HomeMy WebLinkAbout20000609sw.docDECISION MEMORANDUM
TO: COMMISSIONER HANSEN
COMMISSIONER SMITH
COMMISSIONER KJELLANDER
MYRNA WALTERS
RON LAW
LOUANN WESTERFIELD
TONYA CLARK
DON HOWELL
STEPHANIE MILLER
DAVE SCHUNKE
GEORGE FINK
CATHY STOCKTON
WORKING FILE
FROM:
DATE: JUNE 9, 2000
RE: CASE NO. AVU-G-00-01 (Avista)
HAZARDOUS SUBSTANCE CLEAN-UP
REQUEST FOR AUTHORIZATION TO DEFER COSTS
On May 3, 2000, Avista Corporation dba Avista Utilities—Washington Water Power Division (Idaho) filed an Application with the Idaho Public Utilities Commission (Commission) requesting authority to defer clean-up costs associated with its previously owned Hamilton Street Bridge facility, including an allocation to Idaho of 31.574% and the accrual and deferral of related carrying charges.
The Hamilton Street Bridge site is located in Spokane, Washington and contains properties upon which a manufactured gas plant and a coal-tar processing plant once operated. The Washington State Department of Transportation directed an environmental investigation of the site and documented the presence of hydrocarbon contaminated soils.
On January 15, 1999, Avista received notice from the State of Washington Department of Ecology (WDOE) that it had been designated as a potentially liable party with respect to any hazardous substances located at the property upon which the former Spokane Gas Plant once operated. The Spokane Gas Plant operated as a coal gasification plant in the early 1900s until 1948. The property was acquired by the Company through a merger in 1958, together with gas distribution facilities in Washington and Idaho. The Company no longer owns the property.
Avista has submitted a draft remedial investigation study and is reviewing comments from the WDOE. On May 12, 2000, Avista submitted a draft feasibility study. The study sets forth four preliminary cleanup alternatives priced from $304,000—total capital and monitoring cost (the Company’s preference) to $33,910,670. The final cleanup action plan will be determined by the WDOE. Through May 11, 2000, Avista reports that it has experienced approximately $889,000 in incremental costs associated with the Company’s remedial investigation and feasibility study. Avista is requesting authorization to defer incremental costs associated with the remedial investigation, feasibility study, remedial measures and monitoring of the Hamilton Street Bridge site.
Avista is proposing that incremental costs associated with the Hamilton Street Bridge site be deferred in Account 186.2, Miscellaneous Deferred Debits. Avista is proposing that the recovery of the deferred costs, including carrying charges, be addressed in a future rate proceeding. Avista is proposing to accrue carrying charges using the interest rate authorized for customer deposits, which is currently 5.00% for the year 2000. Carrying charges would continue to accrue until the balance of the deferred costs and accrued carrying charges are determined and included in rate base and an amortization is recovered through customer rates.
The allocation to the Washington and Idaho jurisdictions proposed by the Company is the gas jurisdiction four-factor allocation percentage in the Company’s current gas general rate case, i.e., 68.426% for Washington and 31.574% for Idaho.
Commission Decision
Staff recommends that the Company’s Application be processed pursuant to Modified Procedure, i.e., by written submission rather than by hearing. Reference Commission Rules of Procedure, IDAPA 31.01.01.201-204. Does the Commission agree that Modified Procedure is appropriate? If not, what is the Commission’s preference?
vld/M:AVU-G-00-01_sw
DECISION MEMORANDUM 2