20161114Ehrbar Stipulation.pdf

DAVID J . MEYER
VICE PRESIDENT AND CHIEF COUNSEL FOR
REGULATORY & GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
P .O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE : [phone]
FACSIMILE : (509) 495 -8851
DAVID .MEYER@AVISTACORP .COM
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF AVISTA CORPORATION FOR THE
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC SERVICE
TO ELECTRIC CUSTOMERS IN THE
STATE OF IDAHO
CASE NO. AVU -E-16-03
DIRECT TESTIMONY OF
PATRICK D. EHRBAR
IN SUPPORT OF THE
STIPULATION AND
SETTLEMENT
FOR AVISTA CORPORATION
(ELECTRIC)
I.INTRODUCTION
2 Q. Please state your name, employer and business
3 address.
4 A. My name is Patrick D. Ehrbar and I am employed
5 as the Senior Manager of Rates and Tariffs for Avista
6 Utilities ("Company" or "Avista"), at 1411 East Mission
7 Avenue, Spokane, Washington.
8 Q. Have you previously filed direct testimony in
9 this proceeding?
10 A. Yes. My testimony in this proceeding covered
11 the spread of the proposed electric revenue increase
12 among the Company's electric general service schedules.
13 My testimony also described the changes to the rates
14 within the Company's electric schedules.
15 Q. What is the scope of this testimony?
16 A. The purpose of my testimony is to describe and
17 support the non-revenue requirement portions of the
18 Stipulation and Settlement ("Stipulation"), filed on
19 October 2 4, 2016 between the Staff of the Idaho Public
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Utilities Commission ("Staff'),
Corporation ("Clearwater"), Idaho
("Idaho Forest") , the Community
Clearwate r Paper
Forest Group, LLC
Action Partnership
23 Association of Idaho ("CAPAI "), the Snake River Alliance
24 ( "Snake River") and the Company . These entities are
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Avista Corporation
l collectively referred to as the "Parties," and represent
2 all parties in the above-referenced cases .
3 In my testimony I will explain the following
4 Settlement components:
5 1. Rate Spread and Rate Design
6 2. Other Settlement Items
7 I will also provide an overview of the Company 's customer
8 service programs.
9 Q. Are you sponsoring any exhibits?
10
11
A. No, I am not.
sponsoring Exhibit No.
Company witness Ms. Andrews is
14, which is a copy of the
12 Stipulation and Settlement filed on October 24 , 2016 ,
13 with the Commission.
14 II. RATE SPREAD & RATE DESIGN
15 Q. Please explain the settlement terms relating to
16 cost of service.
17 A. In this case , the Company prepared a cost of
18 service analysis that incorporated, among other things, a
19 system load factor peak credit method of classifying
20 production costs , allocat ing 100 % of transmission costs
21 to demand , and allocating transmission costs on a twelve-
22 month coincident peak allocation factor. The Parties in
23 this case did not reach agreement on any particular cost
24 of service methodology. For settlement purposes, the
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Avista Corporation
1 Parties agreed to use a pro-rata allocation based on the
2 Company's proposed 25 % move towards unity for purposes of
3 spreading the agreed-upon electric revenue increase.
4
5
Q.
A.
How did the Stipulation address rate design?
For settlement purposes, with the exception of
6 the Residential Basic Charge, the Parties agreed to the
7 rate design changes proposed by the Company in Mr.
8 Ehrbar's direct testimony. For the electric Residential
9 Basic Charge (Schedule 1 ), the Parties agreed on an
10 increase from $ 5. 2 5 per month to $5. 7 5 per month, an
11 increase of $0.50 per month. Appendix C of the
12 Stipulation (Andrews Exhibit No. 14) provides a summary
13 of the current and proposed rates and charges for
14 electric service.
15 Q. What is the effect on retail rates, by rate
16 schedule, of the proposed settlement?
17 A. The following table reflects the agreed-upon
18 percentage increase by schedule for electric service:
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Rate Schedule
Residential Schedule 1
General Service Schedules 11 /12
Large General Service Schedules 21/22
Extra Large General Service Schedule 25
Clearwater Paper Schedule 25P
Pumping Service Schedules 31/32
Street & Area Lights Schedules 41-48
Overall
Increase in Increase in
Base Rates Billing Rates
3.2% 3.1%
1.9% 1.8%
2.3% 2.3%
1.9% 1.9%
1.8% 1.8%
3.1% 3.0%
3.4% 3.3%
2.6% 2.5% =
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Avista Corporation
1 Q. What is the el.ectric residential. bil.l. impact
2 if the Connnission approves the Settl.ement Stipul.ation?
3 A. An electric residential customer using an
4 average of 918 kilowatt hours per month would see a
5 $2.64, or 3.1%, increase per month for a revised monthly
6 bill of $87.15.
7 III. OTHER ELEMENTS OF THE STIPULATION
8 Q. Pl.ease expl.ain the settl.ement terms rel.ating to
9 the PCA authorized l.evel. of expenses.
10 A. The new level of power supply revenues,
11 expenses, retail load and Load Change Adjustment Rate
12 resulting from the January 1, 201 7 settlement revenue
13
14
requirement,
calculations,
for purposes of monthly PCA mechanism
are detailed in Appendix A of the
15 Stipulation (Andrews Exhibit No. 14).
16
17
Q. Pl.ease expl.ain the settl.ement terms rel.ating to
the authorized base for the El.ectric Fixed Cost
18 Adjustment Mechanism.
19 A. The new level of baseline values for the
20 electric fixed cost adjustment mechanism resulting from
21 the January 1, 2017 settlement revenue requirement are
22 detailed in Appendix B (Andrews Exhibit No. 14).
23 Q. Pl.ease expl.ain the other issues agreed upon in
24 the Settl.ement Stipul.ation.
Ehrbar, Di 4
Avista Corporation
A. The Parties agreed to meet and confer, prior to
2 the Company's next general rate case filing, regarding
3 the Company's electric cost of service study. Included
4 in the workshop ( s) would be discussion related to the
5 methodologies used by Avista to classify and allocate its
6 costs, as well as a review of the changes that occurred
7 between the cost of service study results from the
8 Company's 2015 general rate case filing and its 2016
9 general rate case filing. The Company will provide
10 available information, studies and data requested by a
11 Party so as to enable meaningful workshop participation
12 and discussion of issues. Unless it decides to do so, a
13 Party shall not be bound by workshop discussions and may
14 contest cost of service and rate spread issues in
15 subsequent proceedings.
16 Second, the Company and interested parties will meet
17 and confer prior to the Company 's next general rate
18 filing in order to assess the Low Income Weatherization
19 and Low Income Energy Conservation Education Programs to
20 explore policy goals and program structures that may
21 enhance or improve Avista's low-income program.
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Avista Corporation
IV. CUSTOMER SERVICE PROGRAMS
2 Q. Does the Company have programs in place to
3 mitigate the impacts on customers of the proposed rate
4 increases?
5 A. Yes. We have a history of making it a priority
6 within our Company to maintain meaningful programs to
7 assist our customers that are least able to pay their
8 energy bills . We also have programs to assist our entire
9 customer base , i .e ., not just our low-income customers .
10 Some of the key programs that we offer or support are as
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• DSM Energy Efficiency Programs and Funding . The
Company offers a broad array of energy efficiency
program measures that provide customers with
increased opportunity to manage their energy bills.
Avista conducted 26 events through its Energy
Resource Van reaching 1,741 individuals with energy
saving and bill/payment options and assistance
information and resources throughout our service
terri t ory in Idaho in 2016 . Avista 's mobile outreach
van traveled to locations such as Juliaetta ,
Pinehu rst, Sandpoint , Lapwai and Coeur d 'Alene to
reach low-income customers through their local food
bank .
• Project Share. Project Share is a vol untary program
al l owing customers and employees to donate funds
that are distributed through community action
agencies to customers in need. In the 2015/2016
heating season , Avista Utilities ' customers ,
employees and Avista Corp donated $150,224 which was
di rected to Idaho Community Action Agencies.
• Comfort Level Billing. The Company offers the
option for all customers to pay the same bill amount
each month of the year by averaging their annual
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Avista Corporation
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usage. Under this program, customers can avoid
unpredictable winter heating bills .
Payment Arrangements. The Company's Contact Center
Representatives work with customers to set up
payment arrangements to pay energy bills.
CARES Program . Customer Assistance Referral and
Evaluation Services provide assistance to special­
needs customers through access to specially trained
(CARES) representatives who provide referrals to
area agencies and churches for help with housing,
utilities, medical assistance , etc .
Senior Energy Outreach: Avista has developed
our more
disabled
and energy
comfort and
as follows :
specific outreach efforts to reach
vulnerable customers (seniors and
customers) with bill paying assistance
efficiency information that emphasizes
safety . Some examples of this effort are
• Senior Pub1ications: Avista has created a
one -page advertisement that has been placed
in senior resource directories and targeted
senior publications to reach seniors with
information about energy efficiency, Comfort
Level Billing, Avista CARES and energy
assistance. A brochure with the same
information has also been created for
distribution through senior meal delivery
programs and other senior home-care programs.
• Senior Energy Workshops: With the help of
the Avista Conservation Energy Education
Team, five Energy Workshops have been
facilitated in 2016 , with eight currently
scheduled through December. Through the five
workshops, 126 seniors and low-income
indi victuals were reached and given Home
Energy Saving kits along with learning about
low-cost/no-cost ways to reduce energy use.
Q. Does this conc1ude your direct testimony?
A . Yes, it does .
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Avista Corporation