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HomeMy WebLinkAbout20191031English Direct in Support of Stipulation.pdfBEFORE THE IDAHO PUBLIC UTILITIES COMMISSION, RECEIVED ;:;9 [iT 3 t Pil l: 3i ,.,]'''| IN THE MATTER OF THE APPLICATION OF AVISTA CORPORATION FOR THE AUTHORITY TO INCREASE ITS RATES AND CHARGES FOR ELECTRIC SERVICE TO ELECTRIC CUSTOMERS IN THE STATE OF IDAHO CASE NO. AVU-E.19.04 DIRECT TESTIMONY OF DONN ENGLISH IN SUPPORT OF THE STIPULATION AND SETTLEMENT IDAHO PUBLIC UTILITIES COMMISSION ocToBER 31, 2019 ) ) ) ) ) ) ) 1 2 3 4 5 6 7 8 9 10 11 t2 13 l4 15 l_5 L'7 18 19 20 2l 22 23 24 25 O. Please st.at.e your name and business address for the record. A. My name is Donn English. My business address is l-1331 W. Chinden B1vd., BLDG 8. STE 201-A, Boise, Idaho 837 L4 . O. By whom are you employed and in what capaciEy? A. I am employed by the Idaho PubLic utiLitsies Commissj-on as a Program Manager overseeing t.he Accounting and Audit Department in the Ut.ilities Divisj-on. O. Whats is your educational background and prof essional experience? A. I graduated from Boise Stsaue University in l-998 with a Bachelor of Business AdminisEration ( *BBA" ) degree in Accounting. Fol-1owing my graduation, I accepted a position as a Trust Accountant. with a pension administration, actuarial , and consulting firm in Boise. ln !999, r was promoted Eo Pension Administrator. rn May of 2ool-, I became a designated member of the American Society of Pension Professionals and Actuaries ("ASPPA"). I was the first. person in Idaho to recej-ve the Qualified 401(k) Administrator certification and was also one of approximately ten peopfe in Idaho who have earned the Qualified Pension Administ.rator certification. In 2001, I was promoted to a Pension Consultant. I was hired by t.he Idaho Publ-ic UtiliEies CASE NO. AVU-E-19-04 ENGLISH, D STAFF (stip) 1 1 2 4 5 6 7 I 9 10 11 L2 13 a4 15 16 t7 18 19 20 2L 22 21 24 Commission as a Staff Auditor in 2003. In 2016, I became Ehe Audic Team Lead, and in 2018 I was promoted to Program Manager of Accounting and AudiE. Department. At the Commission, I have audited a number of utilities including elecEric, water, and natural gas companies, and provided comments and Eestimony in numerous cases t.hat dealt with general rates, tax issues, pension issues, depreciation and other accounting issues, and other regul-atory policy declsions. In 2004, I actended thre 46th Annual Regufatory studies Program at the Inst.it.ut.e of Public Util-ities aE Michigan StaLe Universit.y sponsored by the National Association of Regulatory UEility Commissioners ("NARUC" ) . since then I have regularly atEended NARUC conferences and meeEings, Society of Regulatory Financial Analysts (*SURFA") meet.ings, and oE.her regulatory training opportsunities. I am the Commission's representaElve on the NARUC SubcommiEtee of Accounting and Finance. O. What is the purpose of your EesEimony in this proc eeding ? A. The purpose of my testimony is to describe AvisEa Corporation's ("Avista" or "Company" ) Application to increase its rates and charges for el-ectric service in Idaho, describe the proposed comprehensj-ve settLement reached by all part.ies in this case, and explain Staff's support for Ehe proposed agreement. ENGLISH, D STAFF 25 CASE NO. AVU-E- 19 _ 04L0/3r/t9 (stip) 2 1 2 3 4 5 6 7 I 9 10 11 t2 13 L4 15 t5 t7 18 19 20 21 22 23 24 o. A. headings : How is your Lest.imony organized? My test.imony is subdivided under the following Background Page 3 Settlement Overview Page 5 Staff Investigat.ion Page 5 Settlement. Evaluat.ion Page 8 Revenue Requirement. Page 10 Al-locations and Rate Design Page 15 Energy Efficiency Page l-7 Other Terms and CondiEions Page 18 Background O. Please describe AvisEa's original filing. A. Avist.a made iEs original filing on June ).0, 20L9, requesting authority to increase its elect.ric base ratses in Idaho by $5.255 million or 2.].2, effective 'January l, 2020. The requested increase was based on a 2018 tes! year, with proforma adjustsmentss t.hrough 2020. Rate base was presented on a 2019 proforma end of period basis. The Company proposed a capital structure of 50/50 and a return on common equity ("RoE" ) of 9.9t. Based on Ehe different cosE-of-service methodologies fil-ed, the Company proposed no increase for ceneral- Service Schedules 11/12 and street and Area LighE Schedufes 47-49, resulting in a 30? movement towards unity. Large ceneral Service cusEomers (Schedules 21,/22), Extra Large General Service customers (Schedules 25 and 25P) , and25 CASE NO. AVU-E_ 19 - 04 L0 / 31/ re ENGLISH, D (sEip) 3 1 2 3 4 5 5 7 8 9 10 11 l2 13 L4 15 15 l7 18 19 20 21, 22 23 24 Pumping customers (Schedules 3L/32) would receive ?5? of the overall base revenue increase. The remaining revenue requiremenE was proposed to be spread to Residentiaf Service Schedule 1, resulting in a 34t movement towards uniEy. Tabl-e No. 1 below illustrates the proposed revenue spread and relative rates of return ("ROR" ) for Ehe customers cl-asses. Table No. 1 - Proposed Rate Spread and Relative ROR fncreaBe in Base Rates ProposedRelative RORRale scheduleResidenti,af Schedule 1cen. service Schedules 11/ 1-2Lg. cen. Service schedules 2l-/22Extra Lg. Gen. Service Sch. 25 CfearwaLer Papwer Sch. 25P Pumpj-ng service schedules 3l-/32St.reet & Area Lights Sch. 41-49 overalL cAsE NO. AVU-E-19-04 3.42 0.0* 1.5?1.5t 1. st1.5t0.0?4 0.88 1.36 1.06 0.90 0.95 o.96 1.38I.TT O. How was the case processed after the Company's filing was received? A. The Commission issued a notice of filing and established an inE.ervenEion deadline. Intervenor stsaEus was granEed to Cl-earwater Paper Corporation ("Clearwater"), Idaho Forest Group, LLC, the Community Action Part.nership Association of Idaho, Inc. ("CAPAI"), the Idaho Conservation League, Inc. ("ICL"), and Walmart, Inc. A procedural schedule was approved by the Commission and a settlement conference was held on October 1, 2019. A comprehensive set.L.lemenL was reached by all parties, and ENGLISH, D STAFF 25 (sEip) a 1 2 3 4 5 6 7 8 9 10 11 t2 13 14 15 16 l'7 18 19 2Q 21- 22 24 the Motion to Approve the SEipulatsion and Settlement was filed with the Commission on OcEober 1,5, 20L9. settlement overview O. Would you please descrj-be the terms of t.he setElement? A. The proposed Stipulation and Settl-emenL ("SettlemenE") specifies a decrease in elect.ric base revenues of $7.188 million (2.84*) on December 1, 2019. It also specifies a 50/50 debE Eo equity capital stsrucEure, a 5.2? cost of debE, and a 9.5? return on common equity. The overall return is 7.35?. Besides specifying capital structure, return on equity, and Ehe cost of debts, tshe SeEt.Iement also specifies a variety of expense and invescment adjusEments. The revenue requirement adjusEmenE.s faff primarily into lhree categories: 1) update 2019 pro forma expense and invesEments with known, actual amounts; 2) modify or update m j. sce]]aneous Eest year expenses; and 3) lengthen amorEization periods for deferred accounts. The revenue requirement is further adjusted by continuing the PaLouse Wind Purchase Power Agreement ("PPA" ) expense recovery t.hrough the Power cost Adjustment ("PCA") mechanj-sm ratsher than through base rates. The revenue decrease will be spread to the customer classes in varying amounts to move towards ENGLISH, D STAFF (stip) s 25 CASE NO. AVU- E- 19 - 04 L 2 3 4 5 6 7 8 L0 11 r2 13 t4 15 16 L7 18 19 20 2L 22 23 24 25 cost-of-service parity. The decrease by cuscomer class and relative ROR for each class is shown in Table No. 2 below: Table No, 2 - Stipulated Rate Spread and Re1atj.ve ROR IncreaEe in Stipulated Rate Schedule Base Rates Relative RORResidential Schedule Icen. Service Schedules 11/ 12Lg. cen. Service Schedules 21/22Extra Lg. Gen. Service Sch. 25Clearwacer Papwer Sch. 25P Pumping Service Schedules 31/32 Streets & Area Lights Sch. 41-49 Overal l The setstslements also provides additional funding for energy efficiency projects in Idaho, and increases the annuaf funding for the Company's Low Income Weatherization Program from the currenly approved $800,000 to $850,000 per year. O. Are Ehere any other provisions included in the Sett lement ? A. Yes. The Settlement of base power supp]y revenues, Ehe Load Change Adjustment Rate stipulaled revenue reguirement PCA mechanism cafcufations. It al-so specifies the new 1oad, 1evel of base]ine val-ues for t.he adjustment ("FCA" ) mechanism. also specifies electric fixed Staff Inve6tigation O. what type of investigation did staff conduct to fevef andexpenses, retail resulting from for purposes of the the monEhly the new cosLs cAsE NO. AVU-E- 19 - 04 to / 3l./ 7e ENGLISH, D STAF'F (stip) 5 -1.0? -4.52 -1.0? 1 n9 0.0?-T:d* 0.86 1.35 1.05 0 .92 o .99 1.00 L.57 1ITT L 2 3 4 5 5 7 I 9 10 11 I2 13 L4 15 1_6 l7 l8 19 20 21 22 23 evaluatse tshe Company's rate increase request? A. Staff's approach prior to the settlement conference was to extensivel,y review the Company's Application and associaEed testj.mony and workpapers, ident.ify adjustments to its revenue requirement request, and prepare to file testimony for a ful fy- 1j- tigated proceeding. Three Staff auditors were assigned to the case and began reviewing the 2018 results of operations before Ehe Company fifed iE.s Applicaton in ,June of 20f9. AfEer the filing, the auditsors reviewed the capital budget.s, capital spending Erends, operations and maintenance ("o&M" ) expenses and trends, and verj,f ied all of the Company's calculations and assumptions with regards Eo Ehe overall revenue requirement. The auditors spent two rreeks on-siEe at Avist.a's corporate headquarters in Spokane, Washj-ngton. interviewing Company personnel, reviewing thousands of tsransactions, selected samples and performed transacEion testing in accordance wj-Eh standard audit pracEices. The audit.ors reviewed Ehe Company's labor expense, incentive plans, and employee benefiEs Eo insure the appropriaEe 1eve1 of expendiEure. The auditors worked with ten other technical sUaff from the Utilities Division, consisEing of engineers, utility analysts, and consumer investigators, to determine t.he prudence of capit.al additions and verify in-service CASE NO. AVT'_E_ ].9 - 04to/37/te ENGLISH, D STAFF 25 (stip) 7 1 2 3 4 5 6 7 8 9 10 11 t2 13 r4 15 t6 r7 18 l-9 20 2r 22 23 24 25 dat.es. Staff reviewed both completed and proposed Company investments, evaluat.ed expenditures incl-uding pension. salaries, and operation and maintenance expenses, investigated power suppLy modeling, weather normalizat,ion, class cos!-of-service methodologies, and compared rat,e design alternatives. In total, Staff submitEed over 150 production requests to the Company as part of iE.s comprehensive investigation. In additsion to audit. work on-sitse, other Staff also conducted on-site investigations. O. How did St.af f prepare for the settlemenL conf erence ? A. Stsaff prepared for the settlement conference by preparing for testimony as in a litigated case. In developing its revenue requiremenE proposal, Staff identified 28 adjustments Eo Ehe Company's requested revenue requirement totaling $14.35 mi11ion. sE.af f developed iEs revenue requirement proposal and escablished positions on various issues for presentation at the setstslement conference on Oct.ober 1, 2019, whj.Ie simultaneously preparing direct. testimony to file on November 5, 2oL9, should Ehe case be fitigated. Settslement Evaluati.on O. How did Staff determine that the overall Settfement was reasonable? A. In every setstlement evaluaE.ion, Staff and other CASE NO. AVU- E- 19 _ 04to/3a/le ENGLISH, D STAFF (sti.p) I l- 2 3 4 5 5 7 I 9 10 11 t2 13 r4 15 16 l7 18 19 20 2t 24 25 partsies must deLermine if the agreement is a better overall outcome than could be expecE.ed ats hearing. A11 of Ehe 28 revenue requirement adjustments identified by Staff were incorporated eiEher totally or partially in the Settfement.. Rather than an increase of $5.255 million as proposed by the Company, the Settlement specified an electric revenue decrease of $7.188 miLlion. Other parties, made up of customer groups and fow income representatives , agreed wj.th Staff in support of the Settlement. O. Does staff support. the proposed seEtlement as reasonable ? A. Yes. After a comprehensive review of the Company's Application, thorough audit of the Company's books and records, and extensive negotiations with the partsies to tshe case, Staff supports the proposed Sett,1ement. The Sett]ement offers a reasonable balance between E.he Company's opportunity to earn a reE.urn and affordable rates for customers. Several- of Staff's primary goals after evaluation of revenue requirement have been met with this Settl-emetn. Its provides addiLional funding for energy efficiency projects and the Company's low income weatherization program. Not all cost-of-service alfocat.ion concerns or different methods addressed by other parties are included in tshis settlement. However, iE does properly address cost-of-service differentials raised by the various CASE NO. AVU-E- 19 - 04ro/3r/te ENGLISH, D STAFF (stip) e 1 2 4 5 5 7 9 10 11 t2 13 l4 15 t6 t7 18 19 20 21_ )) ,1 24 ,E parties, including Staff, by distributing the rate decrease base on costs causatsion principl-es to bring customer classes closer to parity. Staff believes thaE t.he Settlemenc, supported by alt part.ies to the case, is in t.he public interest, is fair, jusE and reasonabl-e, and should be approved by Ehe Commission. Revenue Requirement O. What type of revenue requirement adjustments were proposed by Staff and included in the Sett.lement? A. The adjustments proposed by SEaff covered a broad range of revenue and cost caEegories. Besides a reduction in RoE, the adjustments generally fa]1 into the three previousfy identified categories: 1) updaEe 2019 pro forma expense and invesEment wit.h known, actual amount.s; 2) modify or update miscellaneous test year expenses,' and 3) Iengthen amortization periods for deferred accounEs. O. Please explain why staff believes the 9.5t RoE is reasonable , A. The Stipulation ref Iect.s an RoE of 9.52 based on a capital- structure of 50? equiLy and 50* debt. The Company originally proposed a 9.9? ROE. The 9.5? RoE is consistent. with the Company's currently authorized ROE, and also with the most recent Commission decisi-on for Inlermountain Gas Company in Order No. 33757. It is also consistenE wit.h authorized ret.urns grantsed for other CASE NO. A\1J_ E. 19 - O 4to/3r/ae ENGLfSH, D STAFF (stip) 1o CASE NO. AVU-E-19-04 ENGLISH, D STAFF ( sEip ) 11 1 2 3 4 5 6 7 8 9 10 11 t2 13 t4 15 15 L7 18 19 20 2L )) 24 25 elecEric and gas utilit.ies operating in t.he NorEhwests. The 40 basis point reduction in ROE from the Company's proposal reduced Ehe Company's requested revenue requiremenE by approximately $2.2 million. The 9.5* ROE allows Avist.a to attract new capitsal from the market to fund new capital investments and refinance maturj-ng debt issuances. a. will you please explain oEher revenue requirement adjustments proposed by SEaff and accept.ed by Ehe part.ies? A. Yes. While Table No. 1 of the SettlemenE provides a line by line calculation of Ehe revenue requirement, and the SeEtlement further provides a summary of each adjusEmenE., I will highlight a few of the major adjustments. The first adjustments proposed by Staff related Eo the timing of expenses and invesEmenEs, The Company proposed a EesE year based on a 2018 base year with proforma expenses t.hrough 2020, arld capitsal investments t.hrough 2019. Staff verj.f ied the proforma expense amounts with acEuaf expenses as they became available. Additional"ly, staff invest.igat.ed t.he in-service dates of proposed capital projects to confirm tshey would be j-n- service and used and useful prior to the end of 2019. By removing capit,al projects not completed in 2019 from the Company's request, Idaho jurisdictional rate base vras reduced by $9,070.000 which reduced the Idaho electric revenue requirement by approximately $1.5 mi1Iion. 1 2 3 4 5 6 7 8 9 10 11 L2 13 t4 15 16 t7 2t 18 19 20 22 23 24 Updating 2019 expenses wit.h acEual amounts reduced Ehe Idaho elecErj-c revenue requirement by another $1.15 mi 11ion . O. Woufd you please explain how the SetElement treats employee labor and benefits? A. Yes. The Company proposed to include in j.ts Idaho efectric revenue requirement proforma labor expenses through 2020 for non-executj.ve employees, and increased labor expense t.hrough 2019 for its execut.ives. The parEies agreed Eo only include the schedufed 2O2O wage increases for the Company's union employees because E.hat wage increase is a conEracEual obligation under the Company's collective bargaining agreements. Af1 other 2020 wage increases were removed, Additionally, the 2019 wage increase for the Company's executives was also removed from t,he revenue requirement. The effect of the agreed upon labor adjustments reduced t.he Company's requested revenue requirement by $305, 000. The company also included in its request. incentive palrments for its employees and execut.ives. Consistent with prior Commission treatmenL, St.af f proposed and the parties agreed Eo remove executive incenEives in their entirety from Ehe Company's revenue requirement.. For non-executive incentive payment.s, t.he part.ies agreed to include on]y the operating portion of the incentives aE the CASE NO. AVU- E- 19 - 04 to/37/Le 25 ENGLISH, D STAFF (SEip) 12 1 2 3 4 5 6 7 8 9 1-0 11 L2 13 \4 15 16 l'7 18 t9 20 2L 22 23 24 2018 t,arget ]eveI, as opposed to the 6-year average proposed by Ehe Company. The effect of the agreed upon level of incentives reduced the Company's requested revenue requirements by $438, 000. The Company also proformed employee benef j-ts through 2020 in its original requesE. Staff proposed and the parties agreed to remove L}re 2o2o mat.ching contribulions Eo the Company's 401(k) and use the 2018 Eest year level of matching contributj-ons plus a 3* labor escalator for 201-9. The Company's pension contributions were estimaEed to decrease ifl 2020. To remain consistenE with Staff's policy on excluding 2020 labor and benefiEs, tshe part.ies agreed Eo accept the higher 201-9 pension contribution. The overalL effect of the adjusEments to Ehe Company's employee benefits increased tshe Company's requested revenue requirement. by $86,000. O. Please explain tshe treatment of t.he PaLouse Wind and RatElesnake Flats Wind PPAs. A. Both the Pafouse Wind and Rattlesnake Flats PPAS have been removed from base rat.es and the costss associated wit.h the PPAS \"ri11 be reflected in the PCA subject to the current sharing (90? customer, LoZ Company) , The Palouse Wind PPA was executed in 2011, and has never been incfuded in base rates. In every previous settlement agreement in Avista's race cases since its execution, Ehe expenses25 CASE NO. AVU-E- 19 - 04 Lo/3t/a9 ENGLISH, D (st ip ) 13 associated with the PPA have been included in the PCA and subjecL to sharing. The Rattlesnake Flats Wj.nd PPA is expect.ed to deliver power beginning in December 2020. The capital investments necessary for Ehis project to be integrated have been excluded from the Company's revenue requirement and will be addressed in the Company's next general raEe case. For purposes of t.his case, tshe partsies agree that any expenses associated with the Ratstlesnake Flats Wind PPA will be included in the PCA and subject t.o sharj-ng. The effect of excluding t.hese two PPAS from base rates reduces the Company's requested revenue requ.irement by approximately $4 .3 million. O. Will you please explain the miscellaneous adjustment l-isted in the settfemenE.? A. The miscellaneuous adjustment ref l-ects Ehe net change in operaEing expenses for items SEaff discovered during iEs audit. Those iEems consist of 1) the reclassif icaEion of non-utility ffights and fixed cosEs associatsed wit.h the Company's private jet, as well as the expired lease expense; 2) Ehe amorEization of the 2018 intervenor funding over a Ewo-year period; 3) removal of other miscellaneous administraEive and general ("A&G" ) expenses thaE should hrave been charged below-the-line; and 4) and agreed upon expense adjustment that increases CASE NO. A!'I]-E-19-04 ENGLISH, D STAFF (srip) 14 1 2 3 4 5 6 7 8 9 10 t1 t2 13 t4 15 L6 l7 18 t9 20 21_ 22 24 25 1 2 3 4 5 5 7 8 9 10 11 L2 13 l4 15 L6 L7 18 t9 20 21_ 22 23 revenue requirement by $500,000. The net effect of the miscellaneous adjustment.s increases the Company's requested revenue requirement by $451, 000. Allocationa and Rate Design O. Please explain the cost-of-service methodofogies included in E.he Company's Application. A. The Company's original Application in this case incl-uded a Base Case electric cost-of-service stsudy where producEion costs are classified to energy and demand based on a the system load fact.or. Transmission costs are cLassified l-00t demand and aLLocated by the average of the 12 monEhly coincident peaks. This methodology is consisEent. with the cost - of - servi-ce studies filed in the last four Idaho general rate cases (Case Nos. AVU-E-]-2-08, AvU-E-15-05, AvU-E-16-03, and AVU-E-17-01) and reflecEs the methodology EhaE was acceptsed in the stipul-ation and Settlement in Case No. AVIJ-E-10-01. The Company also provided three alternative cost-of-service scenarios. The first al-t.ernative scenario startss vrith the Base Case but incorporaEes tshe cfassification of Dist.ribution Land and Land Rights (FERC Pfant Account 360) as reLat.ed to other distribution plant in FERC Plant Accounts 361 though 357. The second alternative scenarj-o modified the coincidenE peak allocation factor which is used on aIl demand-related CASE NO. AVU- E - 19.04 10 /3t/te ENGLISH, D STAFF 25 (Stip)1s production and transmission costs t.o reflect. t.he average of the seven highest monthly peaks during t.he E.est. period. The third alt.ernat.ive scenario al-so modi.f ied the coincident peak a11ocaE.j-on factor by using all twelve monthl-y peaks, but the demand values were weighted by the marginal costs-of-power in each month. a. were Lhere any simiJ.ariti.es in tshe different cost-of-service scenarios presented by Ehe Company? A. Yes. Each cosE-of-service scenario presented by the Company illustrated an under-recovery of assigned costs by tshe ResidenEial class (Schedule 1) and Ehe Extra Large General Service classes (schedul"e 25 and 25P) . General Service Schedules 1l- and 12. al-ong with Larger Genera] Service Schedules 21 and 22, were shown tso be over- recovering Eheir assigned costs. O. Do the parEj-es agree on any specific cost-of-service met.hodology for lhis case? A. No. The parties do not agree on any particular cost-of-service methodology for t.his case. However, the parties generally agree with the represenEations presenEed in the multiple scenarios provided by t.he Company t.hat certain customer classes do not recover all of their costs, while other classes recover more Ehan t.heir assigned costs. In recognition that certain rat.e schedules are wef l- above their relaEive cost-of-service, the Parties agree that ENGLISH, D STAFF CASE NO. AVU-E-19-04 (st ip ) 15 1 2 3 4 5 6 7 8 9 10 11 1_2 13 L4 15 16 t7 l-8 19 20 21- 22 23 25 1 2 ) 4 5 5 7 8 10 11 1) 13 l4 15 76 1_7 18 t9 20 21_ 22 23 24 25 General Service Schedules 11 and 12, and Large Generaf Service Schedufes 21 and 22 will receive a revenue decrease above E.he overafl- base raEe change in order t.o move t.hese schedules closer to cost. - of - service parity. The remaining schedul-es will still receive a revenue decrease, buts tshe decrease wilf be below Lhe overall percentage base rate change. The rat.e decreases by Customer Schedule are shown on page 10 of the settlemenE. Energy Efficiency O. Please explain the Settlement as it refates to energy efficiency. A. First., the sett,lement increases the annual amount funded by the Company for its Low Income weaEherization Assislance Program admininstered by the Lewiston Community Action Partnership. The currencly auEhorized Level of funding is $800,000. The settlement increases the Ieve1 of funding to $850, 000 . The SettLement al-so sEipulaEes that Avist.a will establish an Energy Efficiency Assistance Fund ("EEAF" ) to provide additsional funding for projects that are not otherwise full-y funded through existing energy ef f icj.ency incenEives, or do noL otherwise qualify for t.raditional energy efficiency funding. The EEAF will be funded with a deferred liability owed Eo cusEomers related Eo the Allor"rance for Funds Used During Construction ("AFUDC") CASE NO. AVU-E- 19.04to/3L/te ENGLISH, D STAFF (st ip ) 17 EquiEy Tax Deferral addressed in Case Nos. A\ru-E-19-02 and AVU-G-19-01, as ordered by Commission Order No. 34326. This deferral balance is approxi,mately 9800,000. Avista will also contribute an addj.Eional $800,000 in below-the- fine dollars as a matching contribution to the EEAF. The funding will be disbursed as directed by the EEAF Advisory Group, a new committee of stakehofders tasked with determining which existing or new programs shoul-d receive this addi-tional funding to address energy efficiency, weatherization, conservation. and low-income needs j-n Avista's Idaho service territ.ory. This committee wj-11 initially consj.st of representatives from Avista, Commission SEaff, Cl,earwaEer, Idaho Forest Group, ICL, and the L,ewist.on Community Action Part.nership. other TermB and condit.ionB O. Are there Eerms and conditions described in the Settlement? A. Yes. The new leveI of power supply revenues, expeneses, retail 1oad, and the Load Change Adjustment RaEe resulting from the new December 1-, 2019 stipul-ated revenue requirement. for purposes of the PcA mechanism are detai]ed in Appendix A to the Sett,lemenc. Additionally, the new l-eve1 of baseline val-ues for the electric FcA mechanism resulting from the st.ipulated revenue requirement are detail-ed in Appendix B. CASE NO. AVU-E-19-0410/3r/t9 ENGLISH, D STAFF (stip) 18 1 2 3 4 5 6 7 8 9 10 1l_ t2 13 l4 15 t6 l7 18 t9 2t 23 24 25 1 2 3 4 5 6 7 I 9 10 1l- t2 13 r4 15 r6 t7 l-8 19 20 2L 22 24 ,r O. Does this conclude your testimony in this proc eeding ? A. Yes, it does. CASE NO. AVU-E- 19 - 04 to / 3]-/ te ENGLISH, D STAFF (st ip ) 1e CERTIFICATE OF SERVICE I HEREBY CERTIFY THAT I HAVE ]'HIS 3I'' DAY OF OCTOBER 2019. SERVED THE FOREGOING DIRECT TESTIMONY OF DONN ENGLISH IN SUPPORT OF THE STIPULATION AND SETTLEMENT, IN CASE NO. AVU-E-I9-04, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE FOLLOWING: PATRICK EHRBAR DIR OF REGULATORY AFFAIRS AVISTA CORPORATION PO BOX3727 SPoKANE WA99220-372'1 E-MAIL: rratrick.chrbaraatavistacorD.conr .1\ristadockels aiiavislacQlD.corn PETER J RICHARDSON RICHARDSON ADAMS PLLC 5I5 N 27TH STREET BOISE ID 83702 E-MAIL eter'tZrichardsonadarns.cont NORMAN M SEMANKO PARSONS BEHLE & LATIMER 8OO W MAIN ST STE I3OO BOISE ID 83702 E-MAIL: tlscrnanlior'4parsonsbt hlc.rltlrlr BENJAMIN J OTTO ID CONSERVATION LEAGTJE 710 N 6,IH ST BOISE ID 83702 DAVID J MEYER VP & CHIEF COTINSEL AVISTA CORPORATION POBOX3727 SPOKANE WA99220-3727 E-MAIL: tlavicl.nrcyeririlavi stacorp.corn DEAN J MILLER 3620 E WARM SPRINGS AVE BOISE ID 837I6 E-MAIL: clcanimiIlcra,cableonc.r.rcl DR DON READING 6070 HILL ROAD BOISE ID 83703 E-MAIL: dre-adingiii:rnindspri ns.conr VICKI M BALDWIN PARSONS BEHLE & LATIMER 2OI S MAIN ST STE 18OO SALT LAKE CITY UT 84I I1 E-MAIL: r bald*'inlrDparsonsbchlc.corn E-MAIL: botto:/il itlahoconselr,ation.or 1I CERTIFICATE OF SERVICE RONALD L WILLIAMS WILLIAMS BRADBURY PC PO BOX 388 BOISE ID 83701 E-MAIL: ron/Zrvillianrsbradburv.corn BRAD M PTJRDY AITORNEY AT LAW 20I9N 17TH ST BOISE ID 83702 E-MAIL: bryp!41r_ghq1!t!atL!g l S CERTIFICA'TE OI.- SERV ICE ELECTRONIC ONLY crowle-vlar'4)aol. coln carol. hau qenalJ)clearwaterpaper.cotn lenv.borden(Zlcl earwatemaper. com nral i sa. ma.vnard (a);c learwaten:apcr.corn Stephcu.ch:iss(g)werlnrarl.com