20070731Application.pdf

Avista Corp.
1411 East Mission P.O. Box 3727
Spokane. Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170
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July 30, 2007
State of Idaho
Idaho Public Utilities Commission
472 W. Washington St.
Boise, ID 83702-5983
Attention: Ms. Jean Jewell, Secretary
Case No. A VU-07-
Power Cost Adjustment (PCA) Annual
Rate Adiustment Filing of A vista Corporation
Enclosed is A vista s Power Cost Adjustment (PCA) annual rate adjustment filing. The filing
consists of an original and seven copies of A vista s Application and nine copies of prefiled
testimony and exhibits. Also enclosed are three copies of supporting workpapers and
documentation, including Monthly PCA reports for the months of July 2006 through June 2007.
Also enclosed is a certificate of service, three copies of a customer notice, and three copies of a
press release.
The Company is requesting that the Commission issue an order approving recovery of power
costs deferred through June 30, 2007, and approving a PCA surcharge of 0.267~ per kilowatt-
hour to be effective October 1 , 2007. The proposed surcharge will replace the existing surcharge
which expires on September 30 , 2007. The proposed surcharge is about $9.6 million, which is
approximately $4.6 million more than the existing surcharge of about $5.0 million. The
requested revenue increase of $4.6 million results in an overall 2.22 percent increase. The actual
percentage increase for an individual customer will depend on the rate schedule that the customer
receives service under and on how much energy a customer uses.
Under the Company s proposal, the surcharge rate for residential customers will increase from
0.163~ per kilowatt-hour to 0.267~ per kilowatt-hour, or an increase ofO.104~ per kilowatt-hour.
For an average residential customer using 1 000 kilowatt-hours per month, the monthly increase
will be $1.04. Under present rates, a residential bill for 1 000 kilowatt-hours amounts to $69.38.
With the proposed surcharge in place the monthly bill would be $70.42, or about 1.5% higher
than the bill under present rates.
Please note that A vista has deemed certain supporting documents to be classified as
CONFIDENTIAL, rendering these documents exempt from public inspection, examination and
copying pursuant to Sections 9-340A through 9-340F of the Idaho Code. Avista believes that the
identified CONFIDENTIAL supporting documents contain valuable commercial information.
As such, A vista is submitting a separate electronic CD containing the electronic form of the
CONFIDENTIAL supporting documents , in compliance with Idaho rule 67.01.b. Please adhere
to A vista s request by treating those supporting documents identified as CONFIDENTIAL by not
disclosing to any party outside of this proceeding without the specific written permission of
A vista.
Please direct any questions regarding this filing to Ron McKenzie at [phone].
Sincerely,
Kelly Norwood
Vice President, State and Federal Regulation
Enclosure
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that I have served Avista Corporation s Power Cost
Adjustment (PCA) Annual Rate Adjustment Filing by mailing a copy thereof
postage prepaid , to the following:
Ms Jean 0 Jewell, Secretary
Idaho Public Utilities Commission
472 W. Washington St.
Boise , 10 83702-5983
Pamela Mull
Vice President & General Counsel
Potlatch Corporation
601 W. Riverside Ave.
Suite 1100
Spokane , WA 99201
Howard Ray
Technical Services Manager
Potlatch Corporation
803 Mill Road
PO Box 1126
Lewiston , 10 83501-1126
Dated at Spokane , Washington this 30th day of July 2007.
Rates Coordinator
David J. Meyer
Vice President and Chief Counsel of
Regulatory and Governmental Affairs
A vista Corporation
1411 E. Mission Avenue
P. O. Box 3727
Spokane, Washington 99220
Phone: [phone], Fax: [phone]
ISSie:
2007 JUL 3 !9: 09
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UfIL!TiE::3
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE POWER COST
ADJUSTMENT (PCA) ANNUAL RATE
ADJUSTMENT FILING OF A VISTA
CORPORATION
CASE NO. AVU-07-
I. INTRODUCTION
A vista Corporation, doing business as A vista Utilities (hereinafter A vista or Company), at
1411 East Mission Avenue, Spokane, Washington, respectfully files its Power Cost Adjustment
(PCA) annual rate adjustment filing in the above referenced case. The Company requests the
Commission issue an order approving recovery of power costs deferred through June 30, 2007 , and
approving a PCA surcharge of 0.267~ per kilowatt-hour to be effective October 1 , 2007. The
Company requests that this filing be processed under the Commission s modified procedure rules.
Communications in reference to this Application should be addressed to:
Kelly O. Norwood
Vice President
State and Federal Regulation
A vista Corporation
1411 E. Mission Avenue
Spokane, Washington 99220
Phone: [phone]
Fax: [phone]
David J. Meyer
Vice President and Chief Counsel of
Regulatory and Governmental Affairs
Avista Corporation
1411 E. Mission Avenue
Spokane, Washington 99220
Phone: [phone]
Fax: [phone]
II. BACKGROUND
A VISTA'S PCA ANNUAL RATE ADJUSTMENT FILING PAGEl
On October 31 , 2006, the Idaho Public Utilities Commission (Commission) in Case No.
A VU-06-05 issued Order No. 301691 announcing a review of Avista Corporation s PCA
methodology and method of recovery. Avista s PCA is used to track changes in revenues and
costs associated with variations in hydroelectric generation, secondary prices, thermal fuel costs
and changes in power contract revenues and expenses.
On March 2, 2007, the Commission opened Case No. A VU-07-01 to establish a
vehicle for review of Avista s PCA methodology and method of recovery. On June 29, 2007 the
Commission issued Order No. 30361 in that case and approved changes to the PCA methodology
and method of recovery, as well as a continuation of the existing 2.448% surcharge through
September 30 2007.
In Order No. 30361 the Commission approved a change in the PCA methodology from a
trigger and cap mechanism to a single annual PCA rate adjustment filing requirement. The
Commission approved the following procedural schedule for administering the annual PCA filings:
August 1 Company filing for prior July - June deferral period
September 1 Review and comments by Staff and other interested parties
October 1 Commission Order and effective date of PCA rate adjustment
The Commission also approved a change in the method of PCA deferral recovery from a uniform
percentage basis to a uniform cents per kilowatt-hour basis effective with the October 1 , 2007 rate
change. The current filing is the first annual PCA rate filing to be made since the modifications and
procedural schedule were approved by the Commission in Order No. 30361.
III. UNRECOVERED DEFERRAL BALANCE
A VISTA'S PCA ANNUAL RATE ADJUSTMENT FILING PAGE 2
The unrecovered deferral balance at June 30, 2006 is shown below, together with the
changes in the balance through June 30, 2007. Mr. McKenzie s testimony explains the
components of the changes in the deferral balance and Mr. Storro s testimony provides additional
explanation of the factors causing the deferral entries of$13.2 million for the July 2006 through
June 2007 period.
Unrecovered balance at June 30, 2006
Deferrals (July 2006 - June 2007)
Centralia gain over-refund transferred to PCA deferral
Amortizations related to surcharge revenues (July 2006 - June 2007)
Interest
Unrecovered balance at June 30, 2007
517 103
239 763
380
691 623
501.895
$10.573.518
Monthly reports have been filed with the Commission regarding actual PCA deferral
entries to date. To facilitate Staff's review , additional copies ofthose reports for the months of
July 2006 through June 2007 have been included with this filing and have also been provided to
Potlatch Corporation, who was a party to Case No. A VU-07-01.
IV. PROPOSED SURCHARGE TO BE EFFECTIVE OCTOBER 1, 2007
The Company is proposing a uniform cents per kilowatt-hour PCA surcharge of 0.267 ~ to
be effective October 1 , 2007. Attached as Exhibit "A" is a copy ofthe proposed tariff, Schedule
, which contains the proposed PCA surcharge rate. Also included in Exhibit "A" are tariff
sheets that show the proposed changes to Schedule 66 by the use of strikeouts and underlining.
Page 2 of Mr. McKenzie s Exhibit No. - (RLM-1) shows the calculation of the proposed
surcharge. The proposed surcharge is designed to recover the deferral balance at June 30 , 2007
less forecasted amortization associated with the existing surcharge that is effective through
September 30, 2007, plus an estimate of interest during the recovery period. After applying the
conversion factor related to commission fees and uncollectibles, the resulting revenue
A VISTA'S PCA ANNUAL RATE ADJUSTMENT FILING PAGE 3
requirement of approximately $9.6 million is divided by forecasted kilowatt-hours for the period
October 1 , 2007 through September 30 2008, to derive the proposed surcharge rate ofO.267~ per
kilowatt-hour.
Since the proposed surcharge is spread on a uniform cents per kilowatt-hour basis and
replaces the existing surcharge that was spread on a uniform percentage basis, the resulting
percentage increases vary by rate schedule. Page 1 of Mr. McKenzie s Exhibit No. - (RLM-
shows the effect of the proposed PCA surcharge by rate schedule. The proposed surcharge
approximately $9.6 million, which is approximately $4.6 million more than the existing surcharge of
approximately $5.0 million. Column (j) on page 1 of Exhibit No. - (RLM-1) shows the
breakdown of the $4.6 million increase over the existing surcharge by rate schedule and column (k)
shows the resulting percentage increases by rate schedule.
Under the Company s proposal, the surcharge rate for residential customers will increase
from 0.163~ per kilowatt-hour to 0.267~ per kilowatt-hour, or an increase of 0.104~ per kilowatt-
hour. For an average residential customer using 1 000 kilowatt-hours per month, the monthly
increase will be $1.04. Under present rates, a residential bill for 1 000 kilowatt-hours amounts to
$69.38. With the proposed surcharge in place the monthly bill would be $70.42, or about 1.5%
higher than the bill under present rates.
V. REQUEST FOR RELIEF
The Company requests the Commission issue an order approving recovery of power costs
deferred through June 30, 2007 , and approving a PCA surcharge of 0.267 ~ per kilowatt-hour to be
effective October 1 , 2007. The Company requests that the matter be processed under the
Commission s Modified Procedure rules through the use of written comments.
A VISTA'S PCA ANNUAL RATE ADJUSTMENT FILING PAGE 4
Dated at Spokane, Washington this 30th day of July 2007.
A VISTA CORPORATION
BY
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Kelly Norwood
Vice President
State and Federal Regulation
A VISTA'S PCA ANNUAL RATE ADJUSTMENT FILING PAGE 5
VERIFICATION
STATE OF WASHINGTON)
County of Spokane
Kelly Norwood, being first duly sworn on oath, deposes and says: That he is the Vice
President of State and Federal Regulation of A vista Utilities and makes this verification for and on
behalf of A vista Corporation, being thereto duly authorized;
That he has read the foregoing filing, knows the contents thereof, and believes the same to be
true.
SIGNED AND SWORN to before me this 30th day of July 2007, by Kelly Norwood.
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NOTARY P LIC in and for the State of
Washington, residing at Spokane.
Commission Expires:02/ :2a./1
A VISTA'S PCA ANNUAL RATE ADJUSTMENT FILING PAGE 6
Case No. A VU-07-
Exhibit
I.P.C. No.
Ninth Revision Sheet 66
Canceling
Eighth Revision Sheet 66
A VISTA CORPORATION
d/b/a Avista Utilities
SCHEDULE 66
TEMPORARY POWER COST ADJUSTMENT - IDAHO
APPLICABLE:
To Customers in the State of Idaho where the Company has electric service
available. This Power Cost Adjustment shall be applicable to all retail customers for
charges for electric energy sold and to the flat rate charges for Company-owned or
Customer-owned Street Lighting and Area Lighting Service. This Rate Adjustment is
designed to recover or rebate a portion of the difference between actual and allowed
net power supply costs.
MONTHLY RATE:
The energy charges of electric Schedules 1 , 11 , 12 , 21 , 22 , 25, 25P, 31 , and 32
are to be increased by 267cf, per kilowatt-hour in all blocks of these rate schedules.
Flat rate charges for Company-owned or Customer-owned Street Lighting and
Area Lighting Service, Schedules 41-49, are to be increased by 267cf, per kilowatt-
hour times the monthly usages of the various light sizes and types on these schedules.
SPECIAL TERMS AND CONDITIONS:
The rates set forth under this Schedule are subject to periodic review and
adjustment by the IPUC based on the actual balance of deferred power costs.
Service under this schedule is subject to the Rules and Regulations contained
in this tariff.
The above Rate is subject to increases as set forth in Tax Adjustment
Schedule 58.
Issued July 30, 2007 Effective October 1 , 2007
Issued by Avista Utilities
Kelly O. Norwood - Vice President, State & Federal Regulation
I.P.C. No.
Eighth Revision Sheet 66
Canceling
Seventh Revision Sheet 66
AVISTA CORPORATION
d/b/a Avista Utilities
SCHEDULE 66
TEMPORARY POWER COST ADJUSTMENT - IDAHO
APPLICABLE:
To Customers in the State of Idaho where the Company has electric service
available. This Power Cost Adjustment shall be applicable to all retail customers for
charges for electric energy sold and to the flat rate charges for Company-owned or
Customer-owned Street Lighting and Area Lighting Service. This Rate Adjustment is
designed to recover or rebate a portion of the difference between actual and allowed
net power supply costs.
MONTHLY RATE:
The energy charges of tho indi'lidu3\ rato schedules aro to be increased by the
following amounts
Schedule 1
Schodules 11 & 12
Schodules 21 & 22
Schedulos 25
Schedule 25P
Schodules 31 & 32
163~ per k'\'h
190~ per kwh
145~ por kwh
1 03~ per k\vh
093~ por kwh
151~porkwh
Flat rate charges for Company-owned or Customer-owned Street Lighting and
Area Lighting Service am to be incroasod by tho following perconbge
Schedules 41 49 2.448%
SPECIAL TERMS AND CONDITIONS:
The rates set forth under this Schedule are subject to periodic review and
adjustment by the IPUC based on the actual balance of deferred power costs.
Service under this schedule is subject to the Rules and Regulations contained
in this tariff.
The above Rate is subject to increases as set forth in Tax Adjustment
Schedule 58.
Issued January 19, 2005 Effective April 15, 2005
Issued by Avista Utilities
Kelly O. Norwood - Vice President, State & Federal Regulation
I.P.C. No.
Ninth Revision Sheet 66
Canceling
Eighth Revision Sheet 66
AVISTA CORPORATION
d/b/a Avista Utilities
SCHEDULE 66
TEMPORARY POWER COST ADJUSTMENT - IDAHO
APPLICABLE:
To Customers in the State of Idaho where the Company has electric service
available. This Power Cost Adjustment shall be applicable to all retail customers for
charges for electric energy sold and to the flat rate charges for Company-owned or
Customer-owned Street Lighting and Area Lighting Service. This Rate Adjustment is
designed to recover or rebate a portion of the difference between actual and allowed
net power supply costs.
MONTHLY RATE:
The energy charges of electric Schedules 25P and 32
are to be increased b 2671t er kilowatt-hour in all blocks of these rate schedules.
Flat rate charges for Company-owned or Customer-owned Street Lighting and
Area Lighting Service Schedules 41-are to be increased b 2671t er kilowatt-
hour times the monthl usa es of the various li ht sizes and t es on these schedules.
SPECIAL TERMS AND CONDITIONS:
The rates set forth under this Schedule are subject to periodic review and
adjustment by the IPUC based on the actual balance of deferred power costs.
Service under this schedule is subject to the Rules and Regulations contained
in this tariff.
The above Rate is subject to increases as set forth in Tax Adjustment
Schedule 58.
Issued July 30, 2007 Effective October 1 . 2007
Issued by Avista Utilities
Kelly O. Norwood - Vice President, State & Federal Regulation