20020927Notice.pdf

Office of the Secretary
Service Date
September 27 2002
BEFORE THE ID All 0 PUBLIC UTILITIES CO MMISSI 0 N
IN THE MATTER OF THE APPLICATION OF
AVISTA UTILITIES FOR AUTHORITY TO
DECREASE ITS RATES FOR NATURAL GASSERVICE. CASE NO. A VU-O2-
NOTICE OF APPLICATION
NOTICE OF MODIFIED
PROCEDURE
NOTICE OF COMMENT
DEADLINE
On September 16, 2002, A vista Utilities filed a Purchased Gas Cost Adjustment
(PGA) Application with the Commission for authority to place new rate schedules into effect on
November 1 , 2002 that will decrease its annualized revenues by approximately $10 million.
its Application is approved, Avista states that customer rates will decrease on average by 15.5%.
The Company has requested an effective date of November 1 2002. Avista provides natural gas
service to approximately 56 000 customers in northern Idaho. In this Notice the Commission
processes this filing under Modified Procedure and establishes a written comment deadline.
THE APPLICATION
YOU ARE HEREBY NOTIFIED that Avista requests this rate reduction to true-up
the differences between Avista s actual weighted average cost of gas (W ACOG) purchased and
the W ACOG embedded in rates that have been deferred since September 1999. The Company
has also deferred 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.
W ACOG
YOU ARE FURTHER NOTIFIED that to incorporate these deferred costs and
credits into rates, A vista proposes to modify two rate schedules that will adjust the W ACOG and
the deferral surcharge. The Company advocates reducing the prospective natural gas cost
component (the W ACOG) included in the rates charged to customers by $0.14727 per therm to
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT DEADLINE
$0.33098. This reduction is the result of netting the W ACOG reduction of $0.14946 per therm
against the demand-related increase of$0.00219 per thermo
The chart below depicts gas prices for Avista s residential and small business
customers (Schedule 101) over the past five years. Assuming the deferral is fully recovered in
November 2003 and the W ACOG remains as proposed, the Commission Staff estimates a cost to
customers of $0.6323 per therm - which is reflected below as the estimated price of gas in 2003.
By comparison Natural Gas Monthly lists the year-to-date average price of natural gas delivered
to residential customers as $0.896 per therm in Idaho versus $0.732 per therm nationally.
$1.
$0.
$0.
$0.
$0.
$0.
$0.40
$0.
$0.20
$0.
$0.
Avista Gas Residential and Small Business Gas Prices
(Schedule 101) at Year-End in $/Therm
1998 1999 2000 2001 2002 2003
Deferral Surcharge
YOU ARE FURTHER NOTIFIED that Avista also seeks to recover the previous
timing differences accumulated in the gas cost deferral account over the 12-month period of
November 2002 through October 2003 through a surcharge. When the last PGA filing was
approved by Order No. 28827 issued August 20, 2001 , the gas deferral account totaled
approximately $22.3 million and was to be collected over a two and a half year period. As
depicted on the graph below, Avista estimates the remaining balance to be $8.7 million as of
June 30, 2002 and expects it to be fully recovered by November 2003. The Company proposes
increasing Schedule 155's amortization rates to recover this amount. If approved, firm sales
customers on Rate Schedules 101 , 111 , and 121 (General, Large General and Commercial)
I Energy Information Administration Natural Gas Monthly August 2002.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT DEADLINE
would expenence a $0.0079 per therm increase and interruptible sales customers on Rate
Schedule 131 would experience a $0.01098 per therm increase.
Avista Deferral Account
$25 000 000
000 000 -
$20 000 000
$15 000 000
$10 000 000
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YOU ARE FURTHER NOTIFIED that Avista proposes that the large transportation
and interruptible customers (Schedules 131 , 132, and 146) be given the option of
receiving/paying their portion of the deferred gas costs either through a lump sum credit/charge
or through an amortization rate as set forth in the Company s tariffs. If these customers choose
the lump sum method, Avista proposes to adjust these billings' credits/charges by the amount of
interest that accumulates from the end of the test period used in this filing to the date of actual
settlement. The Company states that this proposal would clear out the small residual balances
related to interest charges that are carried forward between PGA filings for large customers.
YOU ARE FURTHER NOTIFIED that if the Application is approved, Avista states
that the Company s estimated annual natural gas revenue will decrease by approximately
$10 030 000 (15.5%). Avista estimates that the average residential customer using 75 therms per
month would see their monthly bill decrease by approximately $10.45 (14.8%). Larger
commercial customers would experience an average decrease between 16.4% and 17.3%, with
the higher decrease percentages due to lower base rates. Incorporating its proposed changes to
Rate Schedules 150 and 155 , Avista recommends the following annualized change in rates per
customer class:
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT DEADLINE
Customer Class Schedule Proposed Estimated Proposed
Average Decrease Average Decrease Average Price
$ /Therm % Change $/Therm
General 101 $0.13937 14.$0.75816
Large General 111 $0.13937 16.4%$0.7089
Commercial 121 $0.13937 17.$0.6654
Large General 112 $0.14727 21.2%$0.5484
Interruptible 131 $0.13848 19.$0.58661
Interruptible 132 $0.14946 25.$0.44127
Transportation 146 none none $0.10574
YOU ARE FURTHER NOTIFIED that according to Avista, the proposed price
reduction primarily reflects decreases in the cost of gas purchased for customer use and will not
affect its earnings as a result of the proposed decrease in prices and revenues.
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 Company requests these rates be
approved to become effective November 1 2002 and that this matter be handled under Modified
Procedure pursuant to Rules 201-210 of the Commission s Rules of Procedure.
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, IDAP A 31.01.01.000 et seq.
NOTICE OF MODIFIED PROCEDURE
Avista requests that its Application be processed under Modified Procedure , by
written submission rather than by hearing. IDAPA 31.01.01.201-204. The Company has
requested an effective date of July 1 , 2002.
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the filings of
record in Case No. A VU-02-2. The Commission notes that the 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
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT DEADLINE
be processed under Modified Procedure. In so doing, the Commission notes that Modified
Procedure and written comment have 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. IDAP A 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. AVU-02-2 is Wednesday, October 23 2002. 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 written comments concerning this
Application must be mailed to the Idaho Public Utilities Commission and A vista Utilities at the
following addresses:
COMMISSION SECRETARY
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
Street Address for Express Mail:
472 WWASHINGTON ST
BOISE, ID 83702-5983
KELLY O. NORWOOD
DAVID J. MEYER
A VISTA UTILITIES
1411 EAST MISSION
PO BOX 3727
SPOKANE, W A 99220-3727
Email: kelly.norwood~avistacorp.com
da vid .mey er~a vistacorp. com
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Commission s home page located at www.puc.state.id.under the "File Room" icon. Once at
the "File Room" page, select "File a Comment " fill in the case number as it appears on the front
of this document, and enter your comments. These comments must also be sent to the Applicant
at the e-mail addresses listed above.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT DEADLINE
YOU ARE FURTHER NOTIFIED that the Application together with accompanying
exhibits and workpapers can be reviewed at the Commission s office and at the principal office
of Avista Utilities during regular business hours. Avista Utilities is located at 1411 East Mission
in Spokane, Washington (509-489-0500). In addition, the Application (excluding exhibits) are
available on the Commission s Website at www.puc.state.id.under the "File Room" icon.
DATED at Boise, Idaho this
~(p~
day of September 2002.
iJ . tt~Je . Jewell
Commission Secretary
N:AVUGO202 In
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
NOTICE OF COMMENT DEADLINE