20191101Miller Direct.pdf

RECEIVE
DAVID J. MEYER
VICE PRESIDENT AND CHIEF COLINSEL FOR
REGULATORY & GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
P.O.BOX3727
14I I EAST MISSION AVENUE
SPOKANE, WASH INGTON 99220 -37 27
TELEPHONE: [phone] I 6
FACSIMILE: (509) 495-885 I
[e-mail]
-a'4ll CY-rnff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF AVISTA CORPORATION FOR THE
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC
CUSTOMERS IN THE
STATE OF IDAHO
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CASE NO. AVU.E-I9-04
DIRECT TESTIMONY
OF JOSEPH D. MILLER
IN SUPPORT OF
STIPULATION
FOR AVISI'A CORPORATION
(ELECTRIC)
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SSION
I I.INTRODUCTION
a. Please state your name, employer and business address.
A. My name is Joseph D. Miller and I am employed as the Manager of
Pricing and Tariffs for Avista Utilities ("Company" or "Avista"), at l41l East
Mission Avenue, Spokane, Washington.
a. Have you previously filed direct testimony in this proceeding?
A. Yes. My testimony in this proceeding covered the spread of the
proposed 2020 electric revenue increase among the Company's electric general
service schedules. My testimony also described the changes to the rates within the
Company's electric service schedules.
a. What is the scope of this testimony?
A. The purpose of my testimony is to describe and support the non-
revenue requirement portions of the Stipulation and Settlement ("Stipulation"), filed
on October 1 1, 2019 between the Staff of the Idaho Public Utilities Commission
("Staff), Clearwater Paper Corporation ("Clearwater"), Idaho Forest Group, LLC
("ldaho Forest"), the Community Action Partnership Association of Idaho
("CAPAI"),the Idaho Conservation League (lCL), Walmart, Inc. (Walmart), and the
Company. These entities are collectively referred to as the "Parties."
In my testimony I will explain the following Settlement components:
l. Rate Spread and Rate Design
2. Other Settlement Items
a. Are you sponsoring any exhibits?
Miller, Di I
Avista Corporation
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A. No, I am not. Company witness Ms. Andrews is sponsoring Exhibit
No. 13, which is a copy of the Stipulation and Settlement filed on October 11, 2019,
with the Commission.
II. RATE SPREAD & RATE DESIGN
a. Please explain the settlement terms relating to electric cost of
service.
A. In this case, the Company prepared an electric cost of service analysis
that incorporated, among other things, a system load factor peak credit method of
classifying production costs, allocating '100% of transmission costs to demand, and
allocating transmission costs on a twelve-month coincident peak allocation lactor.
The Parties, however, do not agree on any particular cost of service methodology.
Nevertheless, in recognition that certain rate schedules are well above their relative
cost of service the Parties agree that General Service Schedules llll2 and Large
General Service Schedules 21122 will receive a revenue decrease above the overall
percentage base rate change, in order 10 move these schedules closer to cost-of-
service parity. The majority of remaining schedules will receive revenue decreases
below the overall percentage base rate change, at varying levels, that will move the
majority of these schedules closer to their relative cost-ot'-service.
a. How did the Stipulation address rate design?
A. For settlement purposes, the Parties agreed to the rate design changes
proposed by the Company in my direct testimony. The agreed-upon rate design
resulted in no changes to the basic charges, with the revenue changes collected
Miller, Di 2
Avista Corporation
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though the volumetric energy rates. Appendix C olthe Stipulation (Exhibit No. 13)
provides a summary ofthe current and proposed rates and charges.
a, What is the elfect on retail rates, by rate schedule, of the
proposed settlement?
A. The following tables reflect the agreed-upon percentage decreases by
schedule for electric service:l
Effective December l, 2019
Decrease in Decrease in
Base Rates Billing RatesRate Schedule
Resilerfhl Schedule 1
General Service SctBdubs 1 l/12
Large General Service Schedules 21l22
Extra Large General Service Schedule 25
Clearwater Paper Schedr:le 25P
Punping Service Schedules 3ll32
Street & Area Lights Schedules 4l -48
0verall
-1.0%
-8.4%
-45%
-1.0%
-1.0%
-1.6%
0.0%
-1 .00/o
-8.2%
-4.4%
-1.0%
-1.0%
-1.5%
0,0%
-2.8'/, -z$rh
a. What are the residential bill impacts if the Commission approves
the Settlement Stipulation?
A. Etfective December 1,2019, an electric residential customer using an
average of 900 kilowatt hours per month would see a $0.86, or 1.0oh, decrease per
month lor a revised monthly bill of $84.45.
III. OTHER ELEMENTS OF THE STIPULATION
a, Please explain the settlement terms relating to the Power Cost
Adjustment (PCA) authorized level of expenses.
I The Parties agreed to incorporate the cunent Schedule 72 (Permanent Federal Tax Rate Credit) as
pan ofbase rates and to cancel ScheduJe 72 altogether.
Miller, Di 3
Avista Corporation
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A. The new level of power supply revenues, expenses, retail load and
Load Change Adjustment Rate resulting lrom the December l, 2019, settlement
revenue requirement, for purposes of monthly PCA mechanism calculations, are
detailed in Appendix A ofthe Stipulation (Exhibit No. 13).
a. Please explain the settlement terms relating to the authorized base
for the Electric Fixed Cost Adjustment Mechanism.
A. The new level ofbaseline values for the electric fixed cost adjustment
mechanism resulting from the December 1,2019, settlement revenue requirement are
detailed in Appendix B of the Stipulation (Exhibit No. 13).
a. Please explain the other issues agreed upon in the Settlement
Stipulation,
A. The Parties agreed to increase funding for the Low Income
Weatherization Program from the current Commission-approved levels of $800,000
to $850,000.
Second, the Parties agreed that Avista will establish an Energy Efficiency
Assistance Fund ("EEAF"). The purpose of the EEAF is to provide additional
funding for projects that are not otherwise fully funded through existing energy
efficiency incentives, or do not otherwise qualifr for traditional energy efficiency
funding.
a, Did the Parties agree as to how to fund the EEAF?
A. Yes. As part of the give and take of settlement negotiations the
Parties agreed the EEAP will be funded and disbursed as follows:
i. The final deferral balance related to the "AFUDC Equity Tax
Deferral", addressed in Case Nos. AVU-E-19-02 and AVU-G-19-
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Avista Corporation
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a, Did the Stipulation address certain DSM projects specifically
related to Clearwater?
A. Yes. Avista agrees to work with Clearwater to attempt to qualily the
following projects for DSM funding under Tariff Schedule 90:
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Avista Corporation
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01, as ordered in Commission Order No. 34326 will be a source of
funding. The estimated deferral balance is approximately $800,000.
Avista will contribute below-the-line dollars of $800,000 in 2019 as
a match to the estimated AFUDC Equity Tax Deferral (in subsection
i.).
The funding will be disbursed as directed by the Energy Efficiency
Assistance Fund Advisory Group, a new committee of stakeholders
tasked with determining which existing or new programs should
receive this funding to address energy etEciency, weatherization,
conservation, and low-income needs in Avista's Idaho service
territory.
The EEAF Advisory Group will consider the needs olall parties and
remain flexible on the timing of any disbursements. Any entity
seeking funding must first attempt to qualify their applicable project
undcr Avista's existing energy efficiency programs.
The committee will initially consist of representatives from the
following stakeholders: Avista, Staff, the Lewiston Community
Action Partnership, ICL, Idaho Forest, and Clearwater. The
Committee may add representatives at its discretion.
r Variable speed drives on the No. 1 paper machine hydropulper.. Variable speed drives on the No. 4 power boiler demineralized
water pumps.r Energy efficient chillers and compressors for the Lurgi system.. A variable speed drive on the No.l paper machine white water
system.r Variable speed drives on the two waste water outlall pumps.
a. Did the Stipulation address certain DSM projects specifically
related to the Idaho Forest Group?
A. Yes. Avista agrees to work with the Idaho Forest Group to attempt
to qualifu the lollowing projects for DSM funding under TariffSchedule 90:
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Installation of information technology to gather plant information
data (PI Data) on energy usage at Idaho Forest's Lewiston plant, and
through an installed interface, transmit real time energy load
information data for each operating station to the Idaho Forest
Group and Avista. This may serve as a useful demonstration project
for data interfaces with other customers on Avista's system. The
total estimated cost is $300,000.
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Replacement of aging compressors, saws and other equipment with
state of the art machinery at Idaho Forest's Lewiston and
Grangeville plants, in order to increase productivity and energy
efficiency.
O. Is DSM funding addressed in Tariff Schedule 90?
A. Yes. Tariff Schedule 90 allows lbr possible DSM funding ol up to
70Vo of lhe cost of the project, subject to meeting certain specified cost-effectiveness
criteria. The portion of the estimated cost of these identified projects for both
Clearwater and the Idaho Forest Group that is not reimbursed under Schedule 90 will
be considered for funding through the EEAF, who will consider the needs of all
parties and remain flexible on the timing olany disbursements.
a. Does this conclude your direct testimony?
A. Yes. it does.
Milter, Di 6
Avista Corporation
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