benefits to be received from BP
during the period November 1 2004 through October 31 , 2005.
DECISION MEMORANDUM
The proposed 0.412~ credit is a uniform cents per kilowatt hour decrease that will
apply to residential and small farm customers served under Schedules 1 , 12, 22, 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 in
Company workpapers. As reflected in the Company s Application, the proposed increase in the
rate credit will result in an overall reduction in annual revenue of approximately $1.7 million.
The increase in the rate credit will have no effect on A vista s net income.
The Application in Case No. A VU-04-4 was processed pursuant to Modified
Procedure. The deadline for filing written comments was October 28, 2004. Commission Staff
was the only party to file comments.
STAFF ANALYSIS
Staff has reviewed the Company s Application, workpapers, accounting and
calculations. Staff finds the deferral calculations and quantification of the secondary effects of
the BP A exchange credit to be correct. Staff believes that the rate calculation is based on
reasonable estimates of the money A vista will receive from BP A and the amount of energy
A vista will sell to its customers who qualify for the credit. Staff recommends approval of the
Company s Application as filed for an effective date of November 1 2004.
COMMISSION DECISION
Avista requests authority to increase its Schedule 59 Residential and Small Farm
Energy Rate Adjustment credit from 0.252~ per kWh to 0.412~ per kWh for an effective date of
November 1 , 2004. Staff recommends that the Company s Application be approved and
processed without further notice or procedure for an effective date of November 1 , 2004. Does
the Commission continue to find it reasonable to process the Company s Application pursuant to
Modified Procedure, i., by written submission rather than by hearing? Does the Commission
find it reasonable to approve the Company s Application without further procedure for a
November 1 effective date?
Scott Woodbury
Vld/M:A VUEO44 sw
DECISION MEMORANDUM