20170920Comments.pdf

CAMILLE CHRISTEN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BAR NO. 10t77
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3I PFI 2:07
Street Address for Express Mail:
472 W, WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE RESIDENTIAL AND )
SMALL FARM ANNUAL RATE ADJUSTMENT
FILING OF AVISTA CORPORATION
CASE NO. AVU-E-17.05
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
attorney of record, Camille Christen, Deputy Attorney General, and in response to the Notice of
Application and Notice of Modified Procedure issued in Order No. 33840 on August 76,2017 ,
submits the following comments.
BACKGROUND
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, for rate
Schedules l, 12,22,32, and 48, of 0.078 cents per kilowatt-hour (kWh). Application at 1. The
Company requests that the Application be processed under Modified Procedure, with an
effective date of October 1,2017 through September 30,2018. Id. at2. The Company indicated
to Staff that it files on an annual basis to adjust this rate based on how much of the credit is
amortized through the year.
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STAFF COMMENTS SEPTEMBER20,2OIT1
The Company's Application provides the calculation of the Residential and Small Farm
Energy credit rate in Attachment A. The Company also provides a copy of the proposed tariff,
Schedule 59, which contains the credit rate, in Exhibit A to its Application. Exhibit A also
shows the changes to Schedule 59 in legislative format.
STAFF ANALYSIS
The Residential and Small Farm Energy credit rate results from an agreement between
the Company and the Bonneville Power Administration (BPA) regarding the Residential
Exchange Program. Under the Residential Exchange Program, BPA provides a share of the
benefits of the federal Columbia River power system to the residential and small-farm customers
served by the six investor-owned utilities of the Pacific Northwest, including Avista. This
benefit is implemented via a credit on qualifying customers' bills.
The current Avista Residential and Small Farm credit rate is 0.060 cents per kWh. The
current amount of BPA benefits passed through to Avista's Idaho customers is about $0.4
million. An additional credit adjustment of about $0.33 million from October 1,2016, is
currently being retumed to customers from an under-refunded balance, for a total credit of about
$0.73 million. The additional credit adjustment of about $0.33 million is projected to be mostly
refunded to customers by October 1,2017.
The proposed credit rate is 0.078 cents per kWh. The proposed credit rate represents an
increase of about $0.53 million in BPA benefits, to approximately $0.93 million in BPA benefits.
Because the additional credit adjustment of $0.33 million in the current rate will be reduced to
$.01 million by October 1,2017, the total proposed credit amount is about $0.94 million.
The overall increase in the credit amount (which results in a rate decrease to qualifying
customers) under the proposed rate of 0.078 cents per kwh, compared to the current rate of
0.060 cents per kwh, is $0.2 million or 0.2o/o. The current monthly residential bill, including all
adders (Power Cost Adjustment, Fixed Cost Adjustment, etc.), for an average residential
customer using 910 kwh is $86.39. The proposed rate change results in a bill of $86.23 - a
decrease of 16 cents - in the monthly bill for the average residential customer. The change in
the credit rate does not affect Avista's net income.
The calculation of the BPA benefit for residential and small farm customers has two
inputs. The first input is the usage by Avista's residential and small farm customers over the
2STAFF COMMENTS SEPTEMBER20,2OIT
previous two years, which is then averaged to create an annualized usage. The second input is
the difference between two variables calculated by BPA - Avista's Average System Cost
(ASC) and the Priority Firm (PF) Exchange Rate. These variables are calculated by BPA every
two years. The difference between the ASC and the PF Exchange Rate is multiplied by the
annualized usage to calculate the BPA benefit to be passed on to qualifying customers for each
of the next two years.
Avista's Residential and Small Farm Credit rate is calculated by taking the projected
remaining balance of the BPA benefit from previous years and adding the BPA benefit for the
next year. The total is then divided by the projected kWh sales to residential and small farm
customers to create the rate.
Staff has audited the initial inputs and independently recalculated the rate. Staff believes
that the Company correctly calculated the rate of 0.078 cents per kWh and recommends this rate
be approved.
CUSTOMER NOTICE AND PRESS RELEASE
The Company filed a customer notice and a draft copy of its press release with its
Application. Each document covered four cases (Case Nos. AVU-E-17-04, AVU-E-17-05,
AVU-E-I7-06 and AVU-E-I7-07). No final copy of the press release was filed in this case.
Staff reviewed the customer notice filed in this case and the press release filed in AVU-E-17-04
and determined that both comply with Rule 125 of the Commission's Rules of Procedure.
IDAPA 31.01.01.r25.
The notice was included with customer bills beginning August 8,2017 and ending
August 24,2017 . On August 24,2017,9,959 customers who would have received a bill after
that date were sent a copy of the customer notice by direct mail. Also on August 24,2077,
electronic notices were emailedto 26,498 customers. Customers have the opportunity to file
comments on or before the comment deadline of September 20, 2017.
CUSTOMER COMMENTS
As of September 20,2017, the Commission has received zero comments from customers.
STAFF COMMENTS SEPTEMBER20,2OITJ
STAFF RE,COMMENDATION
Staff recommends that the Commission approve the new Residential and Farm Energy
Rate Schedule 59, with a credit rate of 0.078 cents per kilowatt-hour, effective October 1,2017.
Respectfully submittedthis ZatL day ofSeptember 2017.
f=r.u1L
Camille Christen
Deputy Attorney General
Technical Staff: Joe Terry
Bentley Erdwurm
Daniel Klein
i : umisc/comments/avue I T.5ccjtbedk comments
4STAFF COMMENTS SEPTEMBER2O,2Ol7
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 2OTH DAY OF SEPTEMBER 2017,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. AVU-E-I7-05, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
PATRICK EHRBAR
SR MGR RATES & TARIFFS
AVISTA CORPORATION
PO BOX 3727
SPOKANE W A 99220-3727
E-mail: [e-mail]
DAVID J MEYER
VP & CHIEF COUNSEL
AVISTA CORPORATION
PO BOX3727
SPOKANE WA99220-3727
E-mail : [e-mail]
dockets@ avistacorp. com
SECRET
CERTIFICATE OF SERVICE
ELECTRONIC ONLY