20191112Application.pdf

Aittsra
Avista Corp.
14l I East Mission P.O. Box 3127
Spokane. Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170
November 8,2019
Diane I{anian, Commission Secretary
ldaho Public Utilities Commission
11331 WChindenBlvd.
Boise, ID 83714
Re: Avista Application No. AVU-E-19-/2
Dear Ms. Ilanian:
Avista Corporation, doing business as Avista Utilities (hereinafter Avista or Company),
respectfully requests approval to modify its voluntary renewable energy program (program) in
Schedule 95 "Optional Renewable Power Rate" in an effort to eflectively manage costs, provide
customers with greater choice, and to support renewable energy within our region. The proposed
additions are included in the following tariff sheets, I.P.U.C No. 28:
Third Revision Sheet 95 Canceling Second Revision Sheet 95
First Revision Sheet 95A Canceling Original Sheet 95A
Enclosed for filing with the Commission is an original and 7 copies of the Company's application.
Please direct any questions on this matter to myself at [phone].
Sincerely,
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Manager, Regulatory Poticy & Strategy
Avista Utilities
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Attachements
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BEFORE THE IDATIO PUBI,IC UTILI'IIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF AVISTA CORPORATION REQUESTINC
TO MODIFY SCHEDI.JI,E 95 TO REVISE
THE COMPANY'S VOLTINI'ARY
RENEWABI,E ENERGY PROGRAM
CASE NO. AVTJ-E-I9. i 2
I. INTRODUCTION
Avista Corporation, doing business as Avista Utilities (hercinalier Avista or Company), at
l4l1 East Mission Avenue. Spokane. Washington, respectlully requests approval to modify its
voluntary renewable energy program (program), Schedule 95 "Optional Renewable Power Rate"
in an effort to effectively manage costs, provide customers with greater choice, and to support
renewable energy within our region.
During 2019, Avista evaluated the Company's program by conducting customer research,
analyzing program costs and customer participation levels. and reviewing comparable programs
at other investor owned utilities. After completing the review, the Company determined that
updates to the program are necessary in order to mcet the needs ol'our customers and ensure that
I'unds collected from the program participants are suflicient to cover cxpenses.
The Company requests that this filing be processed under the Commission's Modified
Procedure rulcs.
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AVISTA SCHEDIJI,II 95 FILING PA(il, I
1 DAVID J. MEYER2 VICE PRESIDENT AND CHIEF COUNSEL FOR3 REGULATORY AND GOVERNMENTAL AFFAIRS4 AVISTA CORPORATION5 P.O. BOX37276 I41I EASTMISSIONAVENUE7 SPOKANE, WASHINCTON 99220-3]27
8 TELEPHONE: [phone] david.nrever(@.avistacorp.com
1 Communications in rel'erence to this Application should be addressed to:
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Beginning in 2002, Avista, offered electric customers the opportunity to voluntarily
support the development of renewable energy by participating in the Company's "Buck-a-Block"
program under Tariff Schedule 95 "Optional Wind Power Rate." Avista Utilities' wind power
option was priced in increments, or "blocks", ol $1. Each $1 block of wind purchased by
customers equaled 55 kilowatt hours (kWhs).
In 2004, the Company filed revisions to the Buck-a-Block program including a change
Iiom Optional "Wind" Power Rate to Optional "Renewable" Power Rate. These revisions also
reflected a lower wholesale cost of wind power 1<l Avista, and represented the cost of renewable
energy certificates (RECs) associated with that resource. The RECs were primarily from wind
power generated at the Stateline Wind Energy Center, however they could also come from other
"green-e certified" resources.l The revised program continued to include voluntary participation
in increments of $l per block. However, each block was modified to be equal to 300 kWh of
renewable energy rather than the previous block amount of 55 kWh.
ln 2014, the Company fited additional revisions to the program, allowing surplus funds to
be used for issuing rooftop solar grants for installations on commercial buildings in Idaho and
Washington. This was primarily due to the availability of low.cost RECs in past years and a plateau
in subscription levels. The program had surplus revenues that exceeded thc costs by approximately
rThe Creen-e Renewable Electricity Certification Program is administered by the non-profit Center for Resource
Solutions, based in San Francisco, Califomia.
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AVISTA SCTIEDULE 95 FILINC PAGE 2
David J. Meyer, Esq.
Vice President and Chief Counsel Ibr
Regulatory and Governmental Afl'airs
Avista Corporation
P.O.Box3727
141 1 E. Mission Avenue, MSC-I3
Spokane, W A 99220-3'727
Phone: [phone]
[e-mail]
Linda Gervais
Senior Manager, Regulatory Policy & Strategy
Avista Corporation
P.O. Box 3727
141 1 E. Mission Avenue, MSC-27
Spokane, WA 99220-3727
Phone: [phone]
I inda. eervai s(g)avistacorp.com
II. BACKGROUNI)
I $200,000 (Idaho and Washington combined) prompting the Company to ol'fer solar grants using
2 excess funds collected from the program. Since these revisions were approved by the Idaho Public
3 Utilities Commission (Commission), $347,000 in grants and funded nine (9) projects in Idaho and
4 Washington.
III. CUSTOMER FEEDBACK)
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ln 2019, the Company conducted
customer research in order to befier inform
revisions to the program.2 This involved a
variety of aclivities including surveys.
customer panels and individual interviews.
when customers were presented with
several options for renewable programs
and asked what option they were most
Iikely to choose, including an option not to
Customer Preference for Renewable
Programs
32%r Euck-a-Block
r Community Solar
Onsite generation
(rooftop)
8%
480/,
l3o/o r None of these
participate in any program, 3270 of customers selected the Buck-a-Block program. However, less
than one percent (1%) ofthe Company's customers actually participate. In order to understand the
difference in actual participation, the Company conducted additional research. Avista discovered
that most customers, even active program participants, said that "lack of information" is a problem
and they don't understand the value of the program.3 There is clearly a need to further educate
customers on the benefits of the program. Additionally, the Company is seeking to provide
additional choices to our customers based on their lbedback.
? The Company conducted a residential customer research project in 2016 using the Shelton Group, a leading research
firm focused exclusively on energy and the environment. Avista also conducted intemal research specifically
regarding the Buck-a-Block program in 2019.I 589/o ofcustomers surveyed said that "lack ofinformalion" about the program was the largest detractor.
AVISTA SC}IEDULE 95 FI[-ING PACE 3
I IV. RISIN(; COSTS
5000
4000
3000
20003225
1000
Progrom Enrollment Counl
0
36 r0
2018 201920r52016 2017
r Customers
s3.s0
s3.00
s2.s0
s2.00
51.50
s1.00
5o.so
Weighted Avg Price of RECs
S2.9s 52.88
1.95
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The average cost to administer the current
program is approximately 25% of present
voluntary customer funding, so under the
current pricing structure, the Company must
purchase RECs for less than $2.50 in order to
cover the cost of the REC. as well as program
administration expenses.4
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The average cost to purchase a REC in 2019 (year-to-date) was $2.69, which is higher than the
budgeted amount. The cost for RECs is somewhat volatile liom year to year, however the
Company believes that the increased demand for RECs due to Federal and state regulations, will
continue to increase the demand for RECs and therefore the price. In order to prevent the program
from losing money due to the increasing costs of RECs, it is necessary to propose a new pricing
structure.
{ Program participants cunently pay $l for a 300kwh "block". RECs are the equivalent of l000kWh ofenergy. so it
takes just over three blocks to equal one REC. This means the Company can purchase a REC for a maximum of
53.33, not including administration costs.
4190 37503225
AVISTA SCHEDULE 95 I.'ILING PAGE 4
2 ln recent years the cost ofRECs has increased
3 and the level of program participants has decreased.
4 The current operating reserves for the progrzun are
5 approximately $38,000, which is well below previous
6 years. The Company is concemed that the program
7 may not be able to cover its costs if these trends
8 continue.
V. PROPOSED REVISIONS
National Blocks - Participants can purchase 300 kwh "blocks" for $l under the national
option. RECs procured under this option will be sourced from rencwable generation
anywhere in the United States. This provides customers a low cost option to continue
supporting renewable energy.
RecionalBlocks Participants can purchase 100 kwh "blocks" for $l under thc regional
option. RECs procured undcr this option will be sourced from generation located in the
Westem Intcrconnection (WECC), with prefercnce given to the Northwest region
including lD. WA, OR, CA, M'l'and BC. This option provides customers an opportunity
to support regional rcnewablc energ-y at a pricc point thal is more reflective ofthe current
REC market.
Offering customers REC options provides a variety of benefits to them, as well as to the
Company. The national option provides customers with an opportunitl to continue participating
in the program at the current price point because the Company anticipales being able to acquire
national RECs between $l to $3. Current participants will be given the option to select either of
the two options, but will automatically be del'aultcd into the national option ilthey do not specify
a differcnt option under the revised program. Offering the regional option at the recommended
price point will allow customers to suppofi existing renewable energy projects in our rcgion, while
also enabling the Company to continue to of'fer grants for new projects, further increasing regional
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AVISTA SCHEDULE 95 I.'II-ING PAGE 5
2 In order to provide more clarity around the program, mitigate the rising costs of RECs, and
3 provide choices that matler to our customers. the Company is proposing the following revisions to
4 the program. First. Avista is proposing to off'er two REC options lbr customers to choose from, all
5 of which will continue to offer RECs from wind. solar. or other qualified altemative energy
6 sources. 'Ihe price point fbr each option allows the Company to continue to cover the
7 administrative costs, REC costs, and to provide grant funding. 'l'hrough the proposed revisions,
8 the Company has sought to establish options at dift'erent price points to help sustain the program
9 during volatility in the REC market over the next 5-10 years. Avista will continue to monitor costs
l0 and manage the program in a fiscally prudent manner. Second. the Company is proposing to
I I change the name ofthe prograrn to "My Clean Energy" in an effort to help customers understand
12 the progam. The proposed options are listed below and described in more detail thoughout this
l3 section.
1 renewable generation. Making these options available to our customers allows them to support
2 renewable energy in a way that best aligns with their personal desires and is structured similar to
3 other investor-owned utilities.
4 'Ihe Company has structured the prices to account for program administration, which will
5 include increased education for our customcrs in order to help them understand the program and
6 the value it provides. Avista's research clearly indicated that customers desire more information
7 about the program.
VI. IMPLEMENTATIO:{I
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Enrollment will remain simple for our customers and can be done online or over the phone,
as cunently available today. Customers will continue to have the opportunity to pa(icipate with
no contract required and will have thc option to enroll and/or canoel participation at any time in a
given month. The ease of enrollment and no contractual obligations have been validated as a
customer satisfier in recent surveys and customer f'eedback sessions. All charges related to the
progr.rm are in addition to the customer's regular electric charges. Charges will appear on the
customers' regular monthly bill as a separate line item and include appropriate taxes.
In order to successfully implement the proposed changes and deliver on customer
expectations, Avista will modifu the language and positioning on the Company's website to better
illustrate the value ofthe program. 'fhis includes the addition of a value calculator, modifications
to the online enrollment process to illustrate the program's options, and back-end system changes.
All current program participants will receive a notilioation ol'the program changes and will
be able to select the option that best suits their needs. Customers u,ho do not respond will
automatically be defaulted into thc national option. which will ensure their ratc (and level of kWhs)
won't change due to the revision. Avista also plans on distributing ongoing communications to our
customers in order to promote boarder awareness of the program, as well as regular
communications to current program participants that will include intbrmation about the renewable
projects they help support. These communications are intended to increase program participation
and deepen current program participants' engagement by providing increased visibility into the
beneflts of the program.
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AVISTA SCHEDULE 95 FII,INC PAGE 6
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VII. METRICS AIiD PE,RFORMANCE
1'he Company has established baseline melrics and will continue tracking performance in
an effort to meet our objectives. The three primary metrics lbr the program will be customer
satislaction, customer awareness, and customer attrition. Customer satisfaction will be measured
by an annual Net Promoter Score (NPS) survcy on an ongoing basis.s The Company will monitor
customcr awareness through external web traf'fic 1o the program page. In 2018, total traftic was
1,088 extcmal visits, the program will seek to boost the number of extemal visits to 4,000 each
year. Finally, the Company expects to sce customcr attrition decline and will seek to ultimatcly
grow the program fiom approximately 3.600 active participants to 5,000 participants over the
next three years. All three of these metrics will be important as the program strives lbr higher
levels of cuslomer satisfaction and improved scntiment, ultimately driving broader awareness and
intcrest in support ofrene*able energy.
vII. CONCLUSION
WHEREFORE, Applicant respectfully requests the Commission issue its Order approving
the revisions to Schedule 95 to modify its voluntary renewable energy program with an effective
date ofJanuary 1, 2020, with this Application being processed under Modified Procedure.
DATED at Spokane, Washington, this 8th day of November,20l9.
AVISTA CORPORATION
By
Da
Vice Prcsident and ChiefCounsel for
Regulatory and Governmental Affairs
5 NPS measures customer experience and customers' overall satisfaction with a company's products or services
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AVIS'fA SCHL,DULE 95 I.ILINC PAGE 7
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VF]RIFICAl ION
STATE OF WASHINGTON )
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County ofSpokane )
Linda Gervais, being first duly sworn, on oath deposes and says: that she is the
Manager of Regulatory Policy & Strategy for Avista Utilities; that she has read the above and
foregoing Applicalion, knows thc contents thereof, and be Lhe samc be true.
SICNED AND SWORN to before me this 8'h day of Novembcr, by Linda Cervais
rt
NO'IAR UBLIC in and for the State ofzWashington. residing at Spokane.
Commission Expircs:42 2021l(
AVISTA SCHTIDULE 95 FILING PNGE8
l./*4Lt
i
STRIKE/IJNDERLINE
l.P.U.C. No .28
Third Revisaon Sheet 95
Cancelinq
Second Revision Sheet 95
AVISTA CORPORATION
d/b/a Avista Utilities
SCHEDULE 95
M IvlY CLEAN ENERY PROGRAM - IDAHO
AVAILABLE
To Customers in the State of , ldaho where the Company has electric service. Customers
mav participate in one or more available Renewable Enerqy Credit (REC) proqram options
APPLICABLE
To all customers receiving electric service who agree to purchase blocks of
renewable power under this schedule.
+ecK
One (1) bleek equals 300 kWh ef renewable pewer,
CHARGE PER BTECK
+n
@
PROGRAI\A OPTIONS AND CHARGES
oroo ram oDtions will be available to c ers. All options will utilize the same tvpes of
qualifuino resources includinq wind. solar and biomass. but mav also come from other renewable
resources.
National Block Option - One (1) block is equal to 300 kwh of renewable power from a
Nataonal source locateLanylvhere in the United States. Each block is priced at $1.00
oer block. oer month.
Reqional Block OpLiol Onetllhlock rs equal to 100 kwh of renewable power from a
Reoional source located in the Western lnterconnection (WECC). with Dreference
iven to the no incl ID OR CA l\ilT BC, E h
Driced at $1 .00 per block. per month.
MONTHLY BILLING
The monthly billing shall be the number of Blocks the customer has agreed to
purchase multiplied by the Charge per Block. The Monthly Billing is in addition to all other
charges contained in customer's applicable tariff schedule. This schedule's Monthly Billing
shall be applied to the customer's billing regardless of actual energy consumption.
RENEWABLE POWER
For the purpose of this schedule, the renewable power sourced through renewable
energy certificates (RECs) shall be Brimarily frem Green e eertified wind pewer but ma.,alseM recoqnized via the Western Renewable Eneroy
, 2020Effective January 1
v
by
B
ssued Avasta Corporation
Patrick Ehrbar, Director of Regulatory Affairs
All orooram charoes shall be in addition to all other charqes contained in the customer's
aoolicable tariff schedule.
lssued November 8. 2019
Third Revision Sheet 95
l.P.U.C. No .28
Cancelinq
Second Revision Sheet 95
lssued by
By
AVISTA CORPORATION
d/b/a Avista Utilities
Generation lnformation System (WREGIS) t no svstem or another REC trackino svstem of
PROGRAM ADMINISTRATION:
To ensure that all costs and benefits of this program are only applied to program
participants, all funds collected and spent under this Schedule will be separately identified
and tracked. Funds received from Customers under this Schedule will be used to cover
program costs (e.9.: program
lssued November 8. 2019
Avista Corporation
Patrick Ehrbar, Director of Regulatory Affairs
record with preference toward Green-e certified and orimarilv from these sources: Wind and
solar Dower. but mav also come from other renewable resources.
Effective January 1, 2020
CLEAN
l.P.U.C. No .28
by
B
First Revision Sheet 95A
Cancelino
Ori inal Sheet 95A
ssued
v
AVISTA CORPORATION
d/b/a Avista utilaties
SCHEDULE 95 - Continued
management, accounting, communications, etc.) as well as to match block subscriptions to
REC purchases.
RENEWABLE ENERGY PROJECTS/GRANTS:
ln an effort to promote and build awareness of renewable energy generation options, if
available, funds collected, but not otherwise required to meet program obligations may be
distributed for one or more of the following renewable projects:
1 . Funding for locally-owned, non-residential solar projects. Applicable customers,
with a preference for community-based projects that provide for educational and
environmental benefit to local communities, or otheMise receive service under
this Schedule, may apply for a grant to cover all or a portion of the cost of
installation.2. Funding for research and development projects that encourage Renewable
Energy market transformation in order to accelerate marketability of Renewable
Energy technologies.3. Funding for above-market costs associated with the new construction of
Renewable Energy facilities or the purchase by contract of Renewable Energy
that reduces the costs of Renewable Energy to be competitive wrth cost-effective
resources.
Eligible renewable energy projects would not be considered for purposes of any Renewable
Portfolio Standard requirements. Renewable energy that is generated in response to any
federal or state statutory requirement to construct or contact for the renewable energy is not
eligible for the funding under this Schedule.
To the extent an eligible project in Section 1, 2, and 3 above is able to generate RECs, the
grant recipient agrees that the Company, on behalf of the Schedule 95 program, has the
first right to claim a share of the project's REC output. The amount of these RECS is
expressed as a percentage of oulput when comparing the Schedule 95 financial contribution
to the overall cost of the project. The proportional amount of these RECs will be retired on
behalf of the program.
SPECIAL TERMS AND CONDITIONS1. Service under this schedule is subject to the Rules and Regulations contained in this
tariff.2. Customers may apply for or terminate from this schedule anytime during the year.
The Company may limit availability of this program subject to available renewable
power at the cost incurred under the terms described above.3. The above Monthly Billing is subject to increases as set forth in Tax Adjustment
Schedule 58.
Effective Jaruary 1, 2020
Avista Corporation
Patrick Ehrbar, Director of Regulatory Affairs
lssued November 8, 2019
l.P.U.C. No .28
lssued by Avista Corporation
Third Revision Sheet 95
Canceling
Second Revision Sheet 95
AVISTA CORPORATION
d/b/a Avista Utilities
SCHEDULE 95
MY CLEAN ENERGY PROGRAM - IDAHO
AVAILABLE
To Customers in the State of ldaho where the Company has electric service. Customers may
participate in one or more available Renewable Energy Credit (REC) program options.
APPLICABLE
To all customers receiving electric service who agree to purchase blocks of renewable power
under this schedule.
PROGRAM OPTIONS AND CHARGES:
Two program options will be available to customers. All optlons will utilize the same types of
qualifying resources including wind, solar and biomass, but may also come from other
renewable resources.
National Block Option - One (1) block is equal to 300 kwh of renewable power from a
National source located anywhere in the United States. Each block is priced at $1 .00 per
block, per month.
Reoional Block Ootion - One (1) block is equal to 100 kwh of renewable power from a
Regional source located in the Western lnterconnection (WECC), with preference given
to the northwest region including WA, lD, OR, CA, MT, and BC. Each block is priced at
$1 .00 per block, per month.
All program charges shall be in addition to all other charges contained in the customer's
applicable tariff schedule.
MONTHLY BILLING
The monthly billing shall be the number of Blocks the customer has agreed to purchase
multiplied by the Charge per Block. The Monthly Billing is in addition to all other charges
contained in customer's applicable tariff schedule. Thls schedule's i/tonthly Billing shall be
applied to the customer's billing regardless of actual energy consumption.
RENEWABLE POWER
For the purpose of this schedule, the renewable power sourced through renewable energy
certificates (RECs) shall be recognized via the Western Renewable Energy Generation
lnformation System (WREGIS) tracking system or another REC tracking system of record with
preference toward Green-€ certified and primarily from these sour@s: Wind and solar power, but
may also come from other renewable resources.
PROGRAM ADMINISTRATION:
To ensure that all costs and benefits of this program are only applied to program participants, all
funds collected and spent under lhis Schedule will be separately identified and tracked. Funds
received from Customers under this Schedule will be used to cover program costs (e.g.: program
lssued November 8,2019 Effective January 1,2020
+ilv ffia
r' D irector or Rcs u I atorv Arra i rs
l.P.U C. No .28
lssued by
By
Corporation
First Revision Sheet 95A
Canceling
Original Sheet 95A
Patrick Ehrbar, Director of Regulatury Alfairs
AVISTA CORPORATION
d/b/a Avista Utilities
SCHEDULE 95 - Continued
management, accounting, communications, etc.) as well as to match block subscriptions to REC
purchases.
RENEWABLE ENERGY PROJECTS/GRANTS:
ln an effort to promote and build awareness of renewable energy generation options, if available,
funds collected, but not otheMise required to meet program obligations may be distributed for
one or more of lhe following renewable projects:
1. Funding for locally-owned, non-residential solar prolects. Applicable customers, with
a preference for community-based projects that provide for educational and
environmental benefit to local communities, or otheMise receive service under this
Schedule, may apply for a grant to cover all or a portion of lhe cost of installation.
2. Funding for research and developmenl projects that encourage Renewable Energy
market transformation in order to accelerate marketability of Renewable Energy
technologies.3. Funding for above-market costs associated wth the new construction of Renewable
Energy facilities or the purchase by contract of Renewable Energy that reduces the
costs of Renewable Energy to be competitive with cost-effective resources.
Eligible renewable energy projects would not be considered for purposes of any Renewable
Portfolio Standard requirements. Renewable energy that is generated in response to any federal
or state statutory requirement to construct or contact for the renewable energy is not eligible for
the funding under this Schedule.
To the extent an eligible project in Section 1, 2, and 3 above is able to generate RECs, the grant
recipient agrees that the Company, on behalf of the Schedule 95 program, has the first right to
claim a share of the proiect's REC output. The amount of these RECS is expressed as a
percentage of output when comparing the Schedule 95 financial contribution to the overall cost
of the project. The proportional amount of these RECs will be retired on behalf of the program.
SPECIAL TERMS AND CONDITIONS
1. Service under this schedule is subject to the Rules and Regulations contained in this
tariff.2. Customers may apply for or terminate from this schedule anytime during the year. The
Company may limit availability of this program subject to available renewable power at
the cost incurred under the terms described above.
3. The above Monthly Billing is subject to increases as set forth in Tax Adjustment
Schedule 58.
lssued November 8, 2019 Effective ,lanuary I )OZO
Veu^-