20130809Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

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

FROM: DON HOWELL
DEPUTY ATTORNEY GENERAL

DATE: AUGUST 5, 2013

SUBJECT: AVISTA CORPORATION’S ANNUAL POWER COST ADJUSTMENT
(PCA) APPLICATION, CASE NO. AVU-E-13-04

On July 31, 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 1, 2012 through 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 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 requests that its Application be processed under Modified Procedure
and that the Commission issue its Order approving the PCA Application to become effective on
October 1, 2013. Application at 4.
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.
DECISION MEMORANDUM 2
The Company’s current Application outlines the power cost deferrals, including
interest, for the July 1, 2012 through June 30, 2013 deferral period:

Application at 3. The Company’s Application included copies of its monthly PCA deferral
report for the deferral period July 2012 through June 2013. 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 78.11, a decrease of
$.58 per month.
STAFF RECOMMENDATION
Given the proposed increase to the PCA rate credit, Staff concurs that the case can be
processed under Modified Procedure. Staff suggests comments be due September 11, 2013.
COMMISSION DECISION
Does the Commission wish to process Avista’s annual PCA Application via Modified
Procedure with a comment deadline of September 11, 2013?

bls/M:AVU-E-13-04_dh