20130815notice_of_public_workshop_avu.pdf

Office of the Secretary
Service Date
August 15,2013
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF AVISTA CORPORATION FOR ) CASE NO. AVU-E-13-05
AUTHORITY TO INCREASE ITS ENERGY )
EFFICIENCY RIDER ADJUSTMENT, 1
SCHEDULE 91 1
1
IN THE MATTER OF AVISTA 1
CORPORATION'S APPLICATION TO ) CASE NO. AVU-G-13-01
CHANGE ITS RATES AND CHARGES (2013 )
PURCHASED GAS COST ADJUSTMENT). )
) NOTICEOF
) PUBLIC WORKSHOP
)
On July 31 and August 1, 2013, Avista Corporation dba Avista Utilities filed two
Applications asking the Commission to approve several annual rate adjustments. One
Application-Electric Energy Efficiency Tariff Rider Adjustment (Tariff Rider)-would affect
customers' electric rates. The other Application-Avista's annual Purchased Gas Cost
Adjustment (PGA)-affects natural gas rates. The Company asks that the changes proposed in
these Applications take effect on October 1, 2013. The changes do not impact the Company's
earnings.
Commission Staff will hold a public workshop on September 5, 2013, in Coeur
d'Alene, Idaho to discuss these two Applications and two other cases that affect rates.'
Interested persons are invited to attend. The Applications are summarized below. The workshop
details follow the summary
1 On July 3 1, 201 3, Avista also filed two other proposals to change its electric rates. First, the Company proposed to
decrease its annual Power Cost Adjustment (PCA) by about $3.9 million. The adjusted rebate results in an overall
decrease in the annual PCA rate of 0.83%. The Company calculates that average residential customers using 930
kwh per month will experience a monthly decrease in their electric bill of $.58. Case No. AVU-E-13-04. Second,
Avista also proposed to adjust its Residential Exchange Program (REP) credit (tariff Schedule 59) to reflect a
decrease in BPA-derived benefits from the federal Columbia River power system to residential and small fartn
customers. Reducing the level of benefits from BPA's Residential Exchange Program will result in a net reduction
of the benefit of approximately $1.1 million, or approximately 0.5%. The reduction in the BPA credit is a federal
"pass-through" not subject to this Commission's approval. Avista Tariff Advice No. 13-05-E. The requested
effective date for both these rate changes is October 1,201 3.
NOTICE OF PUBLIC WORKSHOP I
SUMMARY OF THE TWO APPLICATIONS
A. Electric Energy Efficiency Tariff Rider Adjustment (A W-E-13-05)
YOU ARE HEREBY NOTIFIED that Avista has applied to increase its "Energy
Efficiency Rider" found in tariff Schedule 91. The Schedule 91 tariff rider is designed to "match
future revenue with budgeted [energy efficiency] expenditures." The tariff rider mechanism
includes a true-up that reconciles the previous period's actual expenditures with Schedule 91
collections. Avista proposes to increase its Schedule 91 rider rates by 1.2%. The proposed tariff
rider is designed to recover a purported $3 million deficit in the rider account over a two-year
period and provide approximately $6.4 million in annual revenues to fund ongoing energy
efficiency programs.
YOU ARE FURTHER NOTIFIED that the Company reports that as of May 3 1,201 3,
the fund balance in the Schedule 91 tariff rider account was approximately $3.0 million
underfunded. The Company reports that the underfunded amount is primarily the result of the
Company's efforts to accelerate the conversion of "T12 fluorescent lighting fixtures to higher
efficiency T8 fi~tures."~ During 2012, Avista operated a T12 conversion program where it
issued 4,740 rebates to customers. The Company had budgeted approximately $1.2 million for
this conversion program but issued approximately $5.2 million in rebates. Avista said that a
significant number of rebate requests were received in the last month of the program (December
20 12).
YOU ARE FURTHER NOTIFIED that the Schedule 91 rider funds a variety of
demand-side management (DSM) programs directed at improving the Company's energy
efficiency services. These programs include rebates for: energy efficiency appliances, HVAC
improvements, lighting measures, electric motor measures, and participating in the Northwest
Energy Efficiency Alliance (NEEA). The Company has about 30 programs for customers to
utilize. In addition, the Company encourages its all-electric residential customers to convert to
natural gas space and water heating. See Order No. 32878 for more details.
YOU ARE FURTHER NOTIFIED that increasing the Schedule 91 Energy Efficiency
Rider by 1.2% in overall billed rates would result in a proposed monthly rate increase in the rider
2 Generally T12 fluorescent lighting fixtures use "older" magnetic ballasts while T8 fixtures use newer electronic
ballasts. T8 lamps with electronic ballasts are more energy efficient than TI2 lamps with magnetic ballasts.
Electronic ballasts will generally reduce the overall load on a circuit by reducing energy demand. See
www.UltraLusLi~ht.co1~1~f111oresccnt tube f'aq.httnl.
NOTICE OF PUBLIC WORKSHOP 2
of $0.92 for the average residential electric customer utilizing 930 kwh per month. This
represents an increase of 1.17% per month for the average residential customer. The table below
reflects the proposed increase to the Energy Efficiency Rider for various customer classes:
Residential Customers - Sch. 1
General Service - Sch. 1 1 & 12
Pumping Service - Sch. 3 1-32 1 0.142# per kwh 1 0.240# per kwh I
PROPOSED
RATE SCHEDULE
Large General Service - Sch. 2 1 & 22
Extra Large Customers - Sch. 25
Clearwater Paper - Sch. 25P
B. Annual Nnturnl Gas PGA (A VU-G-13-02)
EXISTING
RATE
0.146# per kwh
0.162d per kwh
YOU ARE FURTHER NOTIFIED that Avista's PGA Application proposes to
0.245# per kwh
0.271d ~ e r kwh
0.125# per kwh
0.086# per kwh
0.086 per kwh
increase the Company's annualized revenues by about $4.9 million (7.5%).3 The Company says
0.209# per kwh
0.142# per kwh
0.131d ~ e r kwh
its proposal will not affect its earnings and will increase the average, residential or small
commercial customer's rates by $3.80 per month (6.8%).
YOU ARE FURTHER NOTIFIED that the Company buys natural gas and then
transports it through pipelines for delivery to customers. The Company defers the effect of
timing differences due to implementation of rate changes and differences between the
Company's actual weighted average cost of gas (WACOG) purchased and the WACOG
embedded in rates. The Company also defers various pipeline refunds or charges and
miscellaneous revenue received from natural gas related transactions, including pipeline capacity
releases. In its annual PGA filing, the Company proposes to: (1) pass to customers any change
in the estimated cost of natural gas for the next 13 months (Schedule 150); and (2) revise the
amortization rates to refund or collect the balance of deferred gas costs (Schedule 155).
YOU ARE FURTHER NOTIFIED that the Company's present PGA filing would
impact customers as follows:
3 The PGA mechanism is used to adjust rates to reflect annual changes in the Company's costs for the purchase of
Service
General
Lg. General
Interruptible
natural gas from suppliers - including transportation, storage, and other related costs:
NOTICE OF PUBLIC WORKSHOP 3
Schedule
No.
101
11 1
13 1
Commodity
Change
per Therrn
$0.04066
$0.04066
$0.04066
Demand
Cliange
per Therrn
$0.00471
$0.00471
$0.00000
Total
Sch. 150
Change
$0.04537
$0.04537
$0.04066
Amortization
Change
per Therrn
$0.0 1800
$0.01 800
$0.0062 1
Total Rate
Change
per Therm
$0.06337
$0.06337
$0.04687
Overall
Percent
Change
6.8%
9.7%
8.3%
YOU ARE FURTHER NOTIFIED that Avista estimates that the commodity cost
(i.e., the WACOG) will increase by $0.041 per therm, from the currently approved $0.333 per
therm to $.374 per therm.
YOU ARE FURTHER NOTIFIED that Avista says it periodically hedged gas
throughout 2013 for the coming PGA year (13 months), and that it will hedge about 38% of its
estimated annual load requirements for the PGA year (October 2013 - October 2014) at a fixed
price comprised of: (1) 12% of volumes hedged for a term of one-year or less; and (2) 26% of
volumes from prior multi-year hedges. Through June, the planned hedge volumes for the PGA
year have been executed at a weighted average price of $0.452 per therm. Avista says
underground storage capacity represents about 19% of its annual load requirements, with the
estimated weighted average cost for all storage volumes being $0.325 per them.
YOU ARE FURTHER NOTIFIED that Avista says lower overall demand, increased
production, and record high storage impacted the 2012 natural gas market and drove natural gas
prices to ten-year lows. However, these prices trended upward for most of 2013. According to
the Company, the late, colder than normal winter increased demand, reduced excess supply, and
decreased storage balances to levels below the five-year average. The Company explains that
this return to a more balanced market added to the uplift of natural gas prices and increased the
WACOG components (hedges, index, and storage) for the upcoming PGA year above the prior
year and what is currently included in rates.
YOU ARE FURTHER NOTIFIED that Avista's demand costs primarily represent the
cost to transport gas through interstate pipelines to the Company's distribution system. The
Company proposes increasing demand costs principally to account for the inclusion of the new
Northwest Pipeline transportation rates.
YOU ARE FURTHER NOTIFIED that Avista proposes increasing the amortization
rate by $0.01800 per therm (from $0.01785 per therm in the rebate direction to $0.03775 per
therm in the surcharge direction). This increase is the result of fully amortizing the $1.6 million
rebate deferral balance approved in the 20 12 PGA (the Company says the amortization balance
actually was over-amortized by about $0.1 million). The Company says this surcharge balance
was mostly offset by current 20 12-20 13 deferrals, resulting in a deferral balance, in the surcharge
direction, of about $12,000.
NOTICE OF PUBLIC WORKSHOP
NOTICE OF PUBLIC WORKSHOP
YOU ARE HEREBY NOTIFIED that the Commission Staff will hold a public
workshop for Avista customers on THURSDAY, SEPTEMBER 5, 2013 AT 7:00 P.M. IN
THE TODD LECTURE HALL IN THE MOLSTEAD LIBRARY AT NORTH IDAHO
COLLEGE, 1000 W. GARDEN AVENUE, COEUR D' ALENE, IDAHO. At this meeting
customers will have an opportunity to hear from Commission Staff regarding the Company's
Applications in the above-referenced cases and ask questions of Staff and representatives of the
Company.
YOU ARE FURTHER NOTIFIED that the Applications and supporting workpapers,
testimonies and exhibits have been filed with the Commission and are available for public
inspection during regular business hours at the Commission offices. The Applications and
testimonies are also available on the Commission's web site at www.puc.idaho.gov. Click on the
"File Room" tab at the top of the page, scroll down to "Open Electric Cases" or "Open Gas
Cases," and then click on the case numbers as shown on the front of this document.
YOU ARE FURTHER NOTIFIED that all workshops and hearings in these matters
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:
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone] (Telephone)
[phone] (FAX)
E-Mail: secretary(a?puc.idaho.gov
DATED at Boise, Idaho this / 5" day of August 20 13.
N: AVU-E-13-05-AVU-G- 13-01-kk
NOTICE OF PUBLIC WORKSHOP 5