20040622Stockton Direct.pdf

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BEFORE THE
IDAHO PUBLIC UTiliTIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF A VISTA CORPORATION FOR
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC AND
NA TU RAl GAS SERVICE TO ELECTRIC
AND NATURAL GAS CUSTOMERS IN
THE STATE OF IDAHO.
) CASE NO. AVU-O4-) AVU-O4-
DIRECT TESTIMONY OF KATHY STOCKTON
IDAHO PUBLIC UTiliTIES COMMISSION
JUNE 21 , 2004
Please state your name and business address?
My name is Kathy Stockton.My business
address is 472 West Washington Street / Boise / Idaho.
By whom are you employed and in what
capaci ty?
I am employed as a Senior Audi tor by the
Idaho Public Utilities Commission.
Please describe your educational background
and professional experience.
I received my B. B. A. degree in Accounting
from Boise State University in December 1992.Following
graduation I was employed by the Idaho State Tax
Commission as a Tax Enforcement Technician.In that
capaci ty performed desk audits individual state
lncome tax re turns.was promoted to Tax Audi tor and
later to Senior Tax Audi tor.In my capacity as
audi tor / I performed audi ts on Special Fuel and Motor Fuel
Tax returns / International Fuels Tax Agreement Returns and
Special Fuel User tax returns.I accepted employment wi
the Idaho Public Utilities Commission Staff in July
1995.I attended the National Association of Regulated
Utilities Commissioners Annual Regulatory Studies program
at Michigan State Uni versi ty.I have conducted numerous
audi ts and cases for electric / gas / and water util i ties.
I have previously presented testimony before this
CASE NOS. AVU-04-1/AVU-04-06/21/04 (Di)STOCKTON / K Staff
Commission.
What is the purpose of your testimony?
The purpose of my testimony is to present
Commission Staff (Staff) adjustments to the revenue
requirement proposed by Avista Corporation (Avista;
Company) in Company wi tness Falkner's testimony.
propose adjustments to both net operating income and rate
base for both gas and electric operations.I will also
discuss the Company s Commission Basis Adj ustments and why
they are appropriate, as well as Staff's acceptance of the
Company s Pro forma Insurance adj ustment.
Would you please summarize your testimony in
thi s ease?
I recommend 12 Staff adj ustments Yes.
Electric and 5 Gas) to the Company-proposed test year
revenue requirement in the following areas:
Electric
(1 )Coyote Springs 2 - increases net lncome
by $1 72/000; decreases rate base by
$1/621 000; and decreases the total
revenue requirement by $504/000.
(2 )Capital Costs of Small Generation
Options - decreases rate base by
$ 539 / 000; and decreases the total
revenue requirement by $ 7 8/ 000 .
CASE NOS. AVU-E- 04 -l/AVU-G- 04-06/21/04 (Di)STOCKTON / K Staff
Gas
(3 )
(4 )
(5 )
Non-Executive Labor - increases net
income by $26, 000; and decreases the
total revenue requirement by $41,000.
Executive Labor - increases net income
by $ 9, 000; and decreases the total
revenue requirement by $14, 000.
Vegetation Management - increases net
income by $288 , 000; and decreases the
total revenue requirement by $451,000.
(6 )Accounts Receivable Program fees -
increases net income by $357,000; and
decreases the total revenue requirement
by $ 5 5 8 , 0 0 0 .
(7 )Corporate Fees and Expenses - increases
net income by $ 74 , 000; and decreases the
total revenue requirement by $116,000.
(1 )Gas Inventory - decreases rate base by
572,000; and decreases the total
revenue requirement by $227,000.
(2 )Non-Executive Labor - increases net
income by $ 6 , 000; and decreases the
total revenue requirement by $9,000.
(3 )Executi ve Labor - increases net income
by $2,000; and decreases the total
CASE NOS. AVU-E- 04 -l/AVU-G- 04-06/21/04 STOCKTON, K.Staff (Di)
revenue requirement by $3,000.
(4 )Accounts Receivable Program fees -
increases net income by $ 5 6 , 000; and
decreases the total revenue requirement
by $ 8 8 , 0 0 0 .
(5 )Corporate Fees and Expenses - increases
net income by $17 , 000; and decreases the
total revenue requirement by $27,000.
Did Staff perform an audit in preparing its
case?
In assessing the Company s Application,Yes.
Staff reviewed and audi ted the Company 1 s books and records
for the 2002 test year.
Does Staff agree with the use of a 2002 test
year?
Staff accepts the average of monthly average,
2002 test year and agrees with the beginning results of
operations.
Does Staff accept the allocation method used
by the Company?
Staff has reviewed the method the Company
uses to assigned and allocate common costs and common
general plant between services and between jurisdictions.
Staff finds the allocation methodology to be sound and
acceptable.
CASE NOS. AVU-04-1/AVU-04-
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(Di)STOCKTON , K.
Staf f
testimony?
Do you have any exhibits that support your
Yes.
in my testimony:
I am sponsoring 12 exhibits discussed
Staff Exhibits No. 109 through 115
related to my electric adjustments; and Staff Exhibits No.
116 through 120 related to my gas adjustments.
ELECTRIC SECTION
Would you please enumerate the Standard
Commission Basis Adj ustments to Electric Resul ts of
Operations proposed by Avista?
The Company adj ustments detailed in Company
Exhibi t No. 14, beginning wi th page 4 of 10, by column
letter designation are:
f .
l .
J .
1 .
Per Results Report
Deferred FIT Rate Base
Deferred Gain on Office BuildingColstrip 3 AFUDC Elimination
Colstrip Common AFUDC
Kettle Falls Disallowance
MOPS Deferred costs
Weatherization & DSM Investment
Customer Advances
Revenue Adjustment
Hydro Relicensing Adjustment
Eliminate Franchise Fees
Property Tax
Uncollectible Expense
Regulatory ExpenseInj uries and Damages
Federal Income Tax
Restate Debt Interest
Idaho PCA
Nez Perce Settlement Adjustment
Remove Mise Tariffs Adjustment
CASE NOS. AVU-04-1/AVU-04-06/21/04 STOCKTON , K.Staf f (Di)
PGE Monetization Amortization Adjustment
Payroll Clearing Adj ustment
The Company adjustments begin with the Column
b, which starts with the December 2002 Results of
Opera t ions Report.The Resul ts of Operations reports are
filed monthly, for both gas and electric, with the
Commission.The amounts in the report are for the twelve
months ended December 31, 2002.The net operating lncome
dollar amounts tie back to the Company s general ledger.
The Company computes rate base using the average of
monthly averages method.
Does the Staff accept the Standard Commission
Basis Adjustments?
Staff has audi ted these adj ustments andYes.
finds them acceptable.
Please explain the reasonableness of the
Company Pro Forma Insurance adjustment and why Staff
accepts the Company s adj ustment.
The Company s adjustment updates the 2002
lnsurance expense for general liability, directors and
officer liability, property and other policies to the
actual cost of insurance policies that are in effect for
2004 .Staff has verified that the policy expenses have
increased, and that these changes are known and
measurable.Staff has verified that the insurance costs
CASE NOS. AVU-E- 04 -l/AVU-G- 04-06/21/04
(Di)STOCKTON, K.Staf f
that are properly charged to the varlOUS non-utility
operations have been excluded from the Company
adj ustment Staff accepts this Company adjustment as
filed.
STAFF ELECTRIC ADJUSTMENTS TO RATE BASE & NET OPERATING
INCOME
Please explain Staff's adjustment to the
Company s Pro Forma Coyote Springs 2 adj ustment.
Staff's adj ustment brings the Company
adjustment to the actual balance as of April 30 , 2004.
This adj ustment incorporates the latest insurance payment
received for the transformer.In a confidential response
to Staff Production Request No. 268, the Company indicated
that addi tional insurance proceeds had been received.
Staff included the actual balance as of April 30, 2004 to
capture those insurance proceeds.Staff's adjustment
includes the effect of this insurance payment on the
Company s net plant investment in the Coyote Springs
proj ect; in contrast, the Company s filing estimated the
net operating income numbers for 2004 and based the rate
base numbers on the average of the proj ected plant
balances at 12/31/2003 and 12/31/2004.I have verified
that the Coyote Springs 2 proj ect was transferred from
Avista Power (an un-regulated subsidiary of Avista
Corporation) to Avista Utilities at cost.Staff was
CASE NOS. AVU-04-1/AVU-04-
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(Di)STOCKTON, K.
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provided wi th access to the plant records for Coyote
Springs 2 during two on-site audits in Spokane.Staf f
witness Sterling has reviewed the prudency of this
proj ect
What is the effect of Staff's adjustment to
the Company s Pro Forma Coyote Springs 2 adj ustment?
Staff's adj ustment increases Idaho electric
net income by $172 000; decreases rate base by $1,621,000;
and decreases the total revenue requirement by $504 000 as
shown on Staff Exhibit No. 109.
Please explain Staff's adjustment to the
Company s adj ustment - Capital Costs Small Gen Options.
In Order No. 29130 issued August 9, 2002 in
Case No. AVU-02-6 the Commission stated:
We find that the PCA mechanism is for
recovery of variable costs and is not
an appropriate vehicle for recovery of
capi tal costs. Accordingly, we directthe Company to remove the capi tal costs
associated with Kettle Falls Bi-Fuel
($ 5 6 , 598), Devi l' s Gap ($ 96, 743), and
Othello ($744,884) from the PCA deferralaccounts together wi th corresponding
adjustments to the carrying charges.
Order 29130 at 15.
The Company proposed to amortize the total of
the capi tal costs and the related carrying charge of
$921 184 over a 5-year period beginning January 2003, and
Commission Staff concurred.Staff also agreed that the
CASE NOS. AVU-E- 04 -1/AVU-04-06/21/04 (Di)STOCKTON, K.Staff
direct inclusion in rates of any amortized expense would
be addressed in a future rate proceeding.Consequently,
the Company has asked to include the capital cost
amortization expense in rates.The Company has al so asked
to earn a return on the unamortized capital cost balance
by including it in rate base.
Staff finds it reasonable to include the
$184 000 in amortized expenses for recovery in this rate
case.However , Staff does not find it reasonable to
include the $829,000 unamortized balance in rate base.
The Company had pursued various proj ects in order to avoid
the addi tional high-costs purchases of energy from the
wholesale markets during the 2000/2001 energy crlSlS.The
proj ects were terminated prior to completion after the
energy crlSlS subsided.The proj ects were never completed
or beneficial (used and useful) to the customers.
Therefore, the Company should not be entitled to earn a
return on assets that are not used and useful.Because
the plant investment is not used and useful , it does not
meet the regulatory requirement for inclusion in rate
base.Recovery of the actual capi tal expendi tures wi thout
earning a return on the investment is the appropriate
regulatory treatment in this case.Staff therefore
removes the rate base portion of the Company s pro forma
adj ustment
CASE NOS. AVU-04-1/AVU-04-06/21/04 (Di)STOCKTON , K.Staff
What is the effect of Staff's adj ustment to
the Company s adjustment - Capital Costs Small Gen
Options?
Staff's adjustment decreases Idaho electric
ra te base by $ 539 , 000; and decreases the total revenue
requirement by $78 000 as shown on Staff Exhibit No. 110.
Please explain Staff's adj ustment to the
Company s Pro Forma Labor Non-Executive and Executive
adj ustments.
Traditionally, ratemaking principles have
allowed for the inclusion of known and measurable changes
to test year expenses.Wages and salaries in the test
year are usually adjusted to reflect pay changes in the
current level of expense and better match the expenses on
a going-forward basis.The Company has included two
adjustments that reflect known and measurable changes to
the test period union and non-union wages and salaries, as
well as known and measurable changes to the executive
salaries.The test period expenses for wages and salaries
is restated with the increases in wage and salaries for
2002 , 2003, and 2004 , as if they were in place during the
entire pro forma test year.When the Company filed its
case, the amount of the increase for 2004 was estimated to
be 3.5% for both union and non-union employees.
response to Staff Production Request 245, the actual
CASE NOS. AVU-04-1/AVU-04-06/21/04 (Di)STOCKTON, K.Staff
salary increase in 2004 for non-union employees was 2.
and not the 3.5% used in calculating the Company Pro Forma
Labor adjustments for Executive and Non-executive labor.
Staff's adj ustments replace the estimate used by the
Company with the actual salary increases for 2002 , 2003,
and 2004.Staff's adj ustment not only updates the non-
union budgeted 3.5% salary increase to the actual 2.
increase, but also updated the Pro Forma Labor Executive
adjustment for changes in salaries and staffing that
resulted from the retirement of several key executives and
the subsequent hiring of replacements for those posi tions.
What is the effect of Staff's adj ustment to
the Company s Pro Forma Labor Non-Executive adjustment?
Staff's adj ustment increases Idaho electric
net operating income by $26,000, and decreases the total
revenue requirement by $41 000 as shown on Staff Exhibit
No. 111.
What is the effect of Staff's adjustment to
the Company s Pro Forma Labor - Executive adj ustment?
Staff's adjustment increases Idaho electric
net operating income by $9,000 and decreases the total
revenue requirement by $14 000 as shown on Staff Exhibit
No. 112.
Please explain Staff's adj ustment to the
Company s Pro Forma Vegetation Management adj ustment.
CASE NOS. AVU-04-1/AVU-04-06/21/04 (Di)STOCKTON, K Staff
Staff's adj ustment reflects replacing the
Company s requested vegetation management expenses wi th an
average of the actual amounts expended for vegetation
management during the years 1998 through 2003.It is
appropriate to use actual dollars, as these amounts are
known and measurable, rather than an estimate based on a
budget.The budgeted number is just that - a budgeted
number, an estimate.Because the Company has some
flexibili ty in the budgeting process, and because it is
not known what the company will actually expend for
vegetation management, it is more appropriate to look at
what has taken place in the past.The past expenses are
known and measurable.The vegetation management budget
has been reduced in many years based on the Company cash
flow and earnings resul ts.There is no reason to believe
it will be different in the future.
In the prior electric rate case (AVU-98-11)
Staff found that the five-year average of the actual
amounts booked for tree-trimming costs (vegetation
management) was $1 205,893.The five year average similar
to that used in the last rate case lS $1 217 048.The
average of the actual amounts booked for vegetation
management for the years 1998 through 2003 is $1,322 464.
Staff notes that the amount recorded in 2002 was
abnormally low at $550,255.The amounts expended by year
CASE NOS. AVU-04-1/AVU-04-
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tend to fluctuate because of the nature of the program.
Staff is aware that the vegetation management program
expendi tures are not the same from year to year, as
integrated vegetation management includes specific
treatments for each tree-trimming circuit, and each
circuit is different in size, and the requirements for
each circuit are different.The integrated management
approach does not take a one size fits all approach, thus
the fluctuation in expenditures from year to year.
Staff proposes to adj ust the Company s Pro
Forma Vegetation Management adjustment to reflect the
average amount actually expensed during the six-year
period from 1998 through 2003.Staff asserts that a SlX-
year average is reasonable, given the fluctuation in the
amounts actually expended from year to year.The last
electric rate case used a 1997 test year.The six-year
average reflects the activity in vegetation management
from the last rate case through the end of 2003.This
slx-year average allows the Staff to use known and
measurable expenses In calculating an appropriate amount
for future recovery in rates.The average reflects the
variability in the amount expended from year to year due
to the cyclical nature of the vegetation management
program , and recognlzes that the amount recorded in the
test year is abnormally low in comparison to other years.
CASE NOS. AVU-04-1/AVU-04-06/21/04
(Di)STOCKTON, K.Staff
What is the effect of Staff's adj ustment to
the Company s Pro Forma Vegetation Management adj ustment?
Staff's adjustment increases Idaho electric
net operating income by $288,000; and decreases the total
revenue requirement by $451,000 as shown on Staff Exhibit
No. 113.
Please explain Staff's Account Receivable
Program Fees adjustment.
This adjustment removes the fees associated
wi th the Company s Accounts Receivable Sale Program.The
Accounts Receivable Sale Program was initiated in 1988
when the Company entered into a five-year agreement to
sell $30 million of its accounts receivable.At that
time, the effect of the program was to reduce the
Company s need for financing and provide the Company wi
a source of funds at a much lower effective cost.This
arrangement was a true sale of assets because the accounts
receivable were sold wi thout recourse to the Company.The
Company previously agreed in a letter to Staff that the
sale of the accounts receivable and all costs associated
wi th the program would not be included or recovered
through the Company s cost of capital.Since 1988, the
Company has expanded the limit to sell up to $125 million
of the Company s accounts receivables.
In Production Request 261 , the Staff asked
CASE NOS. AVU-04-1/AVU-04-06/21/04 (Di)STOCKTON , K.Staff
the Company to "explain and quantify the benefi ts of the
Accounts Receivable Sale program for the ratepayer.The
Company stated , in response to Production Request 261:
The Accounts Receivable Sale program
is a cost effective approach of funding
the cost of carrying customer receivables
on the Company s balance sheet. The
al ternati ve to factoring accountsreceivable would be a working capi tal
addi tion to rate base at the Company
authorized rate of return.
While the response does not specifically explain the
benefits of the program for the ratepayer , it does state
that the program is like a working capital addition to
rate base, or a substitute for such a program.
Why have you proposed disallowing the fees
associated wi th the Accounts Receivable Sale Program?
I have calculated a negative cash working
capi tal for the Company.Because the Company asserts that
the Accounts Receivable Sale Program is a substitute for a
working capi tal requirement and the Company does not have
a working capi tal requirement, I have removed the fees
associated wi th the Accounts Receivable Program.
What is the effect of Staff's Accounts
Receivable Program fees adj ustment?
Staff's adj ustment increases Idaho electric
net operating income by $357 000 and decreases the total
revenue requirement by $558,000 as shown on Staff Exhibit
CASE NOS. AVU-E- 04 -l/AVU-G- 04-06/21/04 (Di)STOCKTON, K Staff
No. 114.
Please explain working capi tal.
Working capi tal is the amount of capi tal
needed to run the business between the time expenses are
disbursed to provide the services paid for by consumers
and the revenues from those services are received.
Working capital includes prepayments, inventories, and
cash working capi tal.Cash working capi tal is the average
amount of capital (cash) that is supplied by the investors
over and above the investment in plant and other rate base
items that is required to fill the gap between the time
when expendi tures are made to provide services and the
time collections are received for these services.
Historically this Commission has used the balance sheet
method for determining cash working capi tal for large
utilities.
What is the balance sheet method for
determining cash working capi tal?
The balance sheet method of cash working
capital evaluates the need for cash working capital by
identifying whether investors , usually shareholders, are
providing the working capi tal or whether it is being
provided from some other source.Using the balance sheet
method I have calculated a negative cash working capi tal
for Avista Corporation.At the corporate level , the cash
CASE NOS. AVU-04-1/AVU-04-06/21/04 (Di)STOCKTON , K.Staff
working capital requirement is a negative $139,799
million.This negative amount indicates that shareholders
were not the source of working capi tal , and subsequently
no return to the shareholders should be allowed.The
Company does not readily maintain the information
necessary to perform a working capital analysis at the
Avista Utilities level , let alone for Avista Utilities,
Electric Operations, at the Idaho Jurisdictional level.
Therefore , Avista Corp data must be used to calculate cash
working capi tal.
Did the Company request a return on cash
working capi tal?
No, the Company did not request a return on
cash working capi tal, nor did they request a return on
materials and supplies (inventory), and prepayments.
Has the Commission authorized negative cash
working capi tal?
Historically, the Commission has not
recognized negative cash working capital , finding that the
cash working capital allowance in those cases should
zero.In Case No. SOU-94-1 the Commission stated,
Because the Commission has never recognized negative cash
working capital, we find that the working capital
allowance in this case should be zero.Order No. 25785
at
CASE NOS. AVU-04-1/AVU-04-06/21/04 (Di)STOCKTON , K.Staff
Consequently, to the extent the Accounts
Receivable Sale Program is a substitutes for working
capital, the program fees too should not be allowed
recovery.
Please explain Staff's Corporate Fees and
Expenses adj ustment
Staff's Corporate Fees and Expenses
adjustment allocates 50% of the amounts recorded in FERC
account 930., Corporate Fees and Expenses, Electric
Operations, for the Idaho jurisdiction , to affiliates to
reflect the benefit received by the other affiliates from
these activities.In Staff Production Request 112, the
Staff inquired of the Company how the Board of Directors
fees and other expenses were allocated to Avista Utilities
and to the other subsidiaries.The request specifically
asked the Company to:
identify expenses associated wi bond issuances , analyst fees, rating
agencies, Board of Directors ' fees, and
shareholder expenses and how they are
allocated to Avista Corp. and its
subsidiaries, including the utility and
Idaho Gas and Electric Operations.
The Company s response did not identify the expenses
specifically.The response further stated:
Other costs related to Avista s debt
and equity financing activities, such
as Board of Director fees, rating agency
fees and other shareholder costs, are
CASE NOS. AVU-04-1/AVU-04-06/21/04 (Di)STOCKTON , K.Staff
generally recorded to FERC account 930.
Miscellaneous General Expenses. Theseaccount 930 costs are primarily assigned
the common-to-all utility code ' 7' which
spreads those expenses initially to both
electric and gas operations, and then to
all state jurisdictions, through
application of the ' Four Factor
Did the Company s response provide the amount
of or indicate that the other subsidiaries were allocated
any port ion of these expenses?
The Company did not provide Staff withNo.
any information showing the subsidiaries ' portion of these
expenses prior to being allocated to the utility
operations using the common-to-all utility code.This
utility code does not include the subsidiaries in the
allocation process.Therefore , due to the nature of the
allocation method, any apportionment to the subsidiaries
must be done prior to the expenses being allocated to
utility operations through the current allocation process.
The Board of Directors of Avista Corporation
responsible for all subsidiaries including Avista
Utilities.Because the other subsidiaries are included in
the required SEC filings, and the Annual Report to
Shareholders, among other things, the other subsidiaries
benefit from these activities, and therefore should bear
some of the costs.Therefore, the Staff adjustment
asslgns 50% of these activities to the other affiliated
CASE NOS. AVU-04-1/AVU-04-
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(Di)STOCKTON , K.Staff
subsidiaries.
Did you allocate 50% of the total in the
930.2 account to the other subsidiaries?
No, I allocated 50% of sub-account 930.
Corporate Fees and Expenses to the other subsidiaries,
slnce this was the sub-account used by the Company for
Board of Directors ' fees, shareholder expenses, and other
corporate expenses.
How did you determine that 50% was the
appropriate allocation percentage?
Absent any further information from the
Company, I used the 50% allocation based on what other
utility companies in Idaho use to allocate a portion of
the Board of Directors fees and other related expenses to
affiliates.In Case No. IPC-E- 03 -13, Staff wi tness Leckie
recommended that the cost of the Document Management
System be allocated equally between the ratepayers and the
shareholders, because that is the same allocation
percentage (50%) that IDACORP uses to allocate Board of
Director fees.Moreover , Order No. 29505 from that case
states:
The Commission finds that including
the entire cost of the Shareowners
Document Management System in rate base
would be unfair to ratepayers. Because
the system benefits IDACORP in its
administrative responsibilities much like
the fees paid to its Board of Directors,
we find that it should be allocated the
CASE NOS. AVU-04-1/AVU-04-06/21/04 (Di)STOCKTON , K.Staff
same as the Board of Director s fees inthis case. Therefore, only one-half the
cost of the system should be included in
Idaho Power s rate base.
Similarly, Intermountain Gas Company s utility operations
is allocated 50% of the Board of Directors fees and other
similar expenses , with the remaining 50% allocated to
other affiliates.
What is the effect of Staff's Corporate Fees
and Expenses adj ustment?
Staff's adjustment increases Idaho electric
net operating income $74,000; and decreases the total
revenue requirement by $116,000 as shown on Staff Exhibit
No. 115.
Do you have addi tional adj ustments for
Electric Operations?
No I do not.
GAS SECTION
Would you please enumerate the Standard
Commission Basis Adjustments to Gas Results of Operations
proposed by Avista?
The Company adjustments as detailed in
Company Exhibi t No. 15, beginning wi th page 4 of 8, by
column letter designation are:
c .
Per Resul ts Report
Deferred FIT Rate Base
Deferred Gain on Office BuildingGas Inventory
CASE NOS. AVU-E- 04 -l/AVU-G- 04-06/21/04 (Di)STOCKTON, K.Staff
f .
l .
Weatherization & DSM Investment
Customer Advances
Eliminate Franchise Fees
Property Tax
Uncollectible Expense
Regulatory Expense AdjustmentInj uries and Damages
Federal Income Tax
Restate Debt InterestPayroll Clearing Adj ustment
J .
1 .
The Company adjustments begin with the Column
b, which starts with the December 2002 Results of
Operations Report.The Results of Operations reports are
filed monthly, for both gas and electric, with the
Commission.The amounts in the report are for the twelve
months ended December 31 , 2002.The net operating lncome
dollar amounts tie back to the Company s general ledger.
The Company computes rate base using the average of
monthly averages method.
Does the Staff accept the Standard Commission
Basis Adj ustments?
Staff has audited these adjustments and with
the exception of the Gas Inventory adjustment, Staff finds
them acceptable.
" Q.Please explain the reasonableness of the
Company Pro Forma Insurance Adjustment and why Staff
accepts the Company s adj ustment.
The Company s adjustment updates the 2002
lnsurance expense for general liabili ty, directors and
CASE NOS. AVU-04-1/AVU-04-06/21/04 (Di)STOCKTON, K.Staff
officer liability, property and other policies to the
actual cost of insurance policies that are in effect for
2004 .Staff has verified that the policy expenses have
increased, and that these changes are known and
measurable.Staff has verified that the insurance costs
that are properly charge to the various non-utility
operations have been excluded from the Company
adj ustment Staff accepts this adjustment as filed by
Avista.
STAFF GAS ADJUSTMENTS TO RATE BASE & NET OPERATING INCOME
Please explain Staff's adjustment to the
Company s Gas Inventory Pro Forma adj ustment
This adjustment removes the Company s Pro
Forma Gas Inventory adj ustment from rate base.Al though
the Company has been including a gas inventory adj ustment
since 1984 , Staff has not identified a rationale to
justify continuing its current inclusion in rate base.
Gas inventory is normally considered part of
working capi tal.Working capi tal includes inventories,
prepayments , minimum and compensating bank balances, and"
cash working capi tal.Typically three kinds of
inventories are included in working capi tal:fuel stocks,
construction material in inventory, and materials and
supplies held for operating and maintenance purposes.
Working capital is generally allowed in recognition that a
CASE NOS. AVU-04-1/AVU-04-06/21/04 (Di)STOCKTON , K.Staff
company pays some of its expenses before it recel ves
revenue, and to the extent shareholders supply that money,
they should earn a return on it.However , as described
previously in my testimony, Staff identified a negative
cash working capital for Avista Corporation so cash
working capi tal is not an appropriate rate base addi tion.
Therefore, including gas inventory in rate base for this
case also is not appropriate.As previously discussed,
the Commission has not historically recognized negative
cash working capi tal
cash working capi tal
zero.
What
adj ustment?
and had consequently found that the
allowance in those cases should be
the effect of Staff's Gas Inventory
Staff's Gas Inventory adj ustment decreases
Idaho gas rate base by $1,572 000; and decreases the total
revenue requirement by $227 000 as shown on Staff Exhibit
No. 116.
Please explain Staff's adj ustment to the
Company s Executive and Non-Executive Labor Pro Forma
adj ustments.
As previously stated in the electric section
ratemaking principles have traditionally allowed for the
inclusion of known and measurable changes to test year
expenses.Wages and salaries in the test year are usually
CASE NOS. AVU-E- 04 -l/AVU-G- 04-06/21/04 (Di)STOCKTON , K.Staf f
adjusted to reflect pay changes in the current level of
expense and better match the expenses on a going-forward
basis.As previously discussed, Staff's adj ustments
replace the estimate used by the Company wi th the actual
salary increases for 2002, 2003, and 2004.Staff'
adjustment not only updates the non-union budgeted 3.
salary increase to the actual 2.9% increase, but also
updated the Pro Forma Labor - Executive adjustment for
changes in salaries and staffing that resulted from the
retirement of several key executives and the subsequent
hiring of replacements for those positions.
What is the effect of Staff's adj ustment to
the Company s Pro Forma Labor Non-Executive adj ustment?
Staff's adjustment increases Idaho gas net
operating income by $6,000; and decreases the total
revenue requirement by $9,000 as shown on Staff Exhibit
No. 117.
What is the effect of Staff's adj ustment to
the Company s Pro Forma Labor Executive adj ustment?
Staff's adj ustment increases Idaho gas net
operating income by $2 000; and decreases the total
revenue requirement by $3,000 as shown on Staff Exhibit
No. 118.
Please explain Staff's adj ustment to the
Accounts Receivable Sale Program Fees?
CASE NOS. AVU-04-1/AVU-04-06/21/04 (Di)STOCKTON, K.Staff
As stated in the electric section of my
testimony, this adj ustment removes the fees associated
wi th the Company s Accounts Receivable Sale Program.The
Company has equated the fees associated with this program
wi th working capi tal.As I stated previously, Avista
Corporation has a negative cash working capital making a
working capitol aqjustment or expenditures associated with
working capi tal inappropriate in this case.As previously
discussed, the Commission has not historically recognized
negative cash working capital and has found that the cash
working capi tal allowance in those cases should be zero.
therefore, Staff has simply removed these fees in this
case.
What is the effect of Staff's Accounts
Receivable Program fees adjustment?
Staff's adjustment increases Idaho gas net
operating incom~ by $56,000; and decreases the total
revenue requirement by $88,000 as shown on Staff Exhibit
No. 119.
Please explain Staff's Corporate Fees and
Expenses adj ustment
As I stated in the electric section, Staff'
Corporate Fees and Expenses adjustment allocates 50% of
the amounts recorded in the corresponding natural gas FERC
account 1930.27, Corporate Fees and Expenses, Gas
CASE NOS. AVU-04-1/AVU-04-06/21/04 (Di)STOCKTON , K.Staff
Operations, for the Idaho jurisdiction to the other
subsidiaries for the same reasons enumerated.
What is the effect of Staff's Corporate Fees
and Expenses adjustment?
Staff's adj ustment increases Idaho gas net
operating income by $17 000; and decreases the total
revenue requirement by $27 000 as shown on Staff Exhibit
No. 120.
Do you have additional adjustments for Gas
Operations?
No, I do not.
Does this conclude your direct testimony?
Yes, it does.
CASE NOS. AVU-04-1/AVU-04-06/21/04 (Di)STOCKTON, K Staff
AVISTA UTILITIES
ELECTRIC PRO FORMA ADJUSTMENTS
IDAHO PUBLIC UTILITIES COMMISSION STAFF
TWELVE MONTHS ENDED DECEMBER 31 2002
(OOO'S OF DOLLARS)
Line
No.
A vista Utilities. Electric Operations
Coyote Springs 2 Adjustment
Net Adjustment
Idaho
COYOTE SPRINGS 2
Company Adjustment
Idaho
Staff Adjustment
IdahoDESCRIPTION
REVENUES
Total General Business
Interdepartmental Sales
Sales For Resale
Total Sales of Electricity
Other Revenue
Total Electric Revenue
EXPENSES
Production and Transmission
Operating Expenses
Purchased Power
Depreciation and Amortization
Taxes
Total Production & Transmission
535
681
296 122 (174)
(94)
268
629
949
Distribution
Operating Expenses
Depreciation
Taxes
Total Distribution
(32)
(32)
(29)
(29)
16 Customer Accounting17 Customer Service & Information18 Marketing
Administrative & General19 Operating Expenses20 Depreciation21 Taxes22 Total Admin. & General23 Total Electric Expenses
24 Operating Income before FIT
917 652 265
917)652)265
021)(928)
896 ($1 724)$172
Federal Income Taxes25 Current Accrual26 Deferred Income Taxes
35.
27 NET OPERATING INCOME
RATE BASE
PLANT IN SERVICE28 Intangible29 Production30 Transmission31 Distribution32 General33 Total Plant in Service
34 ACCUMULATED DEPRECIATION
35 ACCUM. PROVISION FOR AMORTIZATION36 Total Accum. Depreciation & Amort.37 GAIN ON SALE OF BUILDING
38 DEFERRED TAXES
096 772
519
324)
519
096
629
291
534
805)
(95)
(95)629 534
(502)
$36 965
(413)
$35,34439 TOTAL RATE BASE (~1 621)
($504)40 Revenue Requirement Increase (Decrease)
Exhibit No. 109
Case No. A VU-04-
A VU -04-
K. Stockton, Staff
6/21/04
AVISTA UTILITIES
ELECTRIC PRO FORMA ADJUSTMENTS
IDAHO PUBLIC UTILITIES COMMISSION STAFF
TWELVE MONTHS ENDED DECEMBER 31 2002
(OOO'S OF DOLLARS)
Avista Utilities. Electric Operations CAPITAL COSTS OF SMALL GENERATION OPTIONSCapital Costs of Small Generation Options AdjustmentLine Company Adjustment Staff Adjustment Net AdjustmentNo. DESCRIPTION Idaho Idaho Idaho
REVENUES
To~al General Business
Interdepartmental Sales
Sales For Resale
Total Sales of Electricity
Other Revenue
Total Electric Revenue
EXPENSES
Production and Transmission
Operating Expenses
Purchased Power
Depreciation and Amortization
Taxes
Total Production & Transmission 184
184 184
184
Distribution
Operating Expenses
Depreciation
Taxes
Total Distribution
16 Customer Accounting17 Customer Service & Information18 Marketing
Administrative & General19 Operating Expenses20 Depreciation21 Taxes22 " Total Admin. & General23 Total Electric Expenses
24 Operating Income before FIT
184 184
(184)(184)
Federal Income Taxes25 Current Accrual26 Deferred Income Taxes
35.
(64)
$120
(64)
$12027 NET OPERATING INCOME
RATE BASE
PLANT IN SERVICE28 Intangible29 Production30 Transmission31 Distribution32 General33 Total Plant in Service
34 ACCUMULATED DEPRECIATION
35 ACCUM. PROVISION FOR AMORTIZATION36 Total Accum. Depreciation & Amort.37 GAIN ON SALE OF BUILDING
38 DEFERRED TAXES
829 (829)
829 (829)
(290)
$539
290
39 TOTAL RATE BASE ($539)
$7840 Revenue Requirement Increase (Decrease)
Exhibit No. 110
Case No. A VU-04-
A VU -04-
K. Stockton, Staff
6/21/04
Line
No.
Avista Utilities - Electric Operations
Non-Executive Labor Adjustment
DESCRIPTION
REVENUES
Total General Business
Interdepartmental Sales
Sales For Resale
Total Sales of Electricity
Other Revenue
Total Electric Revenue
EXPENSES
Production and Transmission
Operating Expenses
Purchased Power
Depreciation and Amortization
Taxes
Total Production & Transmission
Distribution
Operating Expenses
Depreciation
Taxes
Total Distribution
16 Customer Accounting17 Customer Service & Information18 Marketing
Administrative & General19 Operating Expenses20 Depreciation21 Taxes22 Total Admin. & General23 Total Electric Expenses
24 Operating Income before FIT
Federal Income Taxes25 Current Accrual26 Deferred Income Taxes
27 NET OPERATING INCOME
RATE BASE
PLANT IN SERVICE28 Intangible29 Production30 Transmission31 Distribution32 General33 Total Plant in Service
34 ACCUMULATED DEPRECIATION
35 ACCUM. PROVISION FOR AMORTIZATION36 Total Accum. Depreciation & Amort.37 GAIN ON SALE OF BUILDING
38 DEFERRED TAXES
39 TOTAL RATE BASE
40 Revenue Requirement Increase (Decrease)
AVISTA UTILITIES
ELECTRIC PRO FORMA ADJUSTMENTS
IDAHO PUBLIC UTILITIES COMMISSION STAFF
TWELVE MONTHS ENDED DECEMBER 31 2002
(OOO'S OF DOLLARS)
NON-EXECUTIVE LABOR ADJUSTMENT
Company Adjustment
Idaho
Staff Adjustment
Idaho
390 378
35.
390 378
272 270
(11)
260 259
140 133
273 254
273 254
084 044
084)044)
(379)(365)
$705 $679
Net Adjustment
Idaho
(12)
(12)
(2)
(1 )
(7)
(1 )
(19)
(19)
(40)
$26
$41
Exhibit No. 111
Case No. A VU-O4-
A VU -O4-
K. Stockton, Staff
6/21/04
Line
No.
Avista Utilities - Electric Operations
Executive Labor Adjustment
DESCRIPTION
REVENUES
Total General Business
Interdepartmental Sales
Sales For Resale
Total Sales of Electricity
Other Revenue
Total Electric Revenue
EXPENSES
Production and Transmission
Operating Expenses
Purchased Power
Depreciation and Amortization
Taxes
Total Production & Transmission
Distribution
Operating Expenses
Depreciation
Taxes
Total Distribution
16 Customer Accounting17 Customer Service & Information18 Marketing
Administrative & General19 Operating Expenses20 Depreciation21 Taxes22 Total Admin. & General23 Total Electric Expenses
24 Operating Income before FIT
Federal Income Taxes25 Current Accrual26 Deferred Income Taxes
27 NET OPERATING INCOME
RATE BASE
PLANT IN SERVICE28 Intangible29 Production30 Transmission31 Distribution32 General33 Total Plant in Service
34 ACCUMULATED DEPRECIATION
35 ACCUM. PROVISION FOR AMORTIZATION36 Total Accum. Depreciation & Amort.
37 GAIN ON SALE OF BUILDING
38 DEFERRED TAXES
39 TOTAL RATE BASE
40 Revenue Requirement Increase (Decrease)
AVISTA UTILITIES
ELECTRIC PRO FORMA ADJUSTMENTS
IDAHO PUBLIC UTILITIES COMMISSION STAFF
TWELVE MONTHS ENDED DECEMBER 31 2002
(OOO'S OF DOLLARS)
EXECUTIVE LABOR ADJUSTMENT
Company Adjustment
Idaho
Staff Adjustment
Idaho
35.
(17)
(17)
(23)(9)
(8)(3)
$15
Net Adjustment
Idaho
(17)
(17)
(14)
($14)
Exhibit No. 112
Case No. A VU-04-
A VU -04-
K. Stockton, Staff
6/21/04
Line
No.
A vista Utilities - Electric Operations
Vegetation Management Adjustment
DESCRIPTION
REVENUES
Total General Business
Interdepartmental Sales
Sales For Resale
Total Sales of Electricity
Other Revenue
Total Electric Revenue
EXPENSES
Production and Transmission
Operating Expenses
Purchased Power
Depreciation and Amortization
Taxes
Total Production & Transmission
Distribution
Operating Expenses
Depreciation
Taxes
Total Distribution
16 Customer Accounting17 Customer Service & Information18 Marketing
Administrative & General19 Operating Expenses20 Depreciation21 Taxes22 Total Admin. & General23 Total Electric Expenses
24 Operating Income before FIT
Federal Income Taxes25 Current Accrual26 Deferred Income Taxes
27 NET OPERATING INCOME
RATE BASE
PLANT IN SERVICE28 Intangible29 Production30 Transmission31 Distribution32 General33 Total Plant in Service
34 ACCUMULATED DEPRECIATION
35 ACCUM. PROVISION FOR AMORTIZATION36 Total Accum. Depreciation & Amort.37 GAIN ON SALE OF BUILDING
38 DEFERRED TAXES
39 TOTAL RATE BASE
40 Revenue Requirement Increase (Decrease)
AVISTA UTILITIES
ELECTRIC PRO FORMA ADJUSTMENTS
IDAHO PUBLIC UTILITIES COMMISSION STAFF
TWELVE MONTHS ENDED DECEMBER 31 2002
(OOO'S OF DOLLARS)
VEGETATION MANAGEMENT ADJUSTMENT
Company Adjustment
Idaho
Staff Adjustment
Idaho
Net Adjustment
Idaho
150 155
150 155
070 617
(8)
057 609 (448)
(453)
35.
207 764 443
207)(764)443
(422)(267)155
$785 ($497)$288
Exhibit No. 113
Case No. A VU-04-
A VU -04-
K. Stockton, Staff
6/21/04
AVISTA UTILITIES
ELECTRIC PRO FORMA ADJUSTMENTS
IDAHO PUBLIC UTILITIES COMMISSION STAFF
TWELVE MONTHS ENDED DECEMBER 31 2002
(OOO'S OF DOLLARS)
A vista Utilities - Electric Operations
Accounts Receivable Fees Adjustment
Line
No.
ACCOUNTS RECEIVABLE FEES
Company Adjustment
Idaho
Staff Adjustment
Idaho
Net Adjustment
IdahoDESCRIPTION
REVENUES
Total General Business
Interdepartmental Sales
Sales For Resale
Total Sales of Electricity
Other Revenue
Total Electric Revenue
EXPENSES
Production and Transmission
Operating Expenses
Purchased Power
Depreciation and Amortization
Taxes
Total Production & Transmission
Distribution
Operating Expenses
Depreciation
Taxes
Total Distribution
16 Customer Accounting17 Customer Service & Information18 Marketing
(556)556
Administrative & General19 Operating Expenses20 Depreciation21 Taxes22 Total Admin. & General23 Total Electric Expenses
24 Operating Income before FIT
550 550
550 550
193 193
$357 $357
Federal Income Taxes25 Current Accrual26 Deferred Income Taxes
35.
27 NET OPERATING INCOME
RATE BASE
PLANT IN SERVICE28 Intangible29 Production30 Transmission31 Distribution32 General33 Total Plant in Service
34 ACCUMULATED DEPRECIATION
35 ACCUM. PROVISION FOR AMORTIZATION36 Total Accum. Depreciation & Amort.37 GAIN ON SALE OF BUILDING
38 DEFERRED TAXES
39 TO!AL RATE BASE
40 Revenue Requirement Increase (Decrease)$558
Exhibit No. 114
Case No. A VU-04-
A VU -O4-
K. Stockton, Staff
6/21/04
AVISTA UTILITIES
ELECTRIC PRO FORMA ADJUSTMENTS
IDAHO PUBLIC UTILITIES COMMISSION STAFF
TWELVE MONTHS ENDED DECEMBER 31 2002
(OOO'S OF DOLLARS)
Avista Utilities - Electric Operations
Corporate Fees and Expenses Adjustment
Line
No.
CORPORATE FEES AND EXPENSES
Company Adjustment
Idaho
Staff Adjustment
IdahoDESCRIPTION
REVENUES
Total General Business
Interdepartmental Sales
Sales For Resale
Total Sales of Electricity
Other Revenue
Total Electric Revenue
EXPENSES
Production and Transmission
Operating Expenses
Purchased Power
Depreciation and Amortization
Taxes
Total Production & Transmission
Distribution
Operating Expenses
Depreciation
Taxes
Total Distribution
16 Customer Accounting17 Customer Service & Information18 Marketing
Administrative & General19 Operating Expenses20 Depreciation21 Taxes22 Total Admin. & General23 Total Electric Expenses
24 Operating Income before FIT
(115)
(115)
114
114
$74
Federal Income Taxes25 Current Accrual26 Deferred Income Taxes
35.
27 NET OPERATING INCOME
RATE BASE
PLANT IN SERVICE28 Intangible29 Production30 Transmission31 Distribution32 General33 Total Plant in Service
34 ACCUMULATED DEPRECIATION
35 ACCUM. PROVISION FOR AMORTIZATION36 Total Accum. Depreciation & Amort.37 GAIN ON SALE OF BUILDING
38 DEFERRED TAXES
39 TOTAL RATE BASE
40 Revenue Requirement Increase (Decrease)
Net Adjustment
Idaho
(115)
(115)
(114)
114
$74
$116
Exhibit No. 115
Case No. A VU-04-
A VU-04-
K. Stockton, Staff
6/21/04
Line
No.
Avista Utilities - Gas Operations
Gas Inventory Adjustment
Description
REVENUES
Total General Business
Total Transportation
Other Revenues
Total Gas Revenues
EXPENSES
Exploration & Development
Production
City Gate Purchases
Purchased Gas Expense
Net Nat. Gas Storage Trans
Total Production
Underground Storage
Operating Expenses
Depreciation
Taxes
Total Underground Storage
Distribution
Operating Expenses
Depreciation
Taxes
Total Distribution
18 Customer Accounting19 Customer Service & Information20 Sales
Administrative and General21 Operating Expenses22 Depreciation23 Taxes24 Total Admin. & General25 Total Gas Expense
26 Operating Income before FIT
Federal Income Taxes27 Current Accrual28 Deferred FIT29 Amort ITC
30 NET OPERATING INCOME
RATE BASE
PLANT IN SERVICE
Underground Storage
Distribution Plant
General Plant
Total Plant in Service
ACCUMULATED DEPRECIATION35 Underground Storage36 Distribution Plant37 General Plant38 Total Accum. Depreciation
39 DEFERRED TAXES
40 GAS INVENTORY41 GAIN ON SALE OF BUILDING
42 TOTAL RATE BASE
43 Revenue Requirement Increase (Decrease)
AVISTA UTILITIES
GAS PRO FORMA ADJUSTMENTS
IDAHO PUBLIC UTILITIES COMMISSION STAFF
TWELVE MONTHS ENDED DECEMBER 31 2002
(OOO'S OF DOLLARS)
GAS INVENTORY ADJUSTMENT
Company Adjustment
Idaho
Staff Adjustment
Idaho
35.
572
572
Net Adjustment
Idaho
572)
($1 572)
($227)
Exhibit No. 116
Case No. A VU-04-
A VU -04-
K. Stockton, Staff
6/21/04
Line
No.
Avista Utilities - Gas Operations
Non-Executive Labor Adjustment
Description
REVENUES
Total General Business
Total Transportation
Other Revenues
Total Gas Revenues
EXPENSES
Exploration & Development
Production
City Gate Purchases
Purchased Gas Expense
Net Nat. Gas Storage Trans
Total Production
Underground Storage
Operating Expenses
Depreciation
Taxes
Total Underground Storage
Distribution
Operating Expenses
Depreciation
Taxes
Total Distribution
18 Customer Accounting19 Customer Service & Information20 Sales
Administrative and General21 Operating Expenses22 Depreciation23 Taxes24 Total Admin. & General25 Total Gas Expense
26 Operating Income before FIT
Federal Income Taxes27 Current Accrual (at 35%)28 Amort ITC29 Deferred FIT
30 NET OPERATING INCOME
RATE BASE
PLANT IN SERVICE
Underground Storage
Distribution Plant
General Plant
Total Plant in Service
ACCUMULATED DEPRECIATION35 Underground Storage36 Distribution Plant37 General Plant38 Total Accum. Depreciation
39 DEFERRED TAXES
40 GAS INVENTORY41 GAIN ON SALE OF BUILDING
42 TOTAL RATE BASE
43 Revenue Requirement Increase (Decrease)
AVISTA UTILITIES
GAS PRO FORMA ADJUSTMENTS
IDAHO PUBLIC UTILITIES COMMISSION STAFF
TWELVE MONTHS ENDED DECEMBER 31 2002
(OOO'S OF DOLLARS)
NON-EXECUTIVE LABOR ADJUSTMENT
Company Adjustment
Idaho
Staff Adjustment
Idaho
111 111
(3)
108 108
268 258
(268)(258)
(94)(90)
($174)($168)
Net Adjustment
Idaho
(4)
(1 )
(1 )
(4)
(4)
(10)
($9)
Exhibit No. 117
Case No. A VU-O4-
A VU -04-
K. Stockton, Staff
6/21/04
Line
No.
Avista Utilities - Gas Operations
Executive Labor Adjustment
Description
REVENUES
Total General Business
Total Transportation
Other Revenues
Total Gas Revenues
EXPENSES
Exploration & Development
Production
City Gate Purchases
" Purchased Gas Expense
Net Nat. Gas Storage Trans
Total Production
Underground Storage
Operating Expenses
Depreciation
Taxes
Total Underground Storage
Distribution
Operating Expenses
Depreciation
Taxes
Total Distribution
18 Customer Accounting19 Customer Service & Information20 Sales
Administrative and General21 Operating Expenses22 Depreciation23 Taxes24 Total Admin. & General25 Total Gas Expense
26 Operating Income before FIT
Federal Income Taxes27 Current Accrual (at 35%)28 Amort ITC
29 ": Deferred FIT
30 NET OPERATING INCOME
RATE BASE
PLANT IN SERVICE
Underground Storage
Distribution Plant
General Plant
Total Plant in Service
ACCUMULATED DEPRECIATION35 Underground Storage36 Distribution Plant37 General Plant38 Total Accum. Depreciation
39 DEFERRED TAXES
40 GAS INVENTORY41 GAIN ON SALE OF BUILDING
42 TOTAL RATE BASE
43 Revenue Requirement Increase (Decrease)
AVISTA UTILITIES
GAS PRO FORMA ADJUSTMENTS
IDAHO PUBLIC UTILITIES COMMISSION STAFF
TWELVE MONTHS ENDED DECEMBER 31 2002
(OOO'S OF DOLLARS)
EXECUTIVE LABOR ADJUSTMENT
Company Adjustment
Idaho
Staff Adjustment
Idaho
(1)
(1)
(13)(10)
(5)(4)
Net Adjustment
Idaho
(3)
(3)
(3)
($3)
Exhibit No. 118
Case No. A VU-04-
A VU -04-
K. Stockton, Staff
6/21/04
AVISTA UTILITIES
GAS PRO FORMA ADJUSTMENTS
IDAHO PUBLIC UTILITIES COMMISSION STAFF
TWELVE MONTHS ENDED DECEMBER 31 2002
(OOO'S OF DOLLARS)
Line
No.
Avista Utilities - Gas Operations
Accounts Receivable Fees Adjustment
Staff Adjustment
IdahoDESCRIPTION
REVENUES
Total General Business
Total Transportation
Other Revenues
Total Gas Revenues
EXPENSES
Exploration & Development
Production
City Gate Purchases
Purchased Gas Expense
Net Nat. Gas Storage Trans
Total Production
Underground Storage10 Operating Expenses11 i Depreciation12 Taxes13 Total Underground Storage
Distribution
Operating Expenses
Depreciation
Taxes
Total Distribution
18 Customer Accounting19 Customer Service & Information20 Sales
Administrative and General21 Operating Expenses22 Depreciation23 Taxes24 Total Admin. & General25 Total Gas Expense
26 Operating Income before FIT
Federal Income Taxes27 Current Accrual28 Deferred FIT29 Amort ITC
30 NET OPERATING INCOME
RATE BASE
PLANT IN SERVICE
Underground Storage
Distribution Plant
General Plant
Total Plant in Service
ACCUMULATED DEPRECIATION35 Underground Storage36 Distribution Plant37 General Plant38 Total Accum. Depreciation
39 DEFERRED TAXES
40 GAS INVENTORY41 GAIN ON SALE OF BUILDING
42 TOTAL RATE BASE
43 Revenue Requirement Increase (Decrease)
ACCOUNTS RECEIVABLE FEES ADJUSTMENT
Company Adjustment
Idaho
(87)
35%
$56
Net Adjustment
Idaho
(87)
$56
$88
Exhibit No. 119
Case No. A VU-O4-
A VU -04-
K. Stockton, Staff
6/21/04
Avista Utilities - Gas Operations
Corporate Fees and Expenses Adjustment
LineNo. Description
REVENUES
Total General Business
Total Transportation
Other Revenues
Total Gas Revenues
EXPENSES
Exploration & Development
Production
City Gate Purchases
Purchased Gas Expense
Net Nat. Gas Storage Trans
Total Production
Underground Storage
Operating Expenses
Depreciation
Taxes
Total Underground Storage
Distribution
Operating Expenses
Depreciation
Taxes
Total Distribution
18 Customer Accounting19 Customer Service & Information20 Sales
Administrative and General21 Operating Expenses22 Depreciation23 Taxes24 Total Admin. & General25 Total Gas Expense
26 Operating Income before FIT
Federal Income Taxes27 Current Accrual (at 35%)28 Amort ITC29 Deferred FIT
30 NET OPERATING INCOME
RATE BASE
PLANT IN SERVICE
Underground Storage
Distribution Plant
General Plant
Total Plant in Service
ACCUMULATED DEPRECIATION35 Underground Storage36 Distribution Plant37 General Plant38 Total Accum. Depreciation
39 DEFERRED TAXES
40 GAS INVENTORY41 GAIN ON SALE OF BUILDING
42 TOTAL RATE BASE
43 Revenue Requirement Increase (Decrease)
AVISTA UTILITIES
GAS PRO FORMA ADJUSTMENTS
IDAHO PUBLIC UTILITIES COMMISSION STAFF
TWELVE MONTHS ENDED DECEMBER 31 2002
(OOO'S OF DOLLARS)
CORPORATE FEES AND EXPENSES ADJUSTMENT
Company Adjustment
Idaho
Staff Adjustment
Idaho
(26)
(26)
$17
Net Adjustment
Idaho
(26)
(26)
(26)
($27)
Exhibit No. 120
Case No. A VU-04-
A VU -04-
K. Stockton, Staff
6/21/04
CERTIFICATE OF SERVICE
HEREBY CERTIFY THAT I HAVE THIS 21ST DAY OF JUNE 2004
SERVED THE FOREGOING DIRECT TESTIMONY OF KATHY STOCKTON, IN
CASE NO. AVU-04-l/AVU-04-, BY MAILING A COpy THEREOF POSTAGE
PREPAID TO THE FOLLOWING:
DAVID J. MEYER
SR VP AND GENERAL COUNSEL
VISTA CORPORATION
PO BOX 3727
SPOKANE WA 99220-3727
KELLY NORWOOD
VICE PRESIDENT STATE & FED. REG.
AVIS T A UTILITIES
PO BOX 3727
SPOKANE WA 99220-3727
CONLEY E WARD
GIVENS PURSLEY LLP
PO BOX 2720
BOISE ID 83701-2720
DENNIS E PESEAU, PH. D.
UTILITY RESOURCES INC
1500 LIBERTY ST SE, SUITE 250
SALEM OR 97302
CHARLES L A COX
EV ANS KEANE
111 MAIN STREET
PO BOX 659
KELLOGG ID 83837
BRAD M PURDY
ATTORNEY AT LAW
2019 N 17TH ST
BOISE ID 83702
CERTIFICATE OF SERVICE