20170929final_order_no_33894.pdf

Office of the Secretary
Service Date
September 29,2017
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE POWER COST )
ADJUSTMENT (PCA)ANNUAL RATE )CASE NO.AVU-E-17-07
ADJUSTMENT FILING OF AVISTA )
CORPORATION )ORDER NO.33894
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)
On August 1,2017,Avista Corporation dba Avista Utilities filed its Power Cost
Adjustment (PCA)annual rate adjustment.The Company requested that the Commission issue
an Order approving the level of power costs deferred for the period July 1,2016 through June 30,
2017,and approve a PCA rebate rate of 0.240 cents per kilowatt-hour (kWh)to be effective
October 1,2017.Application at 1.The Commission issued a Notice of Application and Notice
of Modified Procedure setting comment and reply deadlines.Order No.33841.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.
THE APPLICATION
The Company’s PCA is used to track changes in revenue and costs associated with
variations in hydroelectric generation,secondary prices,thermal fuel costs,and changes in power
contract revenues and expenses,The Company’s existing PCA methodology and method of
recovery were approved in Order No.30361 (Case No.AVU-E-07-01).The present PCA
became effective on October 1,2016.See Order No.33605.
The Company explained that the current PCA rebate for all customers is 0.017 cents
per kWh.Ehrbar Direct at 6.With the increase in the rebate to 0.240 cents per kWh,residential
customers using an average of 910 kWhs per month “would see their monthly bills decrease
from $86.39 to $84.36,a decrease of $2.03 per month,or 2.4%.”Id.
The Company’s power cost deferrals for the period July 2016 through June 2017,
including renewable energy credit retirement benefits and interest,total ($7,233,993).
Application at 4.The deferral amount includes:(1)the amount by which Idaho’s share of power
supply expenses was lower than the authorized level;(2)the credit to Idaho customers for
Renewable Energy Credits (REC5)retired to meet the Washington Renewable Portfolio Standard
ORDER NO.33894
that would otherwise have been sold (referred to as renewable energy credit retirement benefits);
and (3)interest.Johnson Direct at 2.
The factors leading to the lower-than-authorized power supply costs were better than
normal hydro generation,lower wholesale power prices and other contract changes,lower net
transmission expense due to higher than anticipated third-party transmission revenue,and higher
than expected REC sales revenue.Id.at 3.The lower net expense was partially offset by
increased expense from Palouse Wind.Id.The Company provided additional detail and
quantified each item.See id.at 3-5.
The Company also described four long-term power purchase contracts it entered into
between July 2016 and June 2017.Id.at 5-6.Two contracts are with Mid-Columbia hydro plant
owners and two are with qualifying facilities under the Public Utility Regulatory Policies Act.
Id.The Company had existing contracts with each of the four plants.Id.
The Application included the updated rate schedule for the PCA,Schedule 66,with
the proposed change in the rate.See Application Exhibit A.The Application also included a
draft news release that would provide customers with details on the PCA filing and other filings.
The Company also described that its bill paying assistance programs continue to be available to
customers.Id.at 7-8.
STAFF COMMENTS
Staff reviewed the Application and recommended the Commission approve it without
change,effective October 1,2017.Staff Comments at 2,10.Staff believed that Avista
“correctly booked actual [net power cost (NPC)]amounts and amortizations”for the PCA period
(July 2016 through June 2017).Id.Staff also indicated that Avista “utilized proper loads and
NPC amounts embedded in base rates to calculate the deferral.”Id.Staff believed that Avista
properly calculated the deferral using the methods approved by the Commission.Id.at 3.
Staff reviewed,and described in its comments,each component of NPC in the deferral.
Id.at 4-7.Staff explained that under Avista’s PCA,Avista and ratepayers share the difference
between actual NPC and NPC embedded in base rates.Id.at 4.Ratepayers are allocated 90%of
the difference and Avista is allocated 10%.Id.When actual costs are greater than costs in base
rates,customers pay 90%of the difference;when actual costs are lower,customers are credited
90%of the difference.Id.Staff described,for each component of NPC,what the impact is to
customers (cost or credit/benefit).Id.at 4-7.
ORDER NO.33894 2
Staff analyzed the actual NPC in this Application by comparing,for each generation
supply source,actual unit cost and amounts of generation to those assumed in base rates.Id.at
7.Staff believed that the Company’s actual NPC is reasonable.Id.
Staff also described the calculation of the PCA rate.Having reviewed the Company’s
calculation,Staff believed “the Company’s proposed rates are accurate and will fairly reimburse
customers for over collection of actual net power cost embedded in base rates.”Id.
Finally,Staff reviewed the Company’s press release and customer notice and indicated
that both comply with Rule 125 of the Commission’s Rules of Procedure,IDAPA 3 1.01.01.125.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over this matter under Idaho Code §6 1-502 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 Application is reasonable and adheres to our prior Orders regarding the
PCA methodology for recovery or reimbursement of deferred net power supply costs.Thus,we
accept the deferral balance of ($7,233,993).We find that the Company’s proposed PCA rebate
of 0.240 cents per kWh is just and reasonable,and we approve it and the proposed tariff
Schedule 66,to be effective October 1,2017.
ORDER
IT IS HEREBY ORDERED that the Company’s Application regarding its annual
PCA rate adjustment is approved.The Company’s deferred power costs of ($7,233,993)from
July 1,2016 through June 30,2016,are approved.The Company is authorized to implement a
PCA rebate rate of 0.240 cents per kWh and the Company’s proposed Schedule 66 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.
ORDER NO,33894
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of September 2017.
PAUL KJELLADEJ,PRESIDENT
KRtTINE RAPER,CIMISSIONER
ERIC ANDERSON,COMMISSIONER
ATTEST:
Diane M.Hanian
Commission Secretary
O:AVUE 1707 final order cc
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