20130212notice_of_proposed_settlement_order_no_32740.pdf

Office of the Secretary
Service Date
February 12, 20 13
BEFORE: THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF AVISTA CORPORATION DBA AVISTA )
UTILITIES FOR AUTHORITY TO )
INCREASE ITS RATES AND CHARGES FOR )
ELECTRIC AND NATURAL GAS SERVICE )
IN IDAHO 1
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1
1
1
)
1
1
CASE NOS. AVU-E-12-08
AVU-G-12-07
NOTICE OF
PROPOSED SETTLEMENT
NOTICE OF
AMENDED SCHEDULE
NOTICE OF PUBLIC AND
TECHNICAL HEARINGS
ORDER NO. 32740
On October 11, 2012, Avista Corporation dba Avista Utilities applied to the
Commission for authority to increase its electric base rates by $1 1.4 million (4.6%) and its
natural gas base rates by $4.6 million (7.2%). Application at 1. The Company proposed that the
new rates take effect on April 1, 2013. See Amendment to Application. The Commission
subsequently suspended the proposed effective date and allowed the following parties to
intervene in the case: Idaho Forest Group, LLC; Clearwater Paper Corporation; Community
Action Partnership Association of Idaho (CAPAI); Idaho Conservation League (ICL); and Snake
River Alliance (SRA). The Commission also set deadlines for the parties to file testimony and
exhibits and tentatively scheduled a technical hearing date. See Order Nos. 32671, 32678, 32680
and 32687, and 32689.
Settlement conferences occurred on January 17 and 24, 2013 and, on February 6,
2013, the Company, Staff, Idaho Forest Group, Clearwater Paper, and ICL filed a Stipulation and
Settlement that proposes to fully resolve the case.' Additionally, all the parties (including
CAPAI and SRA) agreed to an amended case schedule.
With this Order, we provide notice of the settlement, adopt the amended schedule,
and set technical and public hearings.
1 CAPAI participated in settlement discussions and is continuing to review its position with regard to the Stipulation
and Settlement, and will be filing separate comments and/or testimony in that regard. SRA, as an intervenor, was
provided notice of the settlement discussions, but did not participate.
NOTICE OF PROPOSED SETTLEMENT
NOTICE OF AMENDED SCHEDULE
NOTICE OF PUBLIC AND TECHNICAL HEARINGS
ORDER NO. 32740 1
NOTICE OF PROPOSED SETTLEMENT
YOU ARE HEREBY NOTIFIED that, in summary, the Stipulation and Settlement
7 proposes to fully resolve the case as follows:-
1. Overview of Settlement and Revenue Requirement
The signing parties agreed that Avista should be allowed to recover its revenue
requirement in two steps. After the two step process occurs, Avista will not file another electric
or natural gas general rate case before May 3 1, 2014, and new rates arising from that filing will
not go into effect before January 1,201 5. The two steps are, in sum:
Electric
Step 1: April 1, 2013
a. No electric base rate change effective April 1, 2013, instead of the
proposed 4.6%, or $1 1.393 million.
Step 2: October I , 2013
a. Overall electric & rate increase of 3.1% (3.2% in billed rates) or $7.825
million effective October 1, 201 3.
b. Offsets - Apply $3.865 million for rate mitigation purposes (the BPA
Parallel Operation settlement3), and amortize that offset over 15 months,
from October 1,20 13 to December 3 1,20 14.
c. Net overall bill increase to customers of 1.9% effective October 1, 2013.
* The actual Stipulation and Settlement, including its attachments, is about 36 pages long and much more detailed
than this summary. Interested persons may view the actual Stipulation and Settlement at the Commission's offices
or on the Commission's web site. Further instructions for viewing the Stipulation and Settlement are provided
below.
The BPA Settlement Revenue of $3.865 million represents the Idaho customers' share of $12.224 million (system)
for the past use of Avista's transmission system for the period January 2005 through February 2013. In December
2012, Avista and Bonneville reached a settlement that pertains to the use of Avista's transmission system by
Bonneville. Avista anticipates FERC approval of the settlement in February 2013, after which Avista will bill
Bonneville.
NOTICE OF PROPOSED SETTLEMENT
NOTICE OF AMENDED SCHEDULE
NOTICE OF PUBLIC AND TECHNICAL HEARINGS
ORDER NO. 32740 2
Natural Gas
Step I : April 1, 201 3
a. Overall natural gas base rate increase of 4.9% (5.0% in billed rates) or
$3.1 15 million, instead of the proposed 7.2%, or $4.561 million, effective
April 1,2013.
Step 2: October 1, 2013
a. Overall natural gas base rate increase of 2.0% (2.0% in billed rates) or
$1.330 million effective October 1, 201 3.
b. Offsets - Apply $1.550 million PGA deferral credit balance from 2012
PGA to partially offset the base rate increase, amortized over 15 months,
October 1, 20 13 to December 3 1,20 14.
c. Net overall impact to customers of 0.3% effective October 1,2013.
2. Cost of Capital
The signing parties agreed to the following capital structure and rate of return:
Capital ProForma ProForma
Component Structure Cost Weighted Cost
Total Debt 50.000/0 6.01% 3.01%
Common Equlty 50.00% 9.80% 4.90%
Total 100.00% 7.91%
The Company will refund to customers one-half of any earnings above the 9.8% return on equity
for each of the years 2013 and 2014, to allay any concerns that the base rate relief in April 1,
2013, and October 1, 2013, may allow the Company to exceed its authorized return.
4. Percentage Increase by Service Schedule
The following tables reflect the agreed upon percentage increase by schedule for
electric and natural gas service:
NOTICE OF PROPOSED SETTLEMENT
NOTICE OF AMENDED SCHEDULE
NOTICE OF PUBLIC AND TECHNICAL HEARINGS
ORDER NO. 32740 3
Electric Increase Percentaee bv Schedule - Anrill. 2013
I large General Service Schedule 2 1 122 I 0.0% I 0.0%
Rate Schedule
Residential Schedule 1
General Service Schedule 1 1 11 2
Increase in Base
Rates
0.0%
0.0%
Extra Large General Service Schedule 25
Clearwater Paper Schedule 25P
Net Increase in
Billing Rates
0.0%
0.0%
Pumping Service Schedule 3 1/32
Street & Area Llghts Schedules
Overall
Natural Gas Increase Percentace bv Schedule - Anrill. 2013
0.0%
0.0%
Electric Increase Percentage by Schedule - October 1,2013
I Increase in Base / Net Increase in I
0.0%
0.0%
0.0%
0.0%
0.0%
Rate Schedule
Residential Schedule 1
General Service Schedule 1 1 /I 2
Large General Service Schedule 2 1 /22
Extra Large General Service Schedule 25
Clearwater Paper Schedule 25P
Pumping Service Schedule 3 1 /32
Street & Area Lights Schedules
Overall
0.0%
0.0%
0.0%
1 ~ a r g e General Service Schedule 1 1 111 12 I 3.8% I 3.9% I
* Net Increase includes the effects ofthe proposed changes in Schedule 97 (BPA
Adjustment) and the General Rate Increase, all effective on October 1, 201 3.
Increase in Base
Rates
3.5%
2.8%
3.3%
2.7%
2.3%
3.9%
3.1%
3.1 O/O
Rate Schedule
General Service Schedule 10 1
1 Transportation Service Schedule 146 I 8.7% I 8.7% I
Net Increase in
Billing Rates *
2.6%
1.9%
2.1%
1 .O%
0.4%
2.9%
2.7%
1.9%
NOTICE OF PROPOSED SETTLEMENT
NOTICE OF AMENDED SCHEDULE
NOTICE OF PUBLIC AND TECHNICAL HEARINGS
ORDER NO. 32740
Rates
5.3%
Billing Rates
5.4%
YOU ARE FURTHER NOTIFIED that the Commission is not bound by the
Settlement and Stipulation, although the stipulating parties (the Company, Commission Staff,
Idaho Forest Group, Clearwater Paper, and ICL) represent that it is in the public interest and that
all its terms and conditions are fair, just and reasonable.
YOU ARE FURTHER NOTIFIED that the Stipulation and Settlement, Application,
and supporting workpapers, testimony, and exhibits are available for public inspection during
regular business hours at the Commission offices. They also may be viewed on the
Commission's web site at www.puc.idaho.~ov by clicking on "File Room" and then "Electric
Cases" andlor "Gas Cases" and then going to the case numbers referenced in the above caption.
NOTICE OF AMENDED SCHEDULE
YOU ARE FURTHER NOTIFIED that the Commission adopts the following
amended schedule pursuant to the agreement of the parties:
DATE ACTIVITY
Natural Gas Increase Percentage by Schedule - October 1,2013
February 25, 201 3 Deadline for parties (Company/Staff/Inten/enors) to
file direct testimony and exhibits
Rate Schedule
General Service Schedule 1 0 1
Large General Service Schedule 1 1 111 12
Interruptible Sales Service Schedule 13 111 32
Transportation Service Schedule 146
Ove mll
March 1, 20 13 Deadline for rebuttal testimony and exhibits
March 4 and 5,2013 Customer Hearings
** Net Increase inchdes the effects of the proposed changes in Schedule 197 (PGA) and
the General Rate Increase, all effective on October l,20 1 3.
Increase in Base
Rates
2.1%
1.6%
1.4%
3.5%
2.0%
March 7,20 13 Technical Hearing
Net Increase in
Billing Rates**
0.6%
-0.5%
- 1.4%
3.5%
0.3%
NOTICE OF PROPOSED SETTLEMENT
NOTICE OF AMENDED SCHEDULE
NOTICE OF PUBLIC AND TECHNICAL HEARINGS
ORDER NO. 32740 5
The prepared testimony and exhibits must conform to the requirements of Rules 23 1,
266 and 267 of the Commission's Rules of Procedure. Reference IDAPA 3 1.01.01.231 and
.266-267. The above deadlines are for testimony and exhibit filing with the Commission. E-
copy service on parties of record should be made on the same date to the extent practicable with
full service of testimony and exhibits provided to parties of record no later than the following
business day.
NOTICE OF PUBLIC AND TECHNICAL HEARINGS
YOU ARE FURTHER NOTIFIED that the Commission will convene two public
hearings in this matter. The purpose of the public hearings is to take testimony from Avista's
customers and other interested members of the public. The first public hearing will convene on
MONDAY, MARCH 4, 2013 AT 7:00 P.M. AT THE RED LION HOTEL, 621 21"'
STREET, LEWISTON, IDAHO.
The second public hearing will convene on TUESDAY, MARCH 5, 2013 AT 7:00
P.M. AT THE DRIFTWOOD BAY ROOM OF NORTH IDAHO COLLEGE STUDENT
UNION BUILDING, 1000 W. GARDEN AVENUE, COEUR D'ALENE, IDAHO.
YOU ARE FURTHER NOTIFIED that the Commission will convene a technical
hearing in this matter. The purpose of the technical hearing is to take testimony from the parties
(the Company, Staff, and the intervenors). The technical hearing will convene on THURSDAY,
MARCH '7, 2013, AT 9:30 A.M. IN THE COMMISSION'S HEARING ROOM AT 472
WEST WASHINGTON STREET, BOISE, IDAHO.
YOU ARE FURTHER NOTIFIED that all workshops and hearings in this case will
be held in facilities meeting the accessibility requirements of the Americans with Disabilities Act
(ADA). Persons needing the help of a sign language interpreter or other assistance in order to
participate in or to understand testimony and argument at a public hearing may ask the
Commission to provide a sign language interpreter or other assistance at the hearing. The
request for assistance must be received at least five (5) working days before the hearing by
contacting the Commission Secretary at:
NOTICE OF PROPOSED SETTLEMENT
NOTICE OF AMENDED SCHEDULE
NOTICE OF PUBLIC AND TECHNICAL HEARWGS
ORDER NO. 32740 6
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone] (Telephone)
[phone] (FAX)
E-Mail: secretary~,puc.idalio.liov
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission's jurisdiction under Title 61 of the Idaho Code and that the
Commission may enter any final Order consistent with its authority under Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission's Rules of Procedure, IDAPA 3 1.0 1 .01.000 et seq.
O R D E R
IT IS HEmBY ORDERED that the above schedule is adopted.
P -th DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this /A
day of February 20 13.
MACK A. ~ E D F O I ~ D , COMMISSIONER
i i
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MARSHA H. SMITH, COMMISSIONER
ATTEST:
Cdmmission Secretary
NOTICE OF PROPOSED SETTLEMENT
NOTICE OF AMENDED SCHEDULE
NOTICE OF PUBLIC AND TECHNICAL HEARINGS
ORDER NO. 32740 7