20180905 Comments.pdf

EDITH PACILLO
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 5430
RECEIVED
?31fi StP -5 Pil 2: 20
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Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE RESIDENTIAL AND
SMALL FARM ANNUAL RATE ADJUSTMENT
FILING OF AVISTA CORPORATION.
CASE NO. AVU.E.18.O8
COMMENTS OF
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
attorney of record, Edith Pacillo, Deputy Attorney General, and in response to the Notice of
Application and Modified Procedure issued in Order No. 34127 on August 15, 2018, in Case No
AVU-E-I8-08, submits the following comments.
BACKGROUND
On July 31,2018, Avista Corporation dba Avista Utilities applied to the Commission for
authorization to implement a Residential and Small Farm Energy credit rate, for Rate Schedules
l, 12,22, 32, and 48, of 0.069 cents per kilowatt-hour. Application at l. Avista requested that
the Application be processed under Modified Procedure. Id. at2. Avista requests an effective
date of October l, 2018. Id. at2. The rate shall be effective through September 30, 2019. The
Company files on an annual basis to adjust this rate based on how much of the credit is
amortized through out the year.
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ISTAFF COMMENTS SEPTEMBER 5,2018
The Company's Application provides the calculation of the Residential and Small Farm
Energy credit rate in Attachment A. The Company also provides a copy of the proposed tariff,
Schedule 59, which contains the credit rate, in Exhibit A to its Application. Exhibit A also
shows the changes to Schedule 59 in legislative format.
STAFF ANALYSIS
The Residential and Small Farm Energy credit rate results from an agreement between
the Company and the Bonneville Power Administration (BPA) regarding the Residential
Exchange Program. Id. 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 six
investor-owned utilities of the Pacific Northwest, including Avista. Id. at2-3.
The calculation of the BPA benefit for residential and small farm customers has two
inputs. The first input is the usage by Avista's residential and small farm customers over the
previous two years, in this case 2015 and2016, which is then averaged to create an annualized
usage. The second input is the difference between two variables calculated by BPA: Avista's
Average System Cost rate and the Priority Firm Exchange Rate. These variables are calculated
by BPA every two years. The difference between these two rates is multiplied by the annualized
usage to calculate the BPA benefit to be passed on to qualifying customers for each of the next
two years. Currently the Company is in year 2 of the current credit. The BPA credit is allocated
between Washington and Idaho based on the actual usage in each jurisdiction.
Avista's Residential and Small Farm Credit rate is calculated by taking the projected
remaining balance of the BPA benefit from the previous year and adding the BPA benefit for the
next year. In this filing, the amount from the previous year was over-refunded because
customers used more electricity than was projected. The total is then divided by the projected
annual kWh sales to residential and small farm customers to calculate the rate.
Staff audited the inputs and independently recalculated the rate. Staff reviewed the
methodology and calculation of the proposed Residential and Small Farm credit rate and the
approach is consistent with the terms and conditions of Schedule 59 - Residential and Farm
Energy Rate Adjustment - Idaho. Staff recommends the proposed rate of 0.069 cents per
kilowatt-hour be approved.
The current Residential and Small Farm credit rate is 0.078 cents per kilowatt-hour.
Id. at 3. The proposed credit rate of 0.069 cents per kilowatt-hour is designed to pass through
2STAFF COMMENTS SEPTEMBER 5,2018
approximately $0.84 million which is the Idaho jurisdictional share of BPA benefits, offset by
the over-refunded balance from the prior year, starting in October 2018. Id. at3. While the level
of BPA benefits is consistent with what is currently being passed back to customers today, the
offset by the over-refunded balance results in the reduced credit. Id. at 3.
The reduced credit results in an overall increase to qualifying customers under the
proposed credit rate of $0.1 million, or 0. lYo. The change in the credit rate does not affect the
Company's net income. Id. at l-2.
The proposed rate change results in a monthly bill increase of 8 cents for an average
residential customer using 910 kwh per month - approximately one-tenth of one percent (0.1%).
CUSTOMER NOTICE AND PRESS RELEASE
The Company's press release and customer notice were included with its Application on
July 31,2018. Each document addresses two cases: this case (AVU-E-18-08) and the Power
Cost Adjustment (AVU-E-l8-07). Staff reviewed the documents and determined both meet the
requirements of Rule 125 of the Commission's Rules of Procedure (IDAPA 31.01.01). The
notice was included with bills mailed to customers beginning August 1,2018 and ending
September 11, 2018.
For this case, the Commission set a comment deadline of September 5,2018. Because
the last customer notices will not be inserted into bills until September 11,2018, some customers
in the last billing cycles will not have received their notices or had adequate time to submit
comments before the deadline. Customers must have the opportunity to file comments and have
those comments considered by the Commission. Staff recommends that the Commission accept
late-filed comments from customers. As of September 5,2018, no comments had been filed.
RECOMMENDATION
Staff recommends that the Commission approve the new Residential and Farm Energy
Rate Schedule 59, with a credit rate of 0.069 cents per kilowatt-hour, effective October 1, 2018
through September 30,2019. Additionally, Staff recommends that the Commission accept late-
filed comments from customers.
aJSTAFF COMMENTS SEPTEMBER 5,20I8
Respectfully submitted this day of September 2018.
Pacillo
Deputy Attorney General
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Technical Staff: Bentley Erdwurm
Johnathan Farley
Kathy Stockton
i : umisc:comments/avue I S.8epbejlkls comments
4STAFF COMMENTS SEPTEMBER 5,2018
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CERTIFICATB OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 5th DAY OFSEPTEMBER2O18,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. AVU-E-18-08, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
PATRICK EHRBAR
DIRECTOR REGULATORY AFFAIRS
AVISTA CORPORATION
PO BOX 3727
SPOKANE WA99220-3121
E-mail: [e-mail]
DAVID J MEYER
VP & CHIEF COUNSEL
AVISTA CORPORATION
PO BOX 3727
SPOKANE WA99220-3727
E-mail: david.me),er@,avistacorp.com
CERTIFICATE OF SERVICE