20220518Comments.pdf

CHRIS BURDIN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-007 4
[phone]
IDAHO BARNO.98IO
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Street Address for Express Mail:
1 1331 W CHINDEN BLVD, BLDG 8, SUITE 2OI-A
BOISE, ID 83714
Attomey for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE ELECTRIC LINE
EXTENSION SCHEDULE 51 ANNUAL RATE
ADJUSTMENT FILING OF AVISTA
CORPORATION
CASE NO. AVU.E.22-05
COMMENTS OF THE
COMMISSION STAFF
COMES NOW, the Staff the Idaho Public Utilities Commission ("Staff'), by and through
its Attomey of record, Chris Burdin, Deputy Attomey General, and submits the following
comments.
BACKGROT]ND
On March 11,2022, Avista Corporation, dlbla Avista Utilities ("Avista" or "Company")
applied to the Idaho Public Utilities Commission ("Commission") for approval to update costs and
administrative changes to its Electric Line Extension Schedule 51 ("Schedule 51").
Schedule 5l incorporates average costing for electrical facilities commonly used to extend
service. The Company states that Schedule 5l sets forth "Basic and Exceptional Costs" that have
a fixed and variable component, with the variable component stated on a cost-per-foot basis and
are consistently used for electric line extensions.
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ISTAFF COMMENTS MAY t8,2022
Staff reviewed the company'stffi:f":'rLcommends approval of the update in
average costs and construction allowances to the Company's Electric Line Extension Schedule 51.
As a result of its investigation, Staff concludes the Company's method for calculating average
costs is consistent with past Schedule 5l filings, and Staffbelieves that the proposed construction
allowances are based on embedded line extension costs from the last general rate case and are
reasonable. This recommendation is based on Staff s review of the workpapers provided with the
application, meetings and correspondence with the Company, and the Company's responses to
Staff s production requests.
Staff proposes a change to the Administrative Changes proposed by the Company. Staff
asserts that the Company's proposed change from o'Basic Cost" to "Basic and Exceptional Cost"
was confusing, and Staff worked with the Company to develop a clearer explanation of Basic and
Exceptional costs defi nitions.
A. Update Calculation
1. Construction Allowances
The Company updated the allowances applicable to new residential, commercial, and
industrial customer services. The Company continues to use an embedded cost method for
calculating the revised allowances that is designed to ensure similar investment in
distribution/terminal facilities as those in current facilities reflected in base rates. The following
table summ arized the proposed allowance change s :
Table 1. Proposed Allowance Changes
Service Schedule Existine Proposed
Schedule I Individual Customer (per unit)$ l,9oo $2,065
Schedule 1 Duplex (per unit)$1 520 $1,650
Schedule I Multiplex (per unit)$1 I40 $1,240
Schedule llll2 (per kWh)$ 0.1s486 $0.t6674
Schedule 21122 (per kWh)$ 0.14218 $0.1 5360
Schedule 31132 (per kWh)$ 0.24688 $0.26623
2STAFF COMMENTS MAY 18,2022
Staff verified that the Company utilized its Cost of Service study from its most recent
general rate case filing,lupdated forthe base rates approved in OrderNo. 35156 as the basis of
the embedded costs calculation. Staff has reviewed the calculations for the proposed allowances
and believes the allowances are accurate.
2. Average Costs
Staff reviewed the Company's filing, workpapers, and production responses, and Staff
agrees with the Company's change to its average costs. These costs are calculated using recent
average actual costs for facilities including transformers and conduit which are commonly used
for line extensions. The Company has used this method to update its line extension costs
previously for Schedule 51.2 The Company proposes to update both overhead and underground
circuit line extensions for primary and secondary voltages, as well as service for either
underground or overhead installations. Pad-mount and overhead transformer costs were also
updated. See Table No. 2 infra. Subsequently, residential development costs were updated to
reflect these revised costs. See TableNo.3 infra.
The largest percentage increase to the proposed cost changes during 2021 was in the
variable cost for underground primary and secondary circuits due to an increase in 2-inch and 3-
inch conduit. Chemical suppliers for thermoplastic resins used in the manufacturing of electrical
conduit saw significant price increases during the past year. These resin suppliers located
prinrarily along the Texas gulf coast were taken offline due to hurricanes and storms affecting
supplies to the market. Per the US Bureau of Labor Statistics, Producer Price Index
thermoplastic resins from Novernber 2020 to November 2021 increased by nearly 50%. Staff
confirmed this information and believes the Company's basis for the increase in costs are
reasonable. Both the present and proposed costs including the percent change are shown in Table
No. 2 below.
I See Case No. AVU-E-21-01.
2 See Case No. AVU-E-00-1; Order No. 28562
JSTAFF COMMENTS MAY 18,2022
Present Pronosed "/o Chanse
Overhead Primarv Circuit
Fixed Cost
Variable Cost
$ 4,677
$ 9.17
$
$
4,521
8.75
-3.3%
-4.6%
Undersround Primarv Circuit
Fixed Costs
Variable Costs
$ 1,920
$ 10.01
$
$
1,958
I 1.15
2.0%
n.4%
Undereround Secondarv Circuit
Fixed Costs
Variable Costs
$ 394$ 8.60
$
$
392
1 1.55
-0.3%
343%
Overhead Secondarv Circuit
Fixed Costs $ 1,936 $I ,843 -4.8%
Overhead Service Circuit
Underground Service Circuit
$ 4.27
$ 8.43
$
$
3.96
9.14
-7.3%
8.4%
Overhead Transformer
Padmount Transformer
s 2,345
$ 3,477
$
$
2,508
3,597
7.0%
3.s%
Table 2. Summary of Proposed Cost Changes
The Company asserts that because of these increases, residential development costs are
also higher as shown in Table 3 below. Staff believes that the proposed updates reflect the
increases in cost inputs.
Table 3. Residential Development Cost Changes
B. Administrative Changes
The Company proposes to update its terminology to change the term "Basic Cost" to "Basic
and Exceptional Cost." The Basic and Exceptional Cost will continue to cover all costs necessary
to construct the line extension and will not impact the price customers pay for line extensions. The
4
Residential Developments Present Proposed
Total Cost per Lot
Less: Service Cost
$1,772
s 422
$2,070
Developer Responsibility $ 13s0 $ 1.612
Developer Refundable Payment $1,350 $1,612
Builder Non-Refundable Payment $s 5
Allowance $1,900 $2,065
STAFF COMMENTS MAY 18,2022
Company realizedthat there is difficulty in understanding the provision outlined in the Company's
tariff Schedule regarding Basic Cost, and in order to make Schedule 5l easier for customers to
understand, the Company proposes to update it terminology to avoid confusion.
In Staff s review of the proposed change from "Basic Cost" to "Basic and Exceptional
Cost," Staff determined that the terminology was still subject to confusion. Staff worked with the
Company to develop separate definitions for "Basic Cost" and "Exceptional Cost" that provide
greater clarity and will reduce confusion for customers. Staff recommends the Company submit a
compliance filing updating Schedule 5l with the separate definitions following a Commission
order.
C. Customer Notice
The Company's customer notice was included with its Application. Staff reviewed the
document and determined that it meets the requirements of Rule 125 of the Commission's Rules
of Procedure (IDAPA 31.01.01). The notice was mailed to the relevant customers on March 23,
2022, providing a reasonable opportunity to file timely comments with the Commission by the
May 18, 2022, comment deadline. As of May 17, 2022, the Commission has received no
comments from customers.
STAFF RECOMMENDATIONS
Staff believes the Company's proposals are reasonable and conform with Commission
Order No. 28562. Staff recommends the Company's proposed costs be approved. Staff
recommends that the new definitions of "Basic Cost" and "Exceptional Cost" be included in the
Company's new Schedule 5l Tariff as a compliance filing.
Respectfully submitted this lgtL day of May 2022
tAt*4
Chris Burdin
Deputy Attorney General
Technical Staff: Kathy Stockton
Rick Keller
Robin Maupin
Curtis Thaden
i : um isc/comments/avue22. 5tbklsrkrmct comments
5STAFF COMMENTS MAY 18,2022
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS ISTH DAY OF MAY 2022,
SERVED THE FOREGOING COMMENTS OF TIrE COMMTSSION STAX'X" IN
CASE NO. AVU-E-22-05, BY E-MAILING A COPY THEREOF, TO THE
FOLLOWING:
PATRICK EHRBAR
DIRECTOR REGULATORY AFFAIRS
AVISTA CORPORATION
POBO)(3727
SPOKANE WA99220-3727
E-mail : [e-mail]
dockets@avi stacom. com
DAVID J MEYER
VP & CHIEF COUNSEL
AVISTA CORPORATION
POBOX3727
SPoKANE W499220-3727
E-mail: [e-mail]
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SECRETARY
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a
CERTIFICATE OF SERVICE