20190805notice_of_application_order_no_34392.pdf

Office of the Secretary
Service Date
August 5,2019
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA )CASE NO.AVU-E-19-07
CORPORATION'S APPLICATION TO )
IMPLEMENT FIXED COST ADJUSTMENT )NOTICE OF APPLICATION
RATES FOR ELECTRIC SERVICE FROM )OCTOBER 1,2019 THROUGH )NOTICE OF
SEPTEMBER 30,2020 )MODIFIED PROCEDURE
)ORDER NO.34392
On July 1,2019,Avista Corporation ("Company"or "Avista")applied to the
Commission for authorization to implement Fixed Cost Adjustment ("FCA")rates for electric
service customers from October 1,2019,through September 30,2020,and to approve its
correspondingmodifications to Schedule 75,"Fixed Cost Adjustment Mechanism-Electric."The
Company requests that the Commission issue an order approving FCA deferrals for the period
January 1,2018 through December 31,2018,and approve separate per kilowatt-hour ("kWh")
FCA surcharge rates for its residential group and non-residential group customers.Application at
1.The Company's Application,if approved,would increase its overall electric revenues by about
$4.9 million.See id.at 2,13.The monthlybill of an average residential electric customer would
increase by about $3.00,or 3.6%.Id at 12-13.Avista asks that its Application be processed by
Modified Procedure,and requests an effective date of October 1,2019.Id.at 2,13.
The Commission now issues this Notice of Application and Notice of Modified
Procedure establishing a public comment period and Company reply deadline.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that an FCA is a rate adjustment mechanism
designed to break the link between the amount of energy a utility sells and the revenue it collects
to recover fixed costs'of providing service,thus decoupling the utility's revenues from its
customers'energy usage.See Order No.33437 at 3.Decoupling is intended to remove a utility's
incentive to increase energy sales as a means of increasing revenue and profits,and to encourage
energy conservation.Id.at 3-4.
I "Fixed costs"are a utility's costs to provide service that do not vary with energy use,output,or production,and
remain relatively stable between rate cases -for example,infrastructure and customer service.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34392 1
YOU ARE FURTHER NOTIFIED that the Commission approved Avista's FCA as a
three-year pilot program,and part of the approved settlement of Avista's 2015 general rate case.
See Case Nos.AVU-E-15-05,AVU-G-15-01;Application at 3;and Order No.33437 at 10.The
Order also set forth how the FCA mechanism works,including:treatment of existing versus new
customers,quarterly reporting,annual filings,interest,accounting,and 3%rate increase cap.Order
No.33437 at 10.On June 15,2018,the Commission approved an addendum to the settlement
stipulation approved in AVU-E-15-05 and AVU-G-15-01,which extended the term of the
Company's FCA pilot for an additional year.See Order No.34085;Application at 3-4.Pursuant
to the addendum to the settlement stipulation,the Company,Commission Staff,and interested
parties met on March 27,2019 to review the effectiveness of the FCA mechanism.Applicationat
4 n.2.
YOU ARE FURTHER NOTIFIED that in its electric FCA filing Avista proposes to
increase FCA rates for its electric residential customer group and its non-residential electric
customer groups based on the deferred revenue recorded for January 2018 throughDecember
2018.The Company mostly attributes these proposed changes to warmer than usual weather in
January and December 2018 and savings from energy efficiency programs in 2018.Id.at 6-7.
YOU ARE FURTHER NOTIFIED for its residential customer group,Avista recorded
$1,753,478 in the surcharge deferred revenue in 2018 and $75,245 in 2017 FCA carryover.Id.at
7-8.The Company's proposed surcharge rate of 0.158 cents per kWh is designed to recover
$1,882,379 from the Company's residential electric customers served under rate Schedule 1.Id.;
Exhibit B.If approvedby the Commission,the Company would record this amount in a regulatory
asset balancing account and reduce the account balance each month by the revenue collected under
the tariff.Id.at 8.
YOU ARE FURTHER NOTIFIED that for its non-residential groups,Avista recorded
$1,421,402 in surcharge deferred revenue in 2018 and $67,892 in 2017 FCA carryover.Id.at 8-9.
The Company proposes to increase non-residential rates by 0.145 cents per kWh in order to recover
$1,536,397 from customers in Schedules 11,12,21,22,31,and 32.Id.;Exhibit B.If approvedby
the Commission,the Company would record this amount in a regulatory asset balancing account,
and reduce the account balance each month by the revenue collected under the tariff.Id.at 9.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34392 2
YOU ARE FURTHER NOTIFIED that the Application,Exhibit A (the Company's
proposed tariffs),Exhibit B (FCA rate calculations),Exhibit C (2018 FCA deferral),and Exhibit
D (customer communications)have been filed with the Commission and are available for public
inspection during regular business hours at the Commission's office.The Application and
attachments are also available on the Commission's web site at www.puc.idaho.gov.Click on the
"File Room"tab at the top of the page,scroll down to "Open Electric Cases,"and then click on
the case number as shown in the caption to this document.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the public
interest may not require a formal hearing in this matter and will proceed under Modified Procedure
pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission's Rules of Procedure,
IDAPA 31.01.01.201-204.The Commission notes that Modified Procedure and written comments
have proven to be an effective means for obtaining public input and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application may file a written comment in support or in opposition with the Commission by no
later than September 10,2019.The comment must contain a statement of reasons supportingthe
comment.Persons desiring a hearing must specifically request a hearing in their written comments.
Written comments concerning this Application may be mailed to the Commission and Avista
Corporation at the addresses reflected below:
Commission Secretary David J.Meyer,Esq.
Idaho Public Utilities Commission Avista Corporation
PO Box 83720 P.O.Box 3727
Boise,ID 83720-0074 1411 E.Mission Ave,MSC-27
Spokane,WA 99220-3727
Street Address for Express Mail:email:[e-mail]
472 W.Washington Street Patrick Ehrbar
Boise,ID 83702-5918 Avista Utilities
P.O.Box 3727
1411 E.Mission Ave,MSC-27
Spokane,WA 99220-3727
email:[e-mail]
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34392 3
Commission's home page located at www.puc.idaho.gov.Click the "Case Comment or Question
Form"under the "Consumers"tab,and complete the form using the case number as it appears on
the front of this document.These comments must also be sent to the Company at the e-mail
addresses listed above.
YOU ARE FURTHER NOTIFIED that Avista may file reply comments,if necessary,
no later than September 17,2019.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are received
within the time limit set,the Commission will consider this matter on its merits and enter its order
without a formal hearing.If written comments are received within the time limit set,the
Commission will consider them and,in its discretion,may set the same for formal hearing.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission's jurisdiction under Title 61 of the Idaho Code,and specifically Idaho
Code §61-503.The Commission may enter any final order consistent with its authorityunder Title
61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
pursuant to the Commission's Rules of Procedure,IDAPA 31.01.01.000,et seq.
ORDER
IT IS HEREBY ORDERED that this case be processed under Modified Procedure,
Rule 201-204 (IDAPA 31.01.01.201 -.204).Parties and persons shall have until September 10,
2019,to file written comments,and the Company shall have until September 17,2019,to file a
reply,if any.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34392 4
DONE by order of the Idaho Public Utilities Commission at Boise,Idaho this 5
day of August 2019.
PAUL KJELLSÑDER,PRESIDENT
KRISTINE RAPER,COMM SIONER
ERIC ANDERSON,COMMISSIONER
ATTEST:
Diane M.Hanian
Commission Secretary
I:\Legal\ELECTRIC\AVU-E-19-07\orders\AVUE1907_NtcApp Ntc Mod dh.docx
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34392 5