20220929Final_Order_No_35543.pdf

ORDER NO. 35543 1

Office of the Secretary
Service Date
September 29, 2022

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

On July 29, 2022, Avista Corporation (“Company”), filed its annual Power Cost
Adjustment (“PCA”) Application requesting to adjust the PCA surcharge rate for the period of
October 1, 2022 to September 30, 2023. The Company included a copy of the proposed tariff
Schedule 66, Temporary Power Cost Adjustment-Idaho (“Schedule 66”), with the proposed PCA
rate. The Company represented that residential customers using an average of 892 kilowatt-hours
per month would see their monthly bills decrease from $86.29 to $85.39, a decrease of $0.90 per
month, or 1%, if the Application is approved. The Company requested that this matter be processed
by modified procedure, and that the proposed rates take effect on October 1, 2022.
On August 11, 2022, the Commission issued a Notice of Application and Notice of
Modified Procedure. Order No. 35496. Commission Staff submitted comments to which the
Company replied. No other public comments were submitted.
Having reviewed the record, the Commission now issues this Order approving the
Company’s Application.
BACKGROUND
The Company’s PCA is an annual adjustment mechanism that tracks changes in the
Company’s “hydroelectric generation, secondary prices, thermal fuel costs, and other changes in
power contract revenues and expenses.” Application at 2.
The present surcharge of 0.251¢ per kilowatt-hour (“kWh”) became effective October
1, 2021, and was primarily associated with power supply costs that were higher than those included
in retail rates, due to higher wholesale electric and natural gas prices. Case No. AVU-E-21-09,
Order No. 35184. The surcharge rate ends on September 30, 2022. Id.
THE APPLICATION
The Company requested the Commission approve a PCA surcharge rate of 0.150¢ per
kWh. The Company’s request is a decrease from the 0.251¢ per kWh currently being collected as
approved in Order No. 35135. If approved, the new PCA surcharge would represent an overall
IN THE MATTER OF AVISTA
CORPORATION’S ANNUAL POWER COST
ADJUSTMENT (PCA) APPLICATION.

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CASE NO. AVU-E-22-11

ORDER NO. 35543
ORDER NO. 35543 2

decrease of $3.1 million or 1.2% in Company revenues when accounting for the expiration of the
existing surcharge.
The Company submitted written testimony from Company witnesses who explained
the factors contributing to the power cost deferrals included in the proposed PCA adjustment. The
Company also represented that it has filed monthly reports with its actual PCA deferral entries to
date, and provided updated tariffs in Exhibit A.
STAFF COMMENTS
Staff reviewed the Company’s Application, Exhibits, written testimony, audit findings,
and responses to production requests. Staff audited the Company’s Net Power Costs (“NPC”) data
and analyzed the natural gas purchases, market purchases, transmission revenue, and expenses and
other deferral items. Staff concluded that the Company’s various power cost transactions were
reasonable, prudently incurred, and complied with previous Commission orders and the
Company’s risk management principles.
Staff recommended that the Commission: (1) approve the Company’s request to revise
its tariff Schedule 66, as filed, reducing the Company’s annual revenue by $3.1 million, effective
as of October 1, 2022; (2) authorize the Company to recover Energy Imbalance Market (“EIM”)
incremental expenses in the PCA, up to the benefits realized from the EIM, until its next general
rate case where these costs can be reviewed and included in base rates; (3) order the Company to
provide Staff an explanation of the Company’s method for measuring EIM benefits and how it
differs from the California Independent System Operator’s (“CAISO”) method; and (4) accept
late-filed comments from customers.
COMPANY COMMENTS
The Company generally agreed with Staff’s comments, but wanted to clarify the
Company’s position on the EIM methodology on operations and maintenance (“O&M”) expenses
and EIM benefits. The Company asserted that it currently has authority under Order No. 35156 to
reflect Idaho’s share of incremental EIM and O&M expenses through the PCA, up to Idaho’s share
of EIM benefits that flow through the PCA, effective as of the March 1, 2022 “go live” date. While
Staff proposed that the Commission use the next general rate case to authorize EIM incremental
expenses, the Company would prefer to continue using the approved method of addressing this
matter in the PCA.

ORDER NO. 35543 3

COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over this matter under Idaho Code §§ 61-502 and 61-
503. The Commission is empowered to investigate rates, charges, rules, regulations, practices, and
contracts of public utilities and to determine whether they are just, reasonable, preferential,
discriminatory, or in violation of any provision of law, and may fix the same by order. Idaho Code
§§ 61-502 and 61-503. The Company is an electrical corporation under Idaho Code § 61-119 and
a public utility under Idaho Code § 61-129.
Having reviewed the record, including the Application, Company testimony, Staff’s
comments, and the Company’s reply, the Commission finds the Company’s various power cost
transactions were reasonable, prudently incurred, and complied with previous Commission orders
and the Company’s risk management principles. The Commission approves the Company’s
request to revise its tariff Schedule 66, as filed, reducing the Company’s annual revenue by $3.1
million, effective as of October 1, 2022.
The Commission also finds it just and reasonable to authorize the Company to continue
to recover EIM incremental expenses in the PCA, up to the benefits realized from the EIM. Staff
verified the Company’s calculations of these expenses, but the Commission will require the
Company to further explain its methodology for measuring EIM benefits, and how that method
differs from CAISO’s method. The Commission acknowledges that it gave the Company authority
in Order No. 35156 to reflect Idaho’s share of incremental EIM and O&M expenses through the
PCA, up to Idaho’s share of EIM benefits that flow through the PCA, effective as of the March 1,
2022 “go live” date. In consideration of the Company’s comments and Commission precedent, we
will continue the current method of addressing this matter in the PCA process.
ORDER
IT IS HEREBY ORDERED that the Company’s Application to revise its tariff
Schedule 66, effective as of October 1, 2022, is approved.
IT IS FURTHER ORDERED that the Company’s requested PCA surcharge rate of
0.150¢ per kWh, effective from October 1, 2022 to September 30, 2023, is approved.
IT IS FURTHER ORDERED that the Company’s request to recover its EIM
incremental expenses in the PCA, up to the benefits realized from the EIM, is approved.
IT IS FURTHER ORDERED that the Company’s request to continue the current
method of addressing EIM incremental expenses in the PCA process is approved.
ORDER NO. 35543 4

IT IS FURTHER ORDERED that the Company is directed to explain how its
methodology for measuring EIM benefits, and how that method differs from CAISO’s method, in
a compliance filing fifteen (15) days from the date of this Order.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order regarding any matter
decided in this Order. Within seven (7) days after any person has petitioned for reconsideration,
any other person may cross-petition for reconsideration. Idaho Code § 61-626.
DONE by Order of the Public Utilities Commission at Boise, Idaho this 29th day of
September 2022.

ERIC ANDERSON, PRESIDENT

JOHN CHATBURN, COMMISSIONER

JOHN R. HAMMOND JR., COMMISSIONER
ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\ELECTRIC\AVU-E-22-11 PCA\orders\AVUE2211_final_cs.docx