20200106Comments.pdf

JOHN R. HAMMOND, JR.
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-007 4
[phone]
IDAHO BARNO. 5470
RECEIVED
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Attorney for the Commission Staff
IN THE MATTER OF THE APPLICATION
OF'AVISTA CORPORATION TO APPROVE
ELECTRIC DISTRIBUTION SERVICE
AGREEMENT WITH EAST GREENACRES
IRRIGATION DISTRICT
CASE NO. AVU-E.l9-I3
COMNIENTS OF THE
COMMISSION STAFF
COMES NOW, Staff of the Idaho Public Utilities Commission, by and through its
attomey of record, John R. Hammond Jr., Deputy Aftomey General, and in response to the Notice
of Modified Procedure issued on December 19,2019, in Order No. 34506, submits the following
comments.
BACKGROUND
On November 12,2019, Avista Corporation dba Avista Utilities ("Avista" or "Company")
filed an Application requesting Commission approval ofan Electric Distribution Service
Agreement ("Agreement") between the Company and the East Greenacres Irrigation District
("East Greenacres"). Application at 1,
East Greenacres has operated and maintained two Bureau of Reclamation-built pumping
facilities on the Rathdrum Prairie since December 31,1976, providing irrigation and domestic
water supply to approximately 5,300 acres of land in Idaho. /d. at 2. To operate the pumping
S'fAFF'COMMENTS JANUARY 6,2O2O
Street Address for Express Mail:
I I33I W CHINDEN BLVD, BLDG 8, SUITE 2OI.A
BOISE, ID 837I4
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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facilities, East Greenacres receives electric power from the Bureau of Reclamation which is
delivered through Avista's transmission and distribution facilities. 1d. Since March 1, 2009, this
service has been separated into two service agreements to comply with lederal and state
authorities, one for transmission and one for distribution. Id. at 2-3. l-he current electric
distribution service agreement between Avista and East Greenacres was approved by the
Commission in 2014 and remains in effect until terminated or replaced. See OrderNo.33145.
The parties executed the new Agreement on November 7, 2019, and have stipulated to an
effective date of January I , 2020, or the first day lbllowing Commission approval. ld. at 1.. The
Agreement provides for distribution service from Avista's Post Falls Subslation over l3.2kV
feeders to East Creenacres' two pumping stations. 1d. at 3.
In the Application, Avista asserts that the distribution rate charge contained in thc new
Agrecment is "consistent with distribution charges embedded in cunent Idaho retail rates at the
time it was signed by the pa(ies." Id. at2. Under the new Agreement, in order to continue to
receive electric service over Avista's distribution system, East Greenacres will pay Avista
55,232.57 per month or $62,790.84 pcr yeir. /d. Avista asserts the incremental costs associated
with providing service under the agreement are less than the charge for service; therefore, the
revenue received liom this Agreement will assist Avista in ofl'setting its fixed costs in providing
this service. 1d.
STAFF ANALYSIS
After an examination of the Application, SlafTrecommends that the Commission approve
the Agreement and allow East Greenacres to oontinue receiving Bureau of Reclamation power at
charges consistent with the distribution costs embedded in Idaho retail ratcs.
Avista delivers approximately 3.8 million kilowatt-hours annually to East Greenacres'
pumping facilities. Id. al 3. The annual charge lbr distribution service, under the existing
agreement is $4,23 I .74 per month, or $50,780.88 per year. Under the new Agreement, the annual
charge for distribution service will change to $62,790.84, or $5,232.57 per month. ft/.
Staff verified the values and the method used to generate the new distribution charge. In
compliance with Commission Order No. 33 145, Avista used a demand-based methodology using
the East Greenacres' average share o1' l2 non-coincident monthly peaks ("l2NCP method") to
determine East Greenacres's share ofthe distribution facilities costs. This methodology is
STAFF COMMENTS JANUARY 6,2O2O2
consistent with Avista's last cost of service study that was frled with the Commission in Case No.
AVU-E-17-01, and updated lor both the settlement adjustments and 2019 revenue increase that
was approved by Commission Order No. 33953, and tax reform adjustments approved by
Commission Order No. 34070. This cost allocation method is consistent with general methods
used by Avista lbr allocating distribution costs among other customer classes.
Slalf reviewed the computation of the monthly distribution service flee. The I2NCP of the
East Greenacres demand share is 0.001476. This was derived liom the ratio of the East
Greenacres average 12 month peak load of 840 kW to the Idaho retail average l2-month peak
load of 568,333 kW. The basis that was used for the calculation ofthe East Greenacres' share of
the distribution costs is $42,546,285, which was computed by subtracting customer service,
information, and sales costs of$4,947,156, and secondary distribution tacility costs of
$13,071,679 from the total Idaho distribution costs of$60,565,120. The 12NCP demand share of
0.001476 is multiplied by the distribution costs of$42,546,285 to yield an annual distribution
service charge of$62,790.84, or $5,232.57 per month. Staff believes this methodology is
reasonable. See Id. at 3. Staff also notes that the terms and conditions of this Agreement are
identical to those of the previous agreement and are in compliance with the Commission Order
No.33145.
Additionally, Staffbelieves that the Agreement is in the public interest. Consequently,
Staff supports language included in Section 2 ofthe Agreement, Term and Termination, that
prevents a gap in Avista's ability to charge East Greenacres for distribution service. Specifically,
this language allows for continued service beyond the expiration ofthe associated transmission
agreement.
STAFF RECOMMENDATION
Staff recommends that thc Commission approve the Electric Distribution Service
Agreement without changes or condition, with an cffective date of the first day following
approval by the Commission.
-lSTAFF COMMENTS JANUARY 6,2020
Respectfully submitted this
r*.,--le day of January 2020.
Jo Hammond, Jr.
Attorncy Gcneral
Technical Staff: Johan Kalala-Kasanda
Michael Eldred
Bentley Erdwurm
i:umisc:commenlyavuel 9. 1 3jhjkbemc comments
.+STAFF COMMENTS .IANUARY 6, 2O2O
CERTTFICATE OF SERVICE
I I]ERTBY CERTIFY TIIAT I HAVE THIS 6TH DAY OF JANUARY 2020.
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF', IN
CASE NO. AVU.E.I9.I3, BY MAILING A COPY TIIEREOF, POSTACE PREPAID.
TO I'HE FOLLOWING:
PATRICK EHRBAR
DIRECTOR REGULATORY AFI-'AIRS
AVISTA CORPORATION
PO BOX 3727
SPoKANE WA99220-372'7
E-mail : oatrick.ehrbar({Davistacorrr.conr
DAVID J MEYER
VP & CHIEF COUNSEL
AVISTA CORPORATION
PO BOX372'7
SPOKANE WA99220-3727
E-mail : [e-mail]
CERTIFICATE OF SIRVICF
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SF,CRETARY