20210730Application.pdf

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Avista Corp.l4ll East Mission P.O.Box3727
Spokane, Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170
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July 30,2021
Commission Secretary
Idaho Public Utilities Commission
472W. Washington St.
Boise,ID 83702-5983
RE: Case No. AYII-E-21-!9
Power Cost Adjustment (PCA) Annual Rate Adjustment Filing of Avista Corporation
Dear Commission Secretary:
ln accordance with Case No. GNR-U-20-01, OrderNo.34602, which suspends the requirement to file
physical copies, the Company has attached for electronic filing with the Commission the annual Power
Cost Adjustuent Rate Filing.
The Company is requesting that the Commission issue an order approving recovery of power costs
deferred for the period July l, 2020 through June 30,2021, and approving a PCA surcharge of
0.251i, per kilowatt-hour to be effective October 1,2021. Under the Company's proposal, the
PCA surcharge rate for all customers, including residential customers, would increase from an
existing surcharge rate of 0.0151 per kilowatt-hour to a proposed surcharge rate of 0.251fi per
kilowatt-hour, or an increase in the rate of 0.236i, per kilowatt-hour. Since PCA rate adjustments
are spread on a uniform cents per kilowatt-hour basis, the resulting percentage increase varies by
rate schedule. The overall increase is approximately $7.2 million or 2.8Yo. Residential customers
using an average of 892 kilowatt-hours per month would see their monthly bills increase from $85.63 to
$87 .7 4, an increase of $2. 1 1 per month, or 2.5o/o.
Certain supporting documents are CONFIDENTIAL, rendering these documents exempt from
public inspection, examination and copying pursuant to Sections 74-lDl through 74-126 of the
Idaho Code. Avista believes that the identified CONFIDENTIAL supporting documents contain
valuable commercial information.
As such, Avista is submitting a separate elechonic filing containing the electronic form of the
CONFIDENTIAL supporting documents, in compliance with Rule 067.02.b.
Please direct any questions regarding this filing to Annette Brandon at [phone] or Kaylene
Schultz at [phone].
Sincerely,
/s/ Patrick Ehrbar
Patrick D. Ehrbar
Director of Regulatory Affairs
Enclosures
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1 DAVID J MEYER2 VICE PRESIDENT AND CHIEF COUNSEL FOR
3 REGULATORY & GOVERNMENTAL AFFAIRS4 AVISTA CORPORATION5 I4I1 E. MISSION AVENUE6 P. O.BOX37277 SPOKANE, WASHINGTON 99220
8 PHONE: [phone], FAX: [phone]
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE POWER COST )
ADruSTMENT (PCA) ANNUAL RATE )
ADruSTMENT FILING OF AVISTA )CoRPORATION )
CASE NO. AVU-E-21.q?
APPLICATION OF AVISTA
CORPORATION
19 I. INTRODUCTION
20 In accordance with Idaho Code $61-502 and RP 052, Avista Corporation, doing
2l business as Avista Utilities (hereinafter 'oAvista" or "Company"), dt 14l l East Mission
22 Avenue, Spokane, Washington, respectfully files its Power Cost Adjustrnent (PCA) annual
23 rate adjustment filing in the above referenced case. The Company requests the Commission
24 issue an order approving the level of power costs deferred in the surcharee direction for the
25 period July 1, 2020 through June 30,2021, and approving a PCA surcharge rate of 0.251(,
26 per kilowatt-hour to be effective October 1,2021. The Company requests that this filing
27 be processed under the Commission's Modified Procedure Rules through the use of written
28 comments.
29 Communications in reference to this Application should be addressed to:
AVISTA'S PCA ANNUAL RATE ADruSTMENT FILING PAGE I
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David J. Meyer, Esq.
Vice President and Chief Counsel for
Regulatory & Govemmental Affairs
Avista Corporation
P.O.Box3727
MSC-10
l41l E. Mission Ave
Spokane, WA 99220-3727
Phone: [phone]
David. Meyer@avistacorp. com
Patrick D. Ehrbar
Director of Regulatory Affairs
Avista Utilities
P.O.Box3727
MSC-27
141I E. Mission Ave
Spokane, WA 99220-3727
Phone: [phone]
P atrick. Ehrb ar@avistacorp. com
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Electronically
[e-mail]
25 II. BACKGROUND
26 Avista's PCA is used to track changes in revenues and costs associated with
27 variations in hydroelectric generation, secondary prices, thermal fuel costs, and changes in
28 power contract revenues and expenses. Avista's existing PCA methodology and method
29 of recovery were approved in Case No. AW-E-07-01 by Order No. 30361 dated June 29,
30 2007. In that case, the Commission approved a change in the PCA methodology from a
3l trigger and cap mechanism to a single annual PCA rate adjustment filing requirement.
32 The Commission also approved a change in the method of the PCA deferral rate
33 adjustment from a uniform percentage basis, to a uniform cents per kilowatt-hour basis
34 effective with the October 1,2007 PCA rate change. By Order No. 32206 in Case No.
AVISTA'S PCA ANNUAL RATE ADruSTMENT FILING PAGE 2
1 GNR-E-10-03 dated March 15,2011, the Commission modified the retail revenue credit
methodology and approved a Load Change Adjustment Rate based on the energy classified
portion of ernbedded production revenue requirement effective April l, 20ll .
The Commission approved the following procedural schedule for administering the
annual PCA filings:
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August 1
September 1
October I
Company filing for prior July - June deferral period
Review and comments by Staff and other interested parties
Commission Order and effective date of PCA rate
adjustment
10 The present PCA rebate was made effective on October 1,2020. On July 31,2020,
11 in Case No. AVU-E-20-07, Avista filed its annual PCA rate adjustment for the deferral
12 period July 1, 2019 through June 30, 2020 and requested a PCA surcharge rate of 0.0151
13 per kilowatt-hour, based on an overall surcharge of approximately $0.5 million, effective
14 October 1,2020. That surcharge will end on September 30, 2021. The Commission
15 approved that application in Order No. 34796, dated October 1,2020.
16 The proposed PCA rate adjustment of 0.2511 perkilowatt-hour would surcharge to
17 customers approximately $7.6 million effective October 1,2021. The surcharge is primarily
l8 associated with power supply costs that were higher than those included in retail rates, due
19 to higher wholesale electric and natural gas prices. The net effect of the expiring surcharge,
20 and the proposed surcharge, is an overall increase in revenue of approximately 2.8 percent,
2l or $7.2 million.
AVISTA'S PCA ANNUAL RATE ADruSTMENT FILINU PAGE 3
I III. DEFERRALS -JULY I,2O2O THROUGH JI]NE 3O,2O2I
2 The amount of power cost deferrals for the period July t, 2020 through June 30,
3 202I is shown below, as well as interest for the same period. Company witness Ms.
4 Brandon's testimony provides an explanation of the factors causing the deferral entries for
5 the period. Company witness Ms. Schultz's testimony addresses the deferral, Renewable
6 Energy Credit Benefit, and interest amount.
Deferrals (Jdy 2020 - Jure 2021)
Rerewable EnerpS, Credit Retirerned Benefit
Lferest
Total Deferral Balance
7,899,798
(446,075)
16,047s 7.469_770
$
$
$
10 Monthly reports have been filed with the Commission regarding actual PCA
I I deferral entries to date. An additional copy of those reports for the months of July 2020
12 through June 2021 has been included with this filing and has also been provided to
l3 Clearwater Paper Corporation and Idaho Forest Group.
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15 IV. PROPOSED RATETO BE EFFECTIVE OCTOBER 1.2021
16 The Company is proposing a uniform cents per kilowatt-hour PCA surcharqe rate
l7 of 0.251f, to be eflective October 1,2021. See page I of Ms. Schultz's Exhibit No. KJS-I
18 for the calculation of the proposed rate. Attached to this Application as Exhibit "A" is a
19 copy of the proposed tariff, Schedule 66, which contains the proposed PCA rate. Exhibit
20 "A" also includes the proposed changes to Schedule 66 in strike out/underline format. The
2l proposed rate is designed to surcharge the following:
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AVISTA'S PCA ANNUAL RATE ADruSTMENT FILING PAGE 4
Deftrrals (July 2020 - Jur 2021)
RPS Corryliarce
Renervable Errrgy Credit Retirerrerr Benefit
Total Deferal Balance
UuarnotizedBalance fiourPrevions Deferrals (prior to Jtily |.2020)
Arnortizatiou July 2020 - Jur 2021
[rterest
Total Reuuiniry Aunrtization Balarre
h'ojected Arnortizatiou ard Total Lilerest (Jnly 202l-Septeurber 2021) $
TOTAL BAIANCE FOR AMORTZATION
$
$
$
7.899.798
(446.07s)
r6.047
$7.469.770
46.080
181.730
5.292
$
$
$
$
$
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7.6 l 3.5 l0
9 After applying the conversion factor related to commission fees and uncollectible
l0 customer accounts, the resulting balance of $7,469,770 is divided by forecasted kilowatt-
1l hours to derive the proposed surcharge rate of 0.25l$ per kilowatt-hour.l
12 Since PCA rate changes are spread on a uniform cents per kilowatt-hour basis, the
13 resulting percentage increases vary by rate schedule. Page 1 of Ms. Schultz's Exhibit No.
14 zuS-l shows the effect of the proposed PCA rebate by rate schedule. The overall increase
15 in revenue, after accounting for the expiration of the existing surcharge, and the new
16 surcharge, is $7.2 million or 2.8%.
17 Residential customers using an average of 892 kilowatt-hours per month would see
18 their monthly bills increase from $85.63 to $87 .74, an increase of $2.1 1 per month, or 2.5o/o.
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20 V. REOUEST FOR RELIEF
2l The Company requests that the Commission issue an order approving power costs
22 deferred for the period July l, 2020 through June 30,2021, and approving a PCA surcharge
I TotalBalance forAmortization$7,613,510 dividedbyconversion factor 0995646:$7,646,804.
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AVISTA'S PCA ANNUAL RATE ADruSTMENT FILING PAGE 5
1 rate of 0.2519 per kilowatt-hour to be effective October 1,2021. Under the Company's
2 proposal, the PCA rate for all customers, including residential customers, would increase
3 from a surcharge rate of 0.0151 per kilowatt-hourto a surcharge rateof 0.251I per kilowatt-
4 hour. Since PCA rate adjustnents are spread on a uniform cents per kilowatt-hour basis,
5 the resulting percentage increase varies by rate schedule. The overall increase is
6 approximately $7.2 million or 2.8o/o. The Company requests that the matter be processed
7 under the Commission's Modified Procedure rules through the use of written comments.
8 Dated at Spokane, Washington this 30th day of July 2021.
9 AVISTA CORPORATION
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By:/s/ David J. Mever
David J. Meyer
Vice President and Chief Counsel for
Regulatory & Governmental Affairs
AVISTA'S PCA ANNUAL RATE ADruSTMENT FILING PAGE 6
Case No. AVU-E-2l-ol
2021 Idaho PCA Filing
Exhibit ..A)''
l.P.U.C. No.28
ssued by
By
Twenty{hird Revision Sheet 66
Canceling
Revision Sheet 66
AVISTA CORPORATION
d/b/a Avista Utilities
SCHEDULE 66
TEMPORARY POWER COST ADJUSTMENT - IDAHO
APPLICABLE:
To Customers in the State of ldaho where the Company has electric service
available. This Power Cost Adjustment shall be applicable to all retail customers for
charges for electric energy sold. This Rate Adjustment is designed to recover or
rebate a portion of the difference between actual and allowed net power supply costs
MONTHLY RATE:
The energy charges of electric Schedules 1 , 11, 12, 21 , 22, 25, 25P, 31 , 32, and
41-49 are to be increased by 0.2511 per kilowatt-hour in al! blocks of these rate
schedules.
SPECIAL TERMS AND CONDITIONS:
The rates set forth under this Schedule are subject to periodic review and
adjustment by the IPUC based on the actual balance of deferred power costs.
Service under this schedule is subject to the Rules and Regulations contained
in this tariff.
The above Rate is subject to increases as set forth in Tax Adjustment
Schedule 58.
lssued July 30, 2021 Effective October'1, 2021
Avista Utilities
Patrick Ehrbar - Director of Regulatory Affairs
LP.U.C. No.28
lssued by
By
Twenty-second Revision Sheet 66
Canceling
Revision Sheet 66
AVISTA CORPORATION
d/b/a Avista Utilities
SCHEDULE 66
TEMPORARY POWER COST ADJUSTMENT. IDAHO
APPLICABLE:
To Customers in the State of ldaho where the Company has electric service
available. This Power Cost Adjustment shall be applicable to all retail customers for
charges for electric energy sold. This Rate Adjustment is designed to recover or
rebate a portion of the difference between actual and allowed net power supply costs
MONTHLY RATE:
The energy charges of electric Schedules 1, 11, 12, 21, 22, 25,25P, 31, 32, and
41-49 are to be increased by 0€{5$ per kilowatt-hour in all blocks of these rate
schedules.
SPECIAL TERMS AND CONDITIONS:
The rates set forth under this Schedule are subject to periodic review and
adjustment by the IPUC based on the actual balance of deferred power costs.
Service under this schedule is subject to the Rules and Regulations contained
in this tariff.
The above Rate is subject to increases as set forth in Tax Adjustment
Schedule 58.
lssued July 31 ,2020 Effective October 1, 2020
Avista
Patrick Ehrbar - Director of Regulatory Affairs
l.P.U.C. No.28
Twenty{hird Revision Sheet 66
Canceling
Revision Sheet 66
AVISTA CORPORATION
d/b/a Avista Utilities
SCHEDULE 66
TEMPORARY POWER COST ADJUSTMENT - IDAHO
APPLICABLE:
To Customers in the State of ldaho where the Company has electric service
available. This Power Cost Adjustment shall be applicable to all retail customers for
charges for electric energy sold. This Rate Adjustment is designed to recover or
rebate a portion of the difference between actual and allowed net power supply costs.
MONTHLY RATE:
The energy charges of electric Schedules 1 , 11, 12, 21, 22, 25, 25P, 31, 32, and
41-49 are to be increased by 0.251i, per kilowatt-hour in all blocks of these rate
schedules.
SPECIAL TERMS AND CONDITIONS:
The rates set forth under this Schedule are subject to periodic review and
adjustment by the IPUC based on the actual balance of deferred power costs.
Service under this schedule is subject to the Rules and Regulations contained
in this tariff.
The above Rate is subject to increases as set forth in Tax Adjustment
Schedule 58.
Issued July 30, 2021 Effective October 1, 2021
By
ities
Patrick Ehrbar - Director of Regulatory Affairs
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that I have served Avista Corporation's annual Power Cost
Adjustment (PCA) Annual Rate Adjustment Filing by electronic mailing a copy thereof
to the following:
Commission Secretary
!daho Public Utilities Commission
472W. Washington St.
Boise, !D 83702-5983
Ronald L. Williams
Willams Bradbury, P.C.
P.O. Box 388
Boise, ID 83701
ron@wi I I ia msbrad bu ry.com
Terry Borden
Clearwater Paper
601 W. Riverside Ave. Suite 1100
Spokane, WA 99201
Terrv. Bo rd e n @cl ea rwate rpa pe r. com
Larry A Crowley
The Energy Strategies lnstitute lnc
3738 S. Harris Ranch Ave.
Boise, ID 83716
[e-mail]
(Excluding Confidentia! lnformation)
Peter J. Richardson
Richardson Adams PLLC
515 N. 27th Street
Boise, lD 83702
Peter@ richa rd so nada m s. com
Benjamin J. Otto
Idaho Conservation League
710 N.6h Street
Boise, lD 83702
botto @ id a hoco nse rvatio n. o rq
Brad M. Purdy
Attorney at Law
2019 N. 17th Street
Boise, lD 83702
[e-mail]
Dr. Don Reading
6070 Hill Road
Boise, ldaho 83703
d read inq @ mi nd sprinq.com
Dated at Spokane, Washington this 30th day of July 2021.
lsl Paul Kimball
Paul Kimball
Manager Regulatory Compliance and Discovery
DAVID J. MEYER
VICE PRESIDENT AND CHIEF COUNSEL FOR
REGULATORY AND GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
141I E. MISSION AVENUE
P.O.BOX3727
SPOKANE, WASHINGTON 99220
PHONE: [phone], FAX: (509) 49s-88s1
BEFORE TITT'. IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE POWER COST
ADruSTMENT (PCA) ANNUAL RATE
ADruSTMENT FILING OF AVISTA
CORPORATION
)
)
)
)
CASE NO. AVU-E-zt-!8'
DIRECT TESTIMO}.IY OF
ANNETTE M. BRANDON
FOR AVISTA CORPORATION
1 I. INTRODUCTION
a. Please state your name, business address, and present position with Avista
Corporation.
A. My name is Arurette M. Brandon.My business address is 1411 E. Mission
Avenue, Spokane, Washington, and I am employed by the Company as a Wholesale Marketing
Manager in the Energy Supply department.
a. What is your educational background?
A. I am a 2002 gradtate of Eastern Washington University with a Bachelor of Arts
Degree in Business Adminisfration - Professional Accounting.
a. IIow long have you been employed by the Company and what are your
duties as a Wholesale Marketing Manager?
A. I started working for Avista in 1999 as a Budget Analyst in the Company's
Transmission department. I spent three years in the Company's Tax departmentbefore moving
to Resource Accounting for the next eight years. I joined the Regulatory Affairs department as
a Regulatory Analyst in20l2 and was promoted to Manager of Regulatory Affairs in 2013. My
primary responsibilities in Regulatory Affairs were related to oversight of the purchase gas cost
adjustrnent filings, power supply issues including general rate case adjustnents, served as the
key contact for the Company's compensation and benefits programs, and was the revenue
requirement lead for the Company's2020 Oregon General Rate Case.
I moved to my current role as a Wholesale Marketing Manager in the Energy Supply
deparfrnent in August 2020.In this role, my responsibilities are related to the annual power
supply filings and support for development of authorized power supply in General Rate Case
proceedings. In addition, I manage the Company's transmission contracts, resource
Brandon, Di I
Avista Corporation
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I procurernent processes, and serve as the lead for Washington's Clean Energy Implementation
2 Plan.
3 Q. Have you previously filed testimony in annual Power Cost Adjustment
4 proceedings?
5 A. Yes. In my previous role in Regulatory Affairs, my testimony provided a
6 summary of accounting entries and account balances related to the Power Cost Adjustment
7 (PCA). Company witness Ms. Schultz is sponsoring the accounting testimony in this filing.
8 This is the first filing where I am sponsoring this form of testimony, which had previously been
9 supported by Company witness Bill Johnson.
l0 a. What is the scope of your testimony in this proceeding?
I I A. My testimony gives an overview of power supply operations and provides a
12 summary of the factors contributing to the power cost deferrals during the July 2020 through
l3 June202l Review Period ("Review Period").
14 a. Are you sponsoring any work papers and supporting documentation to be
15 introduced in this proceeding?
16 A. Yes. Detailed work papers supporting the tables and other calculations in my
l7 testimony have been provided in electronic format to the Commission, and other parties
18 coincident to this filing. The Company has also provided supporting documentation, including
19 details of all term natural gas and electricity transactions that flowed during the Review Period,
20 and daily position reports that show, among other things, forward price curves. Copies of long-
2l term power contracts that the Company entered during the Review Period have also been
22 provided.
Brandon, Di 2
Avista Corporation
I II. OVERVIEW OF POWER SUPPLY OPERATIONS
2 a. IIow does Avista, generally, manage its power supply resources?
3 A. Avista Utilities conducts electric planning, procurement, sales, and power
4 resource management activities to ensure an adequate supply of electricity to serve customer
5 and other load obligations, as well as to optimize our generation and fansmission resources.
6 As one can imagine, numerous variables affect short-term power supply. As such, we employ
7 the Energy Resources Risk Policy ("Risk Policy") to recognize and actively manage the
8 interaction and dynamics among these variables by establishing processes for future load and
9 obligation estimation, resource estimation, and management of the expected net surplus or
10 deficit short-term position.
I I It is understood that many factors cause loads to differ from estimates. It is also
12 understood that each of Avista's generating resources has inherent variability because of
13 streamflow and water storage conditions (for hydroelectric plants), mechanical limitations,
14 transmission constraints, fuel availability and conditions, ambient conditions, environmental
15 and permit conditions, and other factors.
16 The Energy Supply department, of which I am a member of, is responsible for fuel
17 managernent, optimizing the use of electric resources including wholesale power confacts,
18 obtaining and dispatching power resources to meet load obligations, and provide good
l9 stewardship of electric resources.
20 Energy resource planning necessarily involves use of estimates. Actual loads rarely
2l match forward estimates precisely. The net surplus or deficit requires constant attention, and
22 that variability always dictates that flexibility be maintained. It is necessary to buy and sell
23 energy (or financially equivalent derivative transactions) in hourly, daily, monthly, and longer
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Avista Corporation
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increments, and adjust dispatch plans to meet prevailing conditions. As such, we may use any
electricity and fuel transactions that are authorized in our Risk Policy to the extent that they
relate directly or indirectly to serving Avista Utilities electric loads or obligations and
optimizing the value of Avista Utilities energy resources.
a. What types of transactions will Avista enter in to, as detailed and
authorized in the Risk Policy?
A. The following are examples of transactions permitted in the context ofmanaging
Avista's energy resources and serving the Company's obligations in the short-term and
intermediate-term time horizons :
o Scheduling and dispatching energy resource facilities owned or controlled by
Avista.
o Transactions with otherparties forphysical delivery of capacity or energy, including
fixed price and indexed or formula priced transactions.
o Ancillary services, such as reserves, load-following, generation imbalance and
others.
o Transportation, transmission, storage and capacity obligations and rights.
o Bilateral forward transactions with approved counterparties.
o Futures contracts traded on an established commodities exchange.
. Swap agreements as a tool for fixed price financial hedges.
o Transactions that allow Avista Utilities to buy or sell electricity or natural gas at
Avista's discretion.
o Exchange agreements (forward commodity agreements expected to be settled with
return of the commodity rather than cash, either with or without associated
settlement prices).
o Fuel (supply, delivery, storage, excess fuel disposition) related to specific electric
generating facilities in which Avista Utilities has an ownership or contractual
interest including natural gas, coal and biomass (wood waste) and related ernission
allowances.
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Avista Corporation
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a Streamflow and water storage rights and benefits related to Avista Utilities owned
or contracted hydroelectric generation stations including coordination of the related
river systems.
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a. How does Avista manage its energy resources for the benefit of its
customers?
A. Avista manages its energy resources portfolio to serve load and take advantage
of market opportunities where applicable. Electric resource management involves choices
among several variables. We assess these variables to select and execute an appropriate mix
for short-term and intermediate-term objectives. Intra-month activity during the prompt month
to serve loads, optimize resources, and participate in the electric market is reported after-the-
fact in the daily position report. Electric optimization variables include:
. Scheduling and dispatching of available Avista generating units as indicated by
relevant plant parameters.
. Buying fuel to operate a generating facility or selling fuel already available to
decrease or eliminate generation from a unit.
o Storing or using water for hydroelectric generation that maximizes expected
generation value and arranging for water from or for other hydroelectric plants in
the coordinated river system.
. Buying or selling or exchanging electricity in the wholesale market from/to other
utilities, power marketers, or independent power producers, including displacing
purchases and sales available to the Avista Utilities balancing area.
o Buying or selling financial contracts that hedge electric purchase or sale prices and
open positions.
o Obtaining transmission rights as may be needed to deliver or receive output to or
from any Avista generation source or any market and selling surplus transmission
rights.
o Buying and selling the gas basis spread based on gas transport contract rights.
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Avista Corporation
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I Q. Does the Company have an active hedging program?
2 A. Yes. The Company employs a Power Supply Hedge Requirements Report tool
3 (PSHRR). The PSHRR is an analytical tool to guide power supply hedging decisions in the
4 short-term forward period. It provides a process to systematically reduce open positions with
5 forward transactions by buying for expected shortages and selling expected surpluses. An
6 o'open" position for this pulpose is the forecasted monthly financial position that is not covered
7 by fixed price physical or financial transactions, i.e., the surplus or deficit that is subject to price
8 risk. The plan provides guidance, but may not be followed rigidly when management judgment
9 or market conditions warrant other actions, no action, or simply a delay in acting.
III. OVERVIEW OF DEFERRAL CALCULATIONS
a. Please provide an overview of the deferral calculation methodolory.
A. Energy cost defsrrals under the PCA are calculated each month by subtracting
base net power supply expense from acfual net power supply expense to determine the change
in net power supply expense. The base levels for the Review Period result from the power
supply revenues and expenses approved by the Commission in Case No. AVU-E-19-04 for the
Review Period. The methodology compares the actual and base amounts each month in FERC
accounts 555 (Purchased Power), 501 (Thermal Fuel), 547 (Fuel) and 447 (Sales for Resale) to
compute the change in power supply expense. These four FERC accounts comprise the
Company's major power supply cosVrevenue accounts. The PCA also includes changes in
Accounts 565 (hansmission expense), and 456 (third-party transmission reve,nue).
In addition, actual expense and revenue for natural gas not burned is included as natural
gas sale revenue under Account 456 (revenue) and purchase expense under Account 557
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Avista Corporation
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I (expense). This would include benefits and costs related to optimizing the value of natural gas
2 turbines and power supply's natural gas transportation contracts. All expenses are recorded in
3 accordance with Generally Accepted Accounting Principles and FERC's Uniform System of
4 Accounts.
5 The total change in net expense under the PCA is multiplied by Idaho's share of the
6 Production/Transmission Ratio (PT Ratio) approved in association with base net power supply
7 expense. Change in Idaho retail sales is then multiplied by the Load Change Adjustment Rate
8 (LCAR) and added or subtracted from the change in power supply expense to calculate the total
9 power expense change. 90 percent of the change in power expense is deferred and 10 percent
10 is retained by the Company.
11 a. Please explain how the load change adjustment is calculated in the PCA.
12 A. The PCA includes a load change adjustment to reflect the change in power
13 production and transmission expense recovered through base retail revenues, related to changes
14 in retail load. The LCAR calculation is based on the energy classified production and
15 transmission costs included in the Company's general rate case. The LCAR revenue adjustment
16 for July 2020 through June 2021 was $22.00/MWh.
17 The monthly load change adjustment in the PCA is computed by multiplying the retail
18 revenue adjustment rate times the difference between actual and authorized monthly retail
19 Megawatt-hour sales. If actual Megawatt-hour sales are greater than base, the retail revenue
20 adjustment will result in a credit to the PCA deferral (reduces power supply costs). If actual
2l Megawatt-hour sales are less than base, the retail revenue adjustment will result in a debit to
22 the PCA deferral (increases power supply costs).
Brandon, Di 7
Avista Corporation
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2 a. What were the changes in power costs during the PCA Review Period?
3 A. During the Review Period, actual net power costs were hieher than the
4 authorized net power costs for the Idatro jurisdiction by $8,778,000. After taking into
5 consideration the 90% allowable deferral percent the total is $7,900,000.
6 O. Please summarize why actual power supply expense was higher than the
7 authorized level during the Review Period?
8 A. Table No. 1 below shows the primary factors impacting power supply expense
9 during the Review Period:
l0 Table No. 1: Factors Impactine Power Supolv Expense
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Avista Corporation
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l. Change inNet Power Purchases (Purchases net of Sales)$
$
$
$
$
$
$
$
7. Change in Net Trursmission Expense (purchases net of sales)
(3,758)
2. Change in Retail Load 27t
3. Chmge in Hyeo Generation 1,339
4. Chanp in WindGeneration 3,M5
5. Change in Thennal Generation 3,563
6. Change inNatural Cras Plant Generation
(8el)
8. Ottrer Miscellaneous Expense
Total Varimce to Autlprized
4,270
60
$ 7,900
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a. Please describe the contribution of each item shown above in Table No. 1 to
the increase in net power supply expenses.
A. In summary, several factors contributed to a surcharge for the annual PCA
filing, primarily driven by increases in thermal generation and changes in natural gas generation
for a total of $12.5 million. These surcharges were offset by favorable net purchases and
transmission expense for $4.7 million rebate. In combination, this resulted in a net surcharge
for Idaho customers of $7.9 million in the Review Period. Provided below is a summary of the
factors that, added together, resulted in an increase in power supply expenses for the Review
Period (the "Item" number references back to Table No. 1). Please note that the Company is
providing work papers supporting all impacts listed in Table No. I and described in more detail
above.
Item No, 1 Chanse in Net Power Purchase Exoense: ($3,758,000 rebate directiod.
Net power purchase expense (power purchase expense offset by wholesale revenue) was
approximately $3.8 million lower than authoized. On a net syston basis, power
purchases exceeded power sales by approximately 43 aMW. However, actual prices
were less than authorized for expense and higher than authorized for our off-syston
sales revenue. These favorable pricing differences more than offset the cost of the
additional generation.
Item No. 2 Chanee in Raail Loads ($271.000 surcharee directiod. The impact ofthe
change in retail loads is the net of the deviation in actual load versus the authorized level
multiplied by the market price of power (netted against the retail revenue adjustment).
For the Review Period, Idaho retail sales were 1 aMW below the authorized level.
However, overall prices for the year were higher than that included in the LCAR,
resulting in a surcharge for the year. Additional information regarding the LCAR has
been provided previously in my testimony.
Brandon, Di 9
Avista Corporation
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Item No. 3 Chanse in Hvdro Generation ($1,339,000 surcharee directiod. Total
hydro generation was lower than the authorized level by 3 average megawatts ("aMW").
Hydro generation at Company-owned plants on the Spokane River and Clark Fork River
were lower than authorizedby 3 aMW and I aMW respectively. Offsetting this was a
favorable I aMW variance due to higher than authorized from the Mid-Columbia
contracted hydro plants. This expense variance is based on actual power prices,
resulting in an expense variance of $1,339,000 in the surcharge direction.
Item No. 4 Chanee in Wind Net Expense ($3,045.000 surcharge directionl. lncluded
in this category is both the Palouse Wind Project and the Rattlesnake Wind Project,
which became operational in December 2020. Because these power purchase
agreements are not included in base rates in Idaho, the increase in net expense in the
PCA is a function of the actual hourly generation of the plant times the contract price,
offset by the hourly market value of the power generated. For the year, Palouse Wind
generated 40 aJVIW, and Rattlesnake Flat generated 29 aMW.
Item No. 5 Chanse in Thermal Generafion ($3.563.000 surcharse directionl. The
change in the value of thermal generating units at Colstrip and Kettle Falls is a function
of the change in generation multiplied by the market price of power, netted against the
change in fuel expense. The value of Kettle Falls was $227,000 lower than the
authorized level, and the value of Colstrip was $3,336,000 lower than the authorized
level, for a total surcharge of $3,563,000. A new coal contract went into effect early
2020,which resulted in a higher fuel cost for Colstrip of $17.34 vs. the authorized level
for $14.00. Colstrip generation was approximately 43 aMW above authorized, and
Kettle Falls generated 3 aMW below the authorized level.
Item No. 6 Chanse in Natural Gas Generation (54,270,000 surcharee directiont.
Lower natural gas prices and increased revenue from natural gas-fired generation
resulted in the largest increase (94.27 million) of any of the items when compared to
authorized. Coyote Springs 2 was down from March - June 2021 in order to replace
the three-phase transformer that suffered a failure in 2018. This longer maintenance
Brandon, Di l0
Avista Corporation
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period was required to reconfigure the generating station from one three-phase
transformer to three single-phase transformers. This longer than normal maintenance
period was not considered in the initial power supply authorized. In total, natural gas-
fired plants generated 64 aMW less than authorized, resulting in $4.3 million (Idaho
allocation) of increased power supply expense at the Mid-Columbia ("Mid-C")
electricity trading hub to replace the lower than normal level of natural gas generation.
Item No. 7 Chanse in Net Transmission Evncnsc rebate iivontinn\Net
transmission expense was below the authorized level primarily due to higher third-party
transmission revenues. Transmission expense was slightly higher than the authorized
level and third-party transmission revenue was much higher than the authorized level.
Third-party transmission revenues result from increased purchases or sales from other
regional entities utilizing our transmission system. Fluctuations in short-term
transmission sales are partially a function of other utilities' load/resource balance and
whether they are sellers or buyers.
Item No. 8 Chanse in Misc. Exoense ($60,000 surcharse directiod. Miscellaneous
Expense consisting of broker fees, California Independent System Operator (CAISO)
fees, and the Montana Invasive Species expenses was only slightly higher than
authorized for $60,000.
V. NEW LONG.TERM CONTRACTS ENTERED INTO DURING RE\IEW PERIOD
a. Please provide a brief description of new long-term contracts that the
Company entered into during the Review Period.
A. The Company entered into one long-term power purchase contract during the
Review Period with Chelan County PUD No. 1. This is a l0-year contract for the output of
Rocky Reach Project. The "slice" contract provides Avista with 5% of the output from the
PUD's Rock Island and Rocky Reach hydropower projects from 2024 through 2033. This
Brandon, Di 1l
Avista Corporation
I contract complements an existing contract between Avista and the PUD, and it will mean l0%
of the renewable hydropower output from the Chelan County PUD projects will supply Avista
customers.
IV. SUPPORTING DOCUMENTATION
a. Please provide a brief overview of the documentation provided by the
Company in this filing.
A. The Company maintains a number of documents that record relevant factors
considered at the time of a transaction. The following is a list of documents that are maintained
and that have been provided in electronic format with this filing:
o Natural Gas/Electric Transaction Records: These documents record the key details of
the price, terms, and conditions of a transaction. As part of Avista's workpapers
accompanying this filing, the Company has provided a confidential worksheet showing
each natural gas and electric term (balance of the month or longer) transaction during
the Review Period, including all key transaction details such as trade date, delivery
period, price, volume and counter-party. Additional information can be provided, upon
request, for any of these transactions.
o Position Reports: These daily reports for each trading day in the Review Period provide
a sunmary of transactions and plant generation and the Company's net average system
position in future periods. The Daily Position Reports also contain forward electric and
natural gas prices.
o Variance Analysis: This analysis provides the detailed calculation of the differences
between actual and authorized for the Review Period for each subsection described
above.
a. Does that conclude your pre-filed direct testimony?
A. Yes.
Brandon, Di 12
Avista Corporation
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DAVID J. MEYER
VICE PRESIDENT AND CHIEF COUNSEL FOR
REGULATORY AND GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
I411 E. MISSION AVENUE
P. O.BOX3727
SPOKANE, WASHINGTON 99220
PHONE: [phone], FAX: [phone]
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE POWER COST
ADruSTMENT (PCA) ANNUAL RATE
ADruSTMENT FILING OF AVISTA
CORPORATION
)
)
)
)
CASE NO. AVU-E.2I.OOI
DIRECT TESTIMONY OF
KAYLENE J. SCHULTZ
FOR AVISTA CORPORATION
I Q. Please state your name, present position with Avista Corporation, and
2 business address.
3 A. My name is Kaylene J. Schultz. I am employed by Avista Corporation as
4 Manager of Regulatory Aflairs in the Regulatory Affairs Departrnent. My business address
5 is 1411 East Mission, Spokane, Washington.
6 a. Would you briefly describe your educational background and
7 professional experience?
8 A. Yes. I am a 2010 graduate from Gorrzaga University with a Bachelor of
9 Business Administration degree, majoring in both Accounting and Business
l0 Administration, with a concentration in Management Information Systerns. After spending
1 1 nearly eight years in the banking and capital markets sector, I joined Avista in September
12 2015 as aNatural Gas Analyst in the Company's Gas Supply Department. In January 2019,
13 I joined the Regulatory Affairs Department as a Regulatory Affairs Analyst where I was
14 responsible for preparing annual filings and various applications related to the Purchased
15 Gas Cost Adjustments (PGA) for all jurisdictions. In my current role as Manager of
16 Regulatory Affairs, my primary responsibilities include oversight of the PGA filings,
17 annual Energy Recovery Mechanism (ERM) and Power Cost Adjustment (PCA) filings,
18 preparing the pro forma capital additions general rate case adjusfrnents for all jurisdictions,
l9 and revenue requirement for the Company's Oregon jurisdiction, among other things.
20 O. What is the scope of your testimony in this proceeding?
2l A. My testimony provides a summary of the accounting entries and account
22 balances related to the PCA for the l2-months ended June 30, 2021. My testimony also
23 addresses the proposed surcharge to be effective October 1,2021, which will replace the
24 existing surcharge that went into effect on October 1,2020.
Schultz, Di 1
Avista Corporation
I Q. Are you sponsoring an Exhibit?
2 A. Yes. I am sponsoring Exhibit No. zuS-l. Page 1 of that exhibit details the
3 calculation of the proposed uniform cents per kilowatt-hour PCA surcharge of 0.251p, as
4 well as the impact of the proposed PCA surcharge rate by rate schedule. Page 2 is the
5 proposed PCA tariff, Schedule 66.
6 a. Would you please provide an overview of the most recent history of
7 Avista's PCA methodolory that has been approved by the Idaho Public Utilities
8 Commission ("IPUC"X
9 A. Yes. On June 29,2007 the Commission issued Order No. 30361 in Case No.
l0 AVU-E-07-01. That case dealt with the review of the PCA methodology and method of
1 1 recovery. The Commission approved a change in the PCA methodology from a trigger and
12 cap mechanism to a single annual PCA rate adjustment filing requirement.
13 The Commission also approved a change in the method of the PCA deferral rate
14 adjustment from a uniform percentage basis to a uniform cents per kilowatt-hour basis,
15 efflective with the October 1,2007 rate change. By Order No. 32206 in Case No. GNR-E-
16 10-03 dated March 15, 2011, the Commission modified the retail revenue credit
17 methodology and approved a Load Change Adjustment Rate based on the energy-classified
I 8 portion of embedded production revenue requirement effective April I , 201I .
l9 The Commission approved the following procedural schedule for administering the
20 annual PCA filings:
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August 1
Septernber 1
Company filing for prior July - June deferral period
Review and comments by Staff and othsr interested
parties
Commission Order and effective date of PCA rate
adjustment
Schultz, Di 2
Avista Corporation
October I
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a. Would you please summarize the liling and Order associated with the
existing PCA rate?
A. Yes. On July 31,2020, Avista filed its annual PCA rate adjustnent for the
period July 1, 2019 through June 30,2020, and requested a PCA surcharge rate of 0.0151
per kilowatt-hour efflective October 1,2020. The Commission approved that request in
Case No. AVU-E-20-07,by Order No. 34796, dated October 1,2020.
a. Does the present filing conform to the 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, 2020 through June 30,2021, including interest,
Unamortized balance remaining from the period October 1,2020 through June
30,2021, including interest, and
o Forecast amortization and interest from July 1,2021through September 30,
202t.
a. What were the amounts of deferrals and interest for the period July 1,
2020 through June 30,2021?
A. Table No. I below summarizes the charges for this period:
Table No. 1- Summarv of Deferral Balance
Deferrals (July 2020 - June 2021)
Renewable Enerry Credit Retirenrcnt Benefit
Interest
Total Deferral Balance
$
$
$
7,899,798
(446,075)
16,047
Company witness Ms. Brandon discusses the components that make up the $7,899,798
deferral balance shown above. The $446,075 credit for Renewable Energy Credit
Retirement benefits is to credit Idaho customers for benefits related to the renewable energy
Schultz, Di 3
Avista Corporation
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credits retired to meet Washington's renewable portfolio standards. The RECs used to meet
Washington RPS are tracked 100% in the PCA. The credit is based on the Idaho allocation
of RECs that were retired to meet Washington RPS (WA I-937) that would have been
otherwise sold.
The $ 16,047 interest amount represents interest for the twelve-month period July l,
2020 tlvough June 30,2021. Interest for the l2-month period was calculated using the
Customer Deposit Rate of 2%o for July 2020 throtgh December 2020, and lo/o for January
2021 throu,gh June 2021, per prior Commission order.
a. What surcharge rate is the Company proposing to be effective October 1,
2021?
A. The Company is proposing a uniform cents per kilowatt-hour PCA surcharge
rate of 0.251i, to be effective October 1,2021. Page I of Exhibit No. KJS-I shows the
calculation of the proposed rate. The proposed rate is designed to surcharge the following:
Deferrals (July 2020 - Jure 2021)
RPS Compliance
Renewable Enerry Credit Retirement Benefit
Total Deferral Balance
Unamortired Balance from Previous Deferrals (prior to July 1, 2020)
AmortizafionJuly2020 - June 2021
Interest
Total Remaining Amortization Bal ance
Projected Amortization and Total Interest (July 2021-September 2021) $
TOTAL BALANCE FOR AMORTIZATION
$
s
$
7,899,798
(446,075)
16,047
$7,469,770
46,080
181,730
5,292
$
$
$
$233,102
(89,362)
$7,613,510
After applying the conversion factor related to commission fees and uncollectible
customer accounts to the Total Balance for Amortization shown above, the resulting
balance of $7,646,804 is divided by forecasted kilowatt-hours to derive the proposed
Schultz, Di 4
Avista Corporation
I surcharge rate of 0.251(, per kilowatt-hour.r
2 a. What is the impact of the proposed PCA rate increase by rate schedule?
3 A. Page I of Exhibit No. zuS-l shows the effect of the proposed PCA rate
4 increase by rate schedule. The proposed surcharse rate is 0.251f, per kilowatt-hour, which
5 is 0.236( per kilowaff-hour more than the existing surcharse rate of 0.0150 per kilowatt-
6 hour. Column (f) shows the percentage increase by rate schedule. The overall increase in
7 revenue is2.8%o, or $7.2 million.
8 Q. Whatwill be the impact of the proposed change on an average residential
9 customer?
l0 A. Residential customers using an average of 892 kilowatt-hours per month
I I would see their monthly bills increase from $85.63 to 987.74, an increase of $2.11 per
12 month, or 2.5Yo. This bill impact does not consider the effects of other filings Avista has
l3 made that will go into effect on October 1,2021.
14 a. What programs are in place to help Avista customers pay or manage their
15 bills?
16 A. The Company has several programs available to assist customers with
17 managing their utility bills. Avista's Comfort Level Billing (CLB) plan, based on historical
18 charges or an estimate of future charges,2 approximates a monthly average of the
19 customer's estimated annual billings. The concept of this plan is to help the customer
20 budget for their Avista bill throughout the year by leveling out the seasonal highs and lows
2l of their monthly bills. Additionally, the Company's Customer Assistance Referral and
22 Evaluation Services (CARES) program provides specialized assistance to customers
I Total Balance for Amortization $7,613,510 divided by conversion factor 0.995646: $7,646,804.2 Estimates of future charges are only used when the premise does not have adequate usage history to
determine approximate annual average use.
Schultz, Di 5
Avista Corporation
I encountering medical crises, unemployment, or other personal or financial hardships. This
2 program offers customers access to specifically-trained CARES representatives who
3 provide support to the customer by way of payment arangements, medical certificates, or
4 referrals to local Community Action Agencies (CAAs, or Agencies) or other organizations
5 for help with-among other things-housing, utilities, and medical assistance.
6 [daho customers who have children, elderly or infirmed persons living in the
7 household may also qualifr for Winter Moratorium between the months of December
8 through February each year. From December I through February 28, customers are not
9 required to pay their bills in-full and can instead opt to defer payment throughout these
l0 winter months or make partial payments. The Winter Payment Plan, offered from
ll November 1 through March 31 annually, provides for lower winter bill payments by
12 allowing customers to make monthly payments equal to one-half of the levelized bill
13 amounts, with the balance then due in-fuIl, or a new payment ilrangement established on
14 the balance, by April 1't. In addition, the Company also offers flexible due dates and both
15 short-term as well as long-term payment arrangements for customers having difficulty
16 paying their bills.
17 Avista also has many convenient payment options available for its customers.
18 Automatic Payment Service (APS) allows customers to opt to have their monthly utility
19 bill deducted directly from their checking account or credit card automatically each month.
20 Other services include debit and credit card service, check-by-phone or over the web,
2l preferred due date, electronic billing, as well as many local drop boxes or pay stations for
22 cash or check payments.
23 For Avista's low-income customers, the Federal Low-lncome Home Energy
24 Assistance Program (LIHEAP) provides funding to assist thern in paying their electric and
Schultz, Di 6
Avista Corporation
I natural gas bills. These funds are distibuted through local CAAs. Additionally, Idaho's
2 Housing Preservation Program offers emergency assistance for utility and/or rental
3 payments for qualifoing low-income households. 3 Lastly, Avista's Project Share is a
4 voluntary contribution option allowing customers to contribute donations that are then
5 dishibuted through local Agencies to customers experiencing financial hardship.
6 a. Does that conclude your pre-filed direct testimony?
7 A. Yes, it does.
3 The Housing Preservation Program, offered by Idaho Housing and Finance Association (by award from the
U.S. Deparnnent of the Treasury), can provide up to l5 months of utility and/or rental paynent assistance for
ldaho renters who earn less than 80% of the Area Median Income (AMI). www.idahohousing.com/hpp/
Schultz, Di 7
Avista Corporation
DAVID J. MEYER
VICE PRESIDENT AND CHIEF COUNSEL FOR
REGULATORY AND GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
I4I I E. MISSION AVENUE
P. O.BOX3727
SPOKANE, WASHINGTON 99220
PHONE: (s09) 495-4316, FAX: [phone]s1
BEFORE THE IDAHO PI]BLIC UTILITIES COMMISSION
IN THE MATTER OF THE POWER COST
ADruSTMENT (PCA) ANNUAL RATE
ADruSTMENT FILING OF AVISTA
CORPORATION
)
)
)
)
CASE NO. AVU-E-21O'
DIRECT TESTIMONY OF
KAYLENE J. SCHULTZ
FOR AVISTA CORPORATION
I Q. Please state your name, present position with Avista Corporation, and
2 business address.
3 A. My name is Kaylene J. Schultz. I am employed by Avista Corporation as
4 Manager of Regulatory Affairs in the Regulatory Affairs Department. My business address
5 is 1411 East Mission, Spokane, Washington.
6 a. Would you briefly describe your educational background and
7 professional experience?
8 A. Yes. I am a 2010 graduate from Goruaga University with a Bachelor of
9 Business Administration degree, majoring in both Accounting and Business
l0 Administration, with a concentration in Managefirent lnformation Systerns. After spending
I I nearly eight years in the banking and capital markets sector, I joined Avista in September
12 2015 as aNatural Gas Analyst in the Company's Gas Supply Department. In January 2019,
13 I joined the Regulatory Affairs Department as a Regulatory Affairs Analyst where I was
14 responsible for preparing annual filings and various applications related to the Purchased
15 Gas Cost Adjustments (PGA) for all jurisdictions. In my current role as Manager of
16 Regulatory Affairs, my primary responsibilities include oversight of the PGA filings,
17 annual Energy Recovery Mechanism (ERM) and Power Cost Adjustment (PCA) filings,
18 preparing the pro forma capital additions general rate case adjustments for all jurisdictions,
19 and revenue requirement for the Company's Oregon jurisdiction, among other things.
20 a. What is the scope of your testimony in this proceeding?
2l A. My testimony provides a sunmary of the accounting entries and account
22 balances related to the PCA for the l2-months ended June 30, 2021. My testimony also
23 addresses the proposed surcharge to be effective October 1,2021, which will replace the
24 existing surcharge that went into effect on October 1,2020.
Schultz, Di I
Avista Corporation
1 a. Are you sponsoring an Exhibit?
A. Yes. I am sponsoring Exhibit No. KJS-I. Page I of that exhibit details the
calculation of the proposed uniform cents per kilowatt-hour PCA surcharge of 0.251(, as
well as the impact of the proposed PCA surcharge rate by rate schedule. Page 2 is the
proposed PCA tarife Schedule 66.
a. Would you please provide an overview of the most recent history of
Avista's PCA methodology that has been approved by the Idaho Public Utilities
Commission ("IPUC")?
A. Yes. On Jtne29,2007 the Commission issued Order No. 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 1,2007 rate change. By Order No. 32206 in Case No. GNR-E-
10-03 dated March 15, 2011, the Commission modified the retail revenue credit
methodology and approved a Load Change Adjustment Rate based on the energy-classified
portion of embedded production revenue requirement effective April I,20ll.
The Commission approved the following procedural schedule for administering the
annual PCA filings:
August I
September I
Company filing for prior July - June deferral period
Review and comments by Staff and other interested
parties
Commission Order and effective date of PCA rate
adjustment
Schultz, Di 2
Avista Corporation
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a. Would you please summarize the filing and Order associated with the
existing PCA rate?
A. Yes. On July 31,2020, Avista filed its annual PCA rate adjustment for the
period July 1, 2019 through June 30,2020, and requested a PCA surcharge rate of 0.015p
per kilowatt-hour effective October 1,2020. The Commission approved that request in
Case No. AVU-E-20 -07, by Order No. 34796, dated October l, 2020.
a. Does the present filing conform to the 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 , 2020 tfuough June 30,2021 , including interest,
Unamortized balance ranaining from the period October 1,2020 through June
30,2021, including interest, and
a Forecast amortization and interest from July 1,2021through September 30,
202t.
a. What were the amounts of deferrals and interest for the period July 1,
2020 through June 30,2021?
A. Table No. I below summarizes the charges for this period:
Table No. 1 - Summarv of Deferral Balance
Deferrals (July 2020 - Jr-ure 2021)
Renewable Enerry Credit Retirement Benefit
Interest
Total Deferral Balance
$
$
$
7,899,798
(446,075)
16,047
Company witness Ms. Brandon discusses the components that make up the 97,899,798
deferral balance shown above. The $446,075 credit for Renewable Energy Credit
Retirernent benefits is to credit Idatro customers forbenefits related to the renewable energy
Schultz, Di 3
Avista Corporation
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credits retired to meet Washington's renewable portfolio standards. The RECs used to meet
Washington RPS are tracked 100% in the PCA. The credit is based on the Idaho allocation
of RECs that were retired to meet Washington RPS (WA I-937) that would have been
otherwise sold.
The $16,047 interest amount represents interest for the twelve-month period July 1,
2020 through June 30,2021. Interest for the l2-month period was calculated using the
Customer Deposit Frate of 2o/o for July 2020 through December 2020, and l%o for January
2021through June 2021, per prior Commission order.
a. What surcharge rate is the Company proposing to be effective October 1,
2021?
A. The Company is proposing a uniform cents per kilowatt-hour PCA surcharge
rate of 0.251A to be effective October 1,2021. Page 1 of Exhibit No. KJS-I shows the
calculation of the proposed rate. The proposed rate is designed to surcharge the following:
Deferrals (July 2020 - June 2021)
RPS Compliance
Renewable Enerry Credit Retirement Benefit
Total Deferral Balance
Unamortizrd Balance from Previous Deferrals (prior to July l, 2020)
Amortization July 2020 - June 2021
Interest
Total Remaining Amortization Balance
Projected Amortization and Total lnterest (July 202l-September 2021) $
TOTAL BALANCE FOR AMORTZATION
$
$
$
$
$
$
$
7,899,798
(446,075)
047
7,469,770
46,080
181,730
5,292
233,102
89
$ 7,613,510
I
$
After applying the conversion factor related to commission fees and uncollectible
customer accounts to the Total Balance for Amortization shown above, the resulting
balance of $7,646,804 is divided by forecasted kilowatt-hours to derive the proposed
Schultz, Di 4
Avista Corporation
I surcharge rate of 0.251f, per kilowatt-hour.l
2 a. What is the impact of the proposed PCA rate increase by rate schedule?
3 A. Page I of Exhibit No. zuS-l shows the effect of the proposed PCA rate
4 increase by rate schedule. The proposed surcharge rate is 0.25U per kilowatt-hour, which
5 is 0.236( per kilowatt-hour more than the existing surcharqe rate of 0.0151 per kilowatt-
6 hour. Column (0 shows the percentage increase by rate schedule. The overall increase in
7 revenue is 2.802, or $7.2 million.
8 Q. What wiII be the impact of the proposed change on an average residential
9 customer?
10 A. Residential customers using an average of 892 kilowatt-hours per month
11 wouldseetheirmonthlybillsincreasefrom$85.63 to$87.74, anincreaseof $2.11per
12 month, or 2.5o/o. This bill impact does not consider the effects of other filings Avista has
13 made that will go into effect on October 1,2021.
14 a. What programs are in place to help Avista customers pay or manage their
15 bills?
16 A. The Company has several programs available to assist customers with
17 managing their utility bills. Avista's Comfort Level Billing (CLB) plan, based on historical
18 charges or an estimate of future charges,2 approximates a monthly average of the
19 customer's estimated annual billings. The concept of this plan is to help the customer
20 budget for their Avista bill throughout the year by leveling out the seasonal highs and lows
21 of their monthly bills. Additionally, the Company's Customer Assistance Referral and
22 Evaluation Services (CARES) program provides specialized assistance to customers
I Total Balance for Amortization $7,613,510 divided by conversion factor 0.995646: $7,646,804.2 Estimates of future charges are only used when the premise does not have adequate usage history to
determine approximate annual average use.
Schultz, Di 5
Avista Corporation
I encountering medical crises, unernployment, or other personal or financial hardships. This
2 program offers customers access to specifically-trained CARES representatives who
3 provide support to the customer by way of payment ilrangements, medical certificates, or
4 referrals to local Community Action Agencies (CAAs, or Agencies) or other organizations
5 for help with-among other things-housing, utilities, and medical assistance.
6 ldaho customers who have children, elderly or infirmed persons living in the
7 household may also qualifu for Winter Moratorium between the months of December
8 through February each year. From December I through February 28, customers are not
9 required to pay their bills in-full and can instead opt to defer payment throughout these
10 winter months or make partial payments. The Winter Payment Plan, offered from
1l November 1 through March 3l annually, provides for lower winter bill payments by
12 allowing customers to make monthly payments equal to one-half of the levelized bill
13 amounts, with the balance then due in-fuIl, or a new payment arrangement established on
14 the balance, by April I't. In addition, the Company also offers flexible due dates and both
15 short-term as well as long-term payment arrangements for customers having difficulty
16 paying their bills.
17 Avista also has many convenient payment options available for its customers.
t8 Automatic Payment Service (APS) allows customers to opt to have their monthly utility
19 bill deducted directly from their checking account or credit card automatically each month.
20 Other services include debit and credit card service, check-by-phone or over the web,
2l preferred due date, electronic billing, as well as many local drop boxes or pay stations for
22 cash or check payments.
23 For Avista's low-income customers, the Federal Low-Income Home Energy
24 Assistance Program (LIHEAP) provides funding to assist them in paying their electric and
Schultz, Di 6
Avista Corporation
I natural gas bills. These funds are distributed through local CAAs. Additionally, Idaho's
2 Housing Preservation Program offers emergency assistance for utility and/or rental
3 payments for qualifuing low-income households. 3 Lasly, Avista's Project Share is a
4 voluntary contribution option allowing customers to contribute donations that are then
5 distributed through local Agencies to customers experiencing financial hardship.
6 a. Does that conclude your pre-filed direct testimony?
7 A. Yes, it does.
3 The Housing Preservation Program, offered by Idaho Housing and Finance Association (by award from the
U.S. Departnent of the Treasury), can provide up to 15 months of utility and/or rental palment assistance for
Idaho renters who eam lsss than 80% of the Area Median Income (AMD. www.idahohousins.com,/hpp/
Schultz, Di 7
Avista Corporation
DAVID J. MEYER
VICE PRESIDENT AND CHIEF COUNSEL FOR
REGULATORY AND GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
I41I E. MISSION AVENUE
P. O.BOX3727
SPOKANE, WASHINGTON 99220
PHONE: (s09) 489-0500, FAX: [phone]
BEFORE TIIT' IDAIIO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE POWER COST
ADruSTMENT (PCA) ANNUAL RATE
ADruSTMENT FILING OF AVISTA
CORPORATION
)
)
)
)
CASENO. AW.E.2I.OJ
EXHIBIT NO. zuS-l
KAYLENE J. SCHULTZ
FOR AVISTA CORPORATION
(000s of Dollars)
(000s of kwh)
Line
No.
Type of
Service
(a)
AVISTA UTILITIES
IDAHO ELECTRIC
IMPACT OF PROPOSED SCHEDUTE 66 PCA DECREASE
PROPOSED RATE TO BE EFFECTIVE OCTOBER 1, 2021
Schedule
Number
(b)
Forecasted
Kilowatt-hours
(cX1)
TotalBilled
Revenue
at Present
Rates
(d)
Residential
General Service
Large General Service
Extra Large General Service
Clearwater
Pumping Service
Street & Area Lights
Total
9 Proposed rate10 Present rate (AVU-E-20-07, Order No.34795)11 Rate Change
L
2
3
4
5
6
7
I
L2
13
L4
15
15
t
tL,L2
2L,22
25
25P
3L,32
4L-49
L,229,3L6 s LL9,79
4t0,275 s 39,85
568,237 5 47,0e
350,528 $ 18,03
418,068 s ZO,ga
6L,757 s 5,56
LO,24O s 3,79@
$
s
0.002s1 s
0.0001s s
7,652
453
Proposed rate
Total Amortization and Deferral Balance including interest thru 9l30l2L
Conversion factor (Case No. AVU-E-21-01, Final Stipulation & Settlement)
Revenue requirement
kWh's from above
Proposed rate:
s 0.00235 s 7,t99
s 7,6L4
0.99s546
s 7,il7
3,048,42Ls 0.002s1
(1) Source: Calendar Load forecast for the twelve month period October t,202L - September 30,2022
AVISTA CORPORATION
d/b/a Avista Utilities
SCHEDULE 66
TEMPORARY POWER COST ADJUSTMENT. IDAHO
APPLICABLE:
To Customers in the State of ldaho where the Company has electric service
available. This Power Cost Adjustment shall be applicable to all retail customers for
charges for electric energy sold. This Rate Adjustment is designed to recover or
rebate a portion of the difference between actual and allowed net power supply costs.
MONTHLY RATE:
The energy charges of electric Schedules 1, 11, 12,21, 22, 25,25P, 31, 32, and
41-49 are to be increased by 0.2511 per kilowatt-hour in all blocks of these rate
schedules.
SPECIAL TERMS AND CONDITIONS:
The rates set forth under this Schedule are subject to periodic review and
adjustment by the IPUC based on the actual balance of deferred power costs.
Service under this schedule is subject to the Rules and Regulations contained
in this tariff.
The above Rate is subject to increases as set forth in Tax Adjustment
Schedule 58.
lssued July 30, 2021 Effective October 1, 2021
l.P.U.C. No.28
Issued by
By
Twenty-third Revision Sheet 66
Canceling
Revision Sheet 66
Exhibit No. KJS-1
Case No. AVU-E-21-_
Avista Utilities
Patrick Ehrbar - Director of Regulatory Affairs
DAVID J. MEYER
VICE PRESIDENT AND CHIEF COUNSEL FOR
REGULATORY AND GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
141I E. MISSION AVENUE
P. O.BOX3727
SPOKANE, WASHINGTON 99220
PHONE: [phone], FAX: [phone]
BEFORE TIIT', IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE POWER COST
ADruSTMENT (PCA) ANNUAL RATE
ADruSTMENT FILING OF AVISTA
CORPORATION
)
)
)
)
CASE NO. AW-E-21-09
EXHIBIT NO. KJS.I
KAYLENE J. SCHULTZ
FOR AVISTA CORPORATION
AVISTA UTILITIES
IDAHO ELECTRIC
IMPACT OF PROPOSED SCHEDULE 66 PCA DECREASE
PROPOSED RATE TO BE EFFECTIVE OCTOBER 1. 2021
(000s of Dollars)
(000s of kWh)
Line
No.
1
2
3
4
5
6
7
8
9
10
11
Type of
Service
(a)
Residential
General Service
Large General Service
Extra Large General Service
Clearwater
Pumping Service
Street & Area Lights
Total
Proposed rate
Present rate (AVU-E-20-07, Order No. 34795)
Rate Change
Prooosed rate
Total Amortization and Deferral Balance including interest thru 9l30l2l
Conversion factor (Case No. AVU-E-21-01, Final Stipulation & Settlement)
Revenue requirement
kWh's from above
Proposed rate:
Schedule
Number
(b)
1
LL,L2
2L,22
25
25P
31,32
4L-49
LLg,79
39,85
47,0C
18,03
20,84
5,56
Forecasted
Kilowatt-hours
(cXr)
TotalBilled
Revenue
at Present
Rates
(d)
t,229,3L6 s
4LO,275 s
568,237 s
350,528 s
418,058 s
6L,757 s
L0,240 s 3,78@
s
s
0.002s1 s
0.0001s s
7,652
453
L2
13
L4
15
16
s 0.00235 s
s
7,L99
7,6L4
0.995546
7,il7
3,048,42Ls 0.002s1
s
(1) Source: Calendar Load forecast for the twelve month period October L,2O2L - September 30,2022
AVISTA CORPORATION
d/b/a Avista Utilities
SCHEDULE 66
TEMPORARY POWER COST ADJUSTMENT. IDAHO
APPL!CABLE:
To Customers in the State of ldaho where the Company has electric service
available. This Power Cost Adjustment shall be applicable to all retail customers for
charges for electric energy sold. This Rate Adjustment is designed to recover or
rebate a portion of the difference between actual and allowed net power supply costs.
MONTHLY RATE:
The energy charges of electric Schedules 1, 11, 12, 21,22, 25, 25P, 31,32, and
41-49 are to be increased by 0.2511 per kilowatt-hour in all blocks of these rate
schedules.
SPECIAL TERMS AND CONDITIONS:
The rates set forth under this Schedule are subject to periodic review and
adjustment by the IPUC based on the actual balance of deferred power costs.
Service under this schedule is subject to the Rules and Regulations contained
in this tariff.
The above Rate is subject to increases as set forth in Tax Adjustment
Schedule 58.
Effective October'1, 2021lssued July 30, 2021
Twe
Twenty{hird Revision Sheet 66
Canceling
Revision Sheet 66l.P.U.C. No.28
ssued by
By
Exhibit No. KJS-1
Case No. AVU-E-2'|-_
Avista Utilities
Patrick Ehrbar - Director of Regulatory Affairs