20170929final_order_no_33897.pdf

Office of the Secretary
Service Date
September 29,2017
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )
OF AVISTA CORPORATION TO )CASE NO.AVU-E-17-06
INCREASE ITS ENERGY EFFICIENCY )
RIDER ADJUSTMENT SCHEDULE 91 )ORDER NO.33897
______________________________________________________________________________
)
On August 2,2017.Avista Corporation applied to the Commission to increase its
“Energy Efficiency Rider”in Tariff Schedule 91 (tariff rider),which would increase electric
customers’rates by 1.6%.The funds collected by the tariff rider “are used to maintain and
operate programs to encourage customers to use electricity and natural gas efficiently.”Order
No.32278 at 1.The tariff rider recovers Company costs associated with providing electric
efficiency services to customers,Order No.30918 at I,and to “match future revenue with
budgeted [energy efficiency]expenditures,”Application at 1.The Company stated that the
purpose of the filing was to “establish tariff riders that are sufficient to fund the following twelve
months of [Demand Side Management (DSM)programs]as well as amortize any tariff rider
imbalance,thus minimizing the amount of future under-or over-collections.”Id.The Company
asked for an October 1,2017 effective date.Id.at 5.
The Commission issued a Notice of Application and Notice of Modified Procedure.
Order No.33842.Staff timely filed the only written comments,and the Company did not reply.
Having reviewed the record,the Commission enters this Order approving the Company’s
Application.The Commission’s decision is more fully set forth below.
BACKGROUND
Avista’s tariff rider (Schedule 91)funds DSM programs described in Avista’s
Schedule 90,and is applied only to electric efficiency service (as opposed to natural gas
programs which are funded through Schedule 191).Id.at 3;see Order No.32650 at 1.Schedule
90 includes about 30 programs that provide rebates for residential and nonresidential energy
efficiency measures,such as appliance,HVAC,lighting,maintenance,weatherization and
sustainable building measures;and conversion from electric to natural gas space and water
heating.Application at 3-4.The Company also helps fund programs through the Northwest
Energy Efficiency Alliance,which promotes market transformation for energy efficiency
through a regional approach.Id.at 4.In 2016,the Company provided about $750,000 for low-
ORDER NO.33897
income weatherization through a program administered by the Community Action Partnership
Association of Idaho,Id.
In determining the cost-effectiveness of its DSM programs,the Company applies tests
including the Total Resource Cost (TRC)test and the Utility Cost Test (UCT).Id.at 5.The
TRC measures the net costs of a program based on the total costs of the program,including the
participants’and utility’s costs.Id.,n.1.The UCT measures the net costs of a program based
on the costs incurred by the program administrator (including incentive costs)and excluding any
net costs incurred by the participant.Id.
APPLICATION
The Company reported that,as of June 30,2017,the tariff rider account was
underfunded by about $9.7 million.Id.at 2.According to the Company,this underfunded
amount was primarily due to the Company’s “nonresidential T-LED market transformation”
lighting incentive program exceeding budget by $9 million.Id.
In addition,the Company reported that its “forecasted expenditures aligned closely
with the actual tariff rider revenues throughout 2016,”but that “actual expenditures began
trending upwards in April,”with a significant steady increase from September through the end of
the year.Id.at 2-3.However,the Company reported that “actual energy savings matched the
upward trend in expenditures and the Company exceeded its annual energy savings goal by
32,630,677 [kilowatt-hours (kwh)].”Id.at 3.
The Company proposed “to increase rates collected in Schedule 91 (the tariff rider)to
bring the forecasted tariff balance close to $0 by September 30,2020,[and]provide an
appropriate level of funding for ongoing DSM operations.”Id.Avista estimated its proposal
would cause “an annual [revenue]increase of approximately $3.9 million,”and would cause a
$1.37 (or 1.6%)increase to the average monthly bill of residential electric customers using 910
kwh.Id.at 5.The following table shows the proposed increase to the tariff rider for various
customer classes:
EXISTING PROPOSED
SCHEDULE RATE RATE
Residential Customers —Sch.1 .2450 per kWh .3950 per kWh
General Service —Sch.1 1 &12 .27 10 per kWh .4270 per kWh
Large General Service —Sch.21 &22 .2090 per kWh .3400 per kWh
Extra Large Customers —Sch.25 .1420 per kWh .2190 per kWh
Clearwater Paper —Sch.25P .13 10 per kWh .2030 per kWh
Pumping Service —Sch.31 &32 .2400 per kWh .3960 per kWh
ORDER NO.33897
Attachment B to Application.
STAFF COMMENTS
On its review of the Company’s Application and attachments,Staff supported the
Company’s requested increase to the tariff rider.Staff Comments at 2.Staff believed the
Company’s proposal to add $3.9 million to “insure adequate revenues [for]forecasted expenses
while amortizing the underfunded balance over 36 months”is reasonable and appropriate.Id.at
4.
Staff believed the Company’s customer notice and press release did not fully comply
with Rule 125.Id.The Company filed a draft customer notice with its Application,but filed a
press release three days later (covering this and three other case filings’),thus failing to fully
satisfy Rule 125.Id.Staff stated the Company informed customers of this filing through notices
sent with customer bills between August 8 and 24,and through notices emailed to more than
26,000 customers.Id.Because of these efforts,Staff believed the Company’s customers
received adequate notice of their opportunity to file comments.Id.
DISCUSSION AND FINDINGS
The Commission has jurisdiction over Avista under Title 61 of the Idaho Code,and
specifically Idaho Code §61-336,-502,and -622.Cost-effective DSM,such as energy
efficiency and load management programs,helps customers control their utility bills,reduces the
need for higher-cost supply-side resources,and increases system reliability,and is thus a vital
utility resource.The Commission has reviewed the Application and comments from
Commission Staff.
The Commission finds that the tariff rider is underfunded by about $3.9 million,and that
the primary contributor to the underfunding of the rider account was the nonresidential T-LED
market transformation lighting incentive program.We find the Company’s proposed adjustments
to its Energy Efficiency Tariff Rider to be fair,just and reasonable,to cover projected expenses
for the Company’s DSM Program and amortize the underfunded tariff rider balance over 36
months.We therefore approve the Company’s proposed tariffs as filed,increasing revenues —
and thus electric customers’rates —by about 1.6%,effective October 1,2017.
We remind the Company that we expect it to comply with Rule 125 of our Rules of
Procedure.Rules 125.03 and .04 require the Company to file its customer notice and press
The three cases are AVU-E-1 7-04 (Avista’s annual Fixed Cost Adjustment filing),AVU-E-17-05 (Avista’s
residential and small farm energy rate adjustment filing),and AVU-E-1707 (Avista’s annual Power Cost
Adjustment filing).
ORDER NO.33897 3
release with its Application,which the Company did not do.IDAPA 3L01.01.125.03-.04.
Adequate notice is important to ensure customers have a meaningful opportunity to participate.
The Commission has received no public comments in this case to date.
ORDER
IT IS HEREBY ORDERED that the Company’s Application to increase its Energy
Efficiency Rider Adjustment Schedule 91 is granted as requested,effective October 1,2017.
The Commission approves the Company’s proposed Tariff Schedule 91,as filed.
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.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,this
day of September 2017.
PAU]PRESIDENT
4L&L?%A&
KR TINE RAPER,COM ISSIONER
ATTEST:
Diane M.Hanian
Commission Secretary
O:AVUEI7O6cc kk
ERIC ANDERSON,COMMISSIONER
ORDER NO.33897 4