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Home My WebLink About20061019Comments.pdfSCOTT WOODBURY DEPUTY ATTORNEY GENERAL IDAHO PUBLIC UTILITIES COMMISSION PO BOX 83720 BOISE, IDAHO 83720-0074 (208) 334-0320 IDAHO BAR NO. 1895 RECEIVED LOOn oel \ 9 PH 2.: 05 ';;'1 \(, IfJF\-1 . I "b. 8810' UI\L\iE.:3 CO\\LVi\ i I Street Address for Express Mail: 472 W. WASHINGTON BOISE, IDAHO 83702-5983 Attorney for the Commission Staff 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. CASE NO. A VU-O6- COMMENTS OF THE COMMISSION STAFF COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its attorney of record, Scott Woodbury, Deputy Attorney General, and in response to the Notice of Application, Notice of Modified Procedure and Notice on Comment Deadline issued on September 28, 2006, submits the following comments. BACKGROUND On September 14 2006, Avista Corporation dba Avista Utilities (Avista; Company) filed an Application with the Idaho Public Utilities Commission (Commission) requesting 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 proposed effective date is November 1 , 2006. 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. STAFF COMMENTS OCTOBER 19, 2006 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 Schedule 11 and 12 Schedule 21 and 22 Schedule 25 Schedule 31 and 32 091~ 0.124~ 085~ 059~ 073~ Flat rate charges for Street and Area Lighting Service (Schedules 41-49) are to be increased by 1.777%. The Commission approved the sale of the Company s interest in the Centralia Power Plant in Order No. 28297 dated March 7 2000 in 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-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 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. The Commission in 2004 approved the sale of the Company 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-04-2. As proposed by the Company and approved by the Commission, the customer portion of the gain on the sale of 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 STAFF COMMENTS OCTOBER 19, 2006 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 2006 be transferred to the deferred Power Cost Adjustment (PCA) deferral account as well as the remaining balance of associated deferred federal income tax being transferred to the PCA deferred tax account. A vista proposes that the Centralia gain temporary rate credits be eliminated effective November 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. STAFF ANALYSIS Staff had the opportunity to perform an on-site audit of the journal entries associated with the Centralia gain credit. The calculation of the monthly Centralia gain credit was properly calculated and accounted for. The Company estimates that the balance will be an over-refund of approximately $18 000 before tax, $12 000 net of tax by the November 1 effective date. The estimate is based on forecasted loads for September and October 2006. Staff accepts the Company proposal that any under-refunded or over-refunded balance on November 2006 be transferred to the deferred PCA deferral account as well as the remaining balance of associated deferred federal income tax being transferred to the PCA deferred tax account. Staff will have an opportunity to audit the remaining balance at the time of the next PCA. Staff recommends that the Company include the Centralia gain credit as a line item in the PCA deferral account. RECOMMENDATION 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 1, 2006 effective date. Staff recommends that any under-refunded or over-refunded balance on November 2006 be transferred 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. STAFF COMMENTS OCTOBER 19, 2006 Respectfully submitted this Technical Staff: Kathy Stockton i :umisc: comments/ a vueO6. 8swkls. doc STAFF COMMENTS ""day of October 2006. Scot D. Woodbury Deputy Attorney General OCTOBER 19 2006 CERTIFICATE OF SERVICE HEREBY CERTIFY THAT I HAVE THIS 19TH DAY OF OCTOBER 2006 SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE NO. A VU-06-, BY E-MAILING A COpy THEREOF AND BY MAILING A COpy THEREOF, POSTAGE PREPAID, TO THE FOLLOWING: DAVID J. MEYER SR VP AND GENERAL COUNSEL A VISTA CORPORATION 1411 EMISSION AVE, MSC- SPOKANE W A 99220 E-mail dmeyer~avistacorp.com KELLY NORWOOD VICE PRESIDENT - STATE & FED. REG. A VISTA UTILITIES 1411 EMISSION AVE, MSC- SPOKANE W A 99220 E-mail Kelly.norwood~avistacorp.com CERTIFICATE OF SERVICE