20060825Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:SCOTT WOODBURY
DATE:AUGUST 21, 2006
SUBJECT:CASE NO. AVU-06-S (Avista)
REQUEST FOR CONTINUATION OF EXISTING 2.448%
PCA SURCHARGE
On August 15, 2006 , Avista Corporation dba Avista Utilities (Avista; Company)
filed an Application with the Idaho Public Utilities Commission (Commission) for an Order
approving continuation of the existing 2.448% PCA surcharge and authorizing recovery of
power costs deferred through June 30 2006. Avista s Application serves as a PCA Status Report
for the 12 months ended June 30, 2006 and complies with the Commission s direction in Avista
PCA Order No. 29881 , Case No. A VU-05-
The Company in its filing identifies the power cost deferrals during the July 1 , 2005
through June 30, 2006 review period, and explains the primary factors causing the PCA
deferrals. The unrecovered deferral balance at June 30, 2005 was $5 935 324. The unrecovered
balance at June 30 , 2006 is $1 517 103. While the annual amount of revenue under the existing
surcharge of approximately $4.3 million is greater than unrecovered surcharge balance at June
, 2006, the Company contends the unrecovered surcharge balance is expected to grow.
Richard Storro, Director of Power Supply, in testimony filed with the Application explains the
reasons that actual power costs are expected to exceed authorized power costs and what the
effect is forecasted to be on the deferral balance. At July 31 , 2006, the deferral balance had
grown to $3.2 million. In all likelihood, the Company estimates that the deferral balance by the
end of August 2006 will be higher than the annual surcharge revenue level of $4.3 million. With
the existing surcharge remaining in place, the deferral balance is expected to approximate $8.
DECISION MEMORANDUM
million at the end of the year. However, should conditions turn out to be more favorable than
expected, resulting in the deferral balance reaching zero at some point, A vista will make a filing
to either zero-out the surcharge rates, or to continue or modify the rates depending upon actual
and expected power supply conditions at the time. Should the surcharge rates not be modified
prior to filing the next PCA Status Report covering the July 2006 through June 2007 12 month
period, the surcharge rates will be reviewed as a part of that filing.
COMMISSION DECISION
A vista has filed a PCA Status Report for the 12 months ending June 30, 2006 and
recommends continuation of the existing 2.448% PCA surcharge. A vista recommends that its
Application be processed pursuant to Modified Procedure, i., by written submission rather than
by hearing.Reference Commission Rules of Procedure, IDAPA 31.01.01.201-204.Staff
concurs in the Company s proposed procedure for processing its Application.
Commission agree that Modified Procedure is appropriate?
Does the
Scott Woodbury
bls/M:A VU-O6-05 sw
DECISION MEMORANDUM