20170801Customer Notice.pdf

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Important Notice for ldaho Electric Customers . ." ,.,. :
(August 2017) - Draft 07t27117 :: '
Proposed Electric Rate Adjustments to be Effective Oct. 1,2017 I
,
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 second adjustment is related to the Bonneville Power Administration (BPA) Residential Exchange
Program. The Residential Exchange Program provides a share of the 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 $0.2 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 enerry 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 $3.9 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.
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.
Customer Bills - If approved, residential electric customers in ldaho using an average of 910 kilowatt hours
per month would see their monthly bills increase from S86.39 to $88.12, an increase of $1.73 per month,
or approximately 2.0 percent. The proposed electric rate changes would be effective Oct. 1, 2017. The
requested electric rate changes by rate schedule are:
Residential Service - Schedule I
General Service - Schedules 11 & 12
Large General Service - Schedules 2l & 22
Extra Large General Service - Schedule 25
Extra Large General Service - Schedule 25P
Pumping Service - Schedules 3l & 32
Street & Area Lights - Schedules 41-49
Overall
2.0%
1.7%
l.8o/o
-2.8%
-3.1%
1.8%
0.9%
t.t%
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 (Uww+USjdAhS€S9. 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.
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