20120817Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: NEIL PRICE
DEPUTY ATTORNEY GENERAL

DATE: AUGUST 17, 2012

SUBJECT: AVISTA CORPORATION’S ANNUAL POWER COST ADJUSTMENT
(PCA) FILING, CASE NO. AVU-E-12-06

On July 31, 2012, Avista Corporation (“Avista” or “Company”) filed its annual
Power Cost Adjustment (“PCA”) and requested a Commission Order approving the recovery of
power costs deferred for the period of July 1, 2011 through June 30, 2012, and a rebate of 0.090¢
per kilowatt-hour (kWh) to be effective October 1, 2012. Application at 1. The Company
estimates an overall decrease of 2.17%. Id. at 4. The Company requests that its Application be
processed through Modified Procedure. Id. at 1.
THE FILING
Avista’s Application states that its “existing PCA methodology and method of
recovery were approved in Case No. AVU-E-07-01 by Order No. 30361 dated June 29, 2007.”
Id. at 2. In that case, the Commission “approved a change in the method of PCA deferral
recovery from a uniform percentage basis to a uniform cents per kilowatt-hour basis effective
with the October 1, 2007 PCA rate change.” Id.
The Company’s Application outlines the power cost deferrals, including interest, for
the July 1, 2011 through June 30, 2012 deferral period:
Deferrals (July 2011 - June 2012) $(3,170,099)
Interest (21,812)
_______________________________________________
PCA deferral balance as of June 30, 2012 $(3,191,911)
DECISION MEMORANDUM 2
Id. at 3. In its filing, Avista include copies of its monthly PCA deferral reports for the months of
July 2011 through June 2012. Id.
Attached as Exhibit A to Avista’s filing, is a copy of the Company’s proposed tariff
“proposing a uniform cents per kilowatt-hour PCA rebate of 0.090¢ to be effective October 1,
2012.” Id. Avista states that the “proposed rebate is designed to pass through the deferrals for
the period July 1, 2011 through June 30, 2012, as well as the unrecovered balance related to the
July 1, 2010 through June 30, 2011 deferral period, and interest during the recovery period of
October 1, 2012 through September 30, 2013.” Id.
Avista’s Application also includes the direct testimony of Ronald L. McKenzie,
Regulatory Account Manager, and William G. Johnson, Power Contracts Analyst. Mr.
McKenzie’s direct testimony “shows the effect of the proposed PCA rebate by rate schedule.”
Id. “The proposed rebate of 0.090¢ per kilowatt-hour . . . is 0.162¢ per kilowatt-hour less than
the existing surcharge of 0.072¢ per kilowatt-hour.” Id. at 3-4. Specifically, Avista claims that
“residential customers using an average of 939 kilowatt-hours per month would see their
monthly bills decrease from $80.56 to $79.04, a decrease of $1.52 per month, or 1.89%.” Id. at
4.
COMMISSION DECISION
Does the Commission wish to process Avista’s PCA Application through Modified
Procedure with a comment deadline of September 21, 2012?

M:AVU-E-12-06_np