20200915Comments.pdf

DAYN HARDIE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BARNO. 9917
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Steet Address for Express Mail:
1I33I W CHINDEN BLVD, BLDG 8, SUITE 2OI-A
BOISE,ID 83714
Attorney for the Commission Staff
BEF'ORE TIIE IDAHO PUBLIC UTILITIES COMMISSION
IN TIIE MATTER OF AVISTA
CORPORATION'S ANNUAL APPLICATION
TO ADJUST RESIDENTIAL AI\D SMALL
FARM ENERGY RATES
CASE NO. AVU-E.20.08
COMMENTS OF THE
COMMISSION STAF'F'
STAFF OF the Idaho Public Utilities Commission, by and through its Attorney of
record, Dayn Hardie, Deputy Attorney General, submits the following comments.
BACKGROUI\D
On July 31,2020, Avista Corporation dba Avista Utilities applied to the Commission for
authority to revise its Residential and Farm Energy Rate Adjustnent-schedule 5fto
implement a0.336 cents per kilowatt-hour ("kWh") credit rate for rate schedules l, 12, 22,32,
and 48. Avista requested that the Application be processed under Modified Procedure, and that
the proposed rates take effect October 1,2020.
The current Residential and Small Farm Energy Adjustment credit rate is 0.387 cents per
kWh and was designed to pass about $4.8 million in BPA benefits to customers through a credit
to energy rates. The proposed credit of 0.336 cents per kWh would pass about $4.2 million to
customers.
STAFF COMMENTS SEPTEMBER 15,2020
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Customers who receive this year's proposed credit would see energy rates increase by
about $0.6 million. The rate increase reflects that this year's $4.2 million credit is about
$0.6 million less than last year's $4.8 million credit. In other words, this year's rate increase
would reflect that the Company over-refunded about $0.6 million to customers through last
year's credit. For residential customers using an average of 898 kilowatt-hours per month, there
would be a monthly bill increase of $0.46 from $86.27 to $86.73.
STAFF ANALYSIS
Staffrecommends the Commission approve the Company's proposed revision to
Schedule 59 to implement a credit rate of 0.336 cents per kilowatt-hour.
The Residential and Small Farm Energy Adjustrnent credit rate derives from an
agreement between the Company and the Bonneville Power Administration ("BPA") regarding
the Residential Exchange Program ("REP"). The REP provides a share of the benefits of the
federal Columbia River power system to the residential and small-farm customers of the six
investor-owned utilities of the Pacific Northwest, including Avista.
The calculation of the BPA benefit for residential and small farm customers has two
components. The first component is the annualized electricity usage by the residential and small
farm customers calculated over the two previous years-2017 and2018. The second component
is the difference between two variables calculated by BPA every two years: Avista's Average
System Cost (ASC) rate and the Priority Firm Exchange rate. The difference between these two
rates is then multiplied by the annualized electricity usage to generate the BPA benefit to be
passed on to qualiffing customers for each of the next two years. The BPA credit is allocated
between Washington and Idaho based on the actual usage in each jurisdiction.
Avista's Residential and Small Farm Energy Adjustrnent credit rate is calculated by
taking the projected remaining balance of the BPA benefit from the previous year and adding the
BPA benefit for the next year. The 2019-2020 BPA benefit was over-refunded by $0.6 million
because customers used more electricity than what was forecasted in AW-E-19-08. Therefore
the2020-2021 benefit is reduced by $0.6 million. The total is then divided by the projected
arurual kWh sales to residential and small farm customers to derive the rate.
STAFF COMMENTS SEPTEMBER 15,20202
Staffreviewed the methodology and calculation of the proposed Residential and Small
Farm Energy Adjustrnent credit rate and confirmed the approach is consistent with the terms and
conditions of Schedule 59.
Overall Impact of Three Filines Effective October l. 2020
The Company has made two other rate adjustment filings, also effective October I,2O2O.
Avista's proposed Power Cost Adjustment (PCA) filing (AVU-E-20-07), if approved, will
increase electric revenues by about $2.2 million (0.9% increase) and its proposed Fixed Cost
Adjustrnent (FCA) filing (AW-E-20-06), if approved, will decrease electic revenues by
$3.0 million (1.2% decrease). The $0.6 million increase in electric revenues from the proposed
Residential and Small Farm Energy Rate Adjustnent represents a0.2%o revenue increase. The
net effect of Avista's three filings (PCA, FCA, and BPA) is to decrease electric revenues by
$0.2 million (0.1% decrease). The net effect of the three filings on the averageresidential
electric customer's monthly bill is a decrease of 6 cents (0.1o/o decrease). Table No. 3 below
summarizes the impact to eleckic revenues of the three filings.
Table No.3: Summarv of Overall Impact to Electric Customers
Filing 20t9 2020 Net Effect o/o Change
PCA $ (1,735,996)$ 459,391 $ 2,195,397 0.90%
FCA 3,422,290 450,589 Q,971,691)-1.20%
BPA (4,769,359)(4,188,620)580,739 0.20%
Total (3,083,075)(3,278,640)(195,565)-0.10%
CUSTOMER NOTICE AI\D PRESS RELEASE
The Company's press release and customer notice were included with its Application.
Each document addresses two casesr this case (AVU-E-20-08) and the Power Cost Adjustment
(AW-E-20-07). Staff reviewed the documents and determined both meet the requirements of
Rule 125 of the Commission's Rules of Procedure. See IDAPA 31.01.01.125. The notice was
included in bills mailed to customers beginning August 3 and ending September 1,2020. The
Commission set a comment deadline of Septernber 15, 2020. Some customers in the last billing
3STAFF COMMENTS SEPTEMBER 15,2020
cycle may not have adequate time to submit comments before the deadline. Customers must
have the opporhrnity to file comments and have those comments considered by the Commission.
Staffrecommends that the Commission accept late filed comments from customers. As of
September 14,2020, no customer comments had been filed.
STAFF RECOMMENDATION
Staff recommends that the Commission:
1. Approve the Company's proposed revision to its Residential and Farm Energy
Rate-Schedule 59 to implernent an Energy Rate Adjustment credit of 0.336 cents
per kilowatt-hour, effective October 1,2020 through September 30,2021:' and
2. Accept late filed comments from customers.
Respectfully submitted this 15rh luy of September2}Z}
Dayn Hardie
Deputy Attorney General
Technical Staff: Bentley Erdwurm
Johan Kalala-Kasanda
Curtis Thaden
i:runisc/commentVavue20. 8tlhbejkct comments
4STAFF COMMENTS SEPTEMBER 15,2O2O
CERTIFICATE OF' SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 15ft DAY OF SEPTEMBER 2020,
SERVED THE FOREGOING COMMENTS OF THE COMI/ilSSION STAFF, IN
CASE NO. AW-E-20-08, BY E-MAILING A COPY THEREOF TO THE
FOLLOWING:
PATRICK EHRBAR
DIR OF REGULATORY AFFAIRS
AVISTA CORPORATION
POBOX3727
SPoKANE WA99220-3727
E-MAIL: [e-mail]
avistadockets@ avistacorp. com
DAVID J MEYER
VP & CHIEF COI.'NSEL
AVISTA CORPORATION
POBOX3727
SPoKANE W499220-3727
E-MAIL: [e-mail]
SECRETARY
CERTIFICATE OF SERVICE