20210818Notice_of_Application_Order_No_35137.pdf

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35137 1
Office of the Secretary
Service Date
August 18, 2021
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF AVISTA’S
APPLICATION TO IMPLEMENT FCA
RATES FOR ELECTRIC SERVICE FROM
OCTOBER 1, 2021 THROUGH
SEPTEMBER 30, 2022
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CASE NO. AVU-E-21-08

NOTICE OF APPLICATION

NOTICE OF
MODIFIED PROCEDURE

ORDER NO. 35137

On July 30, 2021, Avista Corporation dba Avista Utilities (“Company”) applied to the
Commission for authorization to implement Fixed Cost Adjustment (“FCA”) rates for electric
service effective from October 1, 2021 through September 30, 2022, and approve its corresponding
modifications to Schedule 75 “Fixed Cost Adjustment Mechanism – Electric.” The Company also
asks that the Commission approve as prudently incurred the level of electric FCA revenue deferred
during the 18-month deferral period ended June 30, 2021.1 The Company separately applied to
implement FCA rates for natural gas service in Case No. AVU-G-21-06. The Company proposes
per kilowatt-hour (“kWh”) FCA rebate rates for its residential electric customers and surcharge
rates for its non-residential electric customers. The Company’s Application, if approved, would
decrease overall electric revenues by about $0.8 million. The monthly bill of an average residential
electric customer would decrease by about $1.94, or 2.3%.2 The Company asks that its Application
be processed by Modified Procedure and requests an effective date of October 1, 2021.
With this Order, the Commission issues a Notice of Application and Notice of Modified
Procedure establishing a public comment period and Company reply deadline.
BACKGROUND
The FCA is a rate adjustment mechanism designed to break the link between the energy
a utility sells and the revenue it collects to recover fixed costs3 of providing service, thus

1 In Order No. 34502, the Commission authorized the Company to modify its electric and natural gas deferral periods
one-time to run from January 1, 2020, through June 30, 2021.
2 The Company’s Application states Schedule 1 customers’ rates will decrease by 2.2% on page 2 and 2.3% on page
12.
3 “Fixed costs” are a utility’s costs to provide service that do not vary with energy use, output, or production, and
remain relatively stable between rate cases – for example, infrastructure and customer service.

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35137 2
decoupling the utility’s revenues from its customers’ energy usage. Order No. 33437 at 3. This
decoupling removes a utility’s incentive to increase sales to increase revenue and profits and
encourages energy conservation. The Commission originally approved the Company’s FCA as a
three-year pilot program, and part of the approved settlement of its 2015 rate case. See Case Nos.
AVU-E-15-05; AVU-G-15-01; Application at 3; and Order No. 33437 at 10. In the Order
approving the FCA program, the Commission noted that the parties to the Company’s rate case
agreed to review the program’s effectiveness at the end of its second full year, to ensure it is
functioning as intended. The settlement stipulation in those cases and Schedule 75 also set forth
how the FCA mechanism works, including treatment of existing versus new customers, quarterly
reporting requirements, annual filings, interest, accounting, and a 3% rate increase cap.
On June 15, 2018, the Commission approved an addendum to the settlement stipulation
approved in Case Nos. AVU-E-15-05 and AVU-G-15-01, which extended the term of the
Company’s FCA pilot for an additional year. Order No. 34085. On December 13, 2019, the
Commission authorized the Company to: (1) extend its FCA mechanism for both gas and electric
customers through March 31, 2025; (2) alter the first deferral period of the FCA extension by using
a one-time, 18-month deferral period from January 1, 2020, through June 30, 2021; and (3) alter
its quarterly FCA reporting requirement to 60-days after the end of each quarter. Order No. 34502;
Case Nos. AVU-E-19-06 and AVU-G-19-03.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that in its filing, the Company proposes a rate rebate
for its residential electric customers and a rate surcharge for its non-residential electric customer
groups based on the amount of deferred revenue recorded for each group between January 1, 2020,
and June 30, 2021. The Company mostly attributes the proposed changes to drivers including
warmer than normal weather during the 18 months ended June 30, 2021, energy efficiency, and
“other” drivers.
YOU ARE FURTHER NOTIFIED that the Company recorded $2,260,697, in the
rebate direction in deferred revenue for its electric residential customer group for the 18 months
ended June 30, 2021. After considering the prior year residual balance of $35,117, the Company
proposes to return $2,323,407, at a proposed rate of 0.189 cents per kWh, to the Company’s
residential electric customers served under rate Schedule 1. See Exhibit B. If approved by the

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35137 3
Commission, the Company would record this amount in a regulatory liability balancing account
and reduce the account balance each month by the amount returned to customers under the tariff.
YOU ARE FURTHER NOTIFIED that for its electric non-residential customer groups,
the Company recorded $2,011,841, in the surcharge direction in deferred revenue for the 18
months ended June 30, 2020. After considering the prior year residual balance of $18,516, the
Company proposes to recover $2,049,329, at a proposed rate of 0.197 cents per kWh, from the
Company’s commercial and industrial electric customers served under rate Schedules 11, 12, 21,
22, 31 and 32. See Exhibit B. If approved by the Commission, the Company would record this
amount in a regulatory asset balancing account and reduce the account balance each month by the
amount collected from customers under the tariff.
YOU ARE FURTHER NOTIFIED that with its Application, the Company submitted
its residential and non-residential rate calculations, support for its deferrals, and its proposed FCA
Schedule 75.
YOU ARE FURTHER NOTIFIED that the Company’s Application and Exhibits,
including the proposed tariff sheets, are available for public inspection during regular business
hours at the Commission’s office. The Application is also available on the Commission’s web site
at www.puc.idaho.gov. Click on the “ELECTRIC” tab in the left-hand column of the home page,
then select “Open Cases” and then locate 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.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
under 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 it will review the case through written
submissions under the Commission’s Rules of Modified Procedure Rules 201 through 204 of the
Idaho Public Utilities Commission’s Rules of Procedure, IDAPA 31.01.01.201-204. The
Commission notes that Modified Procedure and written comments have proven to be an effective
means for obtaining public input and participation.

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35137 4
YOU ARE FURTHER NOTIFIED that persons desiring to state a position on this
Application may file a written comment explaining why the person supports or opposes the
Application. Persons who would like a hearing must specifically request a hearing in their written
comments. Persons shall have until September 8, 2021, to file written comments. Comments
must be filed through the Commission’s website or by e-mail unless computer access is
unavailable. To comment electronically, please access the Commission’s home page at
www.puc.idaho.gov. Click the “Consumers” tab and then “Case Comment Form” and complete
the form using the case number as it appears on the front of this document. To file by e-mail, the
customer must e-mail the comments to the Commission Secretary and the Company at the e-mail
addresses listed below. If computer access is unavailable, then comments may be mailed to the
Commission and Company at these addresses:
For the Idaho Public Utilities
Commission:

Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074
[e-mail]

Street Address for Express Mail:

11331 W. Chinden Blvd.
Building 8, Suite 201-A
Boise, ID 83714

For Avista Corporation:

David J. Meyer, Esq. (MSC-10)
Patrick Ehrbar (MSC-27)
P.O. Box 3727
1411 E. Mission Ave
Spokane, WA 99220-3727
[e-mail]
[e-mail]
[e-mail]
YOU ARE FURTHER NOTIFIED that the Company must file any reply comments
by September 15, 2021.
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.
O R D E R

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35137 5
IT IS HEREBY ORDERED that this case be processed by Modified Procedure, Rule
201-204 (IDAPA 31.01.01.201 - .204). Persons shall have until September 8, 2021, to file written
comments, and the Company shall have until September 15, 2021, to file a reply, if any.
IT IS FURTHER ORDERED that parties should continue to comply with Order No.
35058, issued June 3, 2021. All pleadings should be filed with the Commission electronically and
shall be deemed timely filed when received by the Commission Secretary. See Rule 14.02. Service
between parties should also be accomplished electronically. Voluminous discovery-related
documents may be filed and served on CD-ROM or a USB flash drive.
DONE by order of the Idaho Public Utilities Commission at Boise, Idaho this 18th day
of August 2021.

__________________________________________
PAUL KJELLANDER, PRESIDENT

__________________________________________
KRISTINE RAPER, COMMISSIONER

__________________________________________
ERIC ANDERSON, COMMISSIONER

ATTEST:

_______________________
Jan Noriyuki
Commission Secretary

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