20200603Comments.pdf

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JOHN R. HAMMOND, JR.
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
(208)334-03s7
IDAHO BAR NO. 5470
Street Address for Express Mail:
1 I33I W CHINDEN BLVD, BLDG 8, SUITE 2OI-A
BOISE, ID 837T4
Attomey for the Commission Staff
BEF'ORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN TIIE MATTER OF THE ELECTRIC Lil\tE
EXTENSION SCHEDTILE 51 RATE
ADJUSTMENT FILING OF AVISTA
CORPORATION
CASE NO. AVU.E,-20.02
COMMENTS OF THE
COMMISSION STAFF
The Staffof the Idaho Public Utilities Commission ("Staff') submits the following
comments regarding the above referenced case.
BACKGROUND
On March 10,2020, Avista Corporation (the "Company") applied for authority to revise
Electric Line Extension Schedule 51. In Order No. 28562, issued November 27 ,2000, the
Commission directed Avista to update its Schedule 51 charges on or before April I of each year.
The Company proposes to update its costs to extend electric lines to new customers, and the
allowance that customers can apply to offset those costs. In the Application, the Company states
it will send a letter notifuing developers and builders that may be affected by the proposed
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ISTAFF COMMENTS JUNE 3,2020
changes in June. Company Letter at l. However, the Company sent this notice to customers
earlier, on May 15,2020. The Company has requested a July l,2O2O, effective date.r
STAFF ANALYSN
Staffreviewed the Company's Application and as a result of its investigation, has come
to the following conclusions:
l. The Company's methodology for calculating allowances is appropriate and the
proposed allowances should be approved.
2. The Company's methodology for calculating average costs is consistent with past
Schedule 5l filings and Staffagrees with the proposed basic costs.
Each of the conclusions will be discussed in more detail in the sections below along with
Staff s recommendations.
Allowances
Staff reviewed the Company's methodology and agrees with the proposed allowances.
The Company determines allowances using an embedded cost methodology designed to ensure
that the Company's investment in each new customer's distribution and terminal facilities does
not put upward pressure on rates paid by the general body of customers.
The Company's embedded cost methodology matches the methodology of past filings.
The ernbedded costs are based on the cost of service study completed in the Company's last
general rate case (AW-E-I9-04), but have been updated to the settlement base rates approved in
the case. The Company proposes average increases of 2.60/o in the allowances offered to all
service schedules. The Company's proposed changes to allowance amounts by service schedule
are reflected in the table below.
I The Company originally requested a May l, 2020, effective date but after discussions with Staffconcerning the
current workplace challenges faced by both the Company and the Commission, the decision was made to amend the
requested effective date to July l, 2020.
STAFF COMMENTS JUNE 3,20202
Table l:
Service Schedule
Sched. 1 Individual Customer (per unit)
Sched. I Duplex (per unit)
Sched. I Multiplex (perunit)
Sched. Il/12 Qter k!Vh)
Sched. 21122 (per kWh)
Sched. 31132 (per kwh)
Present
Allowance
$1,840
$1,470
$1,105
$0.1 s022
s0.138s3
s0.246s3
Proposed
Allowance
$1,900
$1,520
$1,140
$0.15486
$0.r4218
$0.24688
Percent
Change
3.3o/o
3.4o/o
3.2%
3.lo/o
2.60/o
0.lo/o
Basic Costs
Basic costs are calculated using recent average actual costs for facilities such as
transformers and conduit. The Company has consistently used this methodology to determine
line extension tariffs, including prior versions of Schedule 51.
The Company is proposing to update the primary, secondary, service, and transformer
average costs. Residential development costs are also updated for the most current Construction
Standards and average 2019 construction costs.
Staffhas reviewed the filing, including the workpapers provided, and agrees with the
changes. Staffnotes that the average costs for this year are comparable with last year's costs. The
present and proposed basic costs are shown in Table 2 below.
Table 2: Basic Costs - Present and Proposed Cost of Facilities
Single Phase
Overhead Primary Circuit:
Fixed Cost
Variable Cost
Underground Circuit
Fixed Cost
Variable Cost
Underground Secondary Circuit
Fixed Cost
Variable Cost
Overhead Secondary Circuit
Fixed Cost
Overhead Service Circuit
Variable Cost Only
Current Proposed Difference
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
4,253
8.38
1,854
tt.23
418
10.42
1,774
4,205 $8.22 $
1,934 $rr.34 $
428
10.47
r,732
(48)
(0.r6)
$
$
$
$
80
0.1I
l0
0.0s
(42)
(0.17)
JUNE 3,20203STAFF COMMENTS
3.91 3.74
Underground Service Circuit
Variable Cost Only
Overhead Transformer
Fixed Cost Only
Padmount Transformer
Fixed Cost Only
Residential Developments
Total Cost per Lot
Less: Service Cost
Developer Responsibility (Basic Cost)
Average Total Cost per Lot
Less: Allowance
Builder Non-Refundable Payment
STAFF COMMENTS
$ 9.41 $ 9.54 $ 0.13
$ 2,310 $ 2,242
$ 3,507 $ 3,546
$
$
(68)
Residential D evelopments
Developers are responsible for the basic cost of a development, which can be refunded as
new customers receive service within five years from the date that the extension was completed.
The basic cost represents the cost of a development line extension minus the cost of service line
extensions within the development. It is computed by subtracting the average service cost from
the average total cost per lot. The builder must pay the difference between the average total cost
per lot and the allowance.
The Company is proposing a $38 builder non-refundable payment. However, this
payment decreases $29 or 43.3o/o and the overall allowance increases $60 or 3.3%. The present
and proposed residential amounts are found in Table 3 below. Staffanalyzed the Company's
methodology and determined that it is consistent with the methodology prescribed by
Commission Order No .28562.
Table 3: Present and Proposed Residential Pavment Amounts
Current$ 1,907
$ 471
$ 1,436
Proposed
$ 1,938
$ 478
$ 1,460
39
Difference
$ 31
$7s24
Developer Refundable Payment $ 1,436 $ 1,460 g 24
$
$
1,907 $
1.840 $
1,938 $
1.900 s
31
60
$67$38$(2e)
4 JUNE 3,2020
CUSTOMER NOTICE AI\[D PRESS RELEASE
The Company's press release and customer notice were included with its Application.
Staffreviewed the document and determined that it meets the requirernents of Rule 125 of the
Commission's Rules of Procedure (IDAPA 31.01.01). The notice was mailed to the relevant
customers beginning INlay 15,2020.
For this case, the Commission set a comment deadline of June 3,2020. Because the
customer notices were not sent until May 15, 2020, some customers may not receive their notices
or have adequate time to submit comments before the deadline. Customers must have the
opportunity to file comments and have those comments considered by the Commission. Staff
recommends that the Commission accept late-filed comments from customers. As of June 3,
2020, no comments had been filed in this case.
STAFF RECOMMENDATION
Staffbelieves the Company's proposals are reasonable and conform with Commission
Order No. 28562. Staffrecommends the Company's proposed costs and allowances be approved.
In addition, Staffrecommends the Commission accept late-filed comments from customers.
Respectfully submitted this 3'd day of June 2020.
R. Hammond, Jr.
Attorney General
Technical Staff: Michael Eldred
Travis Culbertson
Bentley Erdwurm
Chris Hecht
i:umisc :commentVawe20.2jhmetncbe comments
5STAFF COMMENTS JUNE 3,2020
CERTIFICATE OF' SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 3'd DAY OF JUNE 2020,
SERVED THE FOREGOING COMMENTS OF THE COMN{ISSION STAFF, IN
CASE NO. AVI.]-E-20-02, BY E-MAILING A COPY THEREOF, TO TIIE
FOLLOWING:
PATRICK EHRBAR
DIR OF REGULATORY AFFAIRS
AVISTA CORPORATION
POBOX3727
SPoKANE WA99220-3727
E-MAIL: patrick. ehrbar(davistacom.com
avistadockets@avistacorp. com
DAVID J MEYER
VP & CHIEF COUNSEL
AVISTA CORPORATION
POBOX3727
SPoKANE W499220-3727
E-MAIL: [e-mail]
run L
SECRETARY
CERTIFICATE OF SERVICE