20190501final_order_no_34325.pdf

Office of the Secretary
Service Date
May 1,2019
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE ELECTRIC LINE )CASE NO.AVU-E-19-03
EXTENSION SCHEDULE 51 RATE )
ADJUSTMENT FILING OF AVISTA )CORPORATION )ORDER NO.34325
On March 11,2019,Avista Corporation (the "Company")applied to the Commission
for an order allowingit to revise Electric Line Extension Schedule 51,effective May 1,2019.In
Order No.28562,issued November 27,2000,the Commission directed the Company to update its
Schedule 51 charges by April 1 of each year.With this Application,the Company seeks to update
line extension costs and allowances that apply to new residential,commercial,and industrial
customers.The Company also proposes five administrative changes to make Schedule 51 easier
for customers to understand.
On March 26,2019,the Commission issued a Notice of Application and Notice of
Modified Procedure and set an April 16,2019 comment deadline and an April 23,2019 reply
deadline.See Order No.34291.Commission Staff filed the only comments,and supported the
Company's Application.
Having reviewed the record,we issue this Order approving the Application and the
revised Schedule 51 as filed,effective May 1,2019.
THE APPLICATION
In its Application,the Company proposed to revise Electric Line Extension Schedule
51,effective May 1,2019.Applicationat 1.Specifically,the Company asked to update the average
cost for facilities like transformers and conduit used to extend electric lines.The Company
proposed to use the updated costs to increase the allowances that customers can apply against the
costs to extend new residential,commercial,and industrial service.Any costs that exceed an
allowance would be paid by the customer as a Contribution in Aid of Construction.Id.at 3-4.The
Company's proposed changes to the allowances by service schedule are,in summary:
ORDER NO.34325 1
Present Proposed
Service Schedule Allowance Allowance
Sched.1 Individual Customer (per unit)$1,810 $1,840
Sched.1 Duplex (per unit)$1,445 $1,470
Sched.l Multiplex(per unit)$1,085 $1,105
Sched.11/12 (per kWh)$0.14788 $0.15022
Sched.21/22 (per kWh)$0.13603 $0.13853
Sched.31/32 (per kWh)$0.24227 $0.24653
The Company also proposed to update its primary,secondary,service and
transformer average costs as follows:
Present Proposed
Overhead Primary Circuit
Fixed Cost $4,323 $4,253
Variable Cost $8.43 $8.38
UndergroundPrimary Circuit
Fixed Costs $1,889 $1,854
Variable Costs $11.24 $11.23
UndergroundSecondary Circuit
Fixed Costs $430 $418
Variable Costs $9.93 $10.42
Overhead Secondary Circuit Fixed Costs $1,785 $1,774
Overhead Service Circuit Variable Costs $3.98 $3.91
Underground Service Circuit Fixed Costs $9.39 $9.41
Overhead Transformer Fixed Costs $2,381 $2,310
Padmount Transformer Fixed Costs $3,516 $3,507
Id at 5.
The Company further proposed to update its residential development costs to reflect
the Company's current Construction &Material Standards and average 2018 construction costs,
as follows:
ORDER NO.34325 2
ResidentialDevelopments
Present Proposed
Total Cost per Lot $1,867 $1,907
Less:Service Cost 471 _471
Developer Responsibility $1,396 $1 436
Developer Refundable Payment $1,396 $1,436
Builder Non-Refundable Payment $57 $67
Allowance $1,8 10 $1,840
Id.at 5-6.
Besides updating its costs and allowances,the Company proposed administrative
changes that would make Schedule 51 easier for customers to understand.These include:(1)
clarifying when a Design Fee is charged,and that the Design Fee is not refundable;(2)
combining Basic and Exceptional charges into a single charge (the change would not impact the
costs paid by the customer for line extensions);(3)redefining "Customer-Requested Costs"to
help customers apply their line extension allowance toward the overall cost of their line
extension;(4)for commercial and industrial customers,clarifyingwhen an allowance would not
be immediately provided and,in those cases,when a customer's allowance would be refunded
after service installation;and (5)for conversions and relocations,redefining "Salvage Value"to
clarify that not all removed materials would have salvage value,and that the Company would
determine Salvage Value in its discretion (the Company stated this change would not materially
affect customers).Id.at 6-10.
The Company stated that the week of April 1,2019,it would send a letter to the
developers and builders that may be affected by the proposed changes.Id.at 11.
THE COMMENTS
Commission Staff filed the only comments,and recommended the Commission
approve the Application.Staff stated the Company appropriately calculated allowances and
average costs,and that the proposed administrative changes are reasonable.
Regarding allowances,Staff noted the Company determined the proposed allowances
using an embedded cost methodology that ensures the Company's investment in each new
customer's distribution and terminal facilities does not increase other customers'rates.Staff stated
ORDER NO.34325 3
the Company's methodology for calculating allowances was appropriate,and recommended the
allowances be approved.
Regarding average costs,Staff noted the Company proposed small changes in costs
ranging from a 3.0%or $71 decrease for the fixed cost of an overhead transformer,to a 4.9%or
$0.49-per foot increase for the cost of an underground secondary circuit.Staff concurred with the
Company's proposed cost changes,and explained that the Company determined them using the
same method the Company used for other line extension tariffs,including prior versions of
Schedule 51,and that the proposed changes are consistent with Commission Order No.28562.
Last,Staff noted the Company proposed five administrative changes to Schedule 51 to
add operational flexibility,better align tariff language to operation practices,and make the
language easier to understand and apply.Staff reviewed the proposed changes and believes they
clarify the current tariff,are reasonable,and would more equitably assign costs to customers.Staff
thus recommended the Commission approve the Company's proposed administrative changes.
FINDINGS AND DISCUSSION
The Company is an electric corporation and public utility.The Commission has
jurisdiction over the Company and the issues in this case under Title 61 of the Idaho Code.Having
reviewed the record,includingthe Application and Staff's comments,the Commission finds the
Company's proposed changes to Schedule 51 are fair,just,and reasonable and should be approved
as filed,effective May 1,2019.We note the Company's updated allowances are roughlyequal to
the embedded facilities cost used to calculate base rates,and this ensures new customer-related
distribution costs do not affect rates for existing customers.We find the Company's updates are
consistent with prior orders includingOrder No.28562.
ORDER
IT IS HEREBY ORDERED that the Company's Application is approved.The
proposed update in costs,allowances,and administrative changes to the Company's Electric Line
Extension Schedule 51 are approved as filed,effective May 1,2019.
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.34325 4
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this 2
day of May 2019.
PAUL KJELLÁNDE PRESIDENT
KRISTINE RAPER,COM SSIONER
ERIC ANDERSON,COMMISSIONER
Diane M.Haman
Commission Secretary
I:\Legal\AVU-E-19-03\Orders\AVUE1903 final order_kk
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