20130919final_order_no_32892.pdf

Office of the Secretary
Service Date
September 19,2013
BEFORE THE IDAHO PUBLIC
IN THE MATTER OF THE APPLICATION
OF' AVISTA CORPORATION FOR
AUTHORITY TO AMEND ITS ANNUAL
POWER COST ADJUSTMENT (PCA) RATES
UTILITIES COMMISSION
CASE NO. AVU-E-13-04
ORDER NO. 32892
On July 37,2013, Avista Corporation dba Avista Utilities filed its annual Power Cost
Adjustment (PCA) Application. The PCA is an annual adjustment mechanism that tracks
changes in the Company's hydro generation, thermal fuel costs, secondary prices, and changes in
power contract revenue and expenses. Application at 2. In its Application, the Company
requested that the Commission approve recovery of its deferred power costs for the period of
July l,2012through June 30,2013, and increase the existing PCA customer credit from 0.09
cents per kilowatt-hour (kWh) to 0.152 cents per kWh (a credit increase of 0.062 cents per kwh).
This represents a PCA rate decrease (i.e., a cumulative PCA credit/rebate) to customers of about
$3.89 million. Because PCA rate adjustments are spread on a uniform cents per kWh basis, the
Company calculates that the PCA credit results in an overall PCA rate decrease of 0.83%. The
Company requested that the Commission issue its Order approving the PCA Application to
become effective on October 1,2013.
On August 13,2013, the Commission issued its Notice of Application and Notice of
Modified Procedure requesting written comments no later than September 11,2013. Order No.
32873. In response to the Commission's Notice of Modified Procedure, the only comments filed
were submitted by the Commission Staff. Based upon our review, the Commission approves the
Application to reduce the PCA rates.
THE APPLICATION
Avista's existing PCA methodology was approved in June 2007. Order No. 30361.
In that Order, the Commission approved the concept of a single PCA rate adjustment. The
Commission also approved the PCA deferral recovery on a uniform cents per kilowatt-hour
basis. Last year's PCA application resulted in a credit or rebate to customers of 0.09 cents per
kwh.
The Company's current Application outlines the power cost deferrals, including
interest, for the July 1, 2012 tl'rrough June 30,2013 deferral period:
)
)
)
)
)
ORDER NO. 32892
Power Cost Deferrals ($3.875.180)
lnterest ( 22.309\
Rebate/Credit Balance at June 30,2013 ($3,897,489)
Application at 3. The Company's Application included copies of its monthly PCA defenal
report for the deferral period July 2012 through June20l3. Id.
Based upon the credit/rebate balance of $3.897 million, the Company proposes to
increase the existing PCA credit/rebate by 0.062 cents per kWh to a total rebate of 0.152 cents
per kWh effective October 1,2013. Id. at 3-4. The average residential customer using 930 kwh
per month would see his or her monthly electric bill decrease from $78.69 to 78.1 1, a decrease of
$.58 per month. The Company-proposed overall average rate decrease of 0.83% would vary by
rate schedule as shown below.
Customer Group
(Schedule)Percentage Decrease
Residential (Schedule l)-0.74%
General Service (Schedules ll,12)-0.66%
Large General Service (Schedules 21,22)-0.82%
Extra Large General Service (Schedule 25)-1.2t%
Clearwater (Schedule 25P)-1.37%
Pumping Service (Schedules 31,32)-0.69%
Street and Area Lights (Schedules 4l-49)-0.25%
Average -0.83%
STAFF COMMENTS
Staff reviewed and audited the expense amounts included in the defenal balance in
this case for the period of July 2012 through June 2013. Based on its review of these
transactions, Staff concluded that the booked amounts appear reasonable. Staff agreed that the
Company had correctly calculated the proposed deferral amount of $3,897,489, as set out below.
Staff Comments at 3.
ORDER NO. 32892
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. A11 Clearwater Revenues and Expenses
6. Resource Optimization - Gain on Natural Gas Resold
7. Idaho Retail Revenue Adjustment
8. Net Transmission Revenue and Expense
9. Interest during deferral period
10. Total
$49,633,797
(1,033,536)
(4,834,966)
(40,058,895)
(5,637,769)
(955,643)
(841,960)
(t46,208)
(.22.309\
63-897189)
Staff observed that this PCA period also includes two other booked amounts. First,
the PCA included a deferred state income tax refund in the amount of $484,663 pursuant to
Order No. 32070, Second, Staff confirmed that the Company properly booked a surcharge
amount of $116,773 representing the under-recovered amount associated with last year's PCA
rate. This is a true-up from last year's case. Staff Comments at 6.
Finally, Staff determined that the Company has correctly spread the PCA rate
decrease across its customer schedules and agreed that the PCA credit should be increased to
.1521, per kWh. This results in an overall average rate decrease of 0.83%. Consequently, Staff
recommended that the Commission approve the Company's Application and implement the
increased PCA rate credit effective October 1,2013.
COMMISSION FINDINGS
The Commission has reviewed Avista's Application and the written comments filed
by Staff. Based upon our review, we note that the Company's Application is reasonable and
adheres to our prior Orders regarding the methodology to be utilized for the recovery or
reimbursement for deferred net power supply costs incurred by the Company. We accept the
audited deferral balance of ($3,897,489). We further find that is fair, just and reasonable to
increase the PCA rebate to 0.1521, per kWh to be effective on October l, 2013. Increasing the
amount of the PCA rebate results in overall average PCA rate decrease of 0.83%.
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over Avista Corporation
Avista Utilities and the issues presented in this case pursuant to Idaho Code, Title 61,
specifically ldaho Code $$ 67-307,61-503 and 6l-622.
dba
and
ORDER NO. 32892
As set out in greater detail above, we find that the current PCA rates are no longer
reasonable and order that the PCA rates be reduced as set out in Schedule 66 attached to the
Company's Application to become effective October 1,2013.
ORDER
IT IS HEREBY ORDERED that Avista Corporation's Application for authority to
increase the PCA rebate to 0.152(, per kWh based upon net power supply costs totaling
($3,897,489) is granted.
IT IS FURTHER ORDERED that the PCA tariff sheets (Schedule 66) attached to the
Application are hereby approved to be effective October 1,2013.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally
decided by this Order) or in interlocutory Orders previously issued in this Case No. AVU-E-13-
04 may petition for reconsideration within twenty-one (21) days of the service date of this Order
with regard to any matter decided in this Order or in interlocutory Orders previously issued in
this case. Within seven (7) days after any person has petitioned for reconsideration, any other
person may cross-petition for reconsideration. See ldaho Code $ 6l-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this lilrt
day of September 2013.
bls/O:AVU-E- I 3-04_dh2
oRDER NO. 32892
R, PRESIDENT
MACK A. RED , COMMISSIONER
MARSHA H. SMITH, COMMISSIONER
ATTEST: