20210129Miller Direct.pdf

DAVID J. MEYER
VICE PRESIDENT AND CHIEF COUNSEL FOR
REGULATORY & GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
P.O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: [phone]
FACSIMILE: [phone]
[e-mail]

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION ) CASE NO. AVU-E-21-01
OF AVISTA CORPORATION FOR THE ) CASE NO. AVU-G-21-01
AUTHORITY TO INCREASE ITS RATES )
AND CHARGES FOR ELECTRIC AND )
NATURAL GAS SERVICE TO ELECTRIC ) DIRECT TESTIMONY
AND NATURAL GAS CUSTOMERS IN THE ) OF
STATE OF IDAHO ) JOSEPH D. MILLER

FOR AVISTA CORPORATION

(ELECTRIC AND NATURAL GAS)

Miller, Di 1
Avista Corporation
I. INTRODUCTION 1
Q. Please state your name, business address and present position with 2
Avista Corporation? 3
A. My name is Joseph D. Miller and my business address is 1411 East Mission 4
Avenue, Spokane, Washington. I am presently assigned to the Regulatory Affairs 5
Department as Senior Manager of Rates and Tariffs. 6
Q. Would you briefly describe your educational background and 7
professional experience? 8
A. Yes. I am a 1999 graduate of Portland State University with a Bachelor’s 9
degree in Business Administration, majoring in Accounting. In 2005, I graduated from 10
Gonzaga University with a Master’s degree in Business Administration. I joined the 11
Company in March 2008, after spending eight years in both the public and private 12
accounting sector. I started with Avista as a Natural Gas Accounting Analyst in the 13
Company’s Resource Accounting Department. In January 2009, I joined the State and 14
Federal Regulation Department as a Regulatory Analyst. My primary responsibility was 15
coordinating discovery for the Company’s general rate case filings. In my current role as 16
Senior Manager of Rates and Tariffs, I am responsible for the Company’s electric and 17
natural gas rate design, customer usage and revenue analysis, and tariff administration, 18
among other things. 19
Q. What is the scope of your testimony in this proceeding? 20
A. My testimony in this proceeding will cover the spread of the proposed 2021 21
and 2022 electric and natural gas base revenue increases among the Company’s electric and 22
natural gas general service schedules. For the 2021 rate change, on a total billed revenue 23
basis, after incorporating the proposed Tax Customer Credit Schedules 76 and 176 offsets, 24
Miller, Di 2
Avista Corporation
the Company is proposing no change to electric customer billed rates and a reduction to 1
natural gas customer billed rates of $1.2 million or 1.8%. For the 2022 rate change, on a 2
total billed revenue basis, after incorporating the proposed Deferred Depreciation Credit 3
Schedule 177 offset, the Company is proposing an increase to electric customer billed rates 4
of $8.7 million, or 3.5% and an increase to natural gas customer billed rates of $0.1 million 5
or 0.1%. My testimony will also describe the changes to the rates within the Company’s 6
electric and natural gas service schedules and the implementation of the new Tax Customer 7
Credit Rate Schedules 76 and 176 and the new natural gas Deferred Depreciation Credit 8
Schedule 177. 9
Q. Would you please provide an overview of the Company’s electric and 10
natural gas rate requests? 11
A. Yes. As discussed by Company witness Mr. Vermillion, the Company is 12
proposing a Two-Year Rate Plan for years 2021 and 2022, with proposed rate changes 13
effective September 1 of each year. The Company is proposing a Two-Year Rate Plan, to 14
once again, avoid annual rate cases in its Idaho jurisdiction, providing benefits to all 15
stakeholders. A Two-Year Rate Plan, with rate changes in 2021 and 2022, would provide 16
benefits by providing a level of rate predictability to customers over this two-year period. 17
A two-year window also provides Avista with the opportunity to manage its business in 18
order to achieve a fair rate of return within known price changes. Finally, relief is provided 19
to all stakeholders (customers, the Commission and its Staff, intervenors, and the 20
Company) from the administrative burdens and costs of litigation of annual general rate 21
cases. 22
Accordingly, the Company has filed two sets of tariffs for each of the electric and 23
natural gas service schedules. The first tariff for each rate schedule provides for an effective 24
Miller, Di 3
Avista Corporation
Rate Schedule Description
2021 Billing
Change
2022 Billing
Change
General Service Schedule 101 -1.9%0.1%
Large General Service Schedules 111 & 112 -1.5%0.1%
Interruptible Service Schedules 131 & 132 0.0%0.0%
Transportation Service Schedule 146*-2.7%0.2%
Total -1.8%0.1%
* excludes commodity and interstate pipeline transportation costs
Rate Schedule Description
2021 Billing
Change
2022 Billing
Change
Residential Service Schedule 1 0.0%3.9%
General Service Schedules 11 & 12 0.0%3.5%
Large General Service Schedules 21 & 22 0.0%3.5%
Extra Large General Service Schedule 25 0.0%3.5%
Extra Large General Service 25P Schedule 25P 0.0%1.3%
Pumping Service Schedules 31 & 32 0.0%3.5%
Street & Area Lights Schedules 41 - 49 0.0%3.5%
Total 0.0%3.5%
date of March 1, 2021; however, in the Company’s Application in this case, Avista has 1
requested that the tariffs related to the 2021 rate request be suspended with a proposed 2
effective date of September 1, 2021. The second set of tariffs filed for each of the electric 3
and natural gas service schedules have an effective date of September 1, 2022, consistent 4
with the Company’s second-step rate change proposal. 5
Provided below in Table Nos. 1 & 2 is a summary of the proposed change, by rate 6
schedule, on a billing basis (inclusive of all base and billing rate components, including the 7
effect of the new electric and natural gas rate credits discussed later in my testimony): 8
Table No. 1 – 2021 & 2022 Electric Rate Request by Schedule 9
10
11
12
13
14
15
16
Table No. 2 – 2021 & 2022 Natural Gas Rate Request by Schedule 17
18
19
20
21
22
Q. Are you sponsoring any Exhibits that accompany your testimony? 23
A. Yes. I am sponsoring Exhibit No. 18, Schedules 1 through 3 related to the 24
Miller, Di 4
Avista Corporation
proposed electric increase, and Schedules 4 through 6 related to the proposed natural gas 1
increase. These exhibits were prepared by me, or under my supervision. A table of contents 2
for my testimony is as follows: 3
Table of Contents Page 4
I. Introduction 1 5
6
II. Proposed Electric Revenue Increase 4 7
Summary of Rate Schedules and Tariffs 4 8
Proposed Rate Spread (Increase by Schedule) 6 9
Proposed Rate Design (Rates within Schedules) 9 10
11
III. Proposed Natural Gas Revenue Increase 18 12
Summary of Rate Schedules and Tariffs 19 13
Proposed Rate Spread (Increase by Schedule) 21 14
Proposed Rate Design (Rates within Schedules) 23 15
16
IV. Tax Customer Credit Rate Schedules 27 17
18
V. Deferred Depreciation Credit Rate Schedule 30 19
20
21
II. PROPOSED ELECTRIC REVENUE INCREASE 22
Summary of Electric Rate Schedules and Tariffs 23
Q. Would you please explain what is contained in Schedule 1 of Exhibit No. 24
18? 25
A. Yes. Schedule 1 is a copy of the Company’s present and proposed electric 26
tariffs for 2021 and 2022, showing the changes (strikeout and underline) proposed in this 27
filing. 28
Q. Would you please describe what is contained in Schedule 2 of Exhibit 29
No. 18? 30
A. Yes. Schedule 2 contains the proposed (clean) electric tariff sheets for 2021 31
and 2022 incorporating the proposed changes included in this filing. 32
Miller, Di 5
Avista Corporation
Q. What is contained in Schedule 3 of Exhibit No. 18? 1
A. Schedule 3 contains information regarding the proposed spread of the 2
electric revenue increase among the service schedules and the proposed changes to the rates 3
within the schedules. Page 1 shows the 2021 and 2022 proposed general revenue and 4
percentage increases by rate schedule compared to the present revenue under base tariff and 5
billing rates. Page 2 shows the rates of return and the relative rates of return for each of the 6
schedules before and after application of the proposed 2021 general increase. Pages 3 and 7
4 show the present rates under each of the rate schedules, the proposed changes to the rates 8
within the schedules, and the proposed rates after application of the 20 21 and 2022 rate 9
changes. These pages will be referred to later in my testimony. 10
Q. Would you please describe the Company's present rate schedules and 11
the types of electric service offered under each? 12
A. Yes. The Company presently provides electric service under Residential 13
Service Schedule 1, General Service Schedules 11 and 12, Large General Service Schedules 14
21 and 22, Extra Large General Service under Schedule 25 and Schedule 25P (Clearwater 15
Paper’s Lewiston Plant), and Pumping Service Schedules 31 and 32. Additionally, the 16
Company provides Street Lighting Service under Schedules 41-46, and Area Lighting 17
Service under Schedules 47-49. Schedules 12, 22, 32, and 48 cover residential and farm 18
service customers who qualify for the Residential Exchange Program operated by the 19
Bonneville Power Administration. The rates for these schedules are identical to the rates 20
for Schedules 11, 21, 31, and 47, respectively, except for the Residential Exchange rate 21
credit. 22
The following table shows the type and number of customers served in Idaho (as of 23
December 2019 – the Company’s test year) under each of the electric service schedules: 24
Miller, Di 6
Avista Corporation
Rate Schedule No. of Customers
Residential Schedule 1 110,912
General Service Schedules 11/12 22,006
Large General Service Schedules 21/22 1,052
Extra Large General Service Schedule 25 10
Clearwater Paper Schedule 25P 1
Pumping Service Schedules 31/32 1,441
Table No. 3 - Customers by Service Schedule
Table No. 4 - Proposed % Electric Increase by Schedule - 2021
Rate Schedule
Increase in Base
Rates
Increase in
Billing Rates
before Offset
Increase in
Billing Rates
with Offset
Residential Schedule 1 10.1%10.0%0.0%
General Service Schedules 11/12 10.1%9.7%0.0%
Large General Service Schedules 21/22 10.1%9.7%0.0%
Extra Large General Service Schedule 25 10.1%9.7%0.0%
Clearwater Paper Schedule 25P 10.1%9.7%0.0%
Pumping Service Schedules 31/32 10.1%9.7%0.0%
Street & Area Lights Schedules 41-48 10.1%9.7%0.0%
Overall 10.1%9.8%0.0%
1
2
3
4
5
6
Proposed Electric Rate Spread 7
Q. For 2021, what is the proposed electric revenue increase, and how is the 8
Company proposing to spread the increase by rate schedule? 9
A. For 2021, the proposed electric increase is $24,783,000, or 10.1% over 10
present base tariff rates in effect. The proposed general increase over present billing rates, 11
after including the proposed Tax Customer Credit offset (Schedule 76) discussed later in 12
my testimony and including all other rate adjustments (such as DSM and Residential 13
Exchange), is 0.0%. The proposed percentage change by rate schedule is as follows: 14
15
16
17
18
19
20
21
22
This information is shown with more detail on page 1 of Exhibit No. 18, Schedule 3. 23
Miller, Di 7
Avista Corporation
Present Proposed
Relative Relative
Rate Schedule ROR ROR
Residential Schedule 1 0.81 0.86
General Service Schedules 11/12 1.38 1.27
Large General Service Schedules 21/22 1.01 0.99
Extra Large General Service Schedule 25 0.82 0.90
Clearwater Paper Schedule 25P 1.53 1.44
Pumping Service Schedules 31/32 1.06 1.01
Street & Area Lights Schedules 1.92 1.52
Overall 1.00 1.00
Q. What rationale did the Company use to develop the proposed spread 1
the total 2021 general revenue increase request of $24,783,000 among its various rate 2
schedules? 3
A. The Company believes that the results of the electric cost of service study 4
(sponsored by Company witness Ms. Knox) could be used as a guide to spread the general 5
increase. However, the Company’s objective for rate spread was to offset the rate impact 6
from the general rate increase with the Tax Customer Credit discussed later in my testimony 7
so that all customers will not experience a billed rate increase in 2021. A uniform percent 8
of revenue basis mirrors the rate spread proposal for the Tax Customer Credit offset 9
discussed later in my testimony. The spread of the proposed increase still results in the 10
rates of return for the various electric service schedules moving closer to the overall rate of 11
return (unity). The Company may propose additional movement toward unity in future 12
proceedings. Table No. 5 below shows the relative rates of return before and after 13
application of the proposed general increase: 14
Table No. 5 – Present & Proposed Relative Rates of Return 15
16
17
18
19
20
21
22
This information is shown in detail on Page 2, Schedule 3 of Exhibit No. 18. 23
Q. If the Commission were to order a revenue requirement lower than the 24
Miller, Di 8
Avista Corporation
Company’s request, how does the Company propose to spread the revenue increase? 1
A. If the Commission were to order a lower revenue requirement, the Company 2
proposes to allocate the same increase as the Company’s initial filing to Residential Service 3
Schedule 1. The Company also proposes that Large General Service Schedules 21/22, 4
Extra Large General Service Schedule 25, Pumping Service Schedules 31/32 and Street and 5
Area Lights Schedules continue to receive an equal percentage of revenue increase. Any 6
remaining revenue should then be applied equally to Schedules 11/12 and Schedule 25P as 7
those schedules are providing significantly more than their relative cost of service as 8
discussed by Ms. Knox. 9
Q. For 2022, what is the proposed electric revenue increase, and how is the 10
Company proposing to spread the increase by rate schedule? 11
A. For 2022, the proposed electric increase is $8,722,000, or 3.2% over base 12
tariff rates. The proposed general increase over billing rates, including all other rate 13
adjustments (such as DSM and Residential Exchange), is 3.5%. Consistent with the 2021 14
rate spread, the Company used a uniform percentage of revenue for purposes of spreading 15
the proposed 2022 electric revenue increase to all electric rate schedules except Residential 16
Schedule 1 and Clearwater Paper Schedule 25P. In order to make more movement towards 17
relative cost of service for those schedules furthest from unity, the Company has proposed 18
that Schedule 25P receive roughly one-third of the average overall percentage increase with 19
the residual amount being applied to Residential Schedule 1. The proposed percentage 20
increase by rate schedule is as follows: 21
22
Miller, Di 9
Avista Corporation
Rate Schedule
Increase in Base
Rates
Increase in
Billing Rates
Residential Schedule 1 3.6%3.9%
General Service Schedules 11/12 3.2%3.4%
Large General Service Schedules 21/22 3.2%3.4%
Extra Large General Service Schedule 25 3.2%3.4%
Clearwater Paper Schedule 25P 1.2%1.3%
Pumping Service Schedules 31/32 3.2%3.4%
Street & Area Lights Schedules 41-48 3.2%3.4%
Overall 3.2%3.5%
Table No. 6 – Proposed % Electric Increase by Schedule - 2022 1
2
3
4
5
6
7
This information is shown with more detail on page 1 of Exhibit No. 18, Schedule 3. 8
9
Proposed Rate Design 10
Q. Where in your Exhibit do you show a comparison of the present and 11
proposed rates within each of the Company’s electric service schedules? 12
A. Pages 3 (for 2021) and 4 (for 2022) of Schedule 3 in Exhibit No. 18 shows 13
a comparison of the present and proposed rates within each of the schedules, which I will 14
describe below. Column (a) shows the rate/billing components under each of the schedules, 15
column (b) shows the present base tariff rates within each of the schedules, column (c) 16
shows the present rate adjustments applicable under each schedule, and column (d) shows 17
the present billing rates. Column (e) shows the proposed general rate increase to the rate 18
components within each of the schedules, column (f) shows the proposed revenue credit 19
under Schedule 76, column (g) shows the proposed billing rates and column (h) shows the 20
proposed base tariff rates. 21
Q. Is the Company proposing any changes to the existing rate structures 22
within its rate schedules? 23
A. No. The Company is not proposing any changes to the present rate 24
Miller, Di 10
Avista Corporation
structures within its electric schedules. 1
Q. Turning to Residential Service Schedule 1, could you please describe 2
the present rate structure under this schedule? 3
A. Yes. Residential Schedule 1 has a present customer or basic charge of $6.00 4
per month and two energy rate blocks: 0-600 kWhs and over 600 kWhs. The present base 5
tariff rate for the first 600 kWhs per month is 8.482 cents per kWh and 9.533 cents for all 6
kWhs over 600. 7
Q. How does the Company propose to spread Schedule 1’s proposed 2021 8
general revenue increase of $11,456,000 to the rates within that schedule? 9
A. The Company proposes to apply an equal percentage increase to the two 10
energy blocks and leave the Basic Charge unchanged at $6.00 per month. The proposed 11
increase for the first 600 kWhs used per month under the schedule is 0.924 cents per kWh, 12
and an increase of 1.039 cents per kWh for usage over 600 kWhs per month. 13
Q. Why is the Company proposing to keep the monthly customer charge 14
at $6.00 per month for the 2021 rate change? 15
A. The proposed Tax Customer Credit is proposed to be returned on a per kWh 16
basis. In order to ensure that customers experience no bill change resulting from the general 17
rate case, the Company is proposing to adjust both the general rate increase and Tax 18
Customer Credit on an equal and offsetting energy only basis. 19
Q. How does the Company propose to spread Schedule 1’s proposed 2022 20
general revenue increase of $4,468,000 to the rates within that schedule? 21
A. The Company proposes to increase the monthly customer charge from $6.00 22
per month to $8.00 per month. The remaining revenue increase for the schedule is proposed 23
to be recovered through a uniform percentage increase of approximately 1.6% applied to 24
Miller, Di 11
Avista Corporation
the two energy block rates. The proposed increase for the first 600 kWhs used per month 1
under the schedule is 0.148 cents per kWh, and an increase of 0.166 cents per kWh for 2
usage over 600 kWhs per month. 3
Q. Why did the Company propose a $2 per month increase to the basic 4
charge in Year 2? 5
A. The Company intended to propose an increase to the basic charge in Year 1 6
of the rate plan but did not do so in order to keep the base rate increase and the new 7
Customer Tax Credit rate schedule rate design perfectly aligned so that no customers 8
receive a rate change in 2021. The Company intended to propose a $1 increase in each year 9
under the rate plan, but because no increase was proposed in Year 1, the Company proposed 10
the entire $2 monthly increase in Year 2. 11
Q. For 2021, what is the proposed increase for a residential electric 12
customer with average consumption? 13
A. After incorporating the base rate increase with the proposed tax benefit 14
offset, the proposed bill change for a residential customer using an average of 892 kWhs 15
per month is $0.00 per month, or an 0.0% change in their electric bill. The present bill for 16
892 kWhs is $85.63, and that would be unchanged. 17
Q. For 2022, what is the proposed increase for a residential electric 18
customer with average consumption? 19
A. The proposed increase for a residential customer using an average of 892 20
kWhs per month is $3.38 per month, or a 3.9% increase in their electric bill, resulting in an 21
overall bill of $89.01, including all rate adjustments. 22
Q. Turning to General Service Schedules 11/12, could you please describe 23
the present rate structure and rates under those schedules? 24
Miller, Di 12
Avista Corporation
A. Yes. General Service Schedules 11/12 are the service schedules typically 1
applicable to customers with an average demand of less than 20 k W per month, such as 2
small retail establishments (Schedule 11), or shops for residential customers which require 3
a separate service (Schedule 12). The present rate structure under the schedules includes a 4
monthly customer charge of $13.00, an energy rate of 8.909 cents per kWh for all usage up 5
to 3,650 kWhs per month, and an energy rate of 6.244 cents per kWh for usage over 3,650 6
kWhs per month. There is also a demand charge of $6.00 per kW for all demand in excess 7
of 20 kW per month. There is no charge for the first 20 kW of demand. 8
Q. How is the Company proposing to apply Schedule 11/12’s proposed 9
2021 general revenue increase of $3,712,000 to the rates within those schedules? 10
A. For similar reasons discussed previously regarding Schedule 1, namely to 11
have the base rate increase perfectly offset by the Tax Customer Credit, the Company is 12
proposing that the customer charge of $13.00 per month and the variable demand rate of 13
$6.00/kW per month remain unchanged. The revenue increase for those schedules is 14
proposed to be recovered through a uniform percentage increase applied to the two energy 15
rates. The increase in the first block rate is 1.048 cent per kWh (the first 3,650 kWhs used 16
per month), and a 0.735 cent per kWh increase to the second energy block. 17
Q. How is the Company proposing to apply Schedule 11/12’s proposed 18
2022 general revenue increase of $1,307,000 to the rates within those schedules? 19
A. The Company is proposing that the customer charge increase by $2.00 per 20
month, from $13.00 to $15.00. The Company is also proposing that the variable demand 21
rate increase from $6.00/kW to $6.50/kW. The remaining revenue increase for those 22
schedules is proposed to be recovered through a 0.181 increase to the first energy block 23
(the first 3,650 kWhs used per month), and a 0.127 cent per kWh to the second energy 24
Miller, Di 13
Avista Corporation
block. 1
Q. Turning to Large General Service Schedules 21/22, would you please 2
describe the present rate structure under those schedules and how the Company is 3
proposing to apply Schedule 21/22’s 2021 increase of $4,845,000 to the rates within 4
the schedules? 5
A. Yes. Large General Service Schedules 21/22 are the service schedules 6
applicable to customers with monthly demands over 50 kW, but less than 3,000 kW. 7
Typical customers served are grocery stores, schools, and office buildings on Schedule 21, 8
with retirement homes and other qualified residential load served on Schedule 22. 9
These schedules consist of a minimum monthly charge of $425.00 for the first 50 10
kW or less, a demand charge of $5.50 per kW for monthly demand in excess of 50 kW, and 11
two energy block rates: 5.991 cents per kWh for the first 250,000 kWhs per month, and 12
5.049 cents per kWh for all usage in excess of 250,000 kWhs. 13
The Company is proposing that the minimum demand charge (for the first 50 kW 14
of $425.00 per month and the demand charge of $5.50/kW per month remain unchanged 15
for the reasons provided previously in testimony – namely to have the base rate increase 16
perfectly offset by the Tax Customer Credit. The revenue increase for the schedules is 17
proposed to be recovered through a uniform percentage increase of approximately 13.2% 18
applied to the two energy block rates. The proposed increase for the first 250,000 kWhs 19
used per month under the schedules is 0.789 cents per kWh, and an increase of 0.665 cents 20
per kWh for usage over 250,000 kWhs per month. 21
Q. Would you please describe how the Company is proposing to apply 22
Schedule 21/22’s 2022 increase of $1,706,000 to the rates within the schedule? 23
A. Yes. The Company is proposing to increase the present minimum demand 24
Miller, Di 14
Avista Corporation
charge (for the first 50 kW or less) by $75 per month, from $425.00 to $500.00, and increase 1
the demand charge from $5.50/kW to $6.00/kW. The remaining revenue increase for the 2
schedules is proposed to be recovered through a uniform percentage increase of 3
approximately 0.6% applied to the two energy block rates. The proposed increase for the 4
first 250,000 kWhs used per month under the schedules is 0.039 cents per kWh, and an 5
increase of 0.033 cents per kWh for usage over 250,000 kWhs per month. 6
Q. Turning to Extra Large General Service Schedule 25, would you please 7
describe the present rate structure under that schedule, and how the Company is 8
proposing to apply Schedule 25’s 2021 increase of $1,810,000 to the rates within the 9
schedule? 10
A. Yes. Schedule 25 is applicable for customers with demands in excess of 11
3,000 kVa per month, such as large industrial customers and universities. Extra Large 12
General Service Schedule 25 consists of a minimum monthly charge of $14,000 for the first 13
3,000 kVa or less, a demand charge of $5.00 per kVa for monthly demand in excess of 14
3,000 kVa, and two energy block rates: 5.208 cents per kWh for the first 500,000 kWhs 15
per month and 4.363 cents per kWh for all usage in excess of 500,000 kWhs. 16
The Company is proposing that the present minimum demand charge of $14,000 17
per month and the volumetric demand charge of $5.00/kVA per month remain unchanged. 18
The revenue increase for the schedule is proposed to be recovered through a uniform 19
percentage increase of approximately 12.4% applied to the two energy block rates. The 20
proposed energy rate increase for the first 500,000 kWhs used per month is 0.645 cents per 21
kWh and the increase for usage over 500,000 per month is 0.540 cents per kWh. 22
Q. Would you please describe how the Company is proposing to apply 23
Schedule 25’s 2022 increase of $637,000 to the rates within the schedule? 24
Miller, Di 15
Avista Corporation
A. Yes. The Company is proposing that the present minimum demand charge 1
of $14,000 be increased by $2,500 to $16,500 per month. Further, the Company is 2
proposing to increase the volumetric demand charge from $5.00/kVA to $5.50/kVA. The 3
remaining revenue increase for the schedule is proposed to be recovered through a uniform 4
percentage increase of approximately 1.0% applied to the two energy block rates. The 5
proposed energy rate increase for the first 500,000 kWhs used per month is 0.057 cents per 6
kWh and the increase for usage over 500,000 per month is 0.048 cents per kWh. 7
Q. Please describe the service the Company provides to Clearwater 8
Paper’s Lewiston Plant under Schedule 25P. 9
A. In Commission Order No. 32841, dated June 28, 2013, the Commission 10
approved a five-year Electric Service Agreement (Agreement) between Avista and 11
Clearwater, applicable to its Lewiston Plant.1 The Agreement became effective July 1, 12
2013 and was replaced with a new Agreement effective March 1, 2019. The 2013 13
Agreement provided for Clearwater to use its on-site generation to serve its own load, and 14
for Clearwater to purchase from Avista all of the electric power requirements that exceed 15
the electric power generated by Clearwater. This contract was in effect Avista during the 16
first two months of the 2019 test year. 17
On February 27, 2019 the Commission approved a new Power and Purchase and 18
Sale Agreement (Order No. 34252) between Avista and Clearwater that allows Avista to 19
sell to Clearwater an amount of energy equivalent to its generation at a second block rate 20
of $24.56 per MWh. In turn, Clearwater sells the electricity it generates and the 21
corresponding REC’s to Avista at a contract rate of $24.50 per MWh (adjusted for 22
1 On July 30, 2015 the Commission approved (Order No. 33350) a Joint Petition between Avista and
Clearwater which, among other things, gave approval of a contract amendment which would extend the length
of the original contract from June 30, 2018 to June 30, 2021 (Case No. AVU-E-15-06).
Miller, Di 16
Avista Corporation
Commission fees). Because Avista buys and sells an equivalent amount of energy at near 1
equivalent prices, the new Agreement provides the same benefit to Clearwater as allowing 2
Clearwater to generate into its own load under the prior Agreement. 3
Avista serves Clearwater’s load requirements under Schedule 25P. As described in 4
Schedule 25P, for purposes of all proposals related to General Rate Case Filings, “Base 5
Revenue” will be defined as Clearwater’s “net” generation requirements as measured 6
through the Block 1 Retail Meter. Because the effects of the Block 2 Generation load are 7
removed from the Company’s filing, the new Agreement has no impact on the level of base 8
revenue proposed to be recovered in the Company’s filing. 9
Q. Please describe the application of the proposed Schedule 25P 2021 10
increase of $2,026,000 to the rates within the schedule. 11
A. Like Schedule 25, the Company is proposing that the present minimum 12
demand charge of $14,000 per month and the volumetric demand charges of $5.00/kVA 13
for all kVA between 3,000 and 55,000, and $2.50/kVA for all kVA over 55,000 remain 14
unchanged. The revenue increase for the schedule is proposed to be recovered through an 15
increase of 0.520 cents per kWh to the energy charge. 16
Q. Please describe the application of the proposed Schedule 25P 2022 17
increase of $275,000 to the rates within the schedule. 18
A. Similar to Schedule 25, the Company is proposing that the present minimum 19
demand charge of $14,000 be increased by $2,500, to $16,500 per month. Further, the 20
Company is proposing to increase the volumetric demand charge for the 3,000 – 55,000 21
kVA block from $5.00/kVA to $5.50/kVA. The remaining revenue change for the schedule 22
is proposed to be recovered through a percentage decrease of approximately 0.4% applied 23
to the single energy block rate, a decrease of 0.017 cents per kWh. 24
Miller, Di 17
Avista Corporation
Q. Turning to Pumping Schedules 31/32, would you please describe how 1
the Company is proposing to apply Schedule 31/32’s 2021 increase of $560,000 to the 2
rates within the schedules? 3
A. For reasons discussed previously, namely to have the base rate increase 4
perfectly offset by the Tax Customer Credit , the Company is not proposing an increase to 5
the $11.00 per month customer charge in 2021. The revenue increase is proposed to be 6
spread on a uniform percentage basis of approximately 10.5% to the two energy rate blocks 7
under the schedules. The proposed increase in the first block rate is 1.018 cents per kWh 8
and the increase in the second block rate is 0.859 cents per kwh. 9
Q. Please describe how the Company is proposing to apply Schedule 10
31/32’s 2022 increase of $197,000 to the rates within the schedules. 11
A. The Company is proposing that the customer charge of $11.00 per month be 12
increased by $2.00, to $13.00 per month, and that the remaining revenue increase be spread 13
on a uniform percentage basis of approximately 2.8% to the two energy rate blocks under 14
the schedules. The proposed increase in the first block rate is 0.295 cents per kWh and the 15
increase in the second block rate is 0.249 cents per kWh. 16
Q. How is the Company proposing to spread the proposed 2021 revenue 17
increase of $374,000 applicable to Street and Area Light (Schedules 41-49)? 18
A. The Company proposes to increase present street and area light (base) rates 19
on a uniform percentage basis. The proposed increase for all lighting rates is 10.1%. The 20
(base tariff) rates for those schedules are provided in Exhibit No. 18, Schedule 2. 21
Q. How is the Company proposing to spread the proposed 2022 revenue 22
increase of $132,000 applicable to Street and Area Light (Schedules 41-49)? 23
A. The Company proposes to increase present street and area light (base) rates 24
Miller, Di 18
Avista Corporation
on a uniform percentage basis. The proposed increase for all lighting rates is 3.2%. The 1
(base tariff) rates for those schedules are provided in Exhibit No. 18, Schedule 2. 2
Q. Is the Company proposing any other changes to its Street and Area 3
Light schedules? 4
A. Yes. The Company has made some minor housekeeping type changes to 5
clean up the Street and Area Light tariffs which mostly remove lighting options that are no 6
longer being used by our customers. 7
Q. Turning now to the Company’s Electric Fixed Cost Adjustment 8
Mechanism, how will new baseline information be incorporated into the mechanism? 9
A. As in prior general rate cases, the Company would, as a part of its 10
Compliance Filing, submit the final baseline values for its Fixed Cost Adjustment 11
Mechanism (for both 2021 and 2022) prior to new rates going into effect as a result of this 12
general rate case. 13
14
III. PROPOSED NATURAL GAS REVENUE INCREASE 15
Q. Would you please explain what is contained in Schedule 4 of Exhibit No. 16
18? 17
A. Yes. Schedule 4 of Exhibit No. 18 is a copy of the Company’s present and 18
proposed natural gas tariffs for 2021 and 2022, showing the changes (strikeout and 19
underline) proposed in this filing. 20
Q. Would you please describe what is contained in Schedule 5 of Exhibit 21
No. 18? 22
A. Schedule 5 of Exhibit No. 18 contains the proposed (clean) natural gas tariff 23
sheets for 2021 and 2022 incorporating the proposed changes included in this filing. 24
Miller, Di 19
Avista Corporation
Q. Would you please explain what is contained in Schedule 6 of Exhibit No. 1
18? 2
A. Schedule 6 of Exhibit No. 18 contains information regarding the proposed 3
spread of the natural gas revenue increase among the service schedules and the proposed 4
changes to the rates within the schedules. Page 1 shows the proposed general revenue and 5
percentage increase by rate schedule. Page 2 shows the rates of return and the relative rates 6
of return for each of the schedules before and after the proposed 2021 increase. Pages 3 and 7
4 show the present rates under each of the rate schedules, the proposed changes to the rates 8
within the schedules, and the proposed rates after application of the 2021 and 2022 rate 9
changes. These pages will be referred to later in my testimony. 10
11
Summary of Natural Gas Rate Schedules and Tariffs 12
Q. Would you please review the Company's present rate schedules and the 13
types of natural gas service offered under each? 14
A. Yes. The Company's present Schedules 101 and 111 offer firm sales service. 15
Schedule 101 generally applies to residential and small commercial customers who use less 16
than 200 therms/month. Schedule 111 is generally for customers who consistently use over 17
200 therms/month and Schedule 131 provides interruptible sales service to customers 18
whose annual requirements exceed 250,000 therms. Schedule 146 provides 19
transportation/distribution service for customer-owned natural gas for customers whose 20
annual requirements exceed 250,000 therms. 21
Q. The Company also has rate Schedules 112 and 132 on file with the 22
Commission. Would you please explain which customers are eligible for service under 23
these schedules? 24
Miller, Di 20
Avista Corporation
Rate Schedule No. of Customers
General Service Schedule 101 85,543
Large General Service Schedules 111/112 1,523
Interruptible Sales Service Schedules 131/132 0
Transportation Service Schedule 146 6
A. Yes. Schedules 112 and 132 are in place to provide service to customers 1
who at one time were provided service under Transportation Service Schedule 146. The 2
rates under these schedules are the same as those under Schedules 111 and 131 respectively, 3
except for the application of Temporary Gas Rate Adjustment Schedu le 155. Schedule 155 4
is a temporary rate adjustment used to amortize the deferred natural gas costs approved by 5
the Commission in the prior Purchased Gas Cost Adjustment (“PGA”) filing. Because of 6
their size, transportation service customers are analyzed individually to determine their 7
appropriate share of deferred natural gas costs. If those customers switch back to sales 8
service, the Company continues to analyze those customers individually; otherwise, those 9
customers would receive natural gas cost deferrals which are not due them; thus the need 10
for Schedules 112 and 132. There are only two customers served under these schedules as 11
of December 31, 2019. 12
Q. How many customers does the Company serve under each of its natural 13
gas rate schedules in Idaho? 14
A. As of December 31, 2019, the Company provided service to the following 15
number of customers under each of its schedules in Idaho: 16
Table No. 7 – Customers by Service Schedule 17
18
19
20
21
Q. Is the Company proposing any changes to the present rate structures 22
within its natural gas service schedules? 23
A. No. The Company is not proposing any changes to the present rate 24
Miller, Di 21
Avista Corporation
Increase in
Increase in
Billing Rates
Reduction in
Billing Rates
Rate Schedule Margin Rates before Offset with Offset
General Service Schedule 101 0.1%0.1%-1.9%
Large General Service Schedules 111/112 0.1%0.1%-1.5%
Interrupt. Sales Service Schedules 131/132 0.0%0.0%0.0%
Transportation Service Schedule 146* 0.1%0.1%-2.7%
Overall 0.1%0.1%-1.8%
* excludes commodity and interstate pipeline transportation costs
structures within its natural gas schedules. 1
2
Proposed Rate Spread 3
Q. For 2021, what is the proposed natural gas revenue increase, and how 4
is the Company proposing to spread the increase by rate schedule? 5
A. For 2021, the proposed base revenue increase is $52,000, or 0.1% in base 6
margin2 revenue. The proposed general increase over present billing rates, after including 7
the proposed Tax Customer Credit offset (Schedule 176) discussed later in my testimony 8
and including all other rate adjustments (such as DSM and PGA), is a reduction of 1.8%. 9
The proposed percentage change by rate schedule is as follows: 10
Table No. 8 – Proposed % Natural Gas Change by Schedule - 2021 11
12
13
14
15
16
17
Q. What information did the Company use to develop the proposed spread 18
of the overall 2021 change to the various rate schedules? 19
A. The Company used the results of the cost of service study (sponsored by 20
Company witness Mr. Anderson) as a guide to spread the natural gas general increase. The 21
spread of the proposed increase generally results in the rates of return for the various service 22

2 Base margin revenue refers to the base revenue associated with the Company’s ownership and operation of
its natural gas distribution operations. It is the revenue related to delivering natural gas to customers, and
does not include the cost of natural gas, upstream third-party owned transportation, or the effect of other
tariffs.
Miller, Di 22
Avista Corporation
Present Proposed
Relative Relative
Rate Schedule ROR ROR
General Service Schedule 101 0.90 0.90
Large General Service Schedules 111/112 1.45 1.44
Interruptible Sales Service Schedules 131/132 1.00 1.00
Transportation Service Schedule 146 1.74 1.74
Overall 1.00 1.00
schedules remaining unchanged to the overall rate of return (unity). The relative rates of 1
return before and after application of the proposed 2021 increase by schedule are as follows: 2
Table No. 9 – Present & Proposed Relative Rates of Return 3
4
5
6
7
8
Page 2 of Exhibit No. 18, Schedule 6 shows this information in more detail. 9
Q. If the Commission were to order a revenue requirement lower than the 10
Company’s request, how does the Company propose to spread the revenue increase? 11
A. If the Commission were to order a lower revenue requirement, the Company 12
proposes to allocate the lower revenue requirement to Schedules 111/112 and Schedule 146 13
as those schedules are providing more than their relative cost of service as discussed by Mr. 14
Anderson. 15
Q. For 2022, what is the proposed natural gas revenue increase, and how 16
is the Company proposing to spread the increase by rate schedule? 17
A. For 2022, the proposed base revenue increase is $950,000, or 2.2% in base 18
margin revenue. The proposed general increase over billing rates, after including the 19
proposed Deferred Depreciation Credit offset (Schedule 177) discussed later in my 20
testimony and including all other rate adjustments (such as DSM and PGA), is an increase 21
of 0.1%. Consistent with the 2021 rate spread, the Company used a uniform percentage of 22
margin revenue for purposes of spreading the proposed 2022 natural gas revenue increase 23
to its natural gas service schedules. Below is a table showing the effect of the Company’s 24
Miller, Di 23
Avista Corporation
Increase in
Increase in
Billing Rates
Increase in
Billing Rates
Rate Schedule Margin Rates before Offset with Offset
General Service Schedule 101 2.2%1.6%0.1%
Large General Service Schedules 111/112 2.2%1.3%0.1%
Interrupt. Sales Service Schedules 131/132 0.0%0.0%0.0%
Transportation Service Schedule 146* 2.2%2.3%0.2%
Overall 2.2%1.5%0.1%
* excludes commodity and interstate pipeline transportation costs
2022 proposed natural gas increase by rate schedule: 1
Table No. 10 – Proposed % Natural Gas Change by Schedule - 2022 2
3
4
5
6
7
8
This information is also shown on page 1 of Exhibit No. 18, Schedule 6. 9
Q. What is the Company’s proposal related to the current permanent 10
federal income tax rebate customers are receiving through rate schedule 172? 11
A. Through rate Schedule 172, customers are receiving a rate credit designed 12
to reflect the permanent benefits attributable to the revisions of the federal income tax code 13
caused by enactment of the Tax Cuts and Jobs Act signed into law on December 22, 2017. 14
As stated on the Schedule 172 tariff, the Permanent Federal Tax Rate Credit will be in effect 15
until such time that the permanent federal tax benefits are incorporated into base rates in a 16
general rate case proceeding. The Company has incorporated Schedule 172 as part of base 17
rates in this proceeding and is proposing to cancel the rate schedule altogether. The net 18
effect of eliminating the rate credit under Schedule 172 is an equal and offsetting reduction 19
to base rates, with no impact to customers. 20
21
Proposed Rate Design 22
Q. Would you please explain the present rate design within each of the 23
Company’s present natural gas service schedules? 24
Miller, Di 24
Avista Corporation
A. Yes. General Service Schedule 101 generally applies to residential and small 1
commercial customers who use less than 200 therms/month. The schedule contains a single 2
rate per therm for natural gas usage and a monthly customer/basic charge. 3
Large General Service Schedule 111 has a four-tier declining-block rate structure 4
and is generally for customers who consistently use over 200 therms/month , such as 5
schools, restaurants, and office buildings. The schedule consists of a monthly minimum 6
charge plus a usage charge for the first 200 therms or less, and block rates for 201-1,000 7
therms/month, 1001-10,000 therms/month and usage over 10,000 therms/month. 8
Interruptible Sales Service Schedule 131 contains a single rate per therm for natural 9
gas usage. The schedule also has an annual minimum (deficiency) charge based on a usage 10
requirement of 250,000 therms per year. As required by tariff, customers served on this 11
schedule are required to have standby facilities with an alternate fuel. There are presently 12
no customers taking service under this rate schedule. 13
Transportation Service Schedule 146 contains a $250 per month customer charge 14
and contains a single rate per therm for natural gas usage. The schedule also has an annual 15
minimum (deficiency) charge based on a usage requirement of 250,000 therms per year. 16
Q. Where in your Exhibit No. 18 do you show the present and proposed 17
rates for the Company’s natural gas service schedules? 18
A. Pages 3 and 4 of Schedule 6 shows the present and proposed rates under 19
each of the rate schedules, including all present rate adjustments (adders) for the 2021 and 20
2022 rate changes. Columns (g, h, & i) on those pages show the proposed changes to the 21
rates contained in each of the schedules. 22
Q. How does the Company propose to spread Schedule 101’s proposed 23
2021 general revenue increase of $42,000 to the rates within that schedule? 24
Miller, Di 25
Avista Corporation
A. Similar to electric, the Company is not proposing any change to the basic 1
charge in Year 1. The revenue for the schedule, after incorporating the consolidation of 2
Schedule 172, is proposed to be recovered through an increase of 0.066 cents per therm. 3
This is shown in columns (g & h), page 3, Schedule 6 of Exhibit No. 18. 4
Q. How does the Company propose to spread Schedule 101’s proposed 5
2022 general revenue increase of $778,000 to the rates within that schedule? 6
A. For the reasons stated under electric Schedule 1, the Company proposes to 7
increase the monthly customer charge from $6.00 per month to $8.00 per month. The 8
remaining revenue change for the schedule would be recovered through a 4.2% decrease, 9
or 1.949 cents per therm reduction in the volumetric energy rate. This is shown in column 10
(g), page 4, Schedule 6 of Exhibit No. 18. 11
Q. For 2021, what is the proposed monthly change for a residential natural 12
gas customer with average usage? 13
A. The reduction for a residential customer using an average of 63 therms of 14
natural gas per month would be $0.95 per month, or 1.9%. A bill for 63 therms per month 15
would be reduced from the present level of $49.49 to a proposed level of $48.54. 16
Q. For 2022, what is the proposed monthly increase for a residential 17
natural gas customer with average usage? 18
A. The increase for a residential customer using an average of 63 therms of 19
natural gas per month would be $0.05 per month, or 0.1%, resulting in an overall bill of 20
$48.59, including all rate adjustments. 21
Q. Would you please explain the proposed changes in the rates for Large 22
General Service Schedules 111? 23
A. Yes. The present rates for Schedules 101 and 111 provide guidance for 24
Miller, Di 26
Avista Corporation
customer placement: customers who generally use less than 200 therms/month should be 1
placed on Schedule 101, customers who consistently use over 200 therms per month should 2
be placed on Schedule 111. Not only do the rates provide guidance for customer schedule 3
placement, they provide a reasonable classification of customers for analyzing the costs of 4
providing service. 5
The proposed 2021 increase to the minimum charge for Schedule 111 (for 200 6
therms or less) of $0.13 per month is a function of the volumetric charge change under 7
Schedule 101. This methodology maintains the present relationship between the schedules 8
and will minimize customer shifting. The remaining revenue requirement for the schedule, 9
after incorporating Schedule 172 into base rates, is proposed to be recovered through a 10
uniform percentage change of approximately 0.1% to blocks 2, 3 and 4. 11
The proposed 2022 change to the Schedule 111 minimum charge for Schedule 111 12
(for 200 therms or less) is a reduction of $1.90 per month. The remaining revenue 13
requirement for the schedule is proposed to be recovered through a uniform percentage 14
increase of approximately 3.6% to blocks 2, 3 and 4. 15
Q. Did the Company propose a revenue increase for Schedules 131/132? 16
A. No customers are presently served on these schedules. However, given that 17
customers could decide to take service on these schedules in the future, the Comp any does 18
propose to increase the volumetric rates for this schedule by the same overall percentage 19
increases proposed for 2021 and 2022. Proposing to increase the base rates for these 20
schedules will better reflect cost of service should customers decide to choose these rate 21
schedules in the future. Like the other natural gas rate schedules, the Company is proposing 22
to incorporate the Schedule 172 per therm reduction into base rates under these schedules. 23
Q. How is the Company proposing to spread the proposed 2021 increase of 24
Miller, Di 27
Avista Corporation
$1,000 to the rates under Transportation Schedule 146? 1
A. The Company is not proposing to increase monthly Basic Charge of $250 per 2
month. After incorporating Schedule 172 into base rates, the revenue requirement would be 3
recovered through an increase of 0.019 cents to the per therm rate. 4
Q. How is the Company proposing to spread the proposed 2022 increase of 5
$11,000 to the rates under Transportation Schedule 146? 6
A. The Company is proposing to increase the monthly Basic Charge from $250 7
per month to $300 per month. The remaining revenue requirement would increase the per 8
therm charge under the schedule by 0.198 cents per therm. 9
Q. Is the Company proposing any other changes to its natural gas service 10
schedules? 11
A. No, it is not. 12
Q. Turning now to the Company’s Natural Gas Fixed Cost Adjustment 13
Mechanism, how will new baseline information be incorporated into the mechanism? 14
A. As in the prior general rate case, the Company would, as a part of its 15
Compliance Filing, submit the final baseline values for its Fixed Cost Adjustment 16
Mechanism (for both 2021 and 2022) prior to new rates going into effect as a result of this 17
general rate case. 18
19
IV. TAX CUSTOMER CREDIT 20
Q. Would you please summarize the Tax Customer Credit you have 21
previously referred to in your testimony? 22
A. Yes. As discussed by Company witnesses Mr. Krasselt and Ms. Andrews, 23
prior to the filing of this GRC, the Company has filed its Tax Accounting Petition. Mr. 24
Miller, Di 28
Avista Corporation
Krasselt in particular describes in more detail the Company’s Tax Accounting Petition and 1
explains the Company’s request seeks authorization to change its accounting for federal 2
income tax expense from the normalization method to a flow-through method for certain 3
“non-protected” plant basis adjustments, including Industry Director Directive No. 5 (IDD 4
#5), and meters. Approval of the Company’s Tax Accounting Petition would provide 5
immediate benefits to customers, which the Company also through the Tax Accounting 6
Petition, is requesting approval to defer. However, approval in all three of Avista’s 7
jurisdictions (Washington, Idaho and Oregon) to make this change is required ,3 and any 8
changes need to be adjusted concurrent with a GRC, as it has significant impact on rate 9
base. As discussed further below, after receiving approval in all three jurisdictions of the 10
accounting change and the deferral of the benefits, the Company is proposing to begin 11
amortization of the deferred benefits, concurrent with the effective date of this GRC. 12
As discussed by Ms. Andrews and Mr. Thies, if approved by the Washington, Idaho 13
and Oregon Commissions, the Company estimates a total tax benefit of approximately 14
$150.8 million on a system basis to be used to offset customer rates. That equates to $31.3 15
million for Idaho electric operations and $12.1 million for Idaho natural gas operations. 16
Q. How does the Company propose to return the Tax Customer Credit to 17
customers? 18
A. Concurrent with the effective date of this GRC, the Company proposes to 19
return to customers the Tax Customer Credit (if approved), beginning September 1, 2021 20
through separate Tariff Schedules 76 (electric) and 176 (natural gas). The annualized 21
amount would be $24.8 million for electric and $1.2 million for natural gas - offsetting the 22

3 The Company has requested in its Tax Accounting Petition approval of the change in accounting, and the
deferral of benefits, on or before May 1, 2021, to ensure approval from all three jurisdictions is received in
time to apply this change and return the customer benefits in each state effective with each general rate case.
Miller, Di 29
Avista Corporation
Company’s requested electric and natural gas base rate relief - resulting in no billed impact 1
to electric customers and a rate reduction for natural gas customers in Year 1. Both of these 2
new tariff schedules have been included in Exhibit No. 18, Schedule 3 for electric and 3
Schedule 6 for natural gas. 4
Q. How does the Company propose to spread the Tax Customer Credit? 5
A. As discussed earlier, the Company is proposing to spread the Tax Customer 6
Credit on a uniform percent of revenue basis for both electric and natural gas. The proposed 7
rate spread of the Tax Customer Credit is consistent with the Company’s general base rate 8
increase rate spread proposal, therefore resulting in no billed rate impact to electric 9
customers and a rate reduction for natural gas customers in Year 1. 10
Q. For purposes of rate design, how does the Company propose to spread 11
the Tax Customer Credit within each of the service schedules? 12
A. Consistent with the rate design discussed previously regarding the electric 13
general rate increase, the Tax Customer Credit is proposed to be applied on a uniform 14
percentage to the volumetric energy block rates by rate schedule. By mirroring the rate 15
design from the base rate increase with an equal and offsetting rate credit from the new Tax 16
Customer Credit rate schedules, customers irrespective of their usage will experience no bill 17
impact. For natural gas, the Tax Customer Credit is proposed to be applied to the volumetric 18
energy blocks resulting in a billing rate reduction for natural gas customers in Year 1. 19
Q. What is the proposed term of the Tax Customer Credit? 20
A. Under the levels proposed by the Company, the electric Schedule 76 would 21
remain in effect for approximately 1.25 years and the natural gas Schedule 176 would 22
remain in effect for approximately 10 years. Therefore, the amortization and the Tax 23
Customer Credit Tariff Schedules 76 and 176, if approved as filed, would be in place from 24
Miller, Di 30
Avista Corporation
September 1, 2021 through November 30, 2022 for electric and through August 31, 2031 1
for natural gas. The Company commits to monitoring the balances throughout the rebate 2
period and will adjust the term should the balance deviate from the Company’s expectations 3
due to load variability. Any over- or under-refunded balance at the end of the rebate period 4
would be addressed in a future rate proceeding. 5
6
V. DEFERRED DEPRECIATION CREDIT 7
Q. Please summarize the Deferred Depreciation Credit you have 8
previously referred to? 9
A. As discussed by Ms. Andrews, the Company is proposing to return to 10
customers approximately $0.9 million in natural gas deferred depreciation expense that was 11
a result of the Company deferring the benefit of reduced natural gas depreciation expense 12
recorded on its books of record, but not yet reflected in its natural gas customer rates, for 13
the period December 1, 2019 through August 31, 2021 (estimated), per Order No. 34276 in 14
Case Nos. AVU-E-18-03 and AVU-G-18-02. 15
Q. How does the Company propose to return the Deferred Deprecation 16
Credit to customers? 17
A. Concurrent with the effective date of Year 2 of the Company’s rate plan, the 18
Company proposes to return to customers the Deferred Depreciation Credit, beginning 19
September 1, 2022 through separate Tariff Schedule 177 (natural gas). The annualized 20
amount of $0.9 million for natural gas would mostly offset the natural gas base rate relief 21
proposed to become effective September 1, 2022. This new tariff schedule has been 22
included in Exhibit No. 18, Schedule 6 for natural gas. 23
Miller, Di 31
Avista Corporation
Q. How does the Company propose to spread the Deferred Depreciation 1
Credit? 2
A. Similar to the Tax Customer Credit discussed previously, the Deferred 3
Depreciation Credit is proposed to be spread on a uniform percent of revenue basis. The 4
Company chose this method because it generally matches how costs are being recovered 5
from customers. 6
Q. For purposes of rate design, how does the Company propose to spread 7
the Deferred Depreciation Credit within each of the service schedules? 8
A. Consistent with the rate design discussed for the Tax Customer Credit, the 9
Deferred Depreciation Credit is proposed to be applied to the volumetric energy blocks 10
resulting in a billing rate offset for natural gas customers in Year 2. 11
Q. What is the proposed term of the Deferred Depreciation Credit? 12
A. Under the levels proposed by the Company, natural gas Schedule 177 would 13
remain in effect for one year. Therefore, the amortization and the Deferred Depreciation 14
Credit Tariff Schedule 177, if approved as filed, would be in place from September 1, 2022 15
through August 31, 2023 for natural gas customers. Any over- or under-refunded balance 16
at the end of the rebate period would be addressed in a future rate proceeding. 17
Q. Does this conclude your pre-filed, direct testimony? 18
A. Yes, it does. 19