20231208Final_Order_No_36020.pdf

ORDER NO. 36020 1
Office of the Secretary
Service Date
December 8, 2023
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION
OF AVISTA CORPORATION, D/B/A AVISTA
UTILITIES, REQUESTING AUTHORITY TO
REVISE ITS ELECTRIC AND NATURAL
GAS BOOK DEPRECIATION RATES AND
AUTHORIZE DEFERRED ACCOUNT
TREATMENT FOR DIFFERENCE IN
DEPRECIATION EXPENSE

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CASE NOS. AVU-E-23-02
AVU-G-23-02

ORDER NO. 36020

On February 22, 2023, Avista Corporation, doing business as Avista Utilities
(“Company”), filed an application (“Application”) with the Idaho Public Utilities Commission
(“Commission”), for approval of a proposed change to electric and natural gas book depreciation
rates. The Company also requested that the Commission approve deferred accounting treatment if
allocated depreciation rates were not approved by all jurisdictions prior to September 1, 2023,
resulting in a difference between allocated depreciation expense included in Case Nos. AVU-E-
23-01 and AVU-G-23-01, and allocated depreciation expense ultimately approved in these
dockets.
On March 15, 2023, the Commission issued a Notice of Application and Notice of
Intervention Deadline. Order No. 35709. No parties intervened. On April 27, 2023, the
Commission issued a Notice of Modified Procedure setting an August 8, 2023, comment deadline,
and an August 15, 2023, reply comment deadline. Order No. 35754.
On July 13, 2023, Commission Staff (“Staff”) and the Company participated in a settlement
conference. On August 1, 2023, Staff requested that the Commission vacate the existing comment
deadlines until a proposed settlement was filed. On August 2, 2023, the Commission issued an
Order Vacating Comment Deadlines. Order No. 35874.
On August 29, 2023, the Company and Staff filed a Stipulation and Settlement (“Proposed
Settlement”), and a Motion for Approval. On September 14, 2023, the Commission issued a Notice
of Proposed Settlement and Notice of Modified Procedure establishing an October 26, 2023,
comment deadline. Order No. 35924.
TERMS OF PROPOSED SETTLEMENT
Under the Proposed Settlement, the parties have agreed to book depreciation rates on
directly assigned and common plant effective January 1, 2024. Proposed Settlement at 3. The
ORDER NO. 36020 2
parties also agree to the reserve adjustments that the Company proposed in the filed case, which
provides a five-year amortization to adjust unrecovered or over-recovered reserves based on the
amortization period by account. Id. at 4. For Idaho, the reserve adjustment is a reduction to
expenses of $193,898 for electric, and $59,170 for natural gas annually for five years. Id.
For electric operations, the Proposed Settlement results in an annual overall decrease in
depreciation expense of approximately $2,808,875, and for natural gas operations, the Proposed
Settlement results in an annual overall decrease in depreciation expense of approximately
$748,718.
Table I – Summary of Impact of Settlement on Depreciation Expense

Id. at 4-5.
Under the Proposed Settlement, the parties agree to meet and confer prior to the filing of
the next required adjustment in depreciation rates in early 2028, to reexamine curves and other
supporting information regarding any proposed changes for the following list of accounts:
Table No. 2 – Accounts Subject to Further Examination Before Filing of Next Depreciation Study

Transmission
354.00 Towers and Fixtures
356.00 Overhead Conductors and Devices
Electric Distribution
365.00 Overhead Conductors and Devices
366.00 Underground Conduit
369.10 Overhead
369.20 Underground - Spokane Network
369.30 Underground - Other
Transportation
396.30 Medium Trucks
396.40 Heavy Trucks
396.50 Other
Natural Gas Distribution
376.00 Mains
385.00 Industrial Measuring and Regulating Station Equipment
Line Electric Gas
1 Depreciation study net impact per filings (1,442,858)$ (388,356)$
2 Agreed upon changes
3 ID Electric Distribution (1,366,017)
4 ID Natural Gas Distribution (360,362)
5 Net Impact Depreciation and Amortization (2,808,875) (748,718)
ORDER NO. 36020 3
Id. at 5-6.
Under the Proposed Settlement the parties agree that to the extent depreciation rates and
the effective date of the change in depreciation rates approved in these cases vary from the
depreciation rates or effective date utilized to determine depreciation expense included in the
General Rate Cases, Case Nos. AVU-E-23-02 and AVU-G-23-02, the Company will defer the
difference in depreciation expense included and approved in the General Rate Cases, versus the
actual depreciation expense recorded on the Company’s books of record, as a result of the approved
depreciation rates and effective date per these cases. Id. at 6-7.
PUBLIC COMMENTS
The Commission did not receive any public comments.
PARTY COMMENTS
A. Staff Comments
Staff believed that the Proposed Settlement represents a fair, just, and reasonable
compromise for all issues raised in the case. Staff represented that the Proposed Settlement results
in an overall decrease to depreciation and reserve amortization expenses, and Staff recommended
that the Commission approve the Proposed Settlement including its Attachments with all terms
and conditions effective January 1, 2024.
B. Company Comments
The Company believed that the Proposed Settlement is in the public interest, and that it
strikes a reasonable balance between the interests of the Company and its customers on
depreciation rates and depreciation expense.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over the Company’s Application and the issues in this
case under Title 61 of the Idaho Code including Idaho Code §§ 61-301 through 303. The
Commission is empowered to investigate rates, charges, rules, regulations, practices, and contracts
of all public utilities and to determine whether they are just, reasonable, preferential,
discriminatory, or in violation of any provisions of law, and to fix the same by order. Idaho Code
§§ 61-501 through 503.
The Commission’s process for considering settlement stipulations is set forth in its Rules
of Procedure 271-277, IDAPA 31.01.01.271-277. When a proposed settlement is presented to the
Commission, it “will prescribe the procedures appropriate to the nature of the settlement to
ORDER NO. 36020 4
consider the settlement.” IDAPA 31.01.01.274. Proponents of a proposed settlement must show
“that the settlement is reasonable, in the public interest, or otherwise in accordance with law or
regulatory policy.” IDAPA 31.01.01.275. The Commission is not bound by settlement agreements.
IDAPA 31.01.01.276. Instead, the Commission “will independently review any settlement
proposed to it to determine whether the settlement is just, fair and reasonable, in the public interest,
or otherwise in accordance with law or regulatory policy.” Id.
The Commission has reviewed the record, including the Application, Proposed Settlement,
party comments, public comments, all submitted materials, and the arguments of the parties. The
Commission notes that the parties have built a detailed record through discovery, filings,
negotiations, and comments. The Commission finds that the Proposed Settlement incorporates
input from different parties, and the Proposed Settlement attempts to reach a balance between
different party interests. The Commission finds that the Proposed Settlement is fair, just,
reasonable, and in the public interest.
ORDER
IT IS HEREBY ORDERED that the Motion is granted, and the Proposed Settlement,
including the Attachments, is approved as filed.
IT IS FURTHER ORDERED that the Company is authorized to implement revised
depreciation rates effective January 1, 2024, consistent with the terms of the Proposed Settlement.
IT IS FURTHER ORDERED that the Company is authorized to defer the difference in
Idaho electric and natural gas depreciation expense reflected in base rates beginning September 1,
2023, versus actual depreciation expense recorded on the Company’s books of record, as a result
of the approved change in depreciation rates becoming effective January 1, 2024, until a change
in base rates occurs reflecting the overall revised depreciation rates in the Company’s next general
rate case.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date upon 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.

ORDER NO. 36020 5
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 8th day of
December 2023.

__________________________________________
ERIC ANDERSON, PRESIDENT

__________________________________________
JOHN R. HAMMOND JR., COMMISSIONER

__________________________________________
EDWARD LODGE, COMMISSIONER

ATTEST:

_________________________________
Monica Barrios-Sanchez
Interim Commission Secretary

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