20101027final_order_no_32100.pdf

Office of the Secretary
Service Date
October 27 2010
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF A VISTA CORPORATION FOR
MODIFICATION OF ITS RESIDENTIAL
AND FARM ENERGY RATE
ADJUSTMENT.ORDER NO. 32100
CASE NO. A VU-10-
On September 15, 2010, Avista filed an Application with the Commission seeking
authority to revise its Schedule 59, Residential and Farm Energy Rate Adjustment. Under the
Residential Exchange Program (REP) embodied in Section 5( c) of the Northwest Power Act, the
benefits of the federal hydropower system in the Pacific Northwest are to be shared with the
residential and small farm customers of eligible investor-owned utilities such as Avista.
C. 9 839c(c). The REP benefits take the form of rate credits and are reflected in Schedule
59. In this filing, the Company proposes an adjustment of the REP credit from the currently
approved 0.289~ per kWh to 0.147~ per kWh. The Company requested that its Application be
processed by Modified Procedure with the new REP credit to become effective November 1
2010.
On October 5 , 2010, the Commission issued a Notice of ApplicationINotice of
Modified Procedure and set an October 21 , 2010, comment deadline. Staff was the only party to
file comments. With this Order the Commission authorizes an adjustment to the Schedule 59
rate credit from 0.289~ per kWh to 0.147~ per kWh.
THE APPLICATION
Avista s Application states that the current 0.289~ per kWh REP credit was approved
effective August I , 2009. That rate credit resulted from a Settlement Agreement between A vista
and the Bonneville Power Administration (BPA) executed in June 2009. The 2009 REP credit
was based on two years of assumed payments from BP A for their 2009 and 2010 fiscal years, as
well as an amount from settlement of an outstanding Deemer Account.
A vista maintains that the current rate credit was designed to pass through the total
the 2009 and 2010 benefits over a period of fifteen months, August 1 , 2009 through October 31
2010. The newly proposed REP rate credit ofO.147~ per kWh would replace the current credit
of 0.289~ per kWh and is designed to pass through the amount of expected benefits from BP
ORDER NO. 32100
for the 20 II fiscal year over a refund period of twelve months, November I , 20 I 0 through
October 31 , 2011.
The proposed REP rate credit ofO.147~ per kWh would apply to residential and small
farm customers served under Schedules I , 12, 22 , 32, and 48. For a customer using 1 000 kWh
per month, the proposed, lower rate credit would result in a monthly increase of $1.42 per month
or 1.65%.
The Application states that the proposed rate credit will have no effect on Avista s net
Income. Under the Northwest Power Act, REP rate credits are "passed through" directly to the
residential and small farm customers of Avista. 16 U.c. 9 839c(c)(3). The proposed rate
credit would, however, result in an increase of approximately $1.7 million to Idaho electric
revenue, since a lesser amount of benefits will be passed through to customers.
THE STAFF COMMENTS
The Company submitted workpapers supporting its calculation of the proposed
0.147~/kWh REP credit. This filing reflects estimated payments for the 2011 fiscal year. The
total benefit amount applicable to Idaho customers is approximately $1.7 million. Staff believes
the proposed credit amount of 0.147~/kWh has been correctly computed by Avista. Therefore
Staff recommended that the Commission approve the new tariff rate of 0.147~/kWh effective
November I , 2010 to timely "pass-through" the REP credits received from BP A for the benefit
of Avista s eligible customers.
DISCUSSION AND FINDINGS
In the final Order issued in Case No. A VU-08-, the Commission directed Staff
and the Company to meet and resolve the issue of inclusion of uncollectibles and regulatory fees
in the revenue conversion factor. Order No. 30672. Pursuant to the Commission s Order, Staff
and the Company discussed what adjustments are appropriate for a "pass through" such as the
REP credits. The parties agreed that the removal of regulatory fees, but not uncollectibles, from
the revenue conversion factor was appropriate. Staff recommended, and the Commission
approved, such treatment for Avista 2009 Residential and Small Farm Energy Rate
Adjustment. Tariff Advice No. 28.
After reviewing the Application and comments filed by Staff, we approve Avista
request to modify its Schedule 59, Residential and Farm Energy Rate Adjustment, from the
currently approved 0.289~ per kWh to 0.147~ per kWh. We continue to find the inclusion of
ORDER NO. 32100
uncollectibles in the revenue conversion factor reasonable. The amount of expected benefits
from BPA for the 2011 fiscal year is less than the benefits received last year. Consequently, the
reduction in REP credits results in a higher monthly bill. The actual increase in monthly bills
will vary based on customer usage.
ORDER
IT IS HEREBY ORDERED that Avista s Application to modify its Residential and
Farm Energy Rate Adjustment is approved. The Schedule 59 REP credit of 0.147~ per kWh
shall be effective November 1 , 2010. The tariff sheets filed with the Company s Application are
hereby approved.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally
decided by 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.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this !)7fA
day of October 2010.
MD. KEMPTON SIDENT
MARSHA H. SMITH, COMMISSIONER
MACK A. RED~RD OMMISSIONER
ATTEST:
~~i
Commission Secretary
O:A VU-IO-ks2
ORDER NO. 32100