20070810notice_of_application_order_no_30402.pdf

Office of the Secretary
Service Date
August 10, 2007
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA
CORPORATION'S ANNUAL POWER COST
ADJUSTMENT (PCA) FOR THE PERIOD
JULY 1 2007 TO JUNE 30, 2008 NOTICE OF APPLICATION
CASE NO. A VU-07-
NOTICE OF
MODIFIED PROCEDURE
ORDER NO. 30402
On July 31 , 2007, A vista Corporation dba A vista Utilities filed its annual Power Cost
Adjustment (PCA) Application. Since 1989 the PCA mechanism has permitted A vista to adjust
its PCA rates upward or downward to reflect the Company s annual "power supply costs.
Because of its reliance on hydroelectric and natural gas-fired generation, Avista s actual cost of
providing electricity (its power supply costs) varies from year to year depending on changes in
streamflows, natural gas prices, and the market price of power. The annual PCA surcharge or
credit is combined with the Company s "base rates" to produce a customer s overall energy rate.
In this PCA Application, A vista calculates that its annual power costs have increased
approximately $4.6 million more than the existing PCA surcharge of about $5.0 million. The
Company estimates that this results in an overall PCA rate increase of 2.22%. Application, Exh.
RLM -1 at page 1. The Company proposes an effective date of October 1, 2007.
BACKGROUND
In Order No. 30361 issued June 29, 2007, the Commission approved two major
changes to Avista s PCA methodology. First, the Commission changed Avista s PCA from a
trigger and cap" mechanism to a single, annual PCA rate adjustment. Order No. 30361 at 6.
Under the trigger-and-cap mechanism, a PCA rate change was not "triggered" until the deferral
exceeded a certain threshold, and the rate change was "capped" at 5%. Order No. 28108 at 1.
Second, the Commission changed the PCA rate from a uniform "percentage" basis to a uniform
cents per kilowatt hour (kWh)" basis. Id. The Commission also authorized continuation of the
existing 2.448% PCA surcharge until September 30, 2007. The Commission directed that these
changes be implemented in this docket.
NOTICE OF APPLICA nON
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30402
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that during the PCA year (July 1 , 2006 through
June 30, 2007) the Company reports that its unrecovered deferral balance after the 90/1 0 split is
$10 573 518. Application at 3. The Company attributed the higher power supply costs to higher
natural gas fuel costs and slightly reduced hydro generation. Storro Direct at 2. Consequently,
Avista seeks a PCA surcharge ofO.267~ kWh.
YOU ARE FURTHER NOTIFIED that under the Company s proposal, the PCA
surcharge rate for residential customers will increase from O.163~ per kWh to 0.267~ per kWh
an increase of O.104~ per kWh. If approved, the monthly bill for the average residential
customer using 1 000 kWh per month would increase by $1.04. The average monthly bill for a
residential customer using 1 000 kWh would increase from $69.38 to $70.42, or an increase of
approximately 1.5%.
YOU ARE FURTHER NOTIFIED that because the PCA rate is being changed from
a percentage basis to a cents-per-kilowatt basis, the percentage increase will vary by customer
class. The table below shows the proposed increase in the PCA rates for the major customer
classes:
CUSTOMER GROUP PERCENT AGE
(SCHEDULE)CHANGE
Residential (1)53%
General Services (11 & 12)98%
Large General Services (21 & 22)04%
Extra Large General Services (25)86%
Pumping Services (31 & 32)83%
Street and Area Lights (41 - 49)89%
McKenzie, Exh. RLM-, Page 1 of 3
YOU ARE FURTHER NOTIFIED that the Company s Application is supported by
the testimony of Richard Storro, the Director of Power Supply, and Ronald McKenzie, Manager
of Regulatory Accounting. The Company submitted proposed tariff changes to its Schedule 66
(Temporary Power Cost Adjustment). The Company proposed an effective date of October 1
2007 and requests that its PCA Application be processed under Modified Procedure.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30402
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the
public interest may not require a formal hearing in this matter and will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission s Rules
of Procedure IDAPA 31.01.01.201 through .204.The Commission notes that Modified
Procedure and written comments have proven to be an effective means for obtaining public input
and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application may file a written comment in support or opposition with the Commission within
twenty-eight (28) days from the service date of this Notice. The comment must contain a
statement of reasons supporting the comment. Persons desiring a hearing must specifically
request a hearing in their written comments. Written comments concerning this Application
shall be mailed to the Commission and the Applicant at the addresses reflected below:
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
Street Address for Express Mail:
Kelly O. Norwood
Vice President State & Federal Regulation
A vista Corporation
1411 E. Mission Avenue
Spokane, W A 99220
Mail: kelly.norwood(fYavistacorp.com
472 W. Washington Street
Boise, ID 83702-5983
David 1. Meyer
Vice President and Chief Counsel
Regulatory and Governmental Affairs
A vista Corporation
1411 E. Mission Avenue
Spokane, W A 99220
E-mail: david.meyer(fYavistacorp.com
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Commission s home page located at www.puc.idaho.gov. Click the "Comments and Questions
icon, and complete the comment form, using the case number as it appears on the front of this
document. These comments must also be sent to A vista at the e-mail addresses listed above.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30402
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set, the Commission will consider this matter on its merits and
enter its Order without a formal hearing. If written comments are received within the time limit
set, the Commission will consider them and, in its discretion, may set the same for formal
hearing.
YOU ARE FURTHER NOTIFIED that the Application and supporting workpapers
testimonies and exhibits have been filed with the Commission and are available for public
inspection during regular business hours at the Commission offices.The Application and
testimonies are also available on the Commission s Web site at www.puc.idaho.gov under the
File Room" and then "Electric Cases.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission s jurisdiction under Title 61 of the Idaho Code and specifically
Idaho Code ~~ 61-307 , 61-503, and 61-622. The Commission may enter any final Order
consistent with its authority under Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission s Rules of Procedure, IDAP A 31.01.01.000 et seq.
ORDER
IT IS HEREBY ORDERED that this case be processed under Modified Procedure.
Interested persons wishing to file comments or protests must do so no later than 28 days from the
service date of this Order.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30402
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
+10.-
day of August 2007.
MARSHA H. SMITH, COMMISSIONER
ATTEST:
J~ D. Jewe
Commission Secretary
bls/O:A VU-07-07 dh
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30402