20130920final_order_no_32894.pdf

Office of the Secretary
Service Date
September 20,2013
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF AVISTA CORPORATION FOR
AUTHORITY TO INCR.EASE ITS ENERGY
EFFICIENCY RIDER ADJUSTMENT,
SCHEDULE 9T
)) CASE NO. AVU-E-13-05
)) oRDER NO. 32894
)
On August 1, 2013, Avista Corporation dba Avista Utilities filed an Application
asking to increase its "Energy Efficiency Rider" found in tariff Schedule 9l . The Schedule 91
tariff rider is designed to "match future revenue with budgeted [energy efficiency] expenditures."
Application at l. The tariff rider mechanism includes a true-up that reconciles the previous
period's actual expenditures with Schedule 9l 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.
On August 15,2013, the Commission issued its Notice of Application and Notice of
Modified Procedure requesting written comments no later than September 10, 2013. Order No.
32878. On the same day, the Commission also scheduled a public workshop for September 5,
2013 in Coeur d'Alene to discuss this and other rate filings made by Avista. In response to the
Commission's Notice of Modified Procedure, comments were filed by two customers and the
Commission Staff. The two customers generally opposed all rate increases without
distinguishing between the various Avista rate filings.
Based upon our review of the Application and comments, the Commission grants the
Application as set out below.
THE APPLICATION
A. The Rider Programs
The Company reports that as of May 31,20t3, 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 "Tl2 fluorescent lighting fixtures to higher efficiency T8 fixtures ." Id. at 2.t During 2012,
I Generally T12 fluorescent lighting fixtures use "older" magnetic ballasts while T8 fixtures use newer electronic
ORDERNO. 32894
Avista operated a Tl2 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.
The Schedule 9l 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 (I.JEEA). The
Company has about 30 efficiency-DSM programs for customers. Application at4. In addition,
the Company encourages its all-electric residential customers to convert to natural gas space and
water heating. Id.
The Company also assists in funding various NEEA programs. NEEA operates and
implements programs that promote electric conservation and efficiency in Avista's service
territory. "Historically, Avista has received approximately 1 .5 to 2 aMW of savings in its service
territory from NEEA programs." Id. at 5. The Company also provides $700,000 for low-income
weatherization programs in 2012 and an additional $50,000 for conservation education in Idaho.
The low-income weatherization program is administered by the local community action agencies
in the Company's Idaho service territory.
B. The Proposed Rider Increase
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 of $0.92 for the average residential
electric customer utilizing 930 kwh per month. This represents an increase of l.l7oh per month
for the average residential customer. The table below reflects the proposed increase to the
Energy Efficiency Rider for various customer classes:
SCHEDULE
EXISTING
RATE
PROPOSED
RATE
Residential Customers - Sch. I 0.146A per kWh 0.245rt per kWh
General Service - Sch. ll & 12 0.162A per kWh 0.271(, per kWh
Large General Service - Sch. 2l & 22 0.125( per kWh 0.209(, per kWh
Extra Large Customers - Sch. 25 0.086p per kWh 0.142A per kWh
Clearwater Paper - Sch. 25P 0.08d per kWh 0.13lA per kWh
Pumping Service - Sch. 31-32 0.142i per kWh 0.240A per kWh
ballasts. T8 lamps with electronic ballasts are more energy efficient than
Electronic ballasts will generally reduce the overall load on a circuit
www.Ultral-uxl.i ght.com/f'l uorescent tube_faq.html .
ORDERNO. 32894 2
Tl2 lamps with magnetic ballasts.
by reducing energy demand. See
STAFF COMMENTS
After verifying that the rider account was underfunded by approximately $3.0 million
as of May 31,2013, Staff supported the Company's proposal to increase the Energy Efficiency
fuder.2 The increase in the Energy Efficiency Rider will allow the Company to recover its
deficiency over two years (October 2013 through September 2015) and would yield sufficient
revenue to pay for the Company's budgeted DSM expenditures.
Staff also verified that the deficit was primarily caused by the Company's rebate
program regarding the conversion of Tl2 fluorescent lighting fixtures to higher efficiency T8
lighting fixtures. Avista had originally budgeted approximately $1.2 million for the program but
ultimately paid about $5.2 million in rebates. Staff Comments at 2-3. Staff also noted that this
year's proposed rider increase follows last year's l.3Yo decrease. Id. at3.
Although Staff considered amortizing the deficit over a period longer than two years,
Staff ultimately recommended the two-year period to recover the forecasted $3.6 million deficit.
Staff also anticipates the Company will soon file an application to review the prudency of its
DSM expenditures for years 2010 and2012. Id. at 4.
In summary, Staff recommended the Commission approve the Company's
Application to increase its tariff Schedule 91 rider by an overall average of 1.2o/o effective
October 1,2013.
COMMISSION FINDINGS
Energy effrciency measures and cost-effective DSM programs have long been utilized
to reduce the need for higher cost, supply-side resources. While implementation of energy
efficiency measures by customers without utility incentives is the least cost resource, the next is
prudently administered and cost-effective DSM programs. Some DSM programs provide
monetary incentives to customers while others provide educational information.
The Commission has reviewed the Application and the comments provided by the
two customers and Commission Staff. Based upon the Company's Application and Stafls audit,
we find that the electric Energy Efficiency Rider account is underfunded by approximately $3.0
million as of May 31,2013, and this projection will grow to $3.6 million by the end of this
month. We further find that the primary contributor to the underfunding of the rider account was
2 The Company's Application stated that the Rider account was underfunded by approximately $3.0 million as ofMay3l,20l3. Avistaprojectedthatthedeficitwouldgrowto$3.6millionbytheendofSeptember2013. Staff
Comments at 2.
ORDERNO. 32894
the Tl2 to T8 conversion program for fluorescent lighting fixtures. Based upon our review of
the record, we find that it is reasonable to recover the deficiency and fund ongoing DSM
programs by increasing the Schedule 9l Energy Efficiency Rider by 1.2% in billed rates. The
Commission also approved the recovery of the deficiency over a two-year period. Consequently,
the Commission finds it is fair, just and reasonable to increase the Schedule 91 Energy
Efficiency Rider as proposed by the Company to be effective October 1,2013.
ULTIMATE CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over Avista Corporation dba
Avista Utilities pursuant to the authority granted by Title 61 of the Idaho Code and specifically
Idaho Code $$ 6l-336,61-502, and 6l-622.
The Commission further finds that the current Energy Efficiency Rider is insufficient
to defray the Company's energy efficiency and DSM costs. Consequently, the Commission
finds that the rates proposed in the Company's Application are just and reasonable and shall
become effective on October 1,2013.
ORDER
IT IS HEREBY ORDERED that the Company's Application to increase its electric
Energy Efficiency Rider (Schedule 91) by l.2o/obased upon billed revenue is granted.
IT IS FURTHER ORDERED that tariff Schedule 91 that accompanied the
Application is approved to be effective on 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-I3-
05 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 $ 61-626.
oRDERNO. 32894
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this gOil
day of September 2013.
n*Mb I &*e-
MARSHA H. SMITH, COMMISSIONER
ATTEST:
bls/O:AVU-E- I 3-05_dh2
PAUL KJEL
MACK A. REDFORD,MISSIONER
ORDERNO. 32894