20180530final_order_no_34067.pdf

Office of the Secretary
Service Date
May 30,2018
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT PETITION )CASE NO.AVU-E-18-02
OF AVISTA CORPORATION,IDAHO )AVU-G-18-01
PUBLIC UTILITIES STAFF,AND )COMMUNITY ACTION PARTNERSHIP )ORDER NO.34067
ASSOCIATION OF IDAHO (CAPAI)TO )INCREASE LOW-INCOME FUNDING )UNDER TARIFF SCHEDULES 91 AND 191 )
On February 20,2018,Avista Corporation,Commission Staff,and CAPAI ("the
parties")filed a joint petition requesting approval of a settlement that increases funding to low-
income programs.On March 21,2018,the Commission issued a Notice of Proposed Settlement,
Notice of Modified Procedure,and set comment deadlines.Staff filed the only comments and
outlined its support for the proposed settlement.
BACKGROUND
On December 28,2017,the Commission approved a settlement of Avista's general
rate case.See Order No.33953.One provision of the settlement was that "[t]he Company and
interested parties will meet and confer to consider whether the Low Income Weatherization
Program and Energy Conservation Education Program funding should be increased from the
current Commission approved levels...."See Stipulation and Settlement at 15.After extensive
examination into how low-income funding has been utilized,and conferring with the parties,an
agreement to increase the fundinglevels was reached.
THE SETTLEMENT
The parties report that,after conferring on the issue,a fundingincrease is appropriate.
Specifically,they agreed that $125,000 of additional annual funding for Avista's Low Income
Weatherization Program,and $25,000 of additional annual funding for Avista's Conservation
Education Program in Idaho,be approved.The Company reported that the increase in funding
"has no effect on the Company's approved revenue requirement,"and that "the funding will
come directly out of Avista's Energy Efficiency Tariff Rider Schedules 91 and 191."Joint
Petition at 2.
STAFF COMMENTS
Staff provided a comprehensive review of its investigation into the proposed increase
in low-income program funding.Staff asked dozens of questions to the Company and the
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Lewiston CommunityAction Partnership (CAP)agency,conducted extensive conference calls
and email exchanges,and held meetings in Boise and Lewiston to confer with relevant parties
about how to view the programs.Staff Comments at 1-3.The Lewiston CAP serves ten counties
in Northern Idaho,from Riggins to Canada.Id.at 5.Much of its service territory has
populations in which 40 percent of residents income-qualifyfor weatherization services.Id.The
CAP consistently spends its entire allotment of $700,000 in rider funds for qualifying projects
and measures.Id.at 6.Staff believes the CAP will easily spend the proposed $125,000 annual
funding increase.Id.
Staff determined that the low-income programs are not cost effective.However,Staff
also found that the weatherization waiting list is extremely long,and that the Company has been
granted over 8.9 percent electric,and 12.3 percent natural gas base rate increases since the last
increase in low-income funding.Id.at 3.Staff concluded that the Lewiston CAP has consistently
spent all assigned funds,and that additional funding will enable the CAP to achieve greater
penetration.Id.Staff also found that the Lewiston CAP agency aptly manages the funding it
receives from Avista.Id.
Staff found that the program is not cost effective.However,Staff also found that
buildingmaterial and labor costs to implement the program have increased,and at the same time,
the avoided costs used to calculated cost-effectiveness have decreased.The funding for each
measure is adjusted as avoided costs change.Staff believes that it is appropriate that the
Lewiston CAP directs fundingat measures that are the most cost effective.Staff discovered that
the Company does not include administrative expenses or non-incentive utility funds in
calculating cost-effectiveness.This makes periodic updates to measure funding levels
overestimate the actual cost-effectiveness of the program.Id.at 4.Because of Staff's
investigation,the Company has agreed to include CAP administrative expenses and non-
incentive utility funds in the measure-level screening process going forward.Id.Staff stated this
would improve cost-effectiveness.Id.
Staff discovered that the CAP's waiting list has increased every year since 2012,and
as of October 2017,stands at 303 income-qualified customers.Id.Even with the proposed
funding increase,the CAP reported that it would take well over five years to weatherize these
homes,not factoring in a growing waiting list.Id.Furthermore,the wait-list does not factor in
referrals from the federally funded Low Income Heating Assistance Program that will put further
demand on CAP resources.Id.Staff believes that the Lewiston CAP service area has thousands
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of potential clients,many of whom are unaware of their eligibility,further highlighting the
rationale of increasing the outreach funding.Staff believes that increased saturation may lead to
greater savings potential.
INTERVENOR FUNDING
On April 24,2018,CAPAI petitioned the Commission for a $7,384.58 intervenor-
funding award.See CAPAI's Petition for Intervenor Funding.Avista has informed Staff that
Avista does not object to this request.
COMMISSION DECISION
In 2012,the Commission adopted recommendations aimed to improve the cost-
effectiveness of low-income programs.Order No.32788.Specifically,the Commission approved
factors that should be considered when deciding whether a funding increase for these programs
may be appropriate.Id.
We determined that while cost-effectiveness should always be a benchmark and
measuring stick for such programs,a funding increase could be appropriate under certain
circumstances:if the waiting list of not-previouslyweatherized homes has increased significantly
since the last review;if a utility's program provides significantly less funding on a per-capita
basis than another utility operating in Idaho;if the utility is awarded a significant base rate
increase;if the utility does not have sufficient funds to acquire the annuallyachievable low-
income energy savings potential as indicated by the utility's most recent Conservation Potential
Assessment;or if a utility's CAP agency has been consistently able to spend all of the available
utilityfunding in the previous year.See Id.
Under the circumstances presented in this case,we find that increasing the funding
for the Company's Low Income Weatherization program by $125,000 annually,and its
Conservation Education program by $25,000 annually,is justified under the factors outlined in
Order No.32788.We find that the modest increase is appropriate considering the long waiting
list associated with yet-to-be-weatherized homes waiting in queue with the Lewiston CAP,and
in consideration of improvements to Avista's cost-effectiveness measure screening.We
appreciate the vigorous management of funds by the Lewiston CAP.We also recognize the base
rate increases over the years since the last low income funding increase.The increase in annual
funding fulfills the Commission directive that utilities provide a way for all customers to
participate in the energy efficiencyprograms which all customers fund.
ORDER NO.34067 3
INTERVENOR FUNDING
On April 24,2018,CAPAI filed a Petition for Intervenor Funding,seeking an award
of $7,384.58.See CAPAf s Petition for Intervenor Funding.Intervenor funding is available
under Idaho Code §61-617A,which declares it is the "policy of [Idaho]to encourage
participation at all stages of all proceedings before this Commission so that all affected
customers receive full and fair representation in those proceedings."The statute empowers the
Commission to order any regulated utility with intrastate annual revenues exceeding $3.5 million
to pay all or a portion of the costs of one or more parties for legal fees,witness fees and
reproduction costs not to exceed a total for all intervening parties combined of $40,000.Id.The
Commission must consider the followingfactors when deciding whether to award intervenor
funding:
a)that the participation of the intervenor has materially contributed to the decision
rendered by the Commission;
b)that the costs of intervention are reasonable in amount and would be a significant
financial hardship for the intervenor;
c)that the recommendation made by the intervenor differed materially from the
testimony and exhibits of the Commission Staff;and
d)that the testimony and participation of the intervenor addressed issues of concern
to the general body of users or consumers.
Idaho Code §61-617A(2).To obtain an intervenor funding award,an intervenor must comply
with Commission Rules of Procedure 161 through 165.Rule 162 provides the form and content
for the petition.IDAPA 31.01.01 162.
We find that CAPAI's Petition satisfies the intervenor funding requirements.While
CAPAI did not file supporting comments,it was a party to the proposed settlements,and
participated in all aspects of the proceeding,which was focused on CAPAI's core constituency:
low-income customers.This matter was driven by a provision CAPAI negotiated in the
Company's previous rate case,and its Petition shows that it worked closely with Avista and
Staff.CAPAI noted its role in the Company agreeing to meet with interested parties to discuss
the Low Income Weatherization Assistance and Low Income Conservation Education programs
with the goal of increasing the programs'funding(a provision addressing this was included in the
Settlement).The Commission finds that CAPAI has materially contributed in this matter.We
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find the costs and fees incurred by CAPAI are reasonable in amount,and that CAPAI,as a non-
profit organization,would suffer financial hardship if the request is not approved.
ORDER
IT IS HEREBY ORDERED that the Settlement in this matter of increasing funding in
low income programs by $125,000 in additional annual funding for Avista's Low Income
Weatherization Program,and $25,000 in additional annual funding for Avista's Conservation
Education Program,is approved.
IT IS FURTHER ORDER that CAPAI's Petition for Intervenor Funding is granted in
the amount of $7,384.58 to be recovered from Avista's residential electric customers.
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.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of May 2018.
PAUL KJELÉA ER,PRESIDENT
KR ÌÍNÈ RÃPËR,C ÚMÏSSIONER
ERIC ANDERSON,COMMISSIONER
ATTEST:
Diane M.Hanian
Commission Secretary
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