20200731Brandon Direct.pdf

DAVIDJ. MEYER
VICE PRESIDENT AND CHIEF COUNSEL FOR
REGULATORY AND GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
I4II E. MISSION AVENUE
P.O.BOX3727
SPOKANE,WASHINGTON 99220
PHONE: [phone], FAx [phone]
RECEIVED
2020 lult 31, PM 3:05
IDAEO PUBLIC
ATILITIES COMMISSION
BEFORE TIIE IDAHO PTJBLIC UTILITIES COMMISSION
IN THE MATTER OF THE POWER COST
ADruSTMENT (PCA) ANNUAL RATE
ADJUSTMENT FILING OF AVISTA
CORPORATION
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CASENO. AW-E-20-07
DIRECT TESTIMONY OF
ANNETTEM. BRANDON
FOR AVISTA CORPORATION
I Q. Please state your name, business address and present position with
2 Avista Corporation?
3 A. My name is Annette M. Brandon and my business address is 1411 East
4 Mission Avenue, Spokane, Washington. I am presently assigned to the Regulatory Affairs
5 Department as a Manager of Regulatory Affairs.
6 Q. Would you briefly describe your educational background and
7 professionalexperience?
8 A. Yes. I am a 2002 graduate of Eastem Washington University with a
9 Bachelor of Arts degree in Business Administration - Professional Accounting. I started
t0 with Avista in January 1999 as a Budget Analyst in the Company's Transmission
ll department. I spent three years in the Company's Tax Department before moving to
12 Resource Accounting for the next eight years. In this role, I was primarily responsible for
13 accounting for natural gas and associated budgeting and reporting requirernents. I joined
14 the Regulatory Affairs departrnent as a Regulatory Analyst in 2012 ard was promoted to
15 my current role in 2013. My primary responsibilities relate to oversight ofthe purchase
16 gas cost adjustment filings, Power Supply including general rate case adjustments,
17 monthly/annual reporting, key contact for the Company's compensation and benefits
l8 programs, and revenue requirement for our Oregon jurisdiction.
19 a. What is the scope of your testimony in this proceeding?
20 A. My testimony provides a sunmary of the accounting entries and account
2l balances related to the Power Cost Adjustment (PCA) for the l2-months ended June 30,
22 2020. My testimony also addresses the proposed surcharge to be effective October l, 2020,
23 which will replace the existing rebate.
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a, Are you sponsoring an Exhibit?
A. Yes. I am sponsoring Exhibit No. AMB-I. Page I details the calculation of
the proposed uniform cents per kilowatt-hour PCA surcharge of 0.0151, as well as the
impact of the proposed PCA surcharge mte by rate schedule. Page 2 is the proposed PCA
tariff, Schedule 66.
O. Would you please provide en overiew of the most recent history of
Avista's PCA methodology that has been approved by the Idaho Public Utilities
Commission ('IPUC")?
A. Yes. On June 29, 2007 the Commission issued OrderNo. 30361 in Case No.
AVU-E-07-01. That case dealt with the review of the PCA methodology and method of
recovery. The Commission approved a change in the PCA methodology from a trigger and
cap mechanism to a single annual PCA rate adjustment filing requirement.
The Commission also approved a change in the method of the PCA deferral rate
adjustment from a uniform percentage basis to a uniform cents per kilowatt-hour basis,
effective with the October l, 2007 rate change. By Order No. 32206 in Case No. GNR-E-
10-03 dated March 15, 201 1, the Commission modified the retail revenue credit
methodology and approved a Load Change Adjustrnent Rate based on the energy-classified
portion of embedded production revenue requirement effective April l, 201 l.
The Commission approved the following procedural schedule for administering the
annual PCA filings:
August 1 Company filing for prior July - June deferral period
September 1 Review and comments by Staff and other interested parties
October 1 Commission Order and effective date of PCA rate
adjustment
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a. Would you please summarize the filing and Order associated with the
existing PCA rate?
A. Yes. On July 30, 2019, Avista filed its annual PCA rate adjushnent for the
period July l, 2018 through June 30, 2019 and requested a PCA rebate rate of0.058P per
kilowatt-hour effective October l, 2019. The Commission approved that request in Case
No. AVU-E-I9-09, by Order No. 34453, dated September 30, 2019.
a. Does tle present filing conform to ttre requirements of the prior
Commission Orders regarding the PCA?
A. Yes. Consistent with prior years, the proposed PCA rate adjustment is based
on the following:
o Deferrals for the period July 1, 2019 through June 30, 2020, including interest,
Unamortized balance rernaining from the period October I , 20 I 9 through June
30, 2020, including interest, and
Forecast amortization and interest from July i, 2020 through September 30,
2021.
0. What were the amounts of deferrals ond interest for tle period JuIy l,
2019 through June 30,2020?
A. The table below summarizes the charges for this period:
Deferrals (July 2019 - Jme 2020)
Renewable Enerry Credit Retirerrcnt Benefit
Interest
Total Deferral Balance
$
$
$
1,038,548
(857,010)
t5,928
$ 197.466
Company witness Mr. Reid discusses the components that make up the $1,038,548
deferral balance shown above. The $857,010 credit for Renewable Energy Credit
Retirement benefits is to credit Idaho customers for benefrts related to the renewable energy
credits retired to meet Washington's renewable portfolio standards. The RECs used to meet
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Washinglon RPS are tracked 100% in the PCA, per Commission Order. The credit is based
on the Idaho allocation of RECs that were retired to meeting Washinglon RPS (WA I-937)
that would have been otherwise sold.
The $15,928 interest amount represents interest for the twelve-month period July 1,
2019 through June 30, 2020. lnterest for the 6-month period was calculated using the
Customer Deposit Rate of 2o/o for rhe entire perio{ per prior Commission order.
a. What surcharge rate is the Company proposing to be effective October 1,
2020?
A. The Company is proposing a uniform cents per kilowatt-hour PCA surcharge
rate of 0.0151 to be effective October 1, 2020. Page I of Exhibit No. AMB-I shows the
calculation ofthe proposed rate. The proposed rate is designed to surcharge the following:
Deferrals (July 2019 - June 2020)
RPS Conpliance
Renewable Enerry Credit Retir€ment Benefit
Total Deferral Balance
$
$
$
l,038,548
(8s7,010)
15,928
s 197 ,466
Unarnortized Balance from Previous Deferals (prior to July 1 , 20 I 9)
Amortization July 20 I 9 - Jtme 2020
Interest
Total Rernaining Arnortization Balance
$
$
$
(4,0s7,274)
3,936,513
(30,625)
$
$
(r 51,386)
Projected Amortization and Interest (July 2020-September 2021 )413,31 1
TOTAL BAT ANCE FOR AMORTIZATION $459,39r
After applying the conversion factor related to commission fees and uncollectible
customer accounts, the resulting balance of $461,909 is divided by forecasted kilowatt-
hours to derive the proposed surcharge rate of0.0l5p per kilowatt-hour. I
O. What is the impsct of the proposed PCA rate increase by rate schedule?
I Total Balance for Amofization $459,391 divided by conversion factor 0.994549 = M61,909
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1 A. Page I of Exhibit No. AMB-1 shows the effect of the proposed PCA rate
2 increase by rate schedule. The proposed surcharee rate is 0.0151 per kilowatt-hour, which
3 is 0.013(, per kilowaft-hour more than the existing rebate rate of 0.0581 per kilowatt-hour.
4 Column (g) shows the percentage increase by rate schedule. The overall increase in
5 revenue is 0.9%, or $2.2 million.
6 Q. What will be the impact ofthe proposed change on an average residential
7 customer?
8 A. Residential customers using an average of 898 kilowatt-hours per month
9 would see their monthly bills increase from $86.27 to $86.93, an increase of $0.66 per
10 month, or 0.8%.
1 1 a. Is the Company continuing with its customer bill paying assistance
12 programs?
13 A. Yes. The Company has several programs available to assist customers with
14 paying their bills. Avista's Comfort Level Billing (CLB) plan is based on historical charges
15 or an estimate of future charges and will approximate a monthly average of the customer's
16 estimated annual billings. The concept ofthis plan is to help the customer budget for their
17 utility bills throughout the year by leveling out seasonal highs and lows in their monthly
l8 utility bills. The Customer Assistance Referral and Evaluation Services (CARES) progmm
19 provides assistance to special-needs customers through access to specifically trained
20 CARES representatives who provide referrals to area agencies and churches for help with,
21 among other things, housing, utilities and medical assistance.
22 The Low Income Home Energy Assistance Program (LIHEAP) is a Federal
23 program aimed to assist low income customers pay their electric and natural gas bills.
24 These funds are distributed through local agencies. Project Share is a voluntary
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I contribution option allowing customers to contribute donations that are distributed through
2 local community action agencies to customers in need.
3 ldaho customers who have children, elderly or infirmed persons living in the
4 household may qualify for the Winter Moratorium plan. From December I through
5 February 28, customers are not required to pay their bills in fu and can defer palnnent or
6 make partial payments. ln addition, the Winter Payment Plan provides for lower winter
7 bill payments by allowing customers to make monthly payments equal to one-half of the
8 levelized bill amounts, with the balance in full or a new payment arrangement due by April
9 l"t. The Company also works out pa).rnent arrangements with customers having diffrculty
10 paying their bills.
11 In addition, the Company has convenient options that help those who need
12 flexibility, but are generally able to pay. APS, or automatic palment service (money is
l3 deducted from a customer's checking account automatically each month), is one example.
14 Other services include debit and credit card service, check-by-phone or over the web,
15 preferred due date (the customer picks a more convenient date to pay than the one the
16 Company states on the bill), and e-billing.
l'7 a. Does that conclude your pre.filed direct testimony?
l8 A. Yes, it does.
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