200001214sw.doc

DECISION MEMORANDUM

TO: COMMISSIONER HANSEN
COMMISSIONER SMITH
COMMISSIONER KJELLANDER
JEAN JEWELL
RON LAW
LOU ANN WESTERFIELD
TONYA CLARK
DON HOWELL
DAVE SCHUNKE
RANDY LOBB
ALDEN HOLM
TERRI CARLOCK
NANCY HARMAN
BEVERLY BARKER
WORKING FILE
FROM:
DATE: DECEMBER 14, 2000 RE: CASE NO. AVU-T-00-5 (Avista)
PGA INCREASE $14,106,437 (29.19%)

On December 8, 2000, Avista Corporation dba Avista Utilities—Washington Water Power Division—Idaho (Avista; Company) applied to the Idaho Public Utilities Commission (Commission) for authority to implement new rates and charges for natural gas service in the state of Idaho. As computed by the Company, the total requested net annual revenue increase in Idaho is $14,106,437 (29.19%). The change in rates and charges to customers will vary according to customer class and usage. The Company has requested an effective date of January 11, 2001. The Company maintains that the public interest does not require a hearing on its Application and requests that the matter be processed under the Commission’s Rules of Procedure, i.e., by written submission rather than by hearing, IDAPA 31.01.01.201-204.
Avista serves approximately 59,237 customers in Idaho. Over 58,626 of those customers are residential. The increase in price per therm to residential customers is approximately 28.20%. Residential customers using an average of 80 therms per month under the Company’s proposal can expect an increase in their average bill of $14.92. Large commercial customers served under Schedules 111 and 121 can expect to see an average increase of 32.1% and 35.9% respectively, with the higher percentage due to lower base rates. Actual customer increases will vary based on therms consumed.
The overall effect of the proposed changes, if authorized, would be to increase customer rates per therm in the following amounts:

Class Description and Schedule Dollars per therm increase
General/large general & commercial
(Schedules 101, 111, & 121)

$0.18649 Large general & commercial receiving lump sum bill credits or charges
(Schedules 112 & 122)
$0.18649 Interruptible service & interruptible service receiving lump sum bill credits or charges
(Schedules 131 & 132)
$0.18544 Transportation
(Schedule 146)
$0
SCHEDULE 155—GAS RATE ADJUSTMENT
Schedule 155—gas rate adjustment (Idaho) is used by the Company to pass through any under- or over-collection of gas costs since its last tracker filing. The Company in this filing proposes no adjustment or changes to its tariff Schedule 155 rates.
SCHEDULE 150—PERMANENT GAS COST CHANGES
Schedule 150—permanent gas cost changes (Idaho) is used by the Company to reflect continuing changes in the cost of purchasing and transporting gas for customers. Since rates were last approved, the net change in commodity, demand and storage gas costs results in an increase of $0.18649/therm for firm gas schedules 101 through 122; an increase of $0.18544/therm for interruptible schedules 131 and 132; and no change for transportation schedule 146. As per the Company’s Application, the resultant annual net increase in annual revenue requirement (Idaho) related to Schedule 150 changes is $14,106,437. The Company calculates its current weighted average cost of gas (WACOG) to be $0.48044, an increase of $0.18544 from the previous $0.29500.
As reflected in the Company’s Application, the proposed annual revenue increase is necessary due to continued upward pressure on gas prices. Market prices for gas have more than doubled since the Company’s last PGA ($9,941,262 (29.04%) increase), effective September 21, 2000. Reference Case No. AVU-G-00-3, Order No. 28496. The Company’s forecasted WACOG based on first of the month prices for January 2001 is over $.90 and the forward/future prices for all of 2001 do not drop below $.50 per therm. The Company requested WACOG for the next 12 months based on forward/future published prices is $.48044.
Commission Decision
The Company has requested that its case be processed pursuant to Modified Procedure and has requested an effective date of January 11, 2001.
Given that the Company recently raised gas prices by 29.04% in September, does the Commission find that an informational public workshop should be scheduled in northern Idaho? Should the public be given an opportunity to provide public testimony?

Should the Commission determine to follow such a procedure, Staff recommends the following scheduling:

Workshop/public testimony. Lewiston
Coeur d’Alene 1/22…6:00/7:30 p.m.
1/23…6:00/7:30 p.m. Workshop only Sandpoint 1/24…6:00 Written Comment Deadline 1/26
Staff proposed scheduling would require a suspension of the Company’s proposed effective date. What is a reasonable period of suspension? As yet, there are no scheduled decision meetings in 2001.

Following workshops and public testimony, is it reasonable to dispense with a technical hearing and otherwise process the case pursuant to Modified Procedure (i.e., written comments)?

vld/M:AVU-G-00-05_sw

DECISION MEMORANDUM 3