20170929final_order_no_33895.pdf

Office of the Secretary
Service Date
September 29,2017
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE RESIDENTIAL )
AND SMALL FARM ANNUAL RATE )CASE NO.AVU-E-17-05
ADJUSTMENT FILING OF AVISTA )
CORPORATION )ORDER NO.33895
________________________________________________________________________________________
)
On August 1,2017,Avista Corporation dba Avista Utilities applied to the
Commission for authorization to implement a residential and small farm energy credit rate,in
Schedule 59,of 0.078 cents per kilowatt-hour (kWh).Application at 1.This rate represents an
increase in the annual credit to qualifying customers of approximately $200,000,and a
corresponding decrease to those customers’rates.Id.at 2.The Company requested that the
Application be processed under Modified Procedure,with an effective date of October 1,2017.
Id.The Commission issued a Notice of Application and Notice of Modified Procedure setting a
comment deadline.Order No.33840.Commission Staff timely filed comments.No other
comments were received.
Having reviewed the record,the Commission enters this Order approving the
Company’s Application,with the new rate to be effective October 1,2017.The Commission’s
decision is set out more fully below.
BACKGROUND
This Application results from the Bonneville Power Administration’s (BPA)
Residential Exchange Program.The Residential Exchange Program was established by Section
5(c)of the Northwest Electric Power Planning and Conservation Act.16 U.S.C.§839c(c).That
section makes low-cost power from the federal Columbia River power system available to
investor-owned utilities in the Northwest.See Assoc.o/Pub.Agency Customers v.Bonneville
Power Adinin.(APAC v.BPA),733 F.3d 939,945 (9th Cir.2013).The statute permits utilities to
“exchange power they have purchased or generated for lower-cost power generated by BPA.”
Portland General Elec.Co.v.Bonneville Power Admin.(PGE v.BPA),501 F.3d 1009,1015
(9th Cir.2007).The exchange is a paper transaction—a utility may offer to sell power to BPA at
the utility’s average system cost (ASC)for producing power,which BPA compares to a Priority
Firm (PF)Exchange Rate that BPA calculates for purposes of the exchange.See id.,APAC v.
BPA,733 F.3d at 945-46.If BPA’s PF Exchange Rate is lower than the utility’s ASC,then the
ORDER NO.33895
utility is entitled to a benefit from BPA.APAC v.BRA,733 F.3d at 946.Generally,the utility
benefit is the difference between BPA’s PF Exchange Rate and the utility’s ASC.multiplied by
the utility’s residential load.Id.at 945.The utility must pass the benefit on to its qualifying
(residential and small farm)customers.See id.(citing 16 U.S.C.§839c(c)(3)).The
implementation of the exchange has been litigated over the years;the current implementation
results from a settlement that took effect in 2012.See Id.at 946-47 (describing litigation and
settlement).
THE APPLICATION
In its Application,Avista summarized the Residential Exchange Program.
Application at 2-3.Avista passes the benefits it receives under the program to qualifying
customers via the residential and small farm energy credit rate.Id.
The current residential and small farm energy credit rate is 0.060 cents per kWh.Id.
at 3.The current BPA benefit passed to Avista’s idaho customers is about $400,000.Id.at 3-4
and n.1.The current credit rate includes the $400,000 BPA benefit plus a credit adjustment of
about $330,000 to return to customers an under-refunded balance,for a total credit of about
$730,000.Id.The additional credit adjustment of about $330,000 is projected to be refunded to
customers by October 1,2017.Id.at 3.
The proposed credit rate is 0.078 cents per kWh.Id.The proposed credit rate
represents an increase of about $500,000 in BPA benefits,for a total benefit amount of
approximately $940,000.Id.Thus,the overall decrease for qualifying customers under the
proposed credit rate,compared to the current rate,is $200,000 or 0.2%.Id at 4.The Company
explained that the change in the credit rate does not affect its net income.Id.
The Company’s Application included workpapers that calculate the residential and
small farm energy credit rate.Application Attachment A (Workpapers).The Company also
provided a copy of the proposed tariff,Schedule 59,which contains the credit rate,as Exhibit A
to its Application.The Company requested that the rate be effective from October 1,2017
through September 30,2018.Id.at 1.The Company indicated it will bring the Application to
the attention of its customers via a news release and a customer notice explaining each of several
rate filings.Id.at 5.
ORDER NO.33895 2
STAFF COMMENTS
Staff explained the calculation of the BPA benefit.Staff Comments at 2.The
difference between Avista’s ASC and BPA’s PF Exchange Rate is calculated and then multiplied
by the average amount of energy that Avista’s residential and small farm customers used over
the last two years.Id.at 2-3.The result is the annual benefit the Company will pass to its
qualifying customers.Id.
Avista then calculated its residential and small farm energy credit rate by taking the
annual benefit amount and adding to that amount any projected remaining benefit balance from
previous years.Id.That total is then divided by Avista’s projected sales to residential and small
farm customers (in kwh),resulting in the proposed rate.Id.
Staff audited the inputs to the calculations and independently recalculated the rate.
Id.Staff believed the Company correctly calculated the proposed rate of 0.078 cents per kWh,
and recommended the rate be approved.
Staff also reviewed the Company’s customer notice and draft press release,which
were included with the Company’s Application,and the Company’s final press release
addressing this Application,which was filed in Case No.AVU-E-17-04 (the press release
addressed both cases and two others),Id.Staff believed that the customer notice and final press
release complied with Rule 125 of the Commission’s Rules of Procedure.IDAPA 3 1.01.01.125.
COMMISSION FINDINGS
The Commission has jurisdiction over this matter under Idaho Code §61-502 and
61-503.The Commission has the express statutory authority to investigate rates,charges,rules,
regulations,practices,and contracts of public utilities and to determine whether they are just,
reasonable,preferential discriminatory,or in violation of any provision of law,and may fix the
same by Order.Idaho Code §61-502 and 61-503.The Commission has reviewed the record,
including the Application and comments.
We find that the proposed credit rate of 0.078 cents per kWh is just and reasonable.
We therefore approve the Application and the proposed tariff Schedule 59,to be effective
October 1,2017.
ORDER
IT IS HEREBY ORDERED that the Application of Avista Utilities to implement a
new residential and small farm energy credit rate is approved.The Company is authorized to
ORDER NO.33895
implement its proposed credit rate of 0.078 cents per kWh and the proposed tariff Schedule 59 is
approved,to be effective October 1,2017.
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 with regard to any
matter decided in 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
day of September 2017.
1’fl Rgit&
KR TINE C MMISSIONER
ATTEST:
Diane M.Hanian
Commission Secretary
O:AVU-E-I 7-05cc2
PRESIDENT
ERIC ANDERSON,COMMISSIONER
ORDER NO.33895 4