20070702Comments.pdf

DONOV AN E. WALKER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 5921
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Street Address for Express Mail:
472 W. WASHINGTON
BOISE, ID 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
VISTA CORPORATION TO REVISE THE
RESIDENTIAL AND SMALL FARM ENERGY
RATE ADJUSTMENT CREDIT, SCHEDULE 59. )
CASE NO. A VU-O7-
COMMENTS OF THE
COMMISSION STAFF
The Staff of the Idaho Public Utilities Commission, by and through its Attorney of record
Donovan E. Walker, Deputy Attorney General, in response to Order No. 30328, the Notice of
Modified Procedure issued on May 31 , 2007, respectfully submits the following comments.
BACKGROUND
On May 21 2007, the Bonneville Power Administration (BPA) issued letters to PacifiCorp,
Idaho Power, and Avista indicating that because of recent 9th Circuit Court of Appeals decisions1 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. See Order No.
30327. As a result, on May 22 2007, Avista Corporation (Company) filed a Tariff Advice
Portland General Electric Co. v. Bonneville Power Admin.F. 3d , 2007 WL 1288786 (9 Cir); Golden
Northwest Aluminum, Inc. v. Bonneville Power Admin., 2007 WL 1289539 (9tl1Cir).
STAFF COMMENTS JULY 2, 2007
with the Commission to revise the Residential and Small Farm Rate Adjustment Credit, Schedule
59. The revised tariff sheet proposed elimination ofthe 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 A. 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 because the Schedule 59 rate
credit is a uniform cents per kilowatt-hour rate, and because the REP benefit payments from BP
are lower in the winter and higher in the summer, the result is the over-refunded balance stated
above.
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 Staffs 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. A 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.
STAFF REVIEW
Staff reviewed the information supporting the surcharge approved in Order No. 30327 and
recommends that the methodology and data used in the calculation of the surcharge amount is
appropriate. The surcharge level resulting from those calculations can reasonably be expected to
eliminate the negative balance in the BP A credit account in the proj ected 12 month time period.
Therefore, Staff continues to support the surcharge at the approved level.
STAFF COMMENTS JULY 2, 2007
The Company s proposal did not provide details about how the Company would determine
exactly when to terminate the surcharge, and address any over or under collection of revenue from
the surcharge. In addition, the Company s methodology treats all rate groups as a single unit, and
does not align the amounts to be collected from each rate group with the amounts of excess credits
previously received by each rate group. Staffs analysis of the information provided by the
Company indicates that the different rate groups have varying patterns of seasonal energy usage.
Because credits were received for only part of a year, but the collections will occur throughout the
year, the collections from some rate groups are proj ected to exceed the amount of excess credits
received by that group, while other rate groups are projected to not fully repay the amount of
excess credits paid to their rate group.
According to Staffs calculations, collections from Schedule 1 customers (residential) will
be approximately $10 000 more than the excess credits received by Schedule 1 customers, while
collections from Schedule 22 customers (large farm and residential) will be approximately $8 000
less than excess credits received, and Schedule 32 collections (Irrigation) approximately $2 000
less than excess credits received. Schedules 12 (small farm and residential) and 48 (non-street
lighting) would have minimal differences.
Staff notes that the calculations above are based upon the Company s energy use
proj ections, and that actual usage by rate group for the first 5 months of 2007 varied from the
projections significantly. While the Company s projections are reasonably accurate for system-
wide planning purpose, the projections for each individual rate group, especially on a monthly
basis, appear to vary from actual use by significant margins. This variation between actual usage
and projected usage for the five months for which such data was available was sufficient to
increase or decrease the amount of imbalance in any rate group approximately threefold.
Consequently, Staff does not support making any adjustments to the Company s proposal
based upon projected usage, nor does Staff believe this issue needs to be resolved at this time.
Staff recommends that the Company track the balance of collections from the surcharge versus
excess credits received by rate group, and provide the Commission with a status report within 30
days of the termination or any change in the amount of the surcharge, either due to the elimination
of the deficit in the BP A credit account, or a resumption of payments for credits by BP A. This
report should also include a recommendation if necessary for eliminating any significant
imbalances that remains between the collections and excess credits for each rate schedule. Staff
STAFF COMMENTS JUL Y 2 , 2007
notes that remaining imbalances could be addressed through the continued provision of credits
and/or surcharges, especially if BP A payments are resumed.
STAFF RECOMMENDATION
Staff recommends the surcharge be continued at the current rate. Staff further recommends
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
termination of the surcharge. This report should include an accounting of the credits paid to and
collections received from customers by rate schedule, as well as a recommendation for addressing
any significant imbalances that may remain between credits and collections for any rate class.
Respectfully submitted this day of July 2007.
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Deputy Attorney General
Technical Staff:Wayne Hart
i:umisc/comments/avueO7.3dwwh
STAFF COMMENTS JULY 2, 2007
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 2ND DAY OF JULY 2007 SERVED
THE FOREGOING COMMENTS OF THE COMMISSION STAFF IN CASE
NO. AVU-07-, BY MAILING A COpy THEREOF, POSTAGE PREPAID, TO THE
FOLLOWING:
DAVID J. MEYER
VICE PRESIDENT AND CHIEF COUNSEL
A VISTA CORPORATION
PO BOX 3727
SPOKANE W A 99220
KELLY NORWOOD
VICE PRESIDENT - STATE & FED. REG.
VISTA UTILITIES
PO BOX 3727
SPOKANE W A 99220
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SECRETARY
CERTIFICATE OF SERVICE