2001010928608-mod.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF
AVISTA CORPORATION FOR A DEFERRED ACCOUNTING ORDER. )
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) CASE NO. AVU-G-00-7

NOTICE OF APPLICATION

NOTICE OF MODIFIED
PROCEDURE

ORDER NO. 28608
YOU ARE HEREBY NOTIFIED that on December 21, 2000, Avista Corporation filed its Application for a deferred accounting order. The Applicant states that as a part of its operations it provides natural gas distribution service in certain portions of Eastern Washington, Northern Idaho, California and Oregon.
The Company alleges that because of the recent price volatility of the cost of gas it believes that a greater proportion of future natural gas costs should be hedged through fixed price transactions rather than through the approved Benchmark Mechanism. Avista contends that the recent, higher prices for the cost of gas are driven primarily by increased gas consumption for electric generation by gas-fired turbines, increased retail end-use consumption due in part to below normal temperatures that arrived in early November and congestion on natural gas pipelines. Under these conditions Avista believes it is important to lock up a greater percentage of the pricing for future natural gas requirements in order to provide more stability for natural gas costs for the Company’s retail customers. However, Avista states that currently the cost of natural gas for its customers is determined exclusively by the Company’s Natural Gas Benchmark Mechanism in Tariff Schedule 163 which does not provide accounting treatment for additional transactions relating to gas supplies included in the Company’s purchased gas adjustment (“PGA”). Accordingly, Avista seeks a Commission order authorizing the deferral of revenues and expenses resulting from fixed-price transactions it must enter to serve the Company’s retail natural gas customer. Avista states that this order would allow it to supplement its existing accounting practices to include the costs of these transactions into the Company’s PGA mechanism. Finally, the Company states that its request, if approved by the Commission, does not in any way relieve the Company of its obligation to demonstrate the prudency of these fixed price transactions or any other gas supply transaction when it later seeks recovery on these amounts through its PGA mechanism.
Accordingly, Avista requests approval of deferred accounting treatment for the revenues and expenses associated with fixed price transactions for the period of January 1, 2001 to March 31, 2002.
The Company requests that this Application be processed under Modified Procedure. Staff agrees that Modified Procedure would be appropriate for this case.
YOU ARE FURTHER NOTIFIED that the Application together with supporting workpapers, testimonies and exhibits, have been filed with the Commission and are available for public inspection during regular business hours at the Commission offices.
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 and that the Commission may enter any final Order consistent with its authority under Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted pursuant to the Commission's Rules of Procedure, IDAPA 31.01.01.000 et seq.
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the filings of record in Case No. AVU-G-00-7. The Commission has preliminarily determined that the public interest may not require a hearing to consider the issues presented and that the issues raised by the Application may be processed under Modified Procedure, i.e., by written submission rather than by hearing. Reference Commission Rules of Procedure, IDAPA 31.01.01.201-.204.
YOU ARE FURTHER NOTIFIED that the Commission may not hold a hearing in this proceeding unless it receives written protests or comments opposing the use of Modified Procedure and stating why Modified Procedure should not be used. Reference IDAPA 31.01.01.203.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this Application may file a written comment in support or opposition with the Commission within twenty-one (21) days from the date of this Notice. The comment must contain a statement of reasons supporting the comment. Persons desiring a hearing must specifically request a hearing in their written comments.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are received within the deadline, the Commission will consider the matter on its merits and enter its Order without a formal hearing. If comments or protests are filed within the deadline, the Commission will consider them and in its discretion may set the matter for hearing or may decide the matter and issue its Order on the basis of the written positions before it. Reference IDAPA 31.01.01.204.
YOU ARE FURTHER NOTIFIED that written comments concerning Case No. AVU-G-00-7 should be mailed to the Commission and the Company at the addresses reflected below:

COMMISSION SECRETARY THOMAS D. DUKICH
IDAHO PUBLIC UTILITIES COMMISSION AVISTA CORPORTION
PO BOX 83720 E. 1411 MISSION AVENUE
BOISE, ID 83720-0074 P.O. BOX 3727
SPOKANE, WA 99220
STREET ADDRESS FOR EXPRESS MAIL:
Director, Rates and Tariff
472 W WASHINGTON ST Administration.
BOISE, IDAHO 83702-5983

All comments should contain the case caption and case number shown on the first page of this document.
YOU ARE FURTHER NOTIFIED that the Application in Case No. AVU-G-00-7 can be reviewed at the Commission’s office and at the offices of Avista during regular business hours.
O R D E R
IT IS HEREBY ORDERED that this case shall be processed by Modified Procedure in accordance with the Commission Rules. See, IDAPA 31.01.01.201-.204.
IT IS FURTHER ORDERED that any person desiring to state a position on Avista’s Application may file a written comment in support of or in opposition to the Company’s request. These comments must be filed on or before January 30, 2001. The written comment must contain a statement of reasons supporting the comment. Persons desiring a hearing must specifically request a hearing in their written comments.
IT IS FURTHER ORDERED that all reply comments may be filed on or before February 6, 2001.

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of January 2001.

DENNIS S. HANSEN, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

PAUL KJELLANDER, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

O:avug007_jh
The Applicant also states that it is an investor-owned utility engaged in the generation, transmission, and distribution of electricity in certain portions of eastern Washington and Northern Idaho.
Avista also states that it would like these amounts included in its PGA mechanism

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 28608 1

Office of the Secretary
Service Date
January 9, 2001