20061031final_order_no_30166.pdf

Office ofthe Secretary
Service Date
October 31, 2006
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF A VISTA CORPORATION FOR
ELIMINATION OF THE TEMPORARY
RATE ADJUSTMENT TO PASS THROUGH
THE CENTRALIA GAIN
ORDER NO. 30166
CASE NO. A VU-06-
On September 14, 2006, Avista Corporation dba Avista Utilities (Avista; Company)
filed an Application with the Idaho Public Utilities Commission (Commission) requesting
authority to eliminate or zero-out the temporary rate adjustment credits (tariff Schedule 65) that
have been used to pass through the customer portion of the gain on the sale of the Centralia
Power Plant. The Company expects that the customer portion of the gain on the sale of the
Centralia Power Plant will be fully refunded to customers by November 1, 2006. The proposed
effective date is November 1 , 2006. The Commission in this Order approves Avista s request
and requires that any remaining balance be transferred to the Company s Power Cost Adjustment
deferral account.
Elimination of the rate credit will result in an overall annual increase in Idaho electric
revenue of approximately $2.5 million or 1.45% and will affect all electric customers. Energy
charges for the individual rate schedules are to be increased by the following amounts:
Schedule 1 091~
Schedule 11 and 12 0.124~
Schedule 21 and 22 085~
Schedule 25 059~
Schedule 31 and 32 073~
Flat rate charges for Street and Area Lighting Service (Schedules 41-49) are to be increased by
777%.
BACKGROUND
On March 7, 2000, the Commission approved the sale of the Company s interest in
the Centralia Power Plant. Reference Order No. 28297, Case No. A VU-99-6. The customer
portion of the gain was deferred and was originally to be passed on to customers over an eight-
ORDER NO. 30166
year period. Potlatch's Lewiston facility was initially exempted from receiving any portion of
the gain as the facility was served under a special service contract. The Centralia gain rate
credits contained on Original Sheet 65 were effective August 1 , 2000. Beginning January 1
2002, Potlatch began receiving service under Schedule 25 - Extra Large General Service and
began receiving and has continued to receive the Centralia gain credit applicable to Schedule 25.
In 2004 the Commission approved the sale of A vista s interest in the Skookumchuck
hydroelectric generation facility, which is operated to supply cooling water to the Centralia
Power Plant.Reference Order No. 29484, Case No. A VU-04-As proposed by the
Company and approved by the Commission, the customer portion of the gain on the sale
Skookumchuck was deferred and added to the deferred gain on the Centralia Power Plant.
The customer portion of the net of tax Centralia gain amounted to approximately
507 000 and the customer portion of the net of tax Skookumchuck gain amounted to
approximately $154 000. The Company expects that the total amount of the net of tax gains of
approximately $7 661 000 , and the benefit of a carrying cost on the unamortized gains, will have
been passed on to customers at the end of October 2006. The shorter pass-through period is due
primarily to having Potlatch receive the gain credit applicable to Schedule 25 beginning January
, 2002. In addition, customer loads have grown since the gain credits were made effective on
August 1 , 2000, also resulting in a shorter pass-through period. The Company proposes that any
under-refunded or over-refunded balance on November 1 , 2006 be transferred to the deferred
Power Cost Adjustment (PCA) deferral account as well as the remaining balance of associated
deferred federal income tax.
A vista proposes that the Centralia gain temporary rate credits be eliminated effective
November 1 , 2006. Elimination of the temporary rate credits will result in an overall increase in
annual revenue of approximately $2.5 million. A residential customer using 1 000 kilowatt-
hours per month will see an increase of $0.91 or 1.45% in their monthly bill due to the
elimination of the temporary rate credit.
On September 28, 2006, the Commission issued Notices of Application and Modified
Procedure in Case No. A VU-06-8. The deadline for filing written comments was October 19
2006. Comments were filed by a customer of the Company who is retired and on a fixed income
and cannot afford continuous rate increases. Comments were also filed by Commission Staff.
Staff performed an on-site audit of the journal entries associated with the Centralia gain credit.
ORDER NO. 30166
Staff contends that the calculation of the monthly Centralia gain credit was properly calculated
and accounted for.Staff concurs in the Company s proposal to eliminate or zero out the
temporary Centralia (Skookumchuck) tariff Schedule 65 rate adjustment credit for a November
, 2006 effective date. Staff recommends that any under-refunded or over-refunded balance on
November 1 , 2006 be transferred (as well as the remaining balance of associated deferred federal
income tax) to the deferred PCA deferral account. Staff further recommends that the Company
include the Centralia gain credit balance as a line item in the PCA deferral account.
Commission Findings
The Commission has reviewed the filings of record in Case No. A VU-06-
including the comments and recommendations of Commission Staff and those of the Company
customer.The Commission continues to find it reasonable to process the Company
Application pursuant to Modified Procedure, i., by written submission rather than by hearing.
IDAP A 31.01.01.204.
Addressing first the concerns raised by the Company customer we note that the
Commission has little discretion but to eliminate a credit once it has been fully paid out.
However, recognizing that the end result is an increase in rates we take this opportunity to
encourage those customers who qualify for energy assistance to apply for federally-funded Low
Income Home Energy Assistance Program (LIHEAP) and other non-profit fuel funds such as
Project Share. For more information regarding assistance programs, customers may call the
local Community Action Partnership agency (CAP AI), A vista Utilities, the Idaho Public Utilities
Commission, or for other community resources call the 2-1 Idaho Care Line.
A vista has filed an Application seeking to eliminate or zero out the temporary rate
adjustment credits (tariff Schedule 65) that have been used to pass through the customer portion
of the gain on the sale of the Centralia Power Plant (also Skookumchuck). The Commission is
confident based upon the audit of Commission Staff that the Company has appropriately
accounted for the customer s share of profits related to its sale of Centralia and Skookumchuck.
Finding it probable that the customer portion of gain will be fully credited to customers by
approximately November 1 , 2006 , the Commission finds the recommendation of the Company to
eliminate or zero out the temporary Schedule 65 rate adjustment credit for a November 1 , 2006
effective date to be fair, just and reasonable. We agree also that it is appropriate to transfer any
under-refunded or over-refunded balance on November 1 2006 (as well as the remaining balance
ORDER NO. 30166
of associated deferred income tax) to the Company s Power Cost Adjustment deferral account
and require the Company to include the Centralia gain credit balance as a line item in the PCA
deferral account.
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over A vista Corporation dba
A vista Utilities, an electric utility, pursuant to the authority granted in Title 61 , Idaho Code, and
the Commission s Rules of Procedure, IDAPA 31.01.01.000 et seq.
ORDER
In consideration of the foregoing and as more particularly described and qualified
above, IT IS HEREBY ORDERED and the Commission does hereby approve the Company
proposal to eliminate or zero out the electric tariff Schedule 65 temporary rate adjustment credit
used to pass through the CentraliaiSkookumchuck gain for an effective date of November 1
2006.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code 9 61-626.
ORDER NO. 30166
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 3/ sf"
day of October 2006
~~/
P AUL KJEL~ N . R, RESIDENT
MARSHA H. SMITH, COMMISSIONER
ATTEST:
Je D. Jewell
Co mISSIon Secretary
bls/O:A VU-06-08 sw
ORDER NO. 30166