20110217Application.pdf

Avista Corp.
1411 East Mission P.O. Box 3727
Spokane. Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170
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¿IV'STlie
Corp.
VIA OVERNGHT MA
Februar 15, 2012
Idaho Public Utilities Commission
Office of the SecretaryRECEIVED
FEB 17 2012
Ms. Jean D. Jewell
Commission Secretar
Idaho Public Utilties Commission
472 W. Washington
Boise, ID 83702-5983
Boise, Idaho
Re: Case No. A VU-E-12-~ and A VU-G~12-2
Application of A vista Corporation for an Order Authorizing the change in the depreciation
method applied to transportation equipment
Dear Ms. Jewell:
Enclosed is Avista's Application for an Order Authorizing the change in the depreciation method
applied to transportation equipment. The filing consists of an original and seven copies of Avista's
Application.
Please direct any questions regarding this filing to Karen Schuh at [phone].
Sincerely,
?£ ~"'~
Kelly Norwood
Vice President, State and Federal Regulation
Enclosure
cc: See attached service list
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that I have served Avista Corporation's Application for an Order
Authorizing the change in the depreciation method applied to transportation equipment by
mailng a copy thereof, postage prepaid to the following:
Jean D Jewell, Secretary
Idaho Public Utilities Commission
Statehouse
Boise, ID 83720~5983
Jean. jewellßìpuc. idaho .gov
Brad M. Purdy
Attorney at Law
2019 N 17th Street
Boise, ID 83720
bmpurdyßìhotmail. com
Donald Howell
Deputy Attorneys General
Idaho Public Utilties Commission
472 W. Washington
Boise, ID 83702-0659
kristine.sasserßìpuc. idaho .gov
donald. howellßìpuc. idaho. gov
Peter J. Richardson
Greg M. Adams
Richardson & O'Leary PLLC
515N. 2th Street
PO Box 7218
Boise, ID 83702
peterCãrichardsonandoleary. com
gregCãrichardsondoleary. com
Marv Lewallen
Clearwater Paper
601 W. Riverside Avenue
Suite 1100
Spokane, WA 99201
marv .lewallenCãclearwaterpaper. com
Dean J. Miler
McDevitt & Miler, LLP
420 W. Bannock St.
PO Box 2564-83701
Boise, ID 83701-2564
joeCãmcdevitt-miller.com
Scott Atkison
.Idaho Forest Products
171 Highway 95 N.
Grangevile, ID 83530
scottaCãidahoforestgroup.com
Dated at Spokane, Washington this 15th day of February 2012.
patt£2~
Rates Coordinator
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1 David J. Meyer
2 Vice President and Chief Counsel of
3 Regulatory and Governental Affairs
4 A vista Corporation
5 1411 E. Mission Avenue
6 P. O. Box 3727
7 Spokane, Washington 99220
8 Phone: [phone], Fax: [phone]
Idaho Public Utilities Commission
Office of the SecretaryRECEIVED
FEB 17 2012
Boise, Idaho
9 BEFORE TH IDAHO PUBLIC UTILITIES COMMISSION
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IN THE MATTER OF THE APPLICATION OF
AVISTA CORPORATION, dba AVISTA
UTILITIES FOR A CHAGE IN THE
DEPRECIATION METHOD APPLIED TO
TRASPORTATION EQUIMENT
)
) CASE NO. A VU-E-12-e~
) CASE NO. A VU-G-12-12
) APPLICATION OF AVISTA
) CORPORATION
I. INTRODUCTION
17 A vista Corporation, doing business as A vista Utilities (hereinafter A vista or Company),
18 at 1411 East Mission Avenue, Spokane, Washington, pursuant to Section 61-525 Idaho Code and
19 Rule 52 of the Idaho Public Utilities Commission ("Commission Rules of Procedure") hereby
20 applies to the Commission for approval of a proposed change to the method used to calculate
21 depreciation expense on transportation equipment. The Company is proposing to switch from
22 mileage-based depreciation rates to straight~line depreciation rates for transportation equipment.
23 The Company requests that this filing be processed under the Commission's Modified Procedure
24 Rules.
25 Avista is a utility that provides service to approximately 358,000 electrc customers and
26 223,000 natual gas customers in a 26,000 square~mile area in eastern Washington and northern
27 Idaho. Avista also seres approximately 95,000 in Oregon. The largest community served in the
28 area is Spokane, Washington, which is the location of the corporate headquarers.
29 Communications in reference to this Application should be addressed to:
AVISTA'S APPLICATION TO CHAGE DEPRECIATION METHOD PAGE 1
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Kelly O. Norwood
Vice President
State and Federal Regulation
A vista Corporation
1411 E. Mission Avenue
Spokane, Washington 99220
Phone: [phone]
Fax: [phone]
David J. Meyer
Vice President and Chief Counsel of
Reguatory and Governental Affairs
A vista Corporation
1411 E. Mission Avenue
Spokane, Washington 99220
Phone: [phone]
Fax: [phone]
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11 II. BACKGROUND
12 The Commission is empowered to ascerain and deterine the proper and adequate rates
13 of depreciation of the Company's propery used in the rendering of retail electric and natual gas
14 service under the provisions ofIdaho Code Section 61-525. Each utility under the Commission's
15 jursdiction is required to conform its depreciation accounts to the rates so ascertined and
16 deterined by the Commission. The Commission may make changes in such rates of
17 depreciation from time to time as the Commssion may find necessar.
18 The Company perodically does a depreciation study and requests modifications to its
19 depreciation rates. The Company last changed its depreciation rates in Idaho effective Januar 1,
20 2008, in accordance with Order No. 30498 dated Februar 6, 2008, issued in Case Nos. A VU-E-
21 07 -11 and A VU-G-07 -03. The prior depreciation studies and depreciation rate modifications
22 have not included changes to the mileage-based depreciation rates applicable to transportation
23 equipment. The curent mileage based rates have been in effect for over 50 years.
24 A vista is proposing to switch the depreciation method applicable to transportation
25 equipment from mileage-based depreciation rates to straight-line depreciation rates for several
26 reasons. The depreciation rates for transportation equipment need to be updated. Straight-line
AVISTA'S APPLICATION TO CHAGE DEPRECIATION METHOD PAGE 2
1 depreciation for transportation equipment is the standard method being used by other utilties.
2 Moreover, Avista is contracting to purchase a new computer softare system to calculate
3 depreciation, and the new software is not designed to use mileage-based depreciation rates.
4 Modifyng the softare to accommodate mileage-based depreciation rates would increase the
5 cost of the new system and may delay its implementation.
6 III. PROPOSAL
7 The Company is proposing that the Commission allow a switch from mileage-based to
8 the straight-line method of calculating depreciation expense on transportation equipment. The
9 Company has determined straight-line depreciation rates that wil produce approximately the
10 same amount of depreciation expense on an anual basis as the curent mileage-based rates
11 currently produce. Attachment A shows the varous categories of transportation equipment and
12 the determination of the proposed straight-line depreciation rates for the varous categories.
13 Attachment A also shows an immaterial varance between the serice and jurisdictional split of
14 the depreciation expense for 2011. This is a result of using the same average rate for all
15 jurisdictions when some jurisdictions mileage-based rate was higher or lower than the average
16 for the same class of transportation, as demonstrated in Attachment A.
17 The Company requests that the Commission allow the Company to implement the new
18 proposed straight-line depreciation rates effective when the new depreciation software system
19 becomes operationaL. The new system may become operational as early as July 16,2012. The
20 Company requests that the Commission make its deterination by April 1, 2012 so that the
21 Company knows how to proceed with the design and implementation of the new depreciation
22 software system.
23 The straight-line depreciation rates that the Company proposes to implement when the
AVIST A'S APPLICATION TO CHAGE DEPRECIATION METHOD PAGE 3
1 new software system becomes operational wil be reviewed in the depreciation study that the
2 Company is presently underaking with the assistance of its depreciation consultant. Any
3 proposed change in the straight-line rates wil be reflected in the Company's next general rate
4 case filing, or other filing that wil request approval of the new rates that result from the
5 depreciation study.
6 A vista is making a similar filing with the Washington Utilties and Transportation
7 Commission (WUC) and the Oregon Public Utilty Commission. It is important that the
8 Company maintain uniform utility accounts and depreciation rates that are consistent among the
9 Company's regulatory jurisdictions. In the event different depreciation rates or methods were to
10 be ordered, it would result in multiple sets of depreciation accounts and records that would need
11 to be adjusted anually for changes in allocation factors, which would impose a costly
12 administrative burden on the Company and unecessar expense for the Company's ratepayers.
13 IV. REQUEST FOR RELIEF
14 WHREFORE, Avista respectfully requests that the Commission issue a final Order
15 determining that the Company is allowed to switch from mileage based rates to straight line
16 depreciation rates for transportation equipment and that the straight line depreciation rates shown
17 on Attachment A be allowed to be put in effect when the new depreciation software becomes
18 operationaL. The Company requests that the Commission make its determination by April 1,
19 2012.
20 The Company requests that the matter be processed under the Commission's Modified
21 Procedure rules through the use of written comments.
A VISTA'S APPLICATION TO CHAGE DEPRECIATION METHOD PAGE 4
1 Dated at Spokane, Washington thisl) th day of Februar 2012.
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3 AVISTA CORPORATION
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Bfi~/lki~
KellyNo óod
Vice President
State and Federal Regulation
AVISTA'S APPLICATION TO CHAGE DEPRECIATION METHOD PAGES
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VERIICATION
STATE OF WASHINGTON)
)County of Spokane )
Kelly Norwood, being first duly sworn on oath, deposes and says: That he is the
Vice President of State and Federal Regulation of Avista Utilties and makes ths verification for
and on behalf of Avista Corporation, being thereto duly authorized;
That he has read the foregoing filing, knows the contents thereof, and believes the same
to be tre.
~ ¿,æa
SIGNED AN SWORN to before me this" th ~a of Februar. 2012, by Kelly Norwood.\\\'"'""" ~hi ~,\\\"' L H;1 II" .~~~~¿~~ . - . ~~.. .- ~'¡ "'¡O-. ... .S Q.~."o~~ ~..-i ~ NOTAR LIC In and for the State of
§ t NOTARY '¡ ~ Washigtn, residig at Spokae. L:: cP \ PUBLIC ¡ ;: = .~ ~'.'1 ~I -- .,. .,,~~-..o¡'~J' 'l~'/~~ Commission Expires: Iff 2320 L3, ,~ -" ''1BER '/$¡.' ~ ..
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AVISTA'S APPLICATION TO CHAGE DEPRECIATION METHOD PAGE 6
AVISTA UTILITIES ATIACHMENTA
Transportation Depreciation Rate Application
For the Year Ended December 31,2011
(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11)(12)
Existing Proposed Washington Washington Oregon
Accunt 2010 Avg. Exsting Annual Study Annual Increase or Electc Idaho E1ectiic Natural Gas Idaho Natural Natural Gas
Number Desciiption Balance Rate Depree.Rate Depre.(Decrase)Allocation Allocaton Alloction Gas Allocation Allocation
$""$""$$$$$$$
COMMON PLA
392035 CD AN Passenger Cars 9,152 0 1.83 167 167 89 44 24 11 0
392035 ED AN Passenger Cars 8,671 0 1.83 159 159 107 52 0 0 0
392035 ED WA Passenger cars 23,557 0 1.83 431 431 431 0 0 0 0
392035 GO OR Passenger cars 26,784 4.66 1,247 1.83 490 (757)0 0 0 0 (757)
Total 68,164 1.83 1,247 1,247 0 627 96 24 11 (757.)
392045 CD AN 4x2 Pickups 15,298 2.64 404 3.42 522 118 63 31 17 7 Cl
392045 ED AN 4x2 Pickups 110,959 2.64 2,929 3.42 3,789 860 577 283 0 0 0
392045 GO AN 4x2 Pickups 8,717 2.64 230 3.42 298 68 0 0 45 22 Cl
392045 GO OR 4x2 Pickups 135,831 4.19 5,685 3.42 4,639 (1,046)0 0 0 0 (1,046)
Total 270,805 3.42 9,248 9,248 0 640 314 62 29 (1,046)
392046 CD AA 4x4 Pickups 213,065 2.77 5,906 3.97 8,463 2,557 1,241 611 337 161 208
392046 CD AN 4x4 Pickups 604,700 3.92 23,724 3.97 24,018 294 155 77 43 19 0
392046 CD 10 4x4 Pickups 307,185 4.03 12,392 3.97 12,201 (191)0 (151)0 (40)0
392046 CD WA 4x4 Pickups 895,210 4.03 36,114 3.97 35,557 (557)(440)0 (117)0 0
392046 ED AN 4x4 Pickups 931,137 4.00 37,267 3.97 36,984 (283)(189)(93)0 0 0
392046 ED 10 4x4 Pickups 525,009 4.03 21,153 3.97 20,853 (300)0 (300)0 0 0
392046 ED WA 4x4 Pickups 1,180,551 4.02 47,425 3.97 46,891 (534)(534)0 0 0 0
392046 GO AN 4x4 Pickups 35,537.4.04 1,434 3.97 1,412 (22)0 0 (15)(7)0
392046 GO 10 4x4 Pickups 67,413 4.03 2,720 3.97 2,678 (42)0 0 0 (42)0
392046 GO OR 4x4 Pickups 323,675 4.18 13,545 3.97 12,856 (689)0 0 0 0 (689)
392046 GO WA 4x4 Pickups 476,246 4.02 19,150 3.97 18,916 (234)0 0 (234)0 0
Total 5,559,728 3.97 220,830 3.97 220,830 (0)233 144 14 91 (481)
392047 CD AN 4x2 Servce 89,441 4.95 4,430 4.69 4,196 (234)(124)(61)(33)(16)0
392047 CD 10 4x2 Service 10,043 5.32 534 4.69 471 (63)0 (50)0 (13)0
392047 CD WA 4x2 Service 10,638 5.31 565 4.69 499 (66)(52)0 (14)0 0
392047 ED AN 4x2 Servce 208,931 5.32 11,106 4.69 9,802 (1,304)(874)(430)0 0 0
392047 ED WA 4x2 Service 69 5.80 4 4.69 3 (1)(1)0 0 0 0
392047 GO AN 4x2 Servce 45,273 5.31 2.406 4.69 2,124 (282)0 0 (190)(92)0
392047 GO OR 4x2 Servce 470,237 4.18 19,661 4.69 22,061 2,400 0 0 0 0 2,400
392047 GO WA 4x2 Servce 54,950 5.51 3,028 4.69 2,578 (450)0 0 (450)0 0
Total 889,582 4.69 41,734 41,734 (0)(1,051)(541)(687)(121)2,400
392048 CD AN 4x4 Servce 33,917 4.91 1,664 4.16 1,412 (252)(134)(66)(37)(17)0
392048 CD 10 4x4 Service 9,006 4.27 385 4.16 375 (10)0 (8)0 (3)0
392048 CD WA 4x4 Servce 51,210 4.36 2,234 4.16 2,132 (102)(80)0 (21)0 0
392048 ED AN 4x4 Servce 258,556 4.28 11,073 4.16 10,764 (309)(207)(102)0 0 0:
392048 ED 10 4x4 Servce 24,102 4.28 1,031 4.16 1,003 (28)0 (28)0 0 O.
392048 ED WA 4x4 Servce 66,331 4.28 2,837 4.16 2,761 (76)(76)0 0 0 0
392048 GO AN 4x4 Servce 425,655 4.17 17,736 4.16 17,721 (15)0 0 (10)(5)~
392048 GO 10 4x4 Servce 493,615 4.10 20,228 4.16 20,550 322 0 0 0 322 0
392048 GO OR 4x4 Servce 698,030 4.10 28,595 4.16 29,060 465 0 0 0 0 465
392048 GO WA 4x4 Service 1,175,541 4.16 48,935 4.16 48,940 5 0 0 5 0 0
Total 3,235,963 4.16 134.718 134,718 (0)(497)(204)(63)297 465
392055 GO AN Crw Truck 55,342 2.44 1,349 2.44 1,349 0 0 0 0 0 0
392056 CD AN Dual Wheel 155,421 1.96 3,040 1.61 2,501 (539)(286)(141)(77)(35)0
392056 CD 10 Dual Wheel 248,988 1.48 3,679 1.61 4,006 327 0 259 0 68 0
392056 CD WA Dual Wheel 305,563 1.48 4,515 1.61 4,917 402 318 0 84 0 0
392056 ED AN Dual Wheel 2,952,994 1.47 43,466 1.61 47,512 4,046 2,712 1,334 0 0 0
392056 ED 10 Dual Wheel 1,321,426 1.48 19,538 1.61 21,261 1,723 0 1,723 0 0 0
392056 ED WA Dual Wheel 4,003,181 1.48 59,184 1.61 64,409 5,225 5,225 0 0 0 0
392056 GO AN Dual Wheel 465,84 1.48 6,878 1.61 7,489 611 0 0 414 198 0
392056 GO 10 Dual Wheel 453,660 1.48 6,703 1.61 7,299 596 0 0 0 596 0
392056 GO OR Dual Wheel 537,949 4.16 22,376 1.61 8,655 (13,721)0 0 0 0 (13,721)
392056 GO WA Dual Wheel 958,228 1.47 14,089 1.61 15,417 1,328 0 0 1,328 0 0
Total 11,402,914 1.61 183,468 183,46 (0)7,969 3,175 1,749 827 (13,721)
392057 CD 10 Dump/Flatbed 102,390 2.33 2,382 3.14 3,219 837 0 661 0 176 0
392057 ED AN Dump/Flatbed 458,367 3.14 14,382 3.14 14,410 28 19 9 0 0 0
392057 ED 10 DumplFlatbed 77655 3.14 2,437 3.14 2,441 4 0 4 0 0 0
392057 ED WA Dump/Flatbed 892,186 3.15 28,124 3.14 28,049 (75)(75)0 0 0 0
392057 GO OR DumplFlatbed 78,962 4.18 3,304 3.14 2,482 (822)0 0 0 0 (822)
392057 GO WA Dump/Flatbed 435,342 3.14 13,660 3.14 13,687 27 0 0 27 0 0
Totl 2,044,902 3.14 64,289 64,289 0 (56)674 27 176 (822)
392056 ED AN LinelDigger 66,768 2.05 1,372 3.29 2,197 825 554 272 0 0 0
392058 GO OR Line/Digger 92,389 4.18 3,866 3.29 3,041 (825)0 0 0 0 (825)
Total 159,157 3.29 5,238 5,238 0 554 272 0 0 (825)
392065 CD AA Road Tractor 125,204 2.24 2,806 3.16 3,962 1,156 561 276 153 73 95
392065 GO WA Road Tractor 101,711 4.30 4,375 3.16 3,219 (1,156)0 0 (1,156)0 Ô
Total 226,915 3.16 7,181 7,181 0 561 276 (1,003)73 !i
'"
392066 ED AN Tandem Diggers 38,658 3.41 1,317 3.41 1,317 0 0 0 0 0
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Page,l of 2
AVISTA UTILITIES ATTACHMENT A
Transporttion Deprecation Rate Application
For the Year Ended Decmber 31, 2011
(1)(2)(3)(4)(5)(6)(7 (8)(9)(10)(11)(12)
Existing Proposed Washington Washington Oregon
Account 2010 Avg.Existing Annual Study Annual Increase or Electric Idaho Electric Natural Gas Idaho Natural Natural Gas
Number Descrption Balance Rate Depree.Rate Depree.(Decrease)Allocation Allocation Allocation Gas Allocation Alloction.
392758 GO 10 Leased Equipmei 205,116 1.01 2,071 1.01 2,071 (0)0 0 0 0 0
392758 GO WA Leased Equipmei 555,864 1.01 5,611 1.01 5,611 0 0 0 0 0 0
Total 760,980 1.01 7,682 7,682 0 0 0 0 0 0
396055 ED AN Crew Truck 194,657 3.46 6,741 2.75 5,347 (1,394)(934)(460)0 0 0
396055 ED WA Crew Truck 451,334 2.44 11,003 2.75 12,397 1,394 1,394 0 0 0 0
Total 645,991 2.75 17,744 17,744 0 460 (460)0 0 0
396056 ED 10 Dual Wheel 7,970 1.48 118 1.48 118 (0)0 0 0 0 cf
396056 ED WA Dual Wheel 21,741 1.48 321 1.48 321 (0)0 0 0 0 0
396056 ED 10 Dual Wheel 4,227 1.47 62 1.48 62 0 0 0 0 0 0
Total 33,938 1.48 501 501 (0)0 0 0 0 0
396057 ED 10 Dump/Flatbed 52,274 3.14 1,640 3.14 1,640 0 0 0 0 0 0'
396057 ED WA Dump/Flatbed 80,784 3.14 2,535 3.14 2,535 (0)0 0 0 0 a
Total 133,058 3.14 4,175 4,175 (0)0 0 0 0 0:
396058 ED AN Line/Digger 462,388 1.01 4,668 1.01 4,668 0 0 0 0 0 Ò.
396058 ED 10 LineIigger 268,396 1.01 2,709 1.01 2,710 1 0 1 0 0 0
396058 ED WA Line/Digger 101,628 1.01 1,029 1.01 1,026 (3)(3)0 0 0 0
396058 GD AN Line/Digger 311,528 1.01 3,145 1.01 3,145 0 0 0 1 0 0
396058 GO ID Line/Digger 468,35 1.01 4,729 1.01 4,729 0 0 0 0 0 0
396058 GD WA Line/Digger 1,344,145 1.01 13,569 1.01 13,570 1 0 0 1 0 0
Total 2,956,520 1.01 29,849 29,849 (0)(3)1 2 0 0
396065 ED WA Road Tractor 123,875 4.30 5,328 4.30 5,328 0 0 0 0 0 0
396066 ED AN Tandem Diggers 3,604,679 1.60 57,578 1.60 57,570 (8)(5)(3)0 0 0'
396066 ED ID Tandem Diggers 4,226,443 1.60 67,477 1.60 67,500 23 0 23 0 0 0
396066 ED WA Tandem Diggers 6,351,045 1.60 101,445 1.60 101,431 (14)(14)0 0 0 0
396066 GD AN Tandem Diggers 158,711 1.60 2,535 1.60 2,535 (0)0 0 0 0 0
Total 14,340,878 1.60 229,035 229,035 (0)(19)20 0 0 0
396067 CD WA Bucket/Ladder 59,502 3.61 2,150 5.70 3,391 1,241 981 0 260 0 0
396067 ED AN Bucket/Ladder 1,913,474 5.70 109,148 5.70 109,060 (88)(59)(29)0 0 O.
396067 ED ID Bucket/Ladder 1,601,463 5.73 91,789 5.70 91,277 (512)0 (512)0 0 0
396067 ED WA Bucket/Ladder 4,079,196 5.72 233,140 5.70 232,498 (642)(642)0 0 0 0
Total 7,653,635 5.70 436,227 436,227 0 280 (541)260 0 0
396068 ED AN Double Bucket 3,174,868 1.78 56,372 1.77 56,271 (101)(67)(33)0 0 0
396068 ED 10 Double Bucket 1,676,279 1.77 29,689 1.77 29,710 21 0 21 0 0 0
396068 ED WA Double Bucket 3,886,990 1.77 68,813 1.77 68,893 80 80 0 0 0 0
Total 8,738,137 1.77 154,874 154,874 0 13 (12)0 0 0
TOTAL PLANT S 59,339,142 1,556,034 1,556,034 0 9,712 3,214 385 1,383 (14;69;i)
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