2001082828785-mod.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF
AVISTA UTILITIES FOR AN ORDER APPROVING A CHANGE IN NATURAL GAS RATES AND CHARGES.
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CASE NO. AVU-G-01-2

NOTICE OF APPLICATION

NOTICE OF MODIFIED PROCEDURE

NOTICE OF COMMENT DEADLINE

ORDER NO. 28785

On July 9, 2001, Avista Utilities (“Avista”), a subsidiary of Avista Corporation filed an Application with the Idaho Public Utilities Commission for authority to place into effect revised Schedule 155, containing rates and charges for natural gas service in the state of Idaho. If approved, Avista states, the Company’s annual revenue will increase by approximately $6.9 million or about 11.5%. However, the proposed change in rates and charges to customers will vary according to customer class and usage. Avista requests an effective date for revised Schedule 155 of August 9, 2001. Finally, Avista requests that if appropriate, the Commission process its Application using Modified Procedure under the Commission’s Rules of Procedure. In this Order the Commission elects to suspend the effective date of the Company’s revised Schedule 155 until September 1, 2001 and to process this Application by Modified Procedure.
THE APPLICATION
YOU ARE HEREBY NOTIFIED that Avista seeks recovery of the proposed $6.9 million based on timing differences due to implementation of rate changes and differences between Avista’s actual weighted average cost of gas (“WACOG”) purchased and the WACOG imbedded in rates. Avista also defers the revenue received from Cascade Natural Gas for the release of storage capacity at the Jackson Prairie Storage Facility, various pipeline refunds or charges and miscellaneous revenue received from gas related transactions. Avista’s filing of revised Schedule 155 serves to recover these timing differences accumulated in the gas cost deferral account over a two and a half year period. As of March 31, 2001, these differences total approximately $22.3 million.
YOU ARE FURTHER NOTIFIED that Avista does not seek to change the weighted average cost of gas (WACOG) of $0.48044 per therm that was approved by the Commission in Case No. AVU-G-00-5, Order No. 28641. The Application explains that the Company projects that the average WACOG for August 2001 to July 2002 is $.47 per therm. Avista’s projected WACOG for this period is comprised of the weighted average of fixed price gas and present monthly forward gas prices based on the Basin weighing under the Benchmark mechanism.
YOU ARE FURTHER NOTIFIED that Avista’s total requested increase in annual revenue is $6.9 million or 11.5%. If approved, the Company estimates that residential or small business customers served under Schedule 101 using an average of 80 therms per month could experience an average monthly billing increase of approximately $6.91 per month (10.14%). Large commercial customers served under Schedules 111 and 121 could experience an average increase of 11.26% and 12.23% respectively, with higher percentages due to lower base rates. Customers on Schedule 131 will see an increase on average of $.13436. Actual customer increases will vary based on therms consumed. Avista recommends the following annualized change in rates per customer class:

Customer Class Revenue Proposed
Average Increase $ /Therm Proposed Average Increase % Change Schedule 101 $4,514,957 $0.08642 10.14% Schedule 111 $1,193,007 $0.08642 11.26% Schedule 121 $790,717 $0.08642 12.23% Schedule 131 $97,074 $0.13436 22.74% YOU ARE FURTHER NOTIFIED that the Company’s Application to increase its rates is merely a proposal subject to public review and Commission approval.
YOU ARE FURTHER NOTIFIED that the Commission has jurisdiction over this matter and Avista Utilities, a gas utility, pursuant to the authority and power granted under Title 61 of the Idaho Code and the Commission’s Rules of Procedure, IDAPA 31.01.01.000 et seq.
SUSPENSION OR PROPOSED EFFECTIVE DATE
YOU ARE FURTHER NOTIFIED that because Avista will not complete mailing notices to its customers regarding this proposed rate increase until August 7, 2001, two days before the effective date the Company has requested for its revised Schedule 155, the Commission shall suspend it. In order to provide sufficient time for the Commission to complete its analysis of this Application and to consider any public comments in this case the Commission finds that the August 9, 2001 requested effective date for Avista’s revised Schedule 155 shall be suspended until September 1, 2001, or until such earlier time as the Commission may issue its Order approving, rejecting or modifying the Company’s Application.
NOTICE OF MODIFIED PROCEDURE
Avista requests that its Application be processed under Modified Procedure, i.e., by written submission rather that by hearing. Commission Rules of Procedure, IDAPA 31.01.01.201-204.
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the filings of record in Case No. AVU-G-01-2. The Commission acknowledges that the rate increase requested is significant. The Commission notes that the annual PGA tracker reflects only those changes in gas costs that are generally recognized as outside the Company’s control. The Commission has preliminarily determined that the public interest may not require a hearing to consider the issues presented in this case, and that the issues raised by the Company’s filing may be processed under Modified Procedure. In so doing, the Commission notes that Modified Procedure and written comment has proven to be an effective means for obtaining public input and participation.
YOU ARE FURTHER NOTIFIED that the Commission will 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. IDAPA 31.01.01.203.
YOU ARE FURTHER NOTIFIED that if no protests or comments are received within the deadline, the Commission may consider the matter and enter its Order without a hearing. If protests or comments are filed within the deadline, the Commission will consider them and may set the matter for hearing or may decide the matter and issue its Order on the basis of the written positions before it. IDAPA 31.01.01.204.
NOTICE OF COMMENT DEADLINE
YOU ARE FURTHER NOTIFIED that the deadline for filing written comments or protests with respect to the Application and the use of Modified Procedure in Case No. AVUG01-2 is August 13, 2001. IDAPA 31.01.01.202.02. Persons desiring a hearing must specifically request a hearing in their written protests or comments.
YOU ARE FURTHER NOTIFIED that the Company shall have the opportunity to file reply comments with the Commission on or before August 17, 2001.
YOU ARE FURTHER NOTIFIED that written comments concerning this Application must be mailed to the Idaho Public Utilities Commission and Avista Utilities at the following addresses:

COMMISSION SECRETARY
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074

Street Address for Express Mail:

472 W WASHINGTON ST
BOISE, ID 83702-5983 THOMAS DUKICH, MANAGER
AVISTA UTILITIES
RATES & TARIFF ADMINISTRATION
PO BOX 3727
SPOKANE, WA 99220-3727

DAVID J. MEYER, SENIOR VICE PRESIDENT
AVISTA UTILITIES
P.O. BOX 3727
SPOKANE, WA 99220-3727
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-01-2 together with accompanying exhibits and workpapers can be reviewed at the Commission’s office and at the principal office of Avista Utilities at East 1411 Mission Avenue, Spokane, Washington, during regular business hours.
O R D E R
In consideration of the foregoing and as more particularly described above, IT IS HEREBY ORDERED and the Commission does hereby suspend the proposed effective date for the proposed, revised Schedule 155 in Case No. AVU-G-01-5 from August 9, 2001 to September 1, 2001.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of July 2001.

PAUL KJELLANDER, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Barbara Barrows
Assistant Commission Secretary

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Avista Utilities is a public utility engaged in the distribution of natural gas in certain portions of Eastern and Central Washington, Northern Idaho, Southwestern and Northeastern Oregon and Northern California.
Avista purchases natural gas from a subsidiary of Avista Corporation, Avista Energy under provisions of Schedule 163, Natural Gas Benchmark Mechanism. Avista transports the gas it purchases over several pipelines.

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT DEADLINE
ORDER NO. 28785 1

Office of the Secretary
Service Date
July 13, 2001