20080620Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER REDFORD
COMMISSIONER SMITH
CO MMISSI 0 NER KEMPTON
COMMISSION SECRETARY
COMMISSION STAFF
LEG AL
FROM:WELDON STUTZMAN
DEPUTY ATTORNEY GENERAL
DATE:JUNE 18 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 , Avista Corporation filed an Application requesting an order from
the Commission authorizing the Company to defer net revenues from the sale of carbon financial
instruments (CFls). 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.
In this filing, the Company is requesting an order allowing for the deferral of the net
revenue (revenues from sales of CFls, less cost, including membership fees paid to the
Exchange ).The net revenues will be allocated to the Company s Washington and Idaho
jurisdictions based on the current production/transmission allocation of 64.59% to Washington
and 35.41 % to Idaho. The Company requests authority to defer the CFI revenues in Account 254
- Other Regulatory Liabilities. Interest would accrue on the Idaho share of the deferrals at the
customer deposit rate. The Company will propose ratemaking treatment of the net revenues and
accrued interest in its next general rate case filing or some other proceeding.
DECISION MEMORANDUM
A vista requests that its Application be processed by Modified Procedure. Staff
recommends that A vista s Application for an order authorizing the deferral of net revenues from
the sale of CFls be processed by Modified Procedure with 21-day comment period.
COMMISSION DECISION
Should the Application of A vista for an order authorizing the deferral of net revenues
from the sale of CFls be processed by Modified Procedure?
t ~-
Weldon B. Stutzman
Deputy Attorney General
bls/M:A VU-O8-02 ws
DECISION MEMORANDUM