HomeMy WebLinkAbout19990823.docDECISION MEMORANDUM
TO: COMMISSIONER HANSEN
COMMISSIONER SMITH
COMMISSIONER KJELLANDER
MYRNA WALTERS
DON HOWELL
STEPHANIE MILLER
TONYA CLARK
RON LAW
BILL EASTLAKE
RANDY LOBB
KEITH HESSING
TERRI CARLOCK
KATHY STOCKTON
WORKING FILE
FROM:
DATE: August 23, 1999
RE: CASE NO. AVU-E-99-5 (Avista)
POWER COST ADJUSTMENT (PCA)
$2,766,000, 2.503% REBATE
On July 27, 1999, Avista Corporation dba Avista Utilities—Washington Water Power Division (Avista; Company) in Case No. AVU E 99-5 filed an Application with the Idaho Public Utilities Commission (Commission) proposing a revision to the Companys electric tariff Schedule 66temporary Power Cost AdjustmentIdaho. Avista requests that the Commission approve a $2,766,000, 2.503% rebate to Avistas Idaho customers. The rebate is being requested as a result of the trigger being reached and exceeded in Avistas Power Cost Adjustment (PCA) balancing account.
The Companys PCA mechanism was first established in Case No. WWP-E-88-3, Order No. 22816 issued October 31, 1989, and has been extended, modified and clarified in a number of subsequent cases (WWP-E-93-3, Order No. 24874; WWP E 94-4, Order No. 25637; WWP E 97-10, Order No. 27202; and WWP-E-98-4, Order No. 27824). Since its inception to date of filing, there have been eight rebates totaling $20,820,000 and three surcharges totaling $6,769,000.
Water Powers PCA is used to track changes in revenues and costs associated with variations in hydroelectric generation, prices in the secondary market, and changes in PURPA power expenses. The PCA rate adjustment mechanism is designed to recover/rebate variances in power supply expenses incurred by the Company. The PCA mechanism tracks changes in the Companys power supply costs associated with abnormal weather and stream flows. The weather-related portion of the PCA tracks 100% of the variation in hydro generation from the hydro generation authorized, variation in secondary prices from those authorized, and the related variation in thermal generation. The PCA is also designed to recover contract costs incurred pursuant to the Public Utilities Regulatory Policies Act of 1978 (PURPA) and the related implementing rules and regulations of the Federal Energy Regulatory Commission (FERC) beyond the level included in the Companys general revenue requirement. PURPA contract costs are the result of the Companys federally mandated obligation to purchase the output of qualifying small power and cogeneration facilities and, therefore, are largely outside the control of Avista. The PCA tracks 100% of the changes in costs associated with PURPA contracts. The Company is allowed to record the difference between actual power supply costs and the level of those costs authorized by the Commission. When the total difference in costs exceed a balancing account trigger of $2.2 million (Idaho), the Company may request authority to implement a surcharge or rebate. The PCA-related rate changes are limited to no more than two consecutive surcharges or rebates during any 12-month period, July 1 to June 30, and the annual rate cap (floor) during any 12-month period is limited to 5%. As reflected in the Companys Application, the $2.2 million trigger was reached and exceeded in July 1999, based on actual data from the preceding month, June.
Under the Companys proposal in this case, the monthly energy charges of the individual electric rate schedules are to be decreased by the following amounts:
Type of Service
Present
Sch 66 Rebate
Effective 2/1/99; Expires 1/31/00
(2.660%)
Proposed
Sch 66 Rebate
(2.503%)
Schedules 1, 3A-D, & 15
(Residential)
Schedules 11, 12, 13A-D, & 16
(General)
Schedules 17, 21, 22, & 23A-D
(Large General)
Schedule 25
(Extra Large General)
Schedules 18, 31, 32, & 33A-D
(Pumping)
0.127/kWh
0.189/kWh
0.132/kWh
0.082/kWh
0.135/kWh
0.115¢/kWh
0.153¢/kWh
0.114¢/kWh
0.077¢/kWh
0.107¢/kWh
Flat rate charges for Company-owned or customer-owned street lighting and area lighting service (Schedules 41-49) under the present rebate are reduced by 2.660% and under the proposed rebate will be reduced by a further 2.503%. Implementation of the proposed rebate will result in an overall decrease of 2.503% in the Companys Idaho electric rates or $1.15 in the monthly bill of an average residential customer using 1,000 kWh. The combined effect of both the prior existing and proposed rebates is an overall decrease of 5.163%, or $2.42 in the monthly bill of an average residential customer using 1,000 kWh. The prior rebate, however, will expire on January 31, 2000.
Avista requested expedited approval of its PCA rebate on less than statutory notice so that the effective date of the rebate could coincide with the rate change authorized by the Commission in Case No. WWP-E-98-11, the Company’s general rate filing. Reference Order No. 28097.
Based on its review of the filings of record in Case No. AVU-E-99-5 including the Company’s testimony, exhibits and underlying workpapers and being apprised by Commission Staff that a preliminary desk audit of the Company’s filings revealed no irregularities, the Commission in Order No. 28108 pending further analysis, investigation and findings, granted on an interlocutory basis the Company’s request for expedited treatment and implementation of the requested rebate. In approving expedited treatment the Commission also found it reasonable to waive the advance individual customer notice requirements of IDAPA 31.21.02.102.
Together with its Interlocutory Order, the Commission on July 29, 1999, also issued Notices of Application and Modified Procedure. Reference Commission Rules of Procedure, IDAPA 31.01.01.201-204. The deadline for filing written comments was August 20, 1999. Commission Staff was the only party to file comments (attached).
Staff indicates that it has completed its review of the Company’s filing. Staff discovered no irregularities. Staff recommends that the Commission accept the full PCA rebate amount recommended by the Company even though its implementation will cause the 5% cap set in Case No. WWP-E-88-3 to be exceeded. Staff notes that if the cap were adhered to the difference would be carried forward in the prior balancing account. Passing through the total rebate amount now, Staff states, benefits customers and should be authorized.
Staff recommends that the PCA rebate proposed by the Company receive final Commission approval as filed.
Commission Decision
Does the Commission continue to find Modified Procedure, i.e., by written submission rather than by hearing, to be appropriate?
Does the Commission continue to find the authorized PCA rebate amount to be reasonable? As reflected above, the combined effect of the two current rebates is an overall decrease of 5.163%. If so, should final approval be granted?
vld/M: AVU-E-99-5_sw
DECISION MEMORANDUM 4