20191001final_order_no_34449.pdf

Office of the Secretary
Service Date
October 1,2019
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE RESIDENTIAL )AND SMALL FARM ANNUAL RATE )CASE NO.AVU-E-19-08ADJUSTMENTFILINGOFAVISTA)CORPORATION )ORDER NO.34449
On July 30,2019,Avista Corporation dba Avista Utilities ("Avista"or "Company")
applied to the Commission for authorization to implement a new rate credit for Schedule 59-
Residential and Farm Energy Rate Adjustment-Idaho.Application at 1.The Company proposed
a Schedule 59 rate credit of 0.387 cents per kilowatt-hour ("kWh").Id.A rate adjustment to
Schedule 59 is applicable to customers served under Schedules 1,12,22,32,and 48.Id.Avista
stated this rate credit would decrease qualifyingcustomers'rates by $3.9 million,with the average
monthlybill for a residential customer decreasing from $82.57 to $79.71.Id.Avista requested that
the Application be processed under Modified Procedure,and that the proposed rate credit take
effect October 1,2019.Id.at 2,5.
On August 1,2019,we issued a Notice of Application and Notice of Modified
Procedure setting public comment and Company reply deadlines.Order No.34422.Commission
Staff timely filed comments,to which the Company did not reply.No other comments were
received.
Having reviewed the record,the Commission enters this Order approving Avista's
Application,with the new rate to be effective October 1,2019.The Commission's decision is set
out more fully below.
BACKGROUND
This Application results from the Bonneville Power Administration's ("BPA")
Residential Exchange Program ("REP").The REP was established by Section 5(c)of the
Northwest Electric Power Planning and Conservation Act.16 U.S.C.§839c(c).That section
makes low-cost power from the federal Columbia River power system availableto investor-owned
utilities in the Northwest.See Assoc.of Pub.Agency Customers v.Bonneville Power Admin.
(APACv.BPA),733 F.3d 939,945 (9th Cir.2013).The statute permits utilities to "exchangepower
they have purchased or generated for lower-cost power generated by BPA."Portland General
Elec.Co.v.Bonneville Power Admin.(PGE v.BPA),501 F.3d 1009,1015 (9th Cir.2007).The
ORDER NO.34449 1
exchange is a paper transaction--a utility may offer to sell power to BPA at the utility's average
system cost ("ASC")for producing power,which BPA compares to a Priority Firm ("PF")
Exchange Rate that BPA calculates for purposes of the exchange.See id.,APAC v.BPA,733 F.3d
at 945-46.If BPA's PF Exchange Rate is lower than the utility's ASC,then the utility is entitled
to a benefit from BPA.APAC v.BPA,733 F.3d at 946.Generally,the utility benefit is the
difference between BPA's PF Exchange Rate and the utility's ASC,multiplied by the utility's
residential load.Id.at 945.The utility must pass the benefit on to its qualifying(residential and
small farm)customers.See id.(citing 16 U.S.C.§839c(c)(3)).The implementation of the REP has
been litigated over the years;the current implementation results from a settlement that took effect
in 2012.See id.at 946-47 (describing litigation and settlement).
THE APPLICATION
Avista's current Schedule 59 rate credit is 0.069 cents per kWh,and was designed to
pass through about $0.84 million to customers.Application at 3.The proposed rate credit of 0.387
cents per kWh would pass through approximately $4.8 million to customers.Id.The rate credit
reflects Idaho's share of BPA REP benefits,as offset by any over-refunded balance from the prior
year.Id.The $4.8 million in BPA benefits would decrease rates for qualifyingcustomers by about
$3.9 million,or 1.6%.Id.at 3.This decrease in rates reflects the difference between this year's
$4.8 million proposed REP credit and last year's $0.84 million REP credit.Id.The proposed REP
credit is further offset by last year's over-refunded balance of about $0.1 million.Id.Avista
indicated that the change in rate credit does not affect its net income.Id.
The Company brought the Application to the attention of its customers via a news
release and a customer notice explaining each of several rate filings.Id.at 5.
STAFF COMMENTS
Staff explained the calculation of the BPA benefit.Staff Comments at 2.The
calculation of the BPA REP benefit for residential and small farm customers has two inputs.Id.
The first input is the usage by Avista's residential and small farm customers over the previous two
years,in this case 2016 and 2017,which is then averaged to create an annualizedusage.Id.The
second input is the difference between two variables calculated by BPA:Avista's ASC rate and
the PF Exchange Rate.Id.These variables are calculated by BPA every two years.Id.The
difference between these two rates is multipliedby the annualizedusage to calculate the BPA REP
benefit to be passed on to qualifying customers for each of the next two years.Id.Avista's BPA
ORDER NO.34449 2
REP credit is allocated between Washington and Idaho based on the actual usage of qualifying
customers in eachjurisdiction.Id.
Avista's Residential and Small Farm rate credit is calculated by taking the projected
remaining balance of the BPA REP benefit from the previous year and adding the BPA REP benefit
for the next year.Id.In this filing,the amount from the previous year was over-refunded because
customers used more electricitythan was projected,creating a carryover balance of $0.1 million.
Id.The total is then divided by the projected annual kWh sales to residential and small farm
customers'to calculate the rate.Id.
Staff also reviewed the methodology and calculation of the proposed Residential and
Small Farm rate credit and confirmed the approach is consistent with Schedule 59.Id.Staff
recommended the Commission approve the proposed rate of 0.387 cents per kWh.Id.
Staff reviewed the Company's press release and customer notice,which were included
with the Application.Each document addresses two cases:this case (AVU-E-19-08)and the Power
Cost Adjustment (AVU-E-19-09).Staff reviewed the documents and determined both complied
with Commission Rule of Procedure 125.See IDAPA 31.01.01.125.
Staff noted,however,that the Commission set a September 10,2019 comment deadline
and the Company did not begin inserting customer notices into the bills until August 16,2019.Id.
at 3.Staff mentioned that some customers in the last billingcycle would not receive their notices,
or have adequate time to comment,before the comment deadline.Id.Staff stated that customers
"must have the opportunity to file comments and have those comments considered by the
Commission."Id.Accordingly,Staff recommended that the Commission accept late-filed
comments from customers because of the Company's late notice.Id.
COMMISSION DISCUSSION AND FINDINGS
The Commission has jurisdiction over this matter under Idaho Code §§61-502 and 61-
503.The Commission has the express statutory authority to investigate rates,charges,rules,
regulations,practices,and contracts of public utilities and to determine whether they are just,
reasonable,preferential,discriminatory,or in violation of any provision of law,and may fix the
same by Order.Idaho Code §§61-502 and 61-503.The Commission has reviewed the record,
includingthe Application and comments.We are mindful of concerns that some customers may
i The Company estimates that its customers in Idaho will use 1,231,749,756 kWh during the October 1,2019
through September 30,2020 Schedule 59-Residential and Small Farm Energy Rate Adjustment period.AttachmentA-Work Papers.
ORDER NO.34449 3
not have received notice of the Application in time for them to comment on it by the comment
deadline.Accordingly,if any comments had been filed between then and the date of this Order,
we would have considered them.No such comments were filed.
We find that the proposed rate credit of 0.387 cents per kWh is just and reasonable.We
therefore approve the Application and the proposed tariff Schedule 59,to be effective October 1,
2019.
ORDER
IT IS HEREBY ORDERED The Avista's Application is granted and its proposed
tariff Schedule 59-Residential and Farm Energy Rate Adjustment is effective October 1,2019
through September 30,2020.
IT IS FURTHER ORDERED that the rate credit for Avista's Schedule 59 customers
will be 0.387 cents per kWh.
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.34449 4
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of September 2019.
PAUL KJELL ,PRESIDENT
KRI TINE RAPER,C lúMÌSSIONER
ERIC ANDERSON,COMMISSIONER
Diane M.Hanian
Commission Secretary
I:\Legal\ELECTRIC\AVU-E-19-08\orders\AVU-E-19-08linal dh .doex
ORDER NO.34449 5