20220729Schultz Direct and Exhibit.pdf

DAVID J. MEYER
VICE PRESIDENT AND CHIEF COI.]NSEL FOR
REGI.JLATORY AND GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
14I I E. MISSION AVENUE
P. O.BOX3727
SPOKANIE, WASHINGTON 99220
PHONE: [phone], FAX: [phone]
BEFORE THE IDAIIO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE POWER COST
ADruSTMENT (PCA) ANNUAL RATE
ADruSTMENT FILING OF AVISTA
CORPORATION
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cAsENO. AW-E-z2-il_
DIRECT TESTMONY 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 ernployed by Avista Corporation as
4 Manager of Regulatory Affairs in the Regulatory Affairs Department. My business address
5 is 141I East Mission, Spokane, Washington.
6 a. Would you briefly describe your educational background and
7 professional experience?
8 A. Yes. I am a graduate from Gonzaga University with a Bachelor of Business
9 Administration degree, majoring in both Accounting and Business Administation, with a
10 concenffation in Management Information Systems. After spending nearly eight years in
I I the banking and capital markets sector, I joined Avista in September 2015 as a Natural Gas
12 Analyst in the Company's Gas Supply Deparbnent, now Energy Supply. In January 2019,
13 I joined the Regulatory Affairs Deparbnent as a Regulatory Affairs Analyst where I was
14 responsible for preparing various annual filings and applications. [n my current role as
15 Manager of Regulatory Affairs, my primary areas of responsibility include preparation of
16 general rate case filings, annual power supply related filings, among other things.
17 a. \trhat is the scope of your testimony in this proceeding?
18 A. My testimony provides a swnmary of the accounting entries and account
19 balances related to the PCA for the l2-months ended June 30, 2022. My testimony also
20 addresses the proposed surcharge to be effective October 1,2022, which will replace the
2l existing surcharge that went into effect on October I,2021.
22 a. Are you sponsoring any Exhibits?
23 A. Yes. I am sponsoring Exhibit No. KJS-I. Page I of that exhibit details the
Schultz, Di 1
Avista Corporation
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calculation of the proposed uniform cents per kilowatt-hour PCA surcharge of 0.150p, as
well as the impact of the proposed PCA surcharge rate by rate schedule. Page 2 is the
proposed PCA taritr, 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 June 29, 2007, the Commission issued Order No. 30361 in Case
No. AW-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 adjustrnent filing requirement.
The Commission also approved a change in the method of the PCA deferral rate
adjustuent 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 l, 2011.
The Commission approved the following procedural schedule for administering the
annual PCA filings:
August I Company filing for prior July - June deferral period
September I Review and comments by Staff and other interested
parties
October 1 Commission Order and effective date of PCA rate
adjustment
a. Would you please summarize the filing and Order associated with the
Schultz, Di 2
Avista Corporation
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existing PCA rate?
A. Yes. On July 30,2021, Avista filed its annual PCA rate adjustment for the
period July 1, 2020 through June 30, 2021, and requested a PCA surcharge rate of 0.2519
per kilowatt-hour effective October l,2Ul. The Commission approved that request in
Case No. AVU-E-21-09, by Order No. 35184, dated September 30,202I.
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 adjustrnent is based
on the following:
o Deferrals fortheperiodJuly 1,202I throughJune 30,2022,including interest,
Unamortized balance remaining from the period October 1,2021through June
30,2022, including interest, and
Forecast amortization and interest from July 1,2022 through September 30,
2022.
a. What were the amounts of deferrals and interest for the period July 1,
2021 through June 30,2022?
A. Table No. I below summarizes the charges for this period:
Table No. 1- Summarv of Deferral Balance
Company witness Ms. Brandon discusses the components that make up the
$4,907,111 deferral balance shown above. The $712,187 credit for Renewable Energy
Credit Retirement benefits is to credit ldaho customers forbenefits related to the renewable
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Avista Corporation
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Deferrals (July202t - Jqg ?022)
Renewabh Enerry Credit Retirerrcrr Berrcft
Ltrerest
Total Deferral Balance
$
$
$
4,907,111
(712,187)
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energy credits (REC) retired to meet Washington's renewable portfolio standards (RPS).
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 that would have
been otherwise sold. The $42,385 interest amount represents interest for the twelve-
month period July 1, 2021 through June 30,2022. lnterest for the l2-month period was
calculated using the Customer Deposit Rate of lo/o,per prior Commission order.
a. What surcharge rate is the Company proposing to be effective October
1,2022?
A. The Company is proposing a uniform cents per kilowatt-hour PCA
surcharge rate of 0.1501 to be effective October 1,2022. Page 1 of Exhibit No. KJS-I
shows the calculation of the proposed rate. The proposed rate is designed to surcharge the
following as shown in Table No. 2 below:
Table No. 2 - Amortization Balance Calculation
After applying the conversion factor related to commission fees and uncollectible
Schultz, Di 4
Avista Corporation
Unanrortired Balarrce from Previors Deferrals (prior to Jr"ily I , 2021)
Anrortization Jruly 2021 - Jwp2022
lterest
fotal nernaining Annrtization Bahnce
Projected Arnortization and Total Lterest (July 2022-Septetber 2022) $
$
$
$
$
$
$
2,122,023
758
TOTAL BALANCE FOR AMORTIZATION 4$
(JulyDeftnals June202 2022)4,907,111
42,385
(712,1
7,702,972
(5,639,772
58,923
4,237,309
FJ$ Conp!rype
Renewable Enerry Credit Retirenerfi Berefit
Total Deftnal Bahrpe
I customer accounts to the "Total Balance for Amortization" shown above, the resulting
2 balance of $4,606,631 is divided by forecasted kilowatt-hours to derive the proposed
3 surcharge rate of 0.150p per kilowatt-hour.l
4 a. What is the impact of the proposed PCA rate decrease by rate schedule?
5 A. Page 1 of Exhibit No. IOS-1 shows the effect of the proposed PCA rate
6 decrease by rate schedule. The proposed surcharqe rate is 0.1500 per kilowatt-hour, which
7 is 0.101P per kilowatt-hour less than the existing surcharqe rate of 0.251i, per kilowatt-
8 hour. Column (f) shows the percentage decrease by rate schedule. The overall decrease in
9 revenue is l.2Yo, or $3.1 million.
10 a. What will be the impact of the proposed change on an average
11 residentialcustomer?
12 A. Residential customers using an average of 892 kilowatt-hours per month
13 would see their monthly bills decrease from $86.29 to $85.39, a decrease of $0.90 per
14 month, or 1.0%o. This bill impact does not consider the effects of other filings Avista has
l5 made that will go into effect on October I,2022.
16 a. What programs are in place to help Avista customers pay or manage
L7 their bills?
18 A. The Company has several programs available to assist customers with
19 managing their utility bills. Avista's Comfort Level Billing (CLB) plan, based on historical
20 charges or an estimate of futtre charges,2 approximates a monthly average of the
2l customer's estimated annual billings. The concept of this plan is to help the customer
I Total Balance for Amortization $4,586,574 divided by conversion factor 0.995646: $4,606,631.2 Estimates of future charges are only used when the premise does not have adequate usage history to
determine approximate annual average use.
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Avista Corporation
I budget for their Avista bill throughout the year by leveling out the seasonal higfu and lows
2 of their monthly bills. Additionally, the Company's Customer Assistance Referral and
3 Evaluation Services (CARES) prograrn provides specialized assistance to customers
4 encountering medical crises, unemployment, or other personal or financial hardships. This
5 program offers customers access to specifically-trained CARES representatives who
6 provide support to the customer by way of payment arrangements, medical certificates, or
7 refenals to local Community Action Agencies (CAAs, or Agencies) or other organizations
8 for help with-among other things-housing, utilities, and medical assistance.
9 Idaho customers who have children, elderly or infirmed persons living in the
l0 household may also qualiff for Winter Moratorium between the months of December
11 through February each year. From December 1 through February 28, customers are not
12 required to pay their bills in-full and can instead opt to defer payment throughout these
13 winter months or make partial payments. The Winter Payment PlarU offered from
14 November I through March 3l annually, provides for lower winter bill payments by
15 allowing customers to make monthly payments equal to one-half of the levelized bill
16 amounts, with the balance then due in-fuIl, or a new payment arrangement established on
17 the balance, by April l't. In addition, the Company also offers flexible due dates and both
18 short-term as well as long-term payment arrangements for customers having difficulty
19 paymg theirbills.
20 Avista also has many convenient billing and payment options available for its
2l customers. For billing purposes, all customers have the opportunity to designate their
22 preferred communication method for their billing and associated rerninders-such options
23 include paper copy, e-mail, or even text messaging. Forpayments, the Automatic Payment
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Avista Corporation
1 Service (APS) allows customers to opt to have their monthly utility bill deducted directly
2 from their checking account or credit card automatically each month. Other payment
3 services include debit and credit card service, check-by-phone or over the web, preferred
4 due date, electronic billing, pay-by-text, as well as many local drop boxes or pay stations
5 for cash or check payments.
6 For Avista's low-income customers, the Federal Low-lncome Home Energy
7 Assistance Progtam (LIHEAP) provides funding to assist them in paying their electric and
8 natural gas bills. These funds are distributed through local CAAs. Additionally, Idaho's
9 Housing Preservation Progtam offers emergency assistance for utility and/or rental
10 payrrents for qualifuing low-income households.3 Lastly, Avista's Project Share is a
11 voluntary contribution option allowing customers to contribute donations that are then
12 distributed through local Agencies to customers experiencing financial hardship.
13 a. Does that conclude your pre-filed direct testimony?
14 A. Yes, it does.
3 The Housing Preservation Program, offered by Idaho Housing and Finance Association (by award from the
U.S. Department of the Treasury), can provide up to l5 months of utility and/or rental payment assistance for
Idaho renters who earn less than 80% of the Area Median Income (AMI). www.idahohousine.com/hnp/
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Avista Corporation
DAVID J. MEYER
VICE PRESIDENT AND CHIEF COUNSEL FOR
REGULATORY AND GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
1411 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) AI.INUAL RATE )
ADruSTMENT FILING OF AVISTA )CoRPoRATTON )
CASE NO. AVU-E-Z}-I
'
E)C{IBIT NO. zuS-l
KAYLENE J. SCHI.'LTZ
FOR AVISTA CORPORATION
(O(Es of Dollars)
(000s of kwh)
Line
AVISTA UfltMES
IDAHO EI"ECIRIC
IMPACI OF PROPOSED SCHEDUI,"E 55 PCA INCREASE
PROPOSED RATE TO BE EFFECNVE OCTOBER 1. 2022
Schedule Forecasted
Number Kilowatt-hours
Total Bllled
Rarenue
at Present
Ealer
(d)
Proposed
Sch.66
Chanre
Percent
change
on Bllled
Eseola
(fl!9.
Type of
Service
(a)
Residential
General Serylce
Large GeneralSeMce
E,ffa Large General s€wice
Cleamater
Pumpint Servlce
Street & Area l-ights
Total
Proposed rate
Present rate (Avu-E-21{9, Order No. 35184)
Rate chante
Prooosed rate
Total Amortlzaton and Deferral Balance includlng lnterest thru 9/30/22
Conversion factor (case No. AVU-E-21{1, Final Stlpulation & Setdement)
Rarenue requirement
kWh's from above
Proposed rate:
0.00150 s
0.002s1 ss (0.00101) s (3,@9)
s 4,587
0.995646
s 4,fi7
3,069/449S o.oorso
3,069,449s 255,610 s (3,099)
chftk
4,ffi
7,701
(el(cXr)(b)
s
s
1
2
3
4
5
6
7
8
9
10
11
1
TL,L2
2t,22
25
25P
31.,32
4t49
1,253,0G s
1t44,816 s
539,070 s
348,288 s
4L2,2t0 5
51,860 5
10,197 s
115,103 s
39,048 s
52,057 s
19,054 s
20,s36 s
5,978 s
3,834 s
(1,256)
(449)
(s44)
(3s2,
(416)
(62)
(10)
-L.t%
-1..t%
-1.,@6
-1.896
-2.86
-L,@6
-0.3%
-L.2%
-t,21*
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(1) Source: Calendar Load forecast for the twelve month period October 1, 2022 - September 30, 2023
Exhibit No. K,$1
Ce!6 No. AW€-21-_
Page 1 ol2
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
4149 are to be increased by 0.1506 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 29,2022 Effective October 1, 2022
I.P.U.C. No.28
lssued by
By
Twenty-fourth Revision Sheet 66
Canceling
Revision Sheet 66
Exhibit No. KJ91
Case No. AW-E-21-_
Page2ot2
Avista
Patrick Ehrbar - Director of Regulatory Affairs