20061027Decision memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
CO MMISSI 0 NER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:SCOTT WOODBURY
DATE:OCTOBER 24, 2006
SUBJECT:CASE NO. A VU-06-9 (Avista)
BP A RESIDENTIAL AND SMALL FARM ENERGY CREDIT
On September 14, 2006, Avista Corporation dba Avista Utilities (Avista; Company)
filed an Application with the Idaho Public Utilities Commission (Commission) requesting
approval of a proposed modification to the residential and small farm energy rate adjustment
credit. Tariff Schedule 59. A vista proposes that the credit be increased from the existing 0.412~
per kilowatt hour (kWh) to 0.459~ per kWh effective November 1 2006.
As reflected in the Application, the purpose of the energy rate adjustment credit is to
pass through to qualifying electric residential and small farm customers the estimated benefits to
be derived under the Residential Exchange Settlement Agreement (Agreement) between Avista
and Bonneville Power Administration (BP A). The increase in the rate credit is due to increased
benefits Avista will receive during the second five-year period (2006-2011) of the to-year
agreement with BPA (2001-2011). Under the Agreement, the base calculator for Avista
customer benefits was set at 98 MW for the first five-year period and 149 MW for the second
five-year period, which results in higher benefits during the second five-year period.
The proposed rate credit is a uniform cents per kWh decrease of 0.459~ and would
apply to residential and small farm customers served under Schedules I , 12 , and 48. For
residential and small farm area lighting customers served under Schedule 48, the proposed credit
is applied on a uniform cents per kWh basis to the energy usages of the various lights covered
under that rate schedule.
DECISION MEMORANDUM
The proposed increase in the rate credit would result in an overall reduction in annual
revenue of approximately $552 000. For residential customers using 1 000 kilowatt hours per
month the new credit would be $4.59 per month or $0.47 more than the existing credit of $4.12
per month. With the new higher credit in place, residential customers ' bills will be about 0.75%
lower than they were before the increase in rate credit. The proposed credit passes through the
expected level of benefits to be received from BP A during the period November 1 , 2006 through
October 31 2007, adjusted for the projected, over-refunded balance at October 31 2006.
On September 28, 2006, the Commission issued Notices of Application and Modified
Procedure in Case No. A VU-06-9. The deadline for filing written comments was October 23
2006. Comments were filed by one of the Company s customers who is retired and on a fixed
income. Comments and recommendations were also filed by Commission Staff. Staff has
reviewed the proposed changes for Avista s Schedule 59 and recommends that the Commission
approve the Application for an effective date of November 2006.
COMMISSION DECISION
A vista has filed an Application requesting a change in its BP A residential and small
farm energy rate adjustment credit. Tariff Schedule 59. The Company proposes that the credit
be increased from the existing 0.412~ per kWh to 0.459~ per kWh effective November 2006.
Staff recommends approval. Does the Commission find it reasonable to approve the Company
Application?
Scott Woodbury
bls/M:A VU-O6-09 sw2
DECISION MEMORANDUM