20170801Application.pdf

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Avista Corp.
1411 East Mission P.O. Box3727
Spokane. Washington 99220-0500
Telephone [phone]
TollFree 800-727-9170
July 31,2017
Diane Hanian, Secretary
Idaho Public Utilities Commission
Statehouse Mail
W. 472 Washinglon Street
Boise,Idaho 83720
RE: Avista Utilities Request for an Increase to its Energy Efficiency Rider Adjustment,
Schedule 91
Dear Ms. Hanian:
Enclosed for filing with the Commission is an original and 7 copies of Avista Corporation's dba
Avista Utilities ("Avista or the Company") Application requesting approval of an increase to
Schedule 9l rates "Energy Efficiency Rider Adjustment."
Please direct any questions regarding this Application to Dan Johnson at [phone] or myself
at 509-495-4975.
Sincerely
Fh
A"'-*
Gervais
Senior Manager, Regulatory Policy
Avista Utilities
509-495-497s
linda. [e-mail]
Enclosure
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1 DAVID J. MEYER2 VICE PRESIDENT AND CHIEF COLTNSEL FOR
3 REGULATORY AND GOVERNMENTAL AFFAIRS4 AVISTA CORPORATION5 P.O. BOX37276 I4I1 EAST MISSION AVENUE7 SPOKANE, WASHINGTON 99220-37278 TELEPHONE: [phone]
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF AVISTA CORPORATION FOR THE
REQUEST TO INCREASE ITS ENERGY
EFFICIENCY RIDER ADJUSTMENT
CASE NO. AVU-E-fi-OQ
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I. INTRODUCTION
Avista Corporation, doing business as Avista Utilities (hereinafter Avista or Company), at
141I East Mission Avenue, Spokane, Washington, respectfully requests approval of a increase to
Schedule 91 rates "Energy Efficiency Rider Adjustment".
The Company's tariff rider mechanism is designed to match future revenue with budgeted
expenditures. To ensure appropriate recovery, the mechanism includes a true-up feature that
reconciles the previous periods' actual expenditures and collections. The purpose of this filing is
to establish tariff riders that are sufficient to fund the following twelve months of DSM as well as
anortize any tariff rider imbalance, thus minimizing the amount of future under- or over-
collections. In this filing, Avista proposes to increase billed electric rates by 1.6% through
proposed revisions in Schedule 91.
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AVISTA SCHEDULE 9lRATE ADJUSTMENT FILING PAGE 1
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The Company requests that this filing be processed under the Commission's Modified
Procedure rules.
3 Communications in reference to this Application should be addressed to:
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David J. Meyer, Esq.
Vice President and Chief Counsel for
Regulatory and Governmental Affairs
Avista Corporation
P.O.Box3727
141I E. Mission Avenue, MSC-13
Spokane, WA 99220-3727
Phone: [phone]
david.meyer@ avistacorp. com
Linda Gervais
Senior Manager, Regulatory Policy
Avista Corporation
P.O.Box3727
1411 E. Mission Avenue, MSC-27
Spokane, WA 99220-3727
Phone: [phone]
linda. gervais@ avistacorp. com
14 II. BACKGROUND
15 As of June 30, 2017, the current Schedule 91 (electric) tariff rider balance was
16 approximately $9.7 million underfunded. Underfunded balances indicate that more tariff rider
17 funding was needed to fund the ongoing Demand Side Management (DSM) operations. This
18 underfunded amount is primarily driven by the Company's nonresidential TI2 to T8 market
19 transformation program which contributed to prescriptive lighting incentives exceeding the $1.2
20 million budgeted incentives by $a.0 million.
2l This underfunded balance was driven primarily by the Company's nonresidential T-LED
22 market transformation program which contributed to prescriptive lighting incentives exceeding the
23 budgeted incentives by $9 million. The program's popularity stemmed from the drastic reduction
24 in the cost of the TLED product from the time the program was conceived until the end of the
25 program year. Because of the market change, many customers took advantage of the lower
26 consumption lighting, with all incremental costs paid in the incentive.
27 The Company's forecasted expenditures aligned closely with the actual tariff rider
AVISTA SCHEDULE gIRATE ADJUSTMENT FILING PAGE 2
I revenues throughout 2016. The actual expenditures began trending upwards in April with a
2 significant and steady increase starting in September and continuing through the end of the year;
3 the increase during this 4ft quarter timeframe resulted in approximately $3.2 million of the overall
4 underfunded tariff balance. The actual energy savings matched the upward trend in expenditures
5 and the Company exceeded its annual energy savings goal by 32,630,677 kWhs.
6 Therefore, the Company is proposing to increase rates collected in Schedule 9l to bring
7 the forecasted tariff balance close to $0 by September 30, 2020 which will provide an appropriate
8 level of funding for ongoing DSM operations.
9 Schedule 91 funds DSM programs described in the Company's Schedule 90. All Schedule
10 91 DSM revenue is applied only to the provision of electric efficiency service including programs
I I offered by the Company directly, through designated contractors, or as part of regional electric
12 programs as well as evaluation, measurement and verification ("EM&V"). These programs include
l3 but are not limited to the following:
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. Appliance measureso Compressed air measures
o HVAC measures
o Industrial measureso Lighting measures
o Maintenance measures
o Motors measures
o Northwest Energy Efficiency Alliance participation
o Shell measureso Sustainable Building measures
o Behavioral programs
The Company's programs are based on providing a financial incentive, or "rebate," for
cost-effective efficiency measures with a simple payback less than fifteen years. This includes
approximately 300 measures that are packaged into about 30 programs for customer convenience.
Avista has long encouraged the direct-use of natural gas to its electric customers. As an29
AVISTA SCHEDULE gIRATE ADJUSTMENT FILTNG PAGE 3
I electric energy efficiency program, the Company is continuing this effort with residential rebates
2 for the conversion of electric to natural gas space and water heat loads as well as a broad program
3 for any non-residential electric to natural gas conversions meeting specified criteria for relative
4 British Thermal Unit (BTU) efficiency. Avista's residential programs include high efficiency
5 equipment, electric to natural gas conversions, weatherization, as well as providing educational
6 assistance through various community events.
7 For non-residential customers, in addition to prescriptive (or "standard offer") programs,
8 Avista offers site-specific (or customized) services. The site-specific program provides incentives
9 on any cost-effective commercial and industrial energy efficiency measure with a simple financial
10 payback less than fifteen years. This is implemented through site analyses, customized diagnoses,
I I and incentives determined for savings generated specific to customers' premise or process. In
12 addition to the site-specific offering, commercial and industrial programs available to Avista
13 customers include lighting and controls, commercial food service equipment, premium efficiency
14 motors, commercial HVAC variable frequency drives, refrigerated warehouses, vending machine
15 controllers, multifamily development and electric to natural gas water heater conversions.
16 In addition to Avista's prescriptive and site-specific programs, the Company helps fund the
17 activities of the Northwest Energy Efficiency Alliance (NEEA). NEEA focuses on using a
18 regional approach to obtain electric efficiency through the transformation of markets for efficiency
19 measures and services. These programs bring resource acquisition opportunities to Avista that
20 would otherwise be either unachievable or more costly in the absence of regional cooperation.
21 The Company provided approximately $750,000 for low-income weatherization in 2016
22 in Idaho. This program is administered by the Community Action Partnership Association of
23 Idaho.
AVISTA SCHEDULE 91RATE ADJUSTMENT FTLING PAGE 4
1 Several metrics are applied to determine the costs and benefits of these programs. The
2 Company has calculated the Total Resource Cost (TRC) test and the Utility Cost Test (UCT) to
3 provide insights into program efficacy.1 Ratios over 1.0 illustrate that benefits exceed costs.
4 III. REQUEST FOR APPROVAL
5 In conclusion, Avista respectfully requests the Commission approve the proposed increase
6 in rates and charges in Schedule 91. The estimated annual revenue change associated with this
7 filing is an annual increase of approximately $3.9 million for electric Schedule 91, or an increase
8 of l.6o/oinoverall billed rates. The proposed rate increase will have an average monthly bill impact
9 to residential electric customers using 910 kwh of $1.37 increase to their bill, or 1.6%.
IO Iv. CUSTOMER NOTIFICATION
1 I Notice to the public of the proposed rates and charges, pursuant to IDAPA 31.21.02.102,
12 will be given simultaneously with the filing, by posting a notice to the Company's website at
13 myavistautilities.com. Notice of proposed rates will also be given to all Idaho customers by
14 individual bill insert, provided as Attachment A. The proposed effective date is October 1,2017.
15 V. CONCLUSION
16 WHEREFORE, Applicant respectfully requests the Commission issue its Order finding the
17 proposed rates and charges in Schedule 9l attached to this Application as Attachment B to be fair,
18 just, reasonable and nondiscriminatory, and effective for electric service rendered on and after
t The Total Resource Cost test measures the net costs of a demand-side management program as a resource option
based on the total costs of the program, including both the participants'and the utility's costs. The Utility Cost Test
measures the net costs of a demand-side management program as a resource option based on the costs incurred by the
program administrator (including incentive costs) and excluding any net costs incurred by the participant. The benefits
are similar to the TRC benefits. Costs are defined more narrowly.
AVISTA SCHEDULE 91RATE ADJUSTMENT FILING PAGE 5
1 October 1,2017, with this application being processed under Modified Procedure
DATED at Spokane, Washington, this 3lst day of July, 2017.
AVISTA CORPORATION
By
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David J. Meyer,
Vice President and Chief Counsel for Regulatory
and Governmental Affairs
AVISTA SCHEDULE gIRATE ADJUSTMENT FILTNG PAGE 6
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VERIFICATION
srATE OF WASHTNGTON )
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County ofSpokane )
David Meyer, being first duly sworn, on oath deposes and says: that he is the Vice
President and Chief Counsel for Regulatory and Governmental Affairs for AvistaUtilities; that he
has read the above and foregoing Application, knows the contents thereof, and believes the same
to be true.
SIGNED AND SWORN to before me this 3l't day of July 2017, by David Meyer.
NO PUBLIC in and for the State of
residing at Spokane.
Commission Expires:7s
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AVISTA SCHEDULE 91RATE ADJUSTMENT FILING PAGE 7
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ATTACHMENT A .fiil l0: t 5
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Important Notice for Idaho Electric Customers
(August 2017) - Draft 07127 ll7
Proposed Electric Rate Adjustments to be Effective Oct. 1,2017
Avista has filed four annual rate adjustment requests with the Idaho Public Utilities Commission
(Commission), with a requested effective date of Oct. 1,2017 . These annual filings are separate from the
general rate case request filed in June 2017 regarding base retail rates in Idaho, have no impact on the
company's earnings, and are not related to the proposed acquisition of Avista by Hydro One.
The first adjustment is Avista's annual Power Cost Adjustment (PCA). The PCA is an annual rate
adjustment made to reflect certain differences between Avista's actual cost of generating and purchasing
electric power to serve customers and the cost currently included in customer rates. It is a true-up to reflect
the actual cost of power to serve customers. The proposed PCA rate adjustment would rebate to customers
approximately $7.3 million effective Oct. 1, 2017.The rebate is primarily associated with power supply
costs that were lower than those included in base retail rates, due to lower wholesale electric and natural
gas prices. As a result of Avista's PCA filing last year, the Commission approved a rebate of approximately
$0.5 million. That rebate will end Sept. 30, 2017 . The net effect of the expiring rebate, and the proposed
rebate, is an overall decrease in revenue of approximately 2.7 percent, or $6.8 million.
The second adjustment is related to the Bonneville Power Administration (BPA) Residential Exchange
Program. The Residential Exchange Program provides a share ofthe benefits of the federal Columbia River
power system to the residential and small farm customers of the investor-owned utilities in the Pacific
Northwest, including Avista. Avista applies the benefits it receives, which typically fluctuate from year to
year, to customers as a credit in their monthly electric rates. The benefit Avista will receive from BPA
starting in October 2017 will result in a slightly higher level of benefits than is currently being passed
through to qualifying customers. As a result of the higher level of benefits, the proposed revenue decrease
for residential and small farm customers is approximately S0.2 million, or an overall decrease of
approximately 0. I percent.
The third rate adjustment is related to the funding of Avista's electric energy efficiency programs. This
filing is a true-up, adjusting the amount of funding that is collected in customer rates needed to run the
programs, including the rebates and incentives paid to customers, so that it aligns with the actual costs to
deliver the programs. Avista's programs are based on providing a financial incentive, or "rebate," for cost-
effective energy efficiency measures with a simple payback less than 15 years. This includes approximately
300 measures that are packaged into about 30 programs, providing choices for our customers. The proposed
revenue change associated with this filing is an increase of approximately S3.9 million, or an overall
increase of approximately 1.6 percent.
The fourth rate adjustment is related to Avista's electric fixed cost adjustment mechanism (FCA). The
FCA mechanism is designed to break the link between a utility's revenues and customers' energy usage.
Avista's actual revenue, based on kilowatt hour sales, will vary, up or down, from the level included in a
general rate case and approved by the Commission. This could be caused by changes in weather, energy
conservation or the economy. Generally, under the FCA Avista's electric revenues are adjusted each month
based on the number of customers, rather than kilowatt hour sales. The difference between revenues based
on sales and revenues based on the number of customers is surcharged or rebated to customers beginning
in the following year. For electric operations, the rate adjustment is designed to increase revenues by
approximately $5.9 million, or 2.3 percent. This rate adjustment is driven primarily by a lower level of
customer usage in 2016 due in part to a warmer than normal winter, and does not apply to Avista's Extra
Large General Service Schedules.
Customer Bills - If approved, residential electric customers in Idaho using an average of 9 1 0 kilowatt hours
per month would see their monthly bills increase from $86.39 to $88.12, an increase of $1.73 per month,
or approximately 2.0 percent. The proposed electric rate changes would be effective Oct. l, 2017. The
requested electric rate changes by rate schedule are:
Residential Service - Schedule 1
General Service - Schedules 11 & 12
Large General Service - Schedules 21 &.22
Extra Large General Service - Schedule 25
Extra Large General Service - Schedule 25P
Pumping Service - Schedules 31 &,32
Street & Area Lights - Schedules 4l-49
Overall
2.0%
1.7%
13%
-2.8%
-3.1%
1.8%
09%
1.1yo
The Company's applications are proposals, subject to public review and a Commission decision. Copies of
the applications are available for public review at the offices of both the Commission and Avista, and on
the Commission's website (www.puc.idaho.gov). Customers may file with the Commission written
comments related to the Company's filings. Customers may also subscribe to the Commission's RSS feed
(http://www.puc.idaho.gov/rssfeeds/rss.htm) to receive periodic updates via e-mail about the case. Copies
of rate filings are also available on our website, www.myavista.com/rates.
If you would like to submit comments on the proposed decrease, you can do so by going to the Commission
website or mailing comments to:
Idaho Public Utilities Commission
P.O. Box 83720
Boise, lD 83720-0074
To assist customers in managing their energy use and energy bills, Avista offers services such as energy
efficiency programs and rebates, comfort level billing, payment arrangements and Customer Assistance
Referral and Evaluation Services (CARES). To leam more, visit www.myavista.com.
AVA258i
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ATTACHMENT B l1l1 l0' l5
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PRESENT SCHEDULE 91
AVISTA CORPORATION
d/b/a Avista Utilities
SCHEDULE 91
ENERGY EFFICIENCY RIDER ADJUSTMENT - IDAHO
APPLICABLE:
To Customers in the State of ldaho where the Company has electric service
available. This Energy Efficiency Rider or Rate Adjustment shall be applicable to all
retail customers for charges for electric energy sold and to the flat rate charges for
Company-owned or Customer-owned Street Lighting and Area Lighting Service.
This Rate Adjustment is designed to recover costs incurred by the Company
associated with providing energy efficiency services and programs to customers.
MONTHLY RATE:
The energy charges of the individual rate schedules are to be increased by
the following amounts:
Schedule 1
Schedule 11 & 12
Schedule 21 &22
- .245 p per kWh
- .2711 per kWh
- .2091 per kWh
Schedule 25
Schedule 25P
Schedule 31 &32
- .1421 per kWh
- .131 I perkWh
- .240 p per kWh
Flat rate charges for Company-owned or Customer-owned Street Lighting
and Area Lighting Services (Schedules 41,42,43,44,45,46,47,48 & 49) are to be
increased by 2.670/o.
SPECIAL TERMS AND CONDITIONS:
Service under this schedule is subject to the Rules and Regulations
contained in this tariff.
The above Rate is subject to increases as set forth in Tax Adjustment
Schedule 58.
Effective October1,2013lssued July 31 ,2013
l.P.U.C. No.28
Tenth Revision Sheet 91
Canceling
Ninth Revision Sheet 91 91
ssued by lities
"4/^-,j'',o.Norwood,Vice-President,State&FederalRegulation
PROPOSED SCHEDULE 91
AVISTA CORPORATION
d/b/a Avista Utilities
SCHEDULE 91
ENERGY EFFICIENCY RIDER ADJUSTMENT - IDAHO
APPL!CABLE:
To Customers in the State of ldaho where the Company has electric service
available. This Energy Efficiency Rider or Rate Adjustment shall be applicable to all
retai! customers for charges for electric energy sold and to the flat rate charges for
Company-owned or Customer-owned Street Lighting and Area Lighting Service.
This Rate Adjustment is designed to recover costs incurred by the Company
associated with providing energy efficiency services and programs to customers.
MONTHLY RATE:
The energy charges of the individual rate schedules are to be increased by
the following amounts:
Schedule 1
Schedule 11 & 12
Schedule 21 &22
Schedules 41 - 49
0.395 I per kWh
0.427 I per kWh
0.340 I per kWh
1.340 d per kWh
Schedule 25
Schedule 25P
Schedule 31 & 32
0.2191 per kWh
0.203 I per kWh
0.396 I per kWh
SPECIAL TERMS AND CONDITIONS:
Service under this schedule is subject to the Rules and Regulations
contained in this tariff.
The above Rate is subject to increases as set forth in Tax Adjustment
Schedule 58.
lssued July 31 ,2017 Effective October 1, 2017
LP.U.C. No.28
Eleventh Revision Sheet 91
Canceling
Tenth Revision Sheet 91 91
ities
O. Norwood, Vice-President, State & Federal Regulation
STRIKE SCHEDULE 91
l.P.U.C. No.28
Tenth Revision Sheet 91
Canceling
Ninth Revision Sheet 91 91
AVISTA CORPORATION
d/b/a Avista Utilities
SCHEDULE 91
ENERGY EFFICIENCY RIDER ADJUSTMENT - IDAHO
APPL!CABLE:
To Customers in the State of ldaho where the Company has electric servlce
available. This Energy Efficiency Rider or Rate Adjustment shall be applicable to all
retail customers for charges for electric energy sold and to the flat rate charges for
Company-owned or Customer-owned Street Lighting and Area Lighting Service.
This Rate Adjustment is designed to recover costs incurred by the Company
associated with providing energy efficiency services and programs to customers.
MONTHLY RATE:
The energy charges of the individual rate schedules are to be increased by
the following amounts:
Schedule 1
Schedule 11 & 12
Schedule 21 &22
- Z+51 per kWh
- ,2711 per kWh
- *Og l per kWh
Schedule 25
Schedule 25P
Schedule 31 & 32
- -1421 per kWh
- l$t I per kWh
- 24f1 per kWh
ing
and Area tighting Serviees (Sehedules 11,42; 13; 44; 15,46, 17, l8 & 19) are te
@
SPECIAL TERMS AND CONDITIONS:
Service under this schedule is subject to the Rules and Regulations
contained in this tariff.
The above Rate is subject to increases as set forth in Tax Adjustment
Schedule 58.
lssued July 31 ,2013 Effective October 1,2013
Avista UtilitiesBy f Kglly O. Nonrvood, Vice-President, State & Federal Regulation
rurnln,r=d
UNDERLINE SCHEDIJLE 91
AVISTA CORPORATION
d/b/a Avista Utilities
SCHEDULE 91
ENERGY EFFICIENCY RIDER ADJUSTMENT - IDAHO
APPLICABLE:
To Customers in the State of ldaho where the Company has electric service
available. This Energy Efficiency Rider or Rate Adjustment shall be applicable to all
retail customers for charges for electric energy sold and to the flat rate charges for
Company-owned or Customer-owned Street Lighting and Area Lighting Service.
This Rate Adjustment is designed to recover costs incurred by the Company
associated with providing energy efficiency services and programs to customers.
MONTHLY RATE:
The energy charges of the individual rate schedules are to be increased by
the following amounts:
Schedule 1
Schedule 11 & 12
Schedule 21 &22
Schedules 41 - 49
0.395 I per kWh
0.427 I per kWh
0.340 I per kWh
1.3401 per kWh
Schedule 25
Schedule 25P
Schedule 31 &32
0.2191 per kWh
0.203 I per kWh
0.396 I per kWh
SPECIAL TERMS AND CONDITIONS:
Service under this schedule is subject to the Rules and Regulations
contained in this tariff.
The above Rate is subject to increases as set forth in Tax Adjustment
Schedule 58.
lssued July 31 ,2017 Effective October 1, 2017
Eleventh Revision Sheet 91
Canceling
Tenth Revision Sheet 91 91l.P.U.C. No.28
ssued byBy I Kglly O. Norwood, Vice-President, State & Federal Regulation
rualn"'.''J