20160801Ehrbar DI.pdf

DAVID J. MEYER
VICE PRESIDENT AND CHIEF COUNSEL FOR
REGULATORY AND GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
1411 E. MISSION AVENUE
P . 0. BOX 3727
SPOKANE, WASHINGTON 99220
PHONE: [phone], FAX: [phone]
RECE IVED
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE POWER COST
ADJUSTMENT (PCA) ANNUAL RATE
ADJUSTMENT FILING OF AVISTA
CORPORATION
FOR AVISTA CORPORATION
CASE NO. AVU-E-16 -~
DIRECT TESTIMONY OF
PATRICK D. EHRBAR
Q. Please state your name, business address and
2 present position with Avista Corporation ( "Avista" or
3 "Company") .
4 A. My name is Patrick D. Ehrbar and my business
5 address is 1411 E. Mission Avenue, Spokane, Washington. I am
6 employed by Avista as Senior Manager, Rates and Tariffs in
7 the State and Federal Regulation Department.
8 Q. Would you briefly describe your educational
9 background and professional experience?
10 A. Yes. I am a 1995 graduate of Gonzaga University
11 with a Bachelors degree in Business Administration. In 1997
12 I graduated from Gonzaga University with a Masters degree in
13 Business Administration. I started with Avista in April
14 1997 as a Resource Management Analyst in the Company's
15 Demand Side Management (DSM) department. Later, I became a
16 Program Manager, responsible for energy efficiency program
17 offerings for the Company's educational and governmental
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customers. In 2000, I was selected to be one of the
Company's key Account Executives. In this role I was
20 responsible for, among other things, being the primary point
21 of contact for numerous commercial and industrial customers,
22 including delivery of the Company's site specific energy
23 efficiency programs.
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2
I joined the State and Federal Regulation Department as
a Senior Regulatory Analyst in 2007. Responsibilities in
3 this role included being the discovery coordinator for the
4 Company's rate cases, line extension policy tariffs, as well
5 as miscellaneous regulatory issues. In November 2009, I was
6 promoted to my current role where I am responsible for
7 managing the Company's cost of service studies, rate
8 spread/rate design initiatives, decoupling and fixed cost
9 adjustment mechanisms, and power and purchased gas cost
10 adjustments, among other things.
11 Q. What is the scope of your testimony in this
12 proceeding?
13 A. My testimony provides a summary of the accounting
14 entries and account balances related to the Power Cost
15 Adjustment (PCA) for the twelve months ended June 30, 2016.
16 My testimony also addresses the proposed rebate to be
17 effective October 1, 2016, which will replace the existing
18 rebate.
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20
Q. Are you sponsoring an Exhibit?
A. Yes. I am sponsoring Exhibit No. PDE-1. Page 1
21 consists of a sheet showing the calculation of the proposed
22 uniform cents per kilowatt-hour PCA rebate of O. 01 7¢, as
23 well as the impact of the proposed PCA rebate rate by rate
24 schedule. Page 2 is the proposed PCA tariff, Schedule 66.
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Avista P. 2
1 Q. Would you please provide an overview of the most
2 recent changes to Avista's PCA methodology that were
3 approved by the Idaho Public Utilities Commission {"IPUC")?
4 A. Yes. On June 29, 2007 the Commission issued Order
5 No. 30361 in Case No. AVU-E-07-01. That case dealt with the
6 review of the PCA methodology and method of recovery. The
7 Commission approved a change in the PCA methodology from a
8 trigger and cap mechanism to a single annual PCA rate
9 adjustment filing requirement.
10 The Commission also approved a change in the method of
11 the PCA deferral rate adjustment from a uniform percentage
12 basis to a uniform cents per kilowatt-hour basis, effective
13 with the October 1, 2007 rate change. By Order No. 32206 in
14 Case No. GNR-E-10-03 dated March 15, 2011, the Commission
15 modified the retail revenue credit methodology and approved
16 a Load Change Adjustment Rate based on the energy classified
17 portion of embedded production revenue requirement effective
18 April 1, 2011.
19 The Commission approved the following procedural
20 schedule for administering the annual PCA filings:
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27
August 1
September
October 1
1
Company filing for
deferral period
Review and comments
interested parties
Commission Order and
PCA rate adjustment
prior July June
by Staff and other
effective date of
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1 Q. Would you please sununarize the filing and Order
2 associated with the existing PCA rate?
3 A. Yes. On July 31, 2015, Avista filed its annual PCA
4 rate adjustment for the period July 1, 2014 through June 30,
5 2015 and requested a PCA rebate rate of 0.032¢ per kilowatt-
6 hour effective October 1, 2 015. The Commission approved
7 that request in Case No. AVU-E-15-07, by Order No. 33389,
8 dated September 30, 2015.
9 Q. Does the present filing conform to the requirements
10 of the prior Commission Orders regarding the PCA?
11 A. Yes. Consistent with prior years, the proposed PCA
12 rate adjustment is based on the following:
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•
•
•
Q.
Deferrals for the period July 1,
30, 2016, including interest,
2015 through June
Unamortized balance from the
September 30, 2016 rate period,
and
during the
in effect
2017).
Interest recorded
surcharge will be
through September 30,
October 1, 2015 to
including interest,
twelve months
(October 1,
the
2016
What were the amounts of deferrals and interest for
23 the period July 1, 2015 through June 30, 2016?
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25
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A. The amounts are shown below:
Deferrals (July 2015 -June 2016)
Interest1
Balance at June 30, 2015
($483,157)
$5,054
($478 ,103)
1 The PCA balance f or the majority of the July 2014 through June 2 015
time period was in the sur charge position. As such , inte r est was
accrued in the surcharge direction , and was only partially offset by the
monthly PCA rebate entries for March through June 2016 . Therefore , net
interest for the year was a surcharge e ven with an overall rebate
balance.
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1 Company witness Mr. Johnson discusses the components
2 that make up the $483,157 deferral balance shown above. The
3 $5,054 interest amount represents interest for the twelve-
4 month period July 1, 2015 through June 30, 2016. Interest
5 for the twelve-month period was calculated using the
6 Customer Deposit Rate of 1%.
7 Q. What rebate rate is the Company proposing to be
8 effective October 1, 2016?
9 A. The Company is proposing a uniform cents per
10 kilowatt-hour PCA rebate rate of O. 017¢ to be effective
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12
October 1, 2 016. Page 1 of Exhibit No. PDE-1 shows the
calculation of the proposed rebate. Page 2 of Exhibit No.
13 PDE-1 is a copy of the proposed tariff, Schedule 66, which
14 contains the proposed PCA rebate rate. The proposed rebate
15 is designed to rebate the following:
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17
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19
20
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23
Deferrals and interest for the July 1, 2015
through June 30, 2016 period
Projected Interest on Deferral July l, 2016
through September 30, 2016
Unamortized Rebate and Interest from October 1,
2015 through September 30, 3016 PCA
Estimate of interest for October 1, 2015 through
September 30, 2016
Total
$ (478,103)
$ (1,209)
$ (34,159)
$ (2,561)
$ (516,032)
After applying the conversion factor related to
24 commission fees and uncollectible customer accounts, the
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1 resulting rebate of $519,032 is divided by forecasted
2 kilowatt-hours to derive the proposed rebate rate of 0.017¢
3 per kilowatt-hour.
4 Q. What is the impact of the proposed PCA rate
5 increase by rate schedule?
6
7
A. Page 1 of Exhibit No. PDE-1 shows the effect of the
proposed PCA rate increase by rate schedule. The proposed
8 rebate rate is 0.017¢ per kilowatt-hour, which is 0.015¢ per
9 kilowatt-hour less than the existing rebate rate of 0.032¢
10 per kilowatt-hour. Column (g) shows the percentage increase
11 by rate schedule. The overall increase is 0.2%, or
12 $457,000.
13 Q. What will be the impact of the proposed rebate on
14 an average residential customer?
15 A. Under the Company's proposal, the PCA rebate rate
16 for all customers, including residential customers, will go
17 from a 0.032¢ per kilowatt-hour rebate to a 0.017¢ per
18 kilowatt-hour rebate, an increase of O. 015¢ per kilowatt-
19 hour. Residential customers using an average of 918
20 kilowatt-hours per month would see their monthly bills
21 increase from $84.72 to $84.86, an increase of $0.14 per
22 month, or 0.2%.
23 Q. Is the Company continuing with its customer bill
24 paying assistance programs?
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A. Yes. The Company has several programs available to
assist customers with paying their bills. Avista's Comfort
3 Level Billing (CLB) plan is based on historical charges or
4 an estimate of future charges and will approximate a monthly
5 average of the customer's estimated annual billings.
6 The concept of this plan is to help the customer budget
7 for their utility bills throughout the year by leveling out
8 seasonal highs and lows in their monthly utility bills. The
9 Customer Assistance Referral and Evaluation Services (CARES)
10 program provides assistance to special-needs customers
11 through access to specifically trained CARES representatives
12 who provide referrals to area agencies and churches for help
13 with, among other things, housing, utilities and medical
14 assistance.
15 The Low Income Home Energy Assistance Program (LIHEAP)
16 is a Federal program aimed to assist low income customers
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pay their electric and natural gas bills. These funds are
distributed through local agencies. Project Share is a
voluntary contribution option allowing customers to
20 contribute donations that are distributed through local
21 community action agencies to customers in need.
22 Idaho customers who have children, elderly or infirmed
23 persons living in the household may qualify for the Winter
24 Moratorium plan . From December 1 through February 28,
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1 customers are not required to pay their bills in full and
2 can defer payment or make partial payments. In addition,
3 the Winter Payment Plan provides for lower winter bill
4 payments by allowing customers to make monthly payments
5 equal to one-half of the levelized bill amounts, with the
6 balance in full or a new payment arrangement due by April
7 The Company also works out payment arrangements with
8 customers having difficulty paying their bills.
9 In addition, the Company has convenient options that
10 help those who need flexibility, but are generally able to
11 pay. APS, or automatic payment service (money is deducted
12 from a customer's checking account automatically each
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month), is one example .
credit card service,
Other services include debit and
check-by-phone or over the web,
15 preferred due date (the customer picks a more convenient
16 date to pay than the one the Company states on the bill),
17 and e-billing.
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Q. Does that conclude your pre-filed direct testimony?
A. Yes, it does.
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