20230818Notice_of_Application_Order_No_35897.pdf

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35897 1
Office of the Secretary
Service Date
August 18, 2023
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE FIXED COST
ADJUSTMENT MECHANISM (FCA)
ANNUAL RATE ADJUSTMENT FILING
OF AVISTA CORPORATION
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CASE NO. AVU-E-23-09

NOTICE OF APPLICATION

NOTICE OF
MODIFIED PROCEDURE

ORDER NO. 35897

On July 31, 2023, Avista Corporation (“Company” or “Avista”) applied to the Commission
for an order (1) approving FCA deferrals for July 1, 2022, through June 30, 2023; (2) authorizing
an adjustment to its Fixed Cost Adjustment (“FCA”) rates for electric service from October 1,
2023, through September 30, 2024; and (3) approving its proposed corresponding modifications
to tariff Sheet 75.
The FCA rate for the Residential Group (Schedule 1) is proposed to change from a present
rebate rate of 0.405¢ per kilowatt-hour (“kWh”) to a proposed rebate rate of 0.540¢ per kWh. The
FCA rate for the Non-Residential Group (Schedules 11, 12, 21, 22, 31 and 32) is proposed to
change from a present surcharge rate of 0.034¢ per kWh to a proposed rebate rate of 0.048¢ per
kWh. The Schedule 1 rate change represents a $1.7 million, or 1.4%, decrease to Residential
customers, and the Non-Residential group rate change represents a $0.2 million, or .2% decrease,
for Schedules 11, 12, 21, 22, 31, and 32. If approved, the monthly bill of an average residential
customer would decrease by $1.25. The Company requests that this matter be processed by
Modified Procedure, and that the proposed rates take effect on October 1, 2023.
With this Order, the Commission issues a Notice of Application and Notice of Modified
Procedure establishing a public comment period and Company reply deadline.
BACKGROUND
The FCA is a rate adjustment mechanism designed to break the link between the energy a
utility sells and the revenue it collects to recover fixed costs1 of providing service, thus decoupling
the utility’s revenues from its customers’ energy usage. This decoupling removes a utility’s

1 “Fixed costs” are a utility’s costs to provide service, such as infrastructure and customer service, which do not vary
with energy use, output, or production, and remain relatively stable between rate cases.

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35897 2
incentive to increase sales to increase revenue and profits and encourages energy conservation.
The Commission originally approved a three-year pilot program of the Company’s FCA as part of
the approved settlement of the Company’s 2015 rate case. Order No. 33437 at 10. The parties to
the Company’s rate case agreed to review the program’s effectiveness at the end of its second full
year, to ensure the program was functioning as intended. In 2018, the Commission approved an
addendum to the settlement that extended the term of the Company’s FCA pilot for an additional
year. Order No. 34085. In 2019, the Commission authorized the Company to extend its FCA
mechanism for both gas and electric customers through March 31, 2025. Order No. 34502.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that the Company proposed a rate rebate for its
Residential and Non-Residential electric customer groups based on the amount of deferred revenue
recorded for each group between July 1, 2022 and June 30, 2023. The Company mostly attributes
the proposed changes to drivers including (1) lower monthly use-per-customer than that embedded
in the FCA base due to cooler than normal temperatures; and (2) energy savings stemming from
customer participation in the Company’s Demand Side Management Programs.
YOU ARE FURTHER NOTIFIED that the Company represented that it recorded
$7,180,059 in the rebate direction in deferred revenue for the electric Residential customer group
for the 12 months ending June 30, 2023. The Company stated that the proposed rate of 0.540¢ per
kWh is designed to return $6,955,562 to the Company’s Residential electric customers served
under rate Schedule 1. The Company represented that the deferral balance for the FCA deferral
period, plus interest through September 2024, revenue related expense adjustment, and any
outstanding balance approved for recovery in the prior year FCA rate filing would be transferred
into a regulatory liability balancing account, and the balance in the account would be reduced each
month by the revenue collected under the tariff.
YOU ARE FURTHER NOTIFIED that the Company represented that it recorded $555,724
in the rebate direction in deferred revenue for the electric Non-Residential Group for the 12 months
ending June 30, 2023. The Company stated that the proposed rebate rate of 0.048¢ per kWh is
designed to return $523,679 to commercial and industrial customers served under rate Schedules
11, 12, 21, 22, 31, and 32. The Company represented that the deferral balance, plus interest through
September 2024, plus revenue related expense adjustment, would be transferred into a regulatory

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35897 3
liability balancing account, and the balance in the account would be reduced each month by the
revenue collected under the tariff.
YOU ARE FURTHER NOTIFIED that the Company submitted its Residential and Non-
Residential rate calculations, support for its deferrals, and its proposed FCA Schedule 75 with its
Application.
YOU ARE FURTHER NOTIFIED that the Company’s Application and all submitted
documentation is available for public inspection during regular business hours at the
Commission’s office. The Application is also available on the Commission’s website at
www.puc.idaho.gov. Click on the “ELECTRIC” tab in the left-hand column of the home page,
then select “Open Cases” and then locate and click on the case number as shown on the front of
this document.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held pursuant
to the Commission’s jurisdiction under Title 61 of the Idaho Code.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
under the Commission’s Rules of Procedure, IDAPA 31.01.01.000, et seq.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the public
interest may not require a formal hearing in this matter and it will review the case through written
submissions under the Commission’s Rules of Modified Procedure Rules 201 through 204 of the
Idaho Public Utilities Commission’s Rules of Procedure, IDAPA 31.01.01.201-204. The
Commission notes that Modified Procedure and written comments have proven to be an effective
means for obtaining public input and participation.
YOU ARE FURTHER NOTIFIED that persons desiring to state a position on this
Application may file a written comment explaining why the person supports or opposes the
Application. Persons who would like a hearing must specifically request a hearing in their written
comments. Persons shall have until September 7, 2023, to file written comments. Comments
must be filed through the Commission’s website or by e-mail unless computer access is
unavailable. To comment electronically, please access the Commission’s home page at
www.puc.idaho.gov. Click the “Case Comment Form” and complete the form using the case
number as it appears on the front of this document. To file by e-mail, the customer must e-mail the

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35897 4
comments to the Commission Secretary and the Company at the e-mail addresses listed below. If
computer access is unavailable, then comments may be mailed to the Commission and Company
at these addresses:
For the Idaho Public Utilities
Commission:

Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074
[e-mail]

Street Address for Express Mail:

11331 W. Chinden Blvd.
Building 8, Suite 201-A
Boise, ID 83714

For Avista Corporation:

David J. Meyer (MSC-10)
Patrick Ehrbar (MSC-27)
P.O. Box 3727
1411 E. Mission Ave.
Spokane, WA 99220-3727
[e-mail]
[e-mail]

YOU ARE FURTHER NOTIFIED that the Company must file any reply comments by
September 14, 2023.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are received
within the time limit set, the Commission will consider this matter on its merits and enter its order
without a formal hearing. If written comments are received within the time limit set, the
Commission will consider them and, in its discretion, may set the same for formal hearing.
ORDER
IT IS HEREBY ORDERED that this case be processed by Modified Procedure. Persons
shall have until September 7, 2023, to file written comments, and the Company shall have until
September 14, 2023, to file a reply, if any.
IT IS FURTHER ORDERED that parties comply with Order No. 35375, issued April 21,
2022. Generally, all pleadings should be filed with the Commission electronically and will be
deemed timely filed when received by the Commission Secretary. See Rule 14.02. Service between
parties should continue to be accomplished electronically when possible. However, voluminous
discovery-related documents may be filed and served on CD-ROM or a USB flash drive.

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35897 5
DONE by order of the Idaho Public Utilities Commission at Boise, Idaho this 18th day of
August 2023.

ERIC ANDERSON, PRESIDENT

JOHN R. HAMMOND JR., COMMISSIONER

EDWARD LODGE, COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\ELECTRIC\AVU-E-23-09_FCA\orders\AVUE2309_NtcAppMod_at.docx