20080725Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSIONER KEMPTON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:WELDON STUTZMAN
DEPUTY ATTORNEY GENERAL
DATE:JUL Y 22, 2008
SUBJECT:CASE NO. A VU-08-
VISTA CORPORATION'S APPLICATION FOR AN ORDER
AUTHORIZING DEFERRAL OF NET REVENUES FROM SALE OF
CARBON FINANCIAL INSTRUMENTS
On May 22, 2008 , A vista Corporation filed an Application requesting an order from
the Commission authorizing the Company to defer net revenues from the sale of carbon financial
instruments (CFIs). The revenues result from the sale of credits relating to the reduction in
greenhouse gas emissions through a pilot program offered through the Chicago Climate
Exchange. Participants in the Exchange are required to reduce greenhouse gas emissions during
two phases. The Exchange allows members to sell greenhouse gas credits based on greenhouse
gas reductions compared to a baseline. A vista banked credits for 2003 through 2006 , and was
able to sell surplus Phase 1 CFIs for $2 557 065 , net of the Exchange commissions. The
Company is requesting an order allowing for the deferral of the net revenue (revenues from sales
of CFIs, less cost, including membership fees paid to the Exchange).
On June 25 , 2008 , the Commission issued a Notice of Application and Notice of
Modified Procedure that established a period for filing written comments. Comments were filed
by Staff and no other party.
Staff recommends the Commission grant Avista s request for deferred accounting
treatment authority utilizing the following components:
The revenues should be deferred in Account 254 - Other Regulatory Liability
with an offset shown for associated CCX commissions and fees.
DECISION MEMORANDUM
Separate regulatory subaccount will be established for Washington and Idaho
based on the Production/Transmission allocator.
Ratemaking treatment will be established in a separate case. Staff intends to
make its recommendation in the current rate case, Case No. A VU-08-01.
COMMISSION DECISION
Should the Application of A vista for an order authorizing the deferral of net revenues
from the sale of CFIs be approved?
tf-"~-r
Weldon B. sfutzman
Deputy Attorney General
bls!M:A VU-O8-02 ws2
DECISION MEMORANDUM