20200108Notice_of_Application_Order_No_34523.pdf

Office of the Secretary
Service Date
January 8,2020
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF COMMISSION )CASE NO.AVU-E-19-14
STAFF'S APPLICATION TO UPDATE )
AVISTA CORPORATION'S AVOIDED COST )NOTICE OF APPLICATION
RATES TO INCORPORATE NEW COST OF )
DEBT )NOTICE OF
)MODIFIED PROCEDURE
)ORDER NO.34523
Pursuant to the Public Utility Regulatory Policies Act of 1978 ("PURPA")and the
implementing regulations of the Federal Energy Regulatory Commission ("FERC"),the Idaho
Public Utilities Commission ("Commission")uses the Surrogate Avoided Resource ("SAR")
methodology to calculate published avoidedcost rates.The Commission has used the SAR method
since Idaho began implementing PURPA in the early 1980's.Order No.32697 at 7.QFs in Idaho
that are ineligible for published avoided cost rates may individually negotiate PURPA contracts
with the utilities using the Integrated Resource Plan ("IRP")pricing method.See id.at 17.
On November 29,2019,the Commission issued Order No.34499,the final Order in
the recent general rate case for Avista Corporation ("Avista"or "Company"),Case No.AVU-E-
19-04.The conclusion of Avista's general rate case triggers recalculation of the Company's
published avoidedcost rates to reflect the change of cost of debt from 5.72%to 5.20%.As a result,
the Company's weighted cost of capital,which depends on debt and equity,has changed from
7.61%to 7.35%.Weighted cost of capital impacts avoided cost rates in the SAR model.
Past practice has been to incorporate changes to a utility's SAR model immediately
followinga general rate case.On December 26,2019,Commission Staff sent a letter to Avista
explaining the proposed update to Avista's avoided cost rates.Staff included a copy of the
proposed published avoided cost rates,and notified Avista that Staff would recommend to the
Commission a comment deadline of January 20,2020.Staff's letter to Avista serves as an
Application in this docket.See Commission Rules 51 and 52.
The Commission now issues this Notice of Application and Notice of Modified
Procedure setting comment and reply deadlines.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34523 1
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that Staff proposes to update the weighted cost of
capital for Avista's SAR model,which will update the published avoided cost rates for Avista.
Avista's new weighted cost of capital is 7.35%.See Case No.AVU-E-19-04,Order No.34499.
YOU ARE FURTHER NOTIFIED that a copy of the proposed updated rates was sent
to Avista for verification.The proposed updated rates are attached to the Application and are
available for public review.
YOU ARE FURTHER NOTIFIED that the Application is available for public
inspection during regular business hours at the Commission's office.These documents are also
available on the Commission's web site at ERILERML giv.Click on the "File Room"tab at
the top of the page,then select "Electric Cases"and click on the case number as shown on the
front of this document.
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 §§61-501 through 61-503.
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.
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 that it will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Commission's Rules of Procedure,IDAPA
31.01.01.201 through .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 supportor opposition with the Commission by
January 20,2020.The comment must contain a statement of reasons supporting the comment.
Persons desiring a hearing must specifically request a hearing in their written comments.Written
comments concerning this Application shall be mailed to the Commission and the Company at the
addressesreflected below:
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34523 2
For the Idaho Public Utilities For Avista:
Commission
Michael Andrea
Commission Secretary Clint Kalich
Idaho Public Utilities Commission Avista Utilities
PO Box 83720 1411 E.Mission
Boise,ID 83720-0074 PO Box 3727
Spokane,WA 99220-3727
Street Address for Express Mail:E-Mail:[e-mail]
[e-mail]
11331 W.Chinden Blvd.
Building 8,Suite 201-A
Boise,Idaho 83714
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
Commission's home page located at .Click the "Consumers"tab then click
the "Case Comment or Question Form"and complete the comment form using the case number as
it appears on the front of this document.
YOU ARE FURTHER NOTIFIED that Staff may file reply comments,if necessary,
by January 27,2020.
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.
ORDER
IT IS HEREBY ORDERED that Staff's Application be processed by Modified
Procedure,Rule 201-204 (IDAPA 31.01.01.201-.204).Persons interested in submitting written
comments must do so by January 20,2020.Staff may file replycomments by January 27,2020.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34523 3
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of January 2020.
AUL KJ I DER,PRESIDENT
KÈI TINE RAPER,MISSIONER
ERIC ANDERSON,COMMISSIONER
Diane M.Hanian
Commission Secretary
I:\Legal\ELECTRIC\AVU-E-19-14\Orders\AVUEl914nte app mod proc_mkdocx
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34523 4