The URL can be used to link to this page

Home My WebLink About20140730Pluth Direct.pdfDAVID J. MEYER VICE PRESIDENT AND CHIEF COUNSEL FOR REGULATORY AND GOVERNMENTAL AFFAIRS AVISTA CORPORATION 14I I E. MISSION AVENUE P. O.BOX3727 SPOKANE, WASHINGTON 99220 PHONE: (509) 495-4316, FAX: (509) 495-8851 RECI i\i:. r] ?flltr JUL 30 ff4 9: 5l BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF THE POWER COST ) ADJUSTMENT (PCA) ANNUAL RATE ) CASE NO. AVU-E-!4. Db ADJUSTMENT FILING OF AVISTA ) DIRECT TESTIMONY OF CORPORATION ) JEANNE M. PLUTH FOR AVTSTA CORPORATION I 2 J 4 5 6 7 8 9 l0 ll t2 l3 t4 t5 l6 t7 l8 t9 20 2t 22 a. Please state your name, the name of your employer, and your business address. A. My name is Jeanne M. Pluth. I am employed by Avista Corporation ("Avista" or "Company") at l4l1 East Mission Avenue, Spokane, Washington. 0. In what capacity are you employed? A. I am employed by Avista as Manager of Regulatory Accounting in the State and Federal Regulation Department. a. Would you briefly describe your educational background and professional experience. A. Yes. I am a 1986 graduate of Eastern Washington University with a Bachelor of Arts Degree in Business Administration, majoring in Accounting. In 1987,Lpassed the Certified Public Accountant exam, earning my CPA License in April 1988. I worked for McFarland & Alton, CPAs from l99l to 1997. I worked at Ecova, a subsidiary of Avista, before joining Avista Utilities in December 2004. I served in the Projects and Fixed Assets section of the Finance Department before I was hired into the State and Federal Regulation Department as a Regulatory Analyst in November 2006. In this role, I have assisted in developing and supporting the Company's electric and/or natural gas general rate filings in Washington, ldaho and Oregon, as well as miscellaneous regulatory accounting issues and special projects. In November 2013,1 was promoted to my current role. I have attended several utility accounting and ratemaking training courses. a. What is the scope of your testimony in this proceeding? A. My testimony provides a status report of the accounting entries and account balances related to the Power Cost Adjustment (PCA) for the twelve months ended June 30, Pluth, Di Avista Page I I 2 J 4 5 6 7 8 9 l0 ll t2 l3 t4 l5 l6 l7 18 t9 20 2t 22 23 2014. My testimony also addresses the proposed surcharge to be effective October l, 2014, which will replace the existing rebate. a. Are you sponsoring an Exhibit? A. Yes. I am sponsoring Exhibit No. JMP-I. Page I consists of a sheet showing the calculation of the proposed uniform cents per kilowatt-hour PCA surcharge of 0.252$, as well as the impact of the proposed PCA rate increase by rate schedule. Page 2 is the proposed PCA tariff, Schedule 66. a. Would you please explain the Order that was issued regarding Avista's existing PCA methodology? A. Yes. On June 29,2007 the Commission issued Order No. 30361 in Case No. AW- E-07-01. That case dealt with the review of the PCA methodology and method of recovery. The Commission approved a change in the PCA methodology from a trigger and cap mechanism to a single annual PCA rate adjustment filing requirement. The Commission approved the following procedural schedule for administering the annual PCA filings: August 1 Company filing for prior July - June deferral period September I Review and comments by Staff and other interested parties October I Commission Order and effective date of PCA rate adjustment The Commission also approved a change in the method of PCA deferral recovery from a uniform percentage basis to a uniform cents per kilowatt-hour basis effective with the October 1, 2007 rute change. By Order No. 32206 in Case No. GNR-E-10-03 dated March 15, 2011, the Commission modified the retail revenue credit methodology and approved a Load Change Adjustment Rate based on the energy classified portion of embedded production revenue requirement effective April l, 201 l. Pluth, Di Avista Page2 l0 ll t2 l3 t4 l5 l6 t7 l8 0. Would you please summarize the filing and Order associated with the existing PCA rate? A. Yes. On July 31,2013, Avista filed its annual PCA report for the period July l, 2012 through June 30,2013 and requested a PCA rebate of 0.152(, per kilowatt-hour effective October 1,2013. The Commission approved that proposal in Case No. AVU-E-13-04, by Order No. 32892, dated September 19,2013. a. Does the present filing conform to the requirements of the prior Commission Orders regarding the PCA? A. Yes. Consistent with prior years, the proposed PCA rate adjustment is based on the following: o Deferrals for the period July 1, 2013 through June 30,2014, including interest,o Estimated rebate to customers in excess of the rebate balance for the October 1,2013 to September 30, 2014 rute period, including interest, ando Interest recorded during the twelve months the surcharge will be in effect (October 1,2014 through September 30, 2015). In addition, the proposed PCA rate adjustment includes the following two adjustments: t9 20 2t 22 23 Increased costs of $505,265 to correct an error related to the allocation of natural gas transport costs between the Company's power supply operations and the Company's natural gas distribution operations', and Rebate of $713,000 related to the 2013 earnings test.2 I Details regarding the adjustment due to an error related to the allocation ofnatural gas transport costs between the Company's power supply operations and the Company's natural gas distribution operations were provided in the December 2013 PCA Defenal Report filed with the Commission on January 16,2014.2 In the Company's last general rate case (Docket No. AVU-E-12-08), the Company agreed to an after-the-fact eamings test, where it would refund to customers one-half of any earnings in excess of the 9.8% return on equity (*ROE"),onaconsolidatedbasisforelectricandnaturalgas,foreachoftheyears2013 and2014. Forthe2013 earnings test, Avista deferred a benefit of $3.914 million for electric customers. In Docket No. AVU-E-14-05, Parties have agreed that $3.201 million of the $3.914 million 2013 electric earnings test deferral would be used to replace the 1.3%o BPA credit on electric Schedule 97 on January 1,2015 that would be expiring. The remaining $713,000 ofthe 2013 earnings test deferral would be credited to customers through the PCA over a one-year period beginning October 1,2014, pending Commission approval. Pluth, Di Avista Page 3 1 2 J 4 5 6 7 8 9 l0 ll t2 l3 t4 l5 l6 t7 a. What were the amounts of deferrals and interest for the period July 1, 2013 through June 30, 2014? A. The amounts are shown below: Deferrals (July 2013 - June 2014) Interest Surcharge Balance at June 30,2014 $7,642,184 63.725 $7.705J09 Company witness Mr. Johnson discusses the components that make up the deferrals shown above. The $63,725 interest amount represents interest for the twelve-month period July I,2013 through June 30, 2014. Interest for the twelve-month period was calculated using the Customer Deposit Rate of l7o. a. What surcharge rate is the Company proposing to be effective October 1, 2014? A. The Company is proposing a uniform cents per kilowatt-hour PCA surcharge of 0.252i, to be effective October 1,2014. Page I of ExhibitNo. JMP-I shows the calculation of the proposed surcharge. Page 2 of Exhibit No. JMP-I is a copy of the proposed tariff, Schedule 66, which contains the proposed PCA surcharge rate. The proposed surcharge is designed to collect the following: Deferrals and interest forthe July 1,2013 through June 30,2014 period $7,705,909 Estimated rebate to customers in excess of the rebate balance for the October 1,2013 to September 30,2014 rate period 162,370 Other Adjustments: Natural Gas Transport Costs 505,265 2013 Earnings Test (713,000) Estimate of interest for July 1,2014 through September 30,2015 57.000 Total Amount to Surcharge from Customers $7.717.s44 Pluth, Di Avista Page 4 I 2 aJ 4 5 6 7 8 9 l0 ll t2 l3 t4 l5 t6 l7 l8 t9 20 2l 22 23 After applying the conversion factor related to commission fees and uncollectible customer accounts receivable, the resulting surcharge increase of $7,756,248 is divided by forecasted kilowatt-hours to derive the proposed surcharge rate of 0.252(, per kilowatt-hour. a. What is the impact of the proposed PCA rate decrease by rate schedule? A. Page I of Exhibit No. JMP-I shows the effect of the proposed PCA rate increase by rate schedule. The proposed surcharge is 0.252$ per kilowatt-hour, which is 0.404(, per kilowatt- hour greater than the existing rebate of 0.152(, per kilowatt-hour. Therefore, 38% of the proposed PCA rate adjustment is related to the expiration of a rebate to customers and 62% is related to increased power supply costs over the last twelve months. Column (f) shows the percentage increases by rate schedule. The overall increase is 4.99o/o. a. What will be the impact of the proposed rebate on an average residential customer? A. Under the Company's proposal, the PCA surcharge rate for all customers, including residential customers, will increase from a 0.152(, per kilowatt-hour rebate to a 0.252$ per kilowatt-hour surcharge, an increase of 0.4041 per kilowatt-hour. Residential customers using an average of 930 kilowatt-hours per month would see their monthly bills increase from $81.88 to $85.64, an increase of $3.76 per month, or 4.59Yo. a. Is the Company continuing with its customer bill paying assistance programs? A. Yes. The Company has several programs available to assist customers with paying their bills. Avista's Comfort Level Billing (CLB) plan is based on historical charges or an estimate of future charges and will approximate a monthly average of the Customer's estimated annual billings. The concept of this plan is to help the customer budget for their utility bills throughout the year by leveling out seasonal highs and lows in their monthly utility bills. The Pluth, Di Avista Page 5 I 2 J 4 5 6 7 8 9 l0 ll t2 l3 t4 l5 t6 t7 l8 t9 20 2t Customer Assistance Referral and Evaluation Services (CARES) program provides assistance to special-needs customers through access to specifically trained CARES representatives who provide referrals to area agencies and churches for help with housing, utilities, medical assistance, etc. Low Income Home Energy Assistance Program (LIHEAP) is a Federal program aimed to assist low income customers pay their electric and natural gas bills. These funds are distributed through local agencies. Project Share is a voluntary contribution option allowing customers to contribute donations that are distributed through local community action agencies to customers in need. Idaho customers who have children, elderly or infirm persons living in the household may qualify for the Winter Moratorium plan. From December I through February 28, customers are not required to pay their bills in full and can defer payment or make partial payments. [n addition, the Winter Payment Plan provides for lower winter bill payments by allowing customers to make monthly payments equal to one-half of the levelized bill amounts, with batance in full or a new payment arrangement due by April I't. The Company also works out payment arrangements with customers having difficulty paying their bills. In addition, the Company has convenient options that help those who need flexibility, but are generally able to pay. APS, or automatic payment service (money is deducted from a customer's checking account automatically each month), is one example. Other services include debit and credit card service, check-by-phone or over the web, preferred due date (the customer picks a more convenient date to pay than the one the Company states on the bill), and e-billing. O. Does that conclude your pre-filed direct testimony? A. Yes, it does. Pluth, Di Avista Page 6 RECf IV!r {1 DAVID J. MEYER VICE PRESIDENT AND CHIEF COUNSEL FOR ?OII' JUL 30 A!{ 9: 58 REGULATORY AND GOVERNMENTAL AFFAIRS AVISTA coRPoRATIoN '-" l.?&F!-'J-i-uL i-i" 1411 E. MTSSTON AVENUE uTlLlTl[S C0fi{i,ilsstoii P. O.BOX3727 SPOKANE, WASHINGTON 99220 PHONE: (509) 489-0500, FAX: (509) 49s-8851 BEFORE THE IDAHO PUBLIC UTILITIES COMIVIISSION rN Tr{E MATTER OF THE POWER COST ) CASE NO. AVr.r-E-I4 -Db ADruSTMENT (PCA) ANNUAL RATE ) ADruSTMENT FILING OF AVISTA ) EXHIBIT NO. JMP.ICORPORATION ) JEANNE M. PLUTH FOR AVISTA CORPORATION AVISTA UTILITIES IDAHO ELECTRIC IMPACT OF PROJECTED SCHEDULE 66 PCA INCREASE PROPOSED RATE TO BE EFFECTIVE OCTOBER 1.2014 (000s of Dollars) (000s of kWh) Line Type ofNo. Service (a) 1 Residential2 General Service3 Large General Service4 Extra Large General Service5 Clearwater6 Pumping Service7 Street & Area Lights8 Total Proposed surcharge rate Existing rebate rate lncrease in rate Schedule Number (b) 1 11,12 21,22 25 25P 31,32 4149 Percent lncrease on Billed Revenue (0 4.440/o 3.90% 5.O2o/o 7.41o/o 7.98o/o 4.370h 1.66% 4.99o/o Pro Forma Kilowatt-hours (cX1) 1,182,736 357,7U 684,603 328,085 452,422 55,826 TotalBilledRevenue Proposed at Present Sch.66Rates lncrease(d) (e) $107,581 $4,78137,060 1,4655,091 2,76717,885 1,32622,907 1,8295,1e1 22613,890 3,392 563,075,297 $249,080 $12,431 I 10 11 $0.00252 -0.00152 $0.004M Prooosed surcharoe rate12 Deferrals including interest 7 I 1 I 13-61301 1413 lnterestTll114-913011414 Gas Transport Adjustment15 Projected Excess Rebate to Customers atgl30l1416 Rebate of2013 Earnings Test17 Forecasted interest 1011114-913011518 Total to surcharge including interest19 Conversion factor20 Revenue requirement21 kWh's from above22 Proposed surcharge rate 1011114 $7,756 -$4,674 $12,431 $7,706 19 505 162 -713 38 -$?,?18' 0.995010 -ffi' 3,075,297 $0.00252 (1) Source: Revenue forecast for the twelve month period October 1 , 2014 - September 30, 201 5. 1) 1G1-14 Rate lncrease.xlsx Page 1 of 1 l.P.U.C. No.28 Sixteenth Revision Sheet 66 Canceling Fifteenth Revision Sheet 66 AVISTA CORPORATION d/b/a Avista Utilities SCHEDULE 66 TEMPORARY POWER COST ADJUSTMENT . IDAHO APPLICABLE: To Customers in the State of ldaho where the Company has electric service available. This Power Cost Adjustment shal! be applicable to all retail customers for charges for electric energy sold and to the flat rate charges for Company-owned or Customer-owned Street Lighting and Area Lighting Service. This Rate Adjustment is designed to recover or rebate a portion of the difference between actual and allorred net power supply costs. MONTHLY MTE: The energy charges of elec'tric Schedules 1, 11, 12, 21, 22, 25, 25P, 31, and 32 are to be increased by 0.252i, per kilowatt-hour in all blocks of these rate schedules. Flat rate charges for Company-owned or Customer-owned Street Lighting and Area Lighting Service, Schedules 4149, are to be increasedby 0.252$ per kilowatt- hour times the monthly usages of the various light sizes and types on these schedules. SPECIAL TERMS AND CONDITIONS: The rates set forth under this Schedule are subject to periodic review and adjustment by the IPUC based on the actual balance of defened power costs. Service under this schedule is subject to the Rules and Regulations contained in this tariff. The above Rate is subject to increases as set forth in Tax Adjustment Schedule 58. lssued by By ..^., I Kelly O. Norwood -Vice President, State & FederalRegulation -% a,,/-.r-rar'lI