20131101Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

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

FROM: KARL KLEIN
DEPUTY ATTORNEY GENERAL

DATE: OCTOBER 31, 2013

SUBJECT: AVISTA’S APPLICATION FOR A PRUDENCY DETERMINATION FOR
2010-2012 ELECTRIC AND GAS ENERGY EFFICIENCY
EXPENDITURES, CASE NOS. AVU-E-13-09 AND AVU-G-13-02

On September 30, 2013, Avista Corporation dba Avista Utilities applied for an order
finding that it prudently incurred $25,380,857 in electric and natural gas energy efficiency
expenditures from January 1, 2013 through December 31, 2012.1 The Company asks the
Commission to process the case under Modified Procedure. Application at 1.
The Company’s energy efficiency programs provide a financial incentive/rebate for
cost-effective efficiency measures with a simple payback of greater than one year and up to 13
years. The Company packages about 300 measures into 30 programs for customer convenience.
Residential programs include high efficiency equipment, electric-to-natural gas conversions,
Compact Fluorescent Lamps, “second” refrigerator recycling, weatherization, and educational
assistance through community events. Id. at 2. Non-residential programs include prescriptive
(standard offer) programs and site-specific (customized) programs. The site-specific programs
provide incentives on cost-effective commercial and industrial energy efficiency measures with a
simple financial payback exceeding one year, up to 13 years. Id. at 2-3.
Besides these programs, the Company helps fund the Northwest Energy Efficiency
Alliance (“NEEA”), which uses a regional approach to obtain electric efficiency by transforming
markets for efficiency measures and services. The Company says these programs allow it to

1 The $25,380,857 in total energy efficiency expenditures consists of $20,010,255 in electric energy efficiency
expenditures and $5,370,602 in natural gas energy efficiency expenditures. See Direct Testimony of Lori B.
Hermanson at 4.
DECISION MEMORANDUM 2
acquire resources that would otherwise be unachievable or more costly without regional
cooperation. Id. at 3.
The Company says it provided about $700,000 for low-income weatherization in
2012 and $50,000 for conservation education in Idaho, with the program being administered by
local community action agencies. Id.
The Company regularly convenes stakeholder meetings to obtain input from
customers, Commission Staff, and environmental interests. At these meetings, the Company
reviews its energy efficiency programs and their cost-effectiveness. Id.
The Company reports that its energy efficiency programs continue to exceed the
targets set in the Integrated Resource Plan (“IRP”) and that its expenditures of tariff rider
revenue has been reasonable and prudent. The Company has offered programs for all customer
classes with total savings of more than 109,100 MWh and 950,822 therms from January 1, 2010
through December 31, 2012. The Company says this represents 190% of the Company’s IRP
target of 57,289 MWh, a 13-year levelized total resource cost per saved MWh of $36.55, and a
21-year levelized total resource cost of per saved therm of $1.13 per therm. The Company says
its tariff rider funded programs have been very successful. Participating customers benefit from
lower bills; non-participating customers benefit from the Company acquiring lower cost
resources and maintaining the energy efficiency message and infrastructure for the benefit of its
service territory. Id. at 3-4.
STAFF RECOMMENDATION
Staff recommends that the Commission process the Company’s Application under
Modified Procedure with a 90-day comment period and 14-day reply period. The Company
concurs with this approach.
COMMISSION DECISION
Does the Commission wish to process the Company’s Application under Modified
Procedure with a 90-day comment period and 14-day reply period?

M:AVU-E-13-09_AVU-G-13-02_kk