20140930final_order_no_33145.pdf

Office of the Secretary
Service Date
September 30,2014
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF AVISTA CORPORATION FOR )CASE NO.AVU-E-14-08
APPROVAL OF AN ELECTRIC )
DISTRIBUTION SERVICE AGREEMENT )
WITH EAST GREENACRES IRRIGATION )ORDER NO.33145
DISTRICT )
On August 14,2014,Avista Corporation (“Avista”)filed an Application seeking
approval of an Electric Distribution Service Agreement with East Greenacres Irrigation District
(“Greenacres”).The Commission issued a Notice of Application and Notice of Modified
Procedure on August 27,2014,and established a 21-day comment period.Order No.33206.
Commission Staff was the only party to file written comments.Based upon our review,we
approve the Agreement as set out below.
THE AGREEMENT
Greenacres operates and maintains two Bureau of Reclamation-built pumping
facilities on the Rathdrum Prairie,providing irrigation and domestic water supply to
approximately 5,300 acres of land.Application at 2.To operate the pumping facilities,
Greenacres receives electric power from the Bureau of Reclamation which is delivered through
Avista’s transmission and distribution facilities.Id.at 2-3.In April 2009,the Commission
approved the initial agreement between Greenacres and Avista.That initial agreement is set to
expire October 1,2014.Order No.30784.The parties executed the new Agreement on August
6,2014,and proposed an effective date of October 1,2014,or the first day after the
Commission’s approval.Application at 1.
The distribution rate set in the new Agreement is “consistent with distribution charges
embedded in current Idaho retail rates.”Id.at 2.That rate provides that Greenacres pay Avista
$4,231.74 per month,or $50,780.88 per year,to receive electric service over Avista’s
distribution system.Id.at 3.The revenue received from the Agreement will help to offset
Avista’s fixed costs.Id.at 2.
STAFF COMMENTS
Staff noted that in the prior agreement,Avista calculated a rate using a “Load Ratio
Share”methodology based on the ratio of East Greenacres’annual energy consumption to
ORDERNO.33145 1
Idaho’s normalized annual energy consumption.In the Commission’s Order approving the
initial agreement,the Commission acknowledged Avista’s energy-based methodology,but
encouraged Avista’s efforts to develop a more appropriate “demand-based methodology.”Staff
Comments at 2,citing Order No.30784 at 3.Staff recognized that,consistent with the
Commission’s recommendation,Avista has —in its new Agreement —employed a demand-based
methodology “using East Greenacres’average share of 12 non-coincident monthly peaks
(1 2NCP method).”id.Staff said,the “1 2NCP cost-allocation method is consistent with general
methods used by the Company for allocating distribution costs among other customer classes.”
id.
As in the initial agreement,the new Agreement excludes certain cost categories from
its methodology,including customer service,information,and sales costs.Staff agrees with the
exclusion of these costs,because they are “not relevant to the distribution facilities being used to
deliver energy to East Greenacres.”Id.Further,the new Agreement excludes costs associated
with secondary distribution because Avista provides no secondary distribution lines or
transformers to East Greenacres;Staff also agrees this exclusion is appropriate.Id.at 3.
Staff reviewed the Agreement using Avista’s 2012 cost-of-service study (Case No.
AVU-E-12-08).Id.Staff verified Avista’s distribution service charge calculations of $50,781
per year,or $4,232 per month.Staff believes “the methodology used to compute East
Greenacres’distribution service charge to be just and reasonable.”Id.Accordingly,Staff
recommends that the Commission approve the Agreement.Id.
COMMISSION FINDINGS
The Commission has reviewed and considered the record in this case,including the
Electric Distribution Agreement and the Staff comments.We find the terms and conditions of
the parties’Agreement,including the use of the 1 2NCP methodology,to be just and reasonable.
We approve the Agreement without changes or conditions,with an effective date of October 1,
2014.
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over Avista Corporation,an
electric utility,and the issues presented in this matter pursuant to its authority under Title 61 of
the Public Utilities Law.Idaho Code §61-501,61-502,61-503.
ORDER NO.33145 2
ORDER
IT IS HEREBY ORDERED that the Commission grants the Application of Avista
Corporation and approves the Electric Distribution Service Agreement with East Greenacres
Irrigation District (No.AV-TR14-0337),effective October 1,2014.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order.Within seven (7)
days after any person has petitioned for reconsideration,any other person may cross-petition for
reconsideration.See Idaho Code §61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this 3O
day of September 2014.
MACK A.REDFORD,COMMISSIONER
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MARSHA H.SMITH,COMMISSIONER
ATTEST:
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Jean D Jewell
C’ommission Secretary
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ORDER NO.33145 3