20070712final_order_no_30366.pdf

Office of the Secretary
Service Date
July 12, 2007
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF A VISTA CORPORATION TO REVISE
THE RESIDENTIAL AND SMALL FARM
ENERGY RATE ADJUSTMENT CREDIT,
SCHEDULE 59.ORDER NO. 30366
CASE NO. A VU-07-
On May 31 , 2007, the Commission granted Avista s request to revise its Schedule 59
Residential and Small Farm Rate Adjustment Credit, and implemented a 0.144 cents per
kilowatt-hour surcharge on an interim basis along with the elimination of Residential Exchange
Credit pass-through from the Bonneville Power Administration (BPA). Order No. 30327. The
Commission also issued a Notice of Modified Procedure seeking comments regarding the
calculation of the surcharge. The Commission received comments from Staff and two
customers. With this Order the Commission authorizes the continuation of the surcharge as
more fully set forth below.
BACKGROUND
On May 21 , 2007, BPA issued letters to PacifiCorp, Idaho Power, and Avista
indicating that because of recent 9th Circuit Court of Appeals decisions 1 it was suspending the
monthly payments or credits that it had been making pursuant to the Residential Exchange
Program (REP) Settlements under the Northwest Power Act. Order No. 30327. As a result, on
May 22 2007, Avista Corporation (Company) filed a tariff advice with the Commission to revise
the Residential and Small Farm Rate Adjustment Credit, Schedule 59. The revised tariff sheet
proposed elimination of the Residential and Small Farm Energy Rate Adjustment Credit of 0.459
cents per kilowatt-hour and established a proposed surcharge of 0.144 cents per kilowatt-hour
rate to recover the over-refunded exchange credit balance over a 12-month period.
The Company uses a balancing account for the receipt of REP benefits from BP
At the end of April 2007 there was an over-refunded balance of approximately $913 000 for
Idaho customers. When the rate credit was established, it was projected that the balancing
account would reach zero at the end of October 2007. The Company stated that during winter
Portland General Electric Co. v. Bonneville Power Admin., 2007 WL 1288786 (9 Cir); Golden
Northwest Aluminum, Inc. v. Bonneville Power Admin.F.3d
-,
2007 WL 1289539 (9 Cir).
ORDER NO. 30366
months, when its loads are higher, the amounts refunded to customers exceed the REP benefit
payments from BP A. Likewise, during summer months, when loads are lower, the amounts
refunded to customers are less than the REP benefit payments from BP A. Consequently, the
tennination of the REP benefit payments from BP A prior to the summer months resulted in the
over-refunded balance.
The Commission found good cause to act on the Company s filing in an expedited
manner, and approved the elimination of the credit as well as the imposition of the requested
surcharge to collect the over-refunded balance. Order No. 30327. The Commission approved
the surcharge in order to bring the over-refunded balance back to zero. Id. The Commission
ordered that the surcharge be approved on an interim basis subject to refund based on Staff's
audit and investigation and subsequent Commission Order. Id. Staff was directed to audit the
deferral balance amount, to review the assumptions and calculations leading to the surcharge
rate, and to advise the Commission as to whether it is properly allocated, whether it is in the
proper amount, and whether the recovery period is appropriate. Id. separate Notice of
Modified Procedure was issued setting forth a 30-day comment period for the purposes stated
above and for public comment. Order No. 30328.
ST AFF COMMENTS
Staff reviewed the infonnation supporting the 0.144 cents per kilowatt-hour
surcharge approved in Order No. 30327 and concluded that the methodology and data used in the
calculation of the surcharge amount was appropriate. Staff stated that the surcharge could
reasonably be expected to eliminate the negative balance in the BP A credit account during the
projected 12-month time period.
Staff recommended the surcharge be continued at the current rate.Staff also
recommended that the Company track the balance of collections from the surcharge versus
excess credits received by rate schedule and provide a report to the Commission within 30 days
of the tennination of the surcharge regarding any significant over/under collection by customer
class.
DISCUSSION/FINDINGS
We find that the interim surcharge rate implemented by Order No. 30327 should be
authorized to continue at its present level until either the over-refunded balance reaches zero or
the REP credits from BP A resume. The REP benefit payments are passed on to customers with a
ORDER NO. 30366
rate credit paid as a uniform cents per kilowatt-hour rate. Because different rate groups have
varying patterns of seasonal energy usage, and because credits were received for only part of a
year, there was a deficit amount in the balancing account at the time of cessation of payments
from BP A. Where normally the account would balance on a yearly basis at the end of October
the cessation of payments as of April left the account over-refunded by approximately $913,000.
We find the surcharge to be a reasonable and appropriate method by which to eliminate the over-
refunded balance.
Because there is the possibility that different customer classes may pay a
disproportionate amount through the surcharge compared to the benefit that group received from
the over-payment, we find that the Company should track the balance of collections from the
surcharge versus excess credits received by each rate schedule, or customer class, and provide a
report to the Commission within 30 days of the termination of the surcharge. The surcharge will
terminate either when the over-refunded balance reaches zero or the REP credits from BP
resume. Any significant imbalances that exist between credits and collections for any customer
classes upon the termination of the surcharge may be addressed in a future Commission
proceeding.
ORDER
IT IS HEREBY ORDERED that the interim surcharge rate of 0.144 cents per
kilowatt-hour, implemented by Order No. 30327, is authorized to continue until either the over-
refunded balance reaches zero or the REP credits from BP A resume.
IT IS FURTHER ORDERED that the Company track the balance of collections from
the surcharge versus excess credits received by rate schedule, or customer class, and provide a
report to the Commission within 30 days of the termination of the surcharge. Any significant
imbalances that exist between credits and collections for any customer classes upon the
termination of the surcharge may be addressed in a future Commission proceeding.
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 with regard to any
matter decided in 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. 30366
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 1;(-r-1-
day of July 2007.
MARSHA H. SMITH, COMMISSIONER
ATTEST:
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D. Jewell
Cothmission Secretary
O:A VU-O7-03 dw3
ORDER NO. 30366