20080930final_order_no_30645.pdf

Office of the Secretary
Service Date
September 30, 2008
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF A VISTA
CORPORATION'S ANNUAL POWER COST
ADJUSTMENT (PCA) FOR RECOVERY OF
POWER COSTS DEFERRED THROUGH JUNE 30, 2008
CASE NO. A VU-08-
ORDER NO. 30645
On July 28, 2008, A vista Corporation dba A vista Utilities (A vista; Company) filed an
Application with the Idaho Public Utilities Commission (Commission) for an order approving a
tariff Schedule 66 Temporary Power Cost Adjustment (PCA) surcharge of 610~/kWh. The
Commission in this Order approves the Company s Application for an effective date of October
2008.
Avista s PCA mechanism 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. The Company s existing PCA methodology and method
of recovery were approved in 2007 in Case No. A VU-07-01 (Order No. 30361). In that case
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 also approved a
change in the method of PCA deferral recovery from a uniform percentage basis to a uniform
cents per kWh basis.
A vista is requesting that the Commission issue an order approving recovery of power
costs deferred by the Company for the period July 1 , 2007 through June 30, 2008. The proposed
61O~IkWh PCA surcharge will replace an existing 0.267~/kWh surcharge that expires on
September 30, 2008. Order No. 30429. The proposed surcharge will recover approximately
$21.7 million in deferrals. The principal factors contributing to the higher power supply expense
during the deferral period are reduced hydro-generation and high natural gas fuel costs.
Under the Company s proposal, the surcharge rate for residential customers will
increase from 0.267~IkWh to 0.61O~/kWh, or an increase of 0.343~IkWh. For an average
residential customer using 1 000 kWh per month, the monthly increase will be $3.43. Under
present rates, a residential bill for 1 000 kWh amounts to $63.44. With the proposed surcharge
in place, the monthly bill would be $66., or about 5.4% higher.
ORDER NO. 30645
The actual percentage increase for individual customers will depend on the rate
schedule that the customer receives service under and on how much energy a customer uses.
The proposed surcharge is spread on a uniform cents per kilowatt hour basis. The percentage
increases will vary by rate schedule as shown below.
Customer Group
(Schedule)Percentae:e Chane:e
Residential Schedule 1 35%
General Service Schedules 11 , 12 29%
Large General Service Schedules 21 , 22 54%
Extra Large General Service Schedule 25 84%
Extra Large General Service Schedule 25P 38%
Pumpmg Service Schedules 31 , 32 29%
Street and Area Lights Schedules 41-78%
The Company s Application is supported by the testimony of William G. Johnson
Wholesale Marketing Manager, and Ronald L. McKenzie, Manager of Regulatory Accounting,
and related workpapers.
On August 7, 2008, the Commission issued Notices of Application and Modified
Procedure in Case No. A VU-08-05. The deadline for filing written comments was September
, 2008. Comments were filed by Commission Staff and three of the Company s customers.
The Company s customers decry the proposed increase and recommend that the Company
Application be denied. Staff performed a review and audit of the amounts that went into the
Company s PCA deferral balance, verifies the accuracy of the account entries, and concludes
that the accounting transactions appear reasonable at the time they were made.Staff
recommends that the Commission accept the audited deferral balance of $20 966 915 presented
in the Company s filing and approve the Company s proposed PCA surcharge rate of
610~/kWh effective for the period of October 1 , 2008 through September 30, 2009. Staffs
comments can be summarized as follows:
Staff performed a review and audit of the amounts that went into the PCA deferral
balance in the current Avista filing. The Company s PCA net deferral activity, Staff states
represents the Idaho jurisdictional share of the excess power costs and associated revenue
adjustments deferred under the PCA mechanism by Avista for the 12 months ended June 30
2008. The main component of the net deferral is the Net Increase in Power Supply Costs, FERC
ORDER NO. 30645
Accounts 555, 501 , 547, and 447. Along with the costs of serving load using Company-owned
resources, these PCA accounts include additional power purchase costs when market prices are
lower than generation costs. Generation costs associated with off-system sales are offset by the
revenue from those sales. The total net increase in power supply cost, $20 966 915 , is comprised
of the following nine items:
1. FERC Account 555 - Purchased Power
2. FERC Account 501 - Thermal Fuel
3. FERC Account 547 - CT Fuel
4. FERC Account 447 - Sales for Resale
5. All Potlatch Revenues and Expenses
6. FERC Account 557 - Resource Optimization
7. Idaho Retail Revenue Adjustment
8. Second Half Coyote Springs 2 Transmission Credit
Subtotal
9. Interest on Deferral
Total Deferrals plus Interest
$51 041 605
315 207
292 311
050 238
403 024
468 320
301 748
14,059
$20 348 374
618,541
$20.966.915
A detailed explanation of each item is set forth in Staff s comments.
Staff notes that the proposed rate is an estimate of the rate required to recover the
unrecovered deferral balance of$20 966 915 (deferrals of $20 348 374 and interest of$618 541).
To the extent that the rate does not recover the approved deferral balance, the difference is
carried into a subsequent PCA filing and trued up.
The PCA reporting period runs from July to June; however the recovery period runs
from October to September. The current surcharge of 0.267~/kWh began October 2007 and
will expire September 30, 2008. At that time, any over- or under-collection of the prior
surcharge will be recorded in the October 2008 PCA report and be subject to review and
recovery in the 2009 PCA case.
Commission Findings
The Commission has reviewed and considered the filings of record in Case No.
A VU-08-05 including the comments and recommendations of Commission Staff and Avista
ORDER NO. 30645
customers. We continue to find that Modified Procedure is appropriate and that the public
interest does not require a hearing to consider the issues presented in this case. RP 204.
The Commission accepts the audited deferral balance of $20 966 915 presented in the
Company s filing and finds it reasonable to approve a tariff Schedule 66 Temporary PCA
surcharge rate ofO.610~/kWh for the period October 1 2008 through September 30, 2009.
The Commission encourages customers who qualify for energy assistance to apply
for the federally-funded Low Income Home Energy Assistance Program (LIHEAP). Bill
payment assistance is also available from organizations such as Project Share.For more
information regarding assistance programs, customers should contact the local Community
Action Agency, Avista Utilities, the Idaho Public Utilities Commission, or the 2-1 Idaho Care
Telephone Line.
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over A vista Corporation dba
A vista Utilities, an electric utility, and the issues raised in this case, by virtue of Title 61 , Idaho
Code, and the Commission s Rules of Procedure, IDAPA 31.01.01.000 et seq.
ORDER
In consideration of the foregoing and as more particularly described above, IT IS
HEREBY ORDERED that the Application of A vista for authority to implement a tariff Schedule
66 Temporary PCA surcharge rate ofO.610~/kWh is approved for an effective date of October 1
2008. The Company is directed to file conforming tariffs.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code 9 61-626.
ORDER NO. 30645
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this -flo.
day of September 2008.
ARSHA H. SMITH, COMMISSIONER
. KEMPTON: COM ISSIONER
ATTEST:
Je p. Jewell
ission Secretary
bls/O:A VU-08-05 sw
ORDER NO. 30645