20190222Decision Memo.pdf

DECISION MEMORANDUM
TO COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:EDWARD JEWELL
DEPUTY ATTORNEY GENERAL
DATE: FEBRUARY 22,2019
SUBJECT APPLICATION OF AVISTA FOR AN ACCOUNTING ORDER
AUTHORIZING ACCOUNTING TREATMENT OF COSTS RELATED
TO ALLOWANCE FOR FUNDS USED DURING CONSTRUCTION;
AVU-E-I9 -02 & AVU-G-19-0r
On February l, 2019, Avista Corporation ("Avista" or "Company") filed an
Application seeking authorization of accounting and ratemaking treatment related to its
Allowance for Funds Used During Construction ("AFUDC").
THE APPLICATION
The Company states that during an audit conducted by the Federal Energy Regulatory
Commission ("FERC") regarding the Company's compliance with the Uniform System of
Accounts, FERC staff made recommendations regarding the recording of AFUDC and the tax
treatment of equity in AFUDC. Applicationat2. The Company requests authorization to defer
the difference between the State AFUDC rate and the FERC AFUDC rate as a regulatory asset
and amortize this regulatory asset over the composite remaining life of the plant-in-service. Id.
The Company also requests authorization of a deferred accounting treatment related to the
decrease in deferred federal income taxes that will result from the accounting change for the
equity portion of the AFUDC. Id. The Company states that neither of the recommended
changes will result in changes to Avista's overall rate base. Id. The Company states that it
concurrently made similar filings in Washington and Oregon. Id. at9.
STAFF RECOMMENDATION
Staff recommends the Commission issue a Notice of Application and Notice of
Modified Procedure and set a thirty-five day comment period and a seven day reply period.
DECISION MEMORANDUM 1
COMMISSION DECISION
Does the Commission wish to issue a Notice of Application and Notice of Modified
Procedure and set a thirty-five day comment period and a seven day reply period?
Edward J. J
Deputy A General
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2DECISION MEMORANDUM