20150731Ehrbar Direct.pdf

DAVID J. MEYER
VICE PRESIDENT AND CHIEF COUNSEL FOR
REGULAT.R' AND G.'ERNMENTAL AFEATRS l['r jjr'- '1'l ir"l 'y: 53
AVISTA CORPORATION
1411 E. MISSION AVENUE .:-,ai I , ':
P. O. BOX 3'727
SPoKANE, WASHTNGTON 99220
PHONE: [phone]L6, EAX: [phone]-
BErORE TIIE IDNIO PITBLfC U'IIIIJIEIES CODOIISSION
rN THE MATTER OF THE POWER COST ) CASE NO. AVU-E-15-a7
AD,JUSTMENT (PCA) ANNUAL RATE )
ADJUSTMENT FILING OF AVISTA ) DIRECT TESTIMONY OF
CORPORATION ) PATRICK D. EHRBAR
EOR AVISTA CORPORATION
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A. Please state you! nane, business address and
present position with Avista Corporation ( I'Avistarr or
"Coryany" ) .
A. My name is Patrick D. Ehrbar and my business
address is L4L7 E. Mission Avenue, Spokane, Washington. f am
employed by Avista as Manager, Rates and Tariffs 1n the
State and Eederal Regulation Department.
A. Would you briefly describe your
background and professiona1 o<perience?
educationa].
A. Yes. I am a 1995 graduate of Gonzaga University
wlth a Bachelors degree in Busj-ness Administration. In 1,991
I graduated from Gonzaga University with a Masters degree in
Business Administration. I started with Avista in ApriI
L997 as a Resource Management Analyst in the Company's
Demand Side Management (DSM) department. Later, f became a
Program Manager, responsible for energy efficiency program
offerings for the Company's educational and governmental
customers. In 2000, I was sel-ected to be one of the
Company's key Account Executives. In this role I was
responsible for, among other things, being the primary point
of contact for numerous commercial and industrial customers,
including deli-very of the Company's site specific energy
ef f ici-ency programs.
Ehrbar,Avista P.
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I joined the State and Federal Regulation Department as
a Senior Regulatory Analyst in 2007. Responsibilities in
this role included being the discovery coordinator for the
Company's rate cases, Ii-ne extension policy tariffs, ds well
as miscellaneous regulatory issues. In November 2009, f was
promoted to my current role.
9. What is the scope of your testimony in this
procee4ing?
A. My testimony provJ-des a sunmary of the accounting
balances related to the Power Costentries and account
Adjustment (PCA) for
My testimony also
effective October L,
surcharge.
the twelve months ended .fune 30, 20L5.
addresses the proposed rebate to be
20L5, which will replace the existing
9. Are you sponsoring an ExhiJcit?
A. Yes. I am sponsoring Exhibit No. PDE-1. Page 1-
consists of a sheet showing the calculation of the proposed
uniform cents per kilowatt-hour PCA rebate of 0.032Cr ds
wel-l as the impact of the proposed PCA rebate rate by rate
schedule. Page 2 is the proposed PCA tariff, Schedule 66.
A. flouId you please provide an ovsrrrier of the most
recent changes to Avista's PCA nethodologry tlrat reae
approved by the ld.aho PtrbJ'ic UtiJ'itj.es C@ission (NIPUC") ?
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A. Yes. On .Tune 29, 2007 the Commission issued Order
No. 30361 in Case No. AVU-E-07-01. That case deal-t 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 requi-rement.
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 L, 2007 rate change. By Order No. 32206 in Case No.
GNR-E-10-03 dated March 15, 20L1,, 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, 20LL.
The Commission approved the following procedural
schedule for administering the annual PCA filings:
August 1
September 1
October 1
A. Would you
associated rittr ttre
Company f iling for prior ,Ju1y June
deferral period
Review and comments by Staff and other
interested parties
Commission Order and effective date of
PCA rate adjustment
pJ.ease su@arize ttre fiJ.ing and Order
existing PCA rate?
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A. Yes. On JuIy 3L, 20L4, Avista filed its annual- PCA
report for the period JuIy 1, 20L3 through June 30, 2074 and
requested a PCA surcharge rate of 0.252C per kil-owatt-hour
effective October l, 2014. The Commission approved that
request in Case No. AVU-E-14-06, by Order No. 33140, dated
September 30 , 20L4.
A. Does the present fiJ.ing confor:m to ttre requirenents
of the prior Comission Orders regarding the PCA?
A. Yes. Consistent with prior years, the proposed PCA
rate adjustment is based on the followi-ng:
Deferrals for the period JuIy
30, 20L5, including interest,
Unamortized balance from the
September 30, 201,5 rate period,
and
Interest recorded during the
surcharge will be in effect
through September 30, 20L6) .
L, 2074 through June
October L, 2014 to
including interest,
twelve months the(October L, 2075
A. fltrat werc! the amounts of deferrals and interest for
the period iluJ.y 1, 2OL4 through ilune 30, 20L5?
A. The amounts are shown below:
Deferrals (Ju1y 2074 - June 2015)
BPA Settlement Transfer
Interestl
Balance at June 30, 2075
($821,579)
($382,725)
$1,700
J51,292,5p_4L
1 The PCA balance for the majority of the JuIy 2014 through June 201,5
time period was in the surcharge position. As such, interest was
accrued in the surcharge direction, and was only partially offset by the
monthly PCA rebate entries for March through June 2015. Therefore, net
lnterest for the year was a surcharqe even with an overall rebate
balance.
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Company wi-tness Mr. ,Johnson discusses the components
that make up the $821,579 deferral balance shown above. The
$1r 700 interest amount represents interest for the twelve-
month period July Lt 201,4 through ,June 30, 201,5. Interest
for the twelve-month period was cal-culated using the
Customer Deposit Rate of 1t.
9. IIouId you please describe the i382,125 \\BPA
Settlement Transfet" coryonent included in the ilune 30, 2015
deferra]. balance?
A. Yes. In Avista's 20LZ general rate case (Case No.
AVU-E-12-08), the Commission approved the Settlement
Stipulation that, among other things, provided for the
rebate of approximately $3.8 million related to a settlement
between Avista and the Bonneville Power Administration
("BPA") for BPA's use of the Company's transmission system.
Whil-e the rate under Schedule 97 was designed to rebate to
customers approximately $3.8 million over the October L,
20L3 through December 31, 2014 time period, the actual
amount rebated to customers was $3.417 miIlion. Under the
terms of the tariff, "any residual balance wilt be trued up
in a future PCA filed by the Company". Therefore, in
January 20L5, the Company transferred the balance of
$382,725 into the PCA deferral account (FERC Account
#L82387).
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A. Iltrat rahate rate is the Coryany proposing to be
effective October 1, 2OL5?
A. The Company is proposing a uniform cents per
kilowatt-hour PCA rebate rate of 0.0324 to be effective
October l, 201,5. Page l- of Exhibit No. PDE-1 shows the
calculation of the proposed rebate. Page 2 of Exhlbit No.
PDE-1 is a copy of the proposed tariff, Schedul-e 66, which
contains the proposed PCA rebate rate. The proposed rebate
is designed to rebate the following:
After applying the conversion factor related to
commission fees and uncollectible customer accounts, the
resulting rebate of $919,313 is divided by forecasted
kilowatt-hours to derive the proposed rebate rate of 0.032C
per kilowatt-hour.
A. What is the iryact of the proposed PCA rate
decrease by rate schedule?
A. Page 1 of Exhibit No. PDE-I shows the effect of the
proposed PCA rate decrease by rate schedule. The proposed
Ehrbar, Di
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Deferral-s and
through June
interest for the
30, 2015 period
July 1, 2074 ($l , 202 , 60 4)
Projected Interest on
through September 30,
Deferral July
2015
l, 20L5 ($3,012)
Unamortized Surcharge and Interest from the
October l-, 2014 through September 30, 2015 PCA $236, 091
Estimate of interest
September 30, 20L6
for October 1, 2015 through ($4,848)
Tota].(s974.373)
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rebate rate is 0.0324 per kilowatt-hour, which i-s 0.2844 per
kilowatt-hour less than the existing surcharge rate of
0.252C per kilowatt-hour. Column (f) shows the percentage
decrease by rate schedule. The overall decrease is 3.58.
9. Wtrat yiJ.I be ttre iryact of, the proposed rebate on
an aveaage residential. customer?
A. Under the Company's proposal, the PCA rebate rate
for aII customers, including residential customers, will go
from a 0.252Q per kilowatt-hour surcharge to a 0.032C per
kilowatt-hour rebate, a decrease of 0.2844 per kilowatt-
hour.Residential customers using an average of 929
kilowatt-hours per month would see their monthly bilIs
decrease from $85.24 to $82.60, a decrease of $2.64 per
month, or 3.1?.
A. Is ttre Coqrany continuing rith its cugtoer biJ.J.
paying assistance programs?
A. Yes. The Company has several programs avail-able to
assist customers with paying their bi1Is. Avista's Comfort
Level Billing (CLB) plan is based on historical charges or
an estimate of future charges and wil-l 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 bil1s throughout the year by leveling out
seasonal highs and lows in their monthly utitity bi11s. The
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Customer Assistance Referra] 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, among other things, housi-ng, utilities and medical
assistance. Low Income Home Energy Assistance Program
(LIHEAP) is a Federal program aimed to assist 1ow income
customers pay their electric and natural gas bil-ls. These
funds are distributed through 1ocaI agencies. Project Share
is a voluntary contrj-bution option allowing customers to
contribute donations that are distributed through 1ocal
community action agencj-es to customers in need.
Idaho customers who have children, elderly or infirmed
persons living in the household may qualify for the Winter
Moratorium p1an. From December 1 through February 28,
customers are not required to pay their bil1s in fu1l and
can defer payment or make partial payments. In addition,
the Winter Payment PIan provides for lower winter bill
payments by allowing customers to make monthly payments
equal to one-half of the l-evelized bill amounts, with the
balance in fulI or a new payment arrangement due by April
1"t. The Company also works out payment arrangements with
customers having difficulty paying their bil1s.
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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 checkj-ng 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-bi11ing.
A. Does ttrat conclude your pre-fi1ed direct testimony?
A. Yes, it does.
Ehrbar, Di
Avista P. 9