20040225Notice of Application.pdf

Office of the Secretary
Service Date
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
February 25, 2004
IN THE MATTER OF THE APPLICATION OF
AVISTA CORPORATION FOR THE
AUTHORITY TO INCREASE ITS RATES AND
CHARGES FOR ELECTRIC AND NATURAL
GAS SERVICE TO ELECTRIC AND NATURAL
GAS CUSTOMERS IN THE ST ATE OF IDAHO. )
CASE NO. AVU-O4-
A VU-O4-
NOTICE OF APPLICATION
NOTICE OF INTERVENTION
DEADLINE
NOTICE OF PRE-HEARING
CONFERENCE
YOU ARE HEREBY NOTIFIED that on February 6 2004, Avista Corporation dba
A vista Utilities (A vista; Company) filed an Application with the Idaho Public Utilities
Commission (Commission) for authority to increase the Company s general rates for electric and
natural gas service by averages of 24.1% and 9.2%, respectively. If approved Company
revenues for electric base retail rates would increase by $35.2 million annually; Company
revenues for natural gas service would increase by $4.7 million annually. A proposed reduction
in the Company s current Power Cost Adjustment (PCA) surcharge rate is also requested. The
net amount of actual increase varies by class of customer and usage.
THE APPLICATION
The Company s Application states that its existing base rates and charges for electric
service were approved as a result ofthe Commission final Order No. 28097, dated July 29, 1999
in Case No. WWP-98-11. See also Avista Utilities Tariff No. 28. Avista contends its existing
base rates and charges for natural gas service were approved as a result of Commission final
Order No. 22974, dated February 12, 1990 in Case No. WWP-88-5. See also Avista Utilities
Tariff No. 27. The Company contends its present electric and natural gas rates will not produce
sufficient revenue to provide operating income required to allow it the opportunity to earn the
82% rate of return, including a 44.3% equity ratio and an 11.5% return on equity.
Accordingly, Avista alleges that unless it is authorized to increase rates as requested, the
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF PRE-HEARING CONFERENCE
Company s rates will not be fair, just and reasonable and it will not have the opportunity to
realize a fair rate of return on its investment. A vista states the evidence in support of its need for
increased electric and natural gas rates is based on a 2002 test year and is presented on an
average basis. In addition, because the Company provides utility service in states other than
Idaho a jurisdictional separation of all investments, revenues and expenses allocated or assigned
in whole or in part to the Idaho utility business regulated by this Commission are described in its
filing.
A vista contends its need for relief regarding its electric service operations is driven
primarily by: 1) the addition of significant new generating capabilities; 2) a reduction in
wholesale sales revenue; 3) increased fuel costs for thermal generation, primarily natural gas; 4)
a decline in electric use per customer; and 5) record low hydro-electric conditions and
unprecedented high wholesale market prices, which have resulted in credit ratings below
investment grade and increased financing costs. In justifying its proposed increase in natural
gas service rates A vista contends its need for relief is driven primarily by: 1) the decline in
natural gas usage by customers; 2) the growth in the number of natural gas customers; and 3) the
general increase in expenses over the past fourteen years.
The charts below shows the averages of all rate components as proposed by A vista
for certain customer groups taking electric or natural gas service from the Company.
Proposed Electric Rate Increase
Current Rates Proposed Average
Customer Group Average Rates Base Rates Overall Percentage
(cents/kWh) (I)(cents/kWh/I)Increase
Residential (Sch. 1)13.
General Service (Sch. 11)9.38
Large General Service (Sch. 21)10.
Extra Large General Service (Sch. 25)15.
Pumpmg Service (Sch. 31)12.
(I) Includes all Company proposed adjustments: Schedule 59-Residential Exchange Credit
Schedule 65-Centralia Credit, Schedule 66-PCA Surcharge & Schedule 91 - DSM Rider
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF PRE-HEARING CONFERENCE
Proposed Natural Gas Rate Increase
Current Rates Proposed Average
Customer Group Average Rates Base Rates Overall Percentage
(cents/Therm il)(cents/Thermil)Increase
General Service (Sch. 101)78.86.10.
Large General Service (Sch. 111)69.73.
Large Gen. Svs High Load Factor (Sch. 121)64.67.
Interruptible Service (Sch. 131)55.57.3.4%
Transportation Service (Sch. 146) (2)10.12.18.2%
(I) Includes Purchase Adjustment Schedule 150/Excludes other rate adjustments
(2) Average increase in transporter s total gas bill assuming 50 cents per therm gas delivered to A vista System
1.93 cents/60.574 cents (present bill) = 3.2% increase.
Service Charges for Electric and Natural Gas Service
The service charge is designed to recover a portion of the costs associated with
providing electrical and natural gas service such as meters, distribution facilities and billing
services. Avista has proposed to increase the monthly, basic customer service charge for electric
service from $4.00 to $5.00 per month and from $3.28 to $5.00 for natural gas service. The
Company has also proposed changes to service charges or monthly minimum charges for certain
other schedules for electric and natural gas service.
A vista Utilities Schedules 11. 21 and 25
In its Application the Company proposes to add an energy usage rate block to each of
its electric general service schedules (Schedules 11 , 21 and 25), whereby the larger customers
served under those schedules would pay a lower incremental energy rate for usage beyond a
certain level.
Potlatch Corporation
A vista is also proposing changes to its present Schedule 25 rate structure that will
result in Potlatch Corporation (Lewiston) paying an average rate per kWh that is lower than the
average rate(s) paid by other Schedule 25 customers.
Issues Deferred from the 2003 Power Cost Adiustment (PCA) Proceeding
Avista also addresses issues surrounding certain gas supply contracts related to
Coyote Springs II that the Commission deferred consideration of in the Company s 2003 PCA
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NOTICE OF INTERVENTION DEADLINE
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proceeding until it filed a general rate proceeding.
No. A VU-03-
See Order No. 29377, Case
Advanced Meter Reading (AMR) Program in Idaho
Through its Application the Company is requesting approval of certain accounting
and ratemaking treatment related to its proposal to implement an AMR program in Idaho. A vista
plans to install meter upgrades to Idaho electric and natural gas meters over a four-year period
beginning in 2005 at a cost of approximately $16.3 million. The Company stated that it does not
seek an increase in rates at this time for any AMR costs.
YOU ARE FURTHER NOTIFIED that the Commission in Order No. 29432 has
suspended the Company-proposed March 10, 2004 effective date for a period of thirty (30) days
plus five (5) months from March 10, 2004, or until such time as the Commission may issue an
Order accepting, rejecting or modifying the Application in this matter.
YOU ARE FURTHER NOTIFIED that persons desiring to intervene in Case Nos.
A VU-04-1 and/or A VU-04-1 for the purpose of becoming a party, i., to present evidence
to acquire rights of cross-examination, to participate in settlement or negotiation conferences
and to make and argue motions must me a Petition to Intervene with the Commission pursuant
to Rules 72 and 73 of the Commission s Rules of Procedure, IDAPA 31.01.01.072 and ':"'073.
Persons desiring to acquire intervenor rights of participation must file a Petition to Intervene on
or before Friday, March 12, 2004. Persons seeking intervenor status shall also provide the
Commission Secretary with their electronic mail address to facilitate future communications in
this matter.
YOU ARE FURTHER NOTIFIED that persons desiring to present their views
without parties' rights of participation and cross-examination are not required to intervene and
may present their comments without prior notification to the Commission or to other parties.
YOU ARE FURTHER NOTIFIED that the Commission Secretary shall issue a
Notice of Parties after the deadline for intervention has passed. The Notice of Parties shall
assign exhibit numbers to each party in this proceeding.
YOU ARE FURTHER NOTIFIED that a pre-hearing conference in Case
Nos. A VU-04-1 and A VU-04-1 has been scheduled to commence at 1:00 p.m. on Tuesday.
March 16. 2004. at the Commission Hearine: Room. 472 West Washine:ton Street. Boise.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF PRE-HEARING CONFERENCE
Idaho [phone] Persons desiring to participate telephonically should make prIor
arrangements with the Commission Secretary (208 334-0338); secretary0J,puc.state.id.. The
purpose of the pre-hearing conference is to identify intervening parties, to discuss the procedural
treatment of PCA-Coyote Springs 2 issues, and to establish hearing dates and deadlines for the
filing of testimony.
YOU ARE FURTHER NOTIFIED that discovery is available in Case
Nos. A VU-04-1 and A VU-04-1 pursuant to the Commission s Rules of Procedure, IDAP A
31.01.01.221-234.
YOU ARE FURTHER NOTIFIED that the Company s Application together with
supporting testimony, exhibits and workpapers in Case Nos. A VU-04-1 and A VU-04-1 can
be reviewed at the Commission s office in Boise, Idaho and at the Idaho offices of Avista
Utilities during regular business hours. The Application is also available for public inspection on
the Commission s Home Page at www.puc.state.id.under the "File Room" icon and "Electric
Cases.
YOU ARE FURTHER NOTIFIED that the following persons are designated as
Avista s representatives in this matter:
DAVID 1. MEYER
SR VP AND GENERAL COUNSEL
A VISTA CORPORATION
PO BOX 3727
1411 EAST MISSION AVE, MSC-
SPOKANE W A 99220-3727
da vi d. meyer0J,a vistacorp. com
KELLY NORWOOD
VICE PRESIDENT - STATE & FED. REG.
A VISTA UTILITIES
PO BOX 3727
1411 EAST MISSION AVE, MSC- 7
SPOKANE W A 99220-3727
ke II y. norwood0J,a vistacorp .com
YOU ARE FURTHER NOTIFIED that Avista s intrastate revenue requirement, and
every component of it, both rate base and expense, are at issue. The Commission may grant
deny, or modify the revenue requirement requested and may find a revenue requirement different
from that proposed by any party is just, fair and reasonable. IDAP A 31.01.01.124.01.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF PRE-HEARING CONFERENCE
YOU ARE FURTHER NOTIFIED that the rates and charges of all Avista retail
customers, both recurring and non-recurring, including those of special contract customers , are at
issue, and every component of every existing and proposed rate and charge is at issue. The
Commission may approve, reject or modify the rates and charges proposed and may find that
rates and charges different from those proposed by any party are just, fair and reasonable.
IDAP A 31.01.01.124.02.
YOU ARE FURTHER NOTIFIED that the Commission may approve, reject or
modify existing or proposed relationships between and among rates and charges within, between
or among customer classes or rate groupings and may approve, reject or modify existing or
proposed relationships among and between customer classes or rate groupings.IDAPA
31.01.01.124.02.
YOU ARE FURTHER NOTIFIED that the Commission may abolish, reduce or
create rate blocks or categories of rates and charges, abolish, create or reduce components of
rates and charges, abolish, reduce or create customer classes or rate groupings, and abolish
reduce or create absolute or relative differences among and between existing classes or rate
groupings of customers. IDAPA 31.01.01.124.02.
YOU ARE FURTHER NOTIFIED that the tariffs , practices, rules and regulations
servIce, instrumentalities, equipment, faciliti , classifications, and customer relations of the
utility are at issue, and the Commission may address any of them in its order.IDAPA
31.01.01.124.02.
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 according to the Commission s Rules of Procedure, IDAPA 31.01.01.000 et seq.
YOU ARE FURTHER NOTIFIED that all hearings and prehearing conferences in
this matter will be held in facilities meeting the accessibility requirements of the Americans with
Disabilities Act (ADA). Persons needing the help of a sign language interpreter or other
assistance in order to participate in or to understand testimony and argument at a public hearing
may ask the Commission to provide a sign language interpreter or other assistance at the hearing.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF PRE-HEARING CONFERENCE
The request for assistance must be received at least five (5) working days before the hearing by
contacting the Commission Secretary at:
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone] (Telephone)
[phone] (FAX)
Mail: secretarv0J,puc.state.id.
DATED at Boise, Idaho this :LS tI- day of February 2004.
~E.il
Commission Secretary
Vld/N:A VUEO401 A VUGO401
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
NOTICE OF PRE-HEARING CONFERENCE