20050929notice of application order no 29876.pdf

Office of the Secretary
Service Date
September 29, 2005
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF A VISTA UTILITIES FOR AN ORDER
APPROVING A CHANGE IN NATURAL GAS
RATES AND CHARGES (2005 PURCHASEDGAS COST ADJUSTMENT)
CASE NO. A VU-05-
NOTICE OF APPLICATION
NOTICE OF MODIFIED
PROCEDURE
ORDER NO. 29876
On September 12, 2005 , Avista Utilities (Avista, Company) filed its annual
Purchased Gas Cost Adjustment (PGA) Application with the Idaho Public Utilities Commission
(Commission) requesting authority to place new rate schedules in effect as of November 1 , 2005
that will increase its annualized revenues by $15.7 million (23.8%). The PGA mechanism is
used to adjust rates to reflect changes in the costs for the purchase of gas from wholesale
suppliers including transportation, storage, and other related costs of acquiring natural gas. The
Company contends that its earnings will not be increased as a result of the proposed changes in
prices and revenues. With this Order the Commission authorizes the use of Modified Procedure
to process the Company s Application and establishes a deadline for the filing of written
comments and/or protests.
THE APPLICATION
YOU ARE HEREBY NOTIFIED that according to Avista s Application if the
requested price increase is approved the Company annual revenue will increase by
approximately $15.7 million or about 23.8%. The average residential customer using 70 therms
per month would see an estimated increase of$16.36 per month.
YOU ARE FURTHER NOTIFIED that Avista states that it purchases natural gas for
customer usage and transports this gas over various pipelines for delivery to customers. The
Company defers the effect of timing differences due to implementation of rate changes and
differences between the Company s actual Weighted Average Cost of Gas (W ACOG) purchased
and the W ACOG embedded in rates. A vista also defers the revenue received from the release of
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 29876
its storage capacity as well as various pipeline refunds or charges and miscellaneous revenue
received from gas related transactions.
YOU ARE FURTHER NOTIFIED that the Company requests an increase in the
prospective natural gas cost component included in the rates charged to customers by 21.443
cents per thermo This consists of an increase of 21.047 cents per therm related to the commodity
cost of purchasing and transporting gas for customer usage and an increase of .396 cents per
therm related to fixed pipeline costs.
YOU ARE FURTHER NOTIFIED that A vista requests an increase in the present
WACOG from 55.739 cents per therm to 76.786 cents per therm, an increase of 21.047 cents.
This reflects first-of-the-month (FOM) forward gas prices as of August 4 , 2005 , and the
Company s hedges executed to date. The Company executes hedges to fix the price of gas on
approximately 50% of its estimated annual gas sales for the year, and uses a dollar-cost
averaging approach for executing hedges, with those volumes divided into 45-day execution
windows between February 15 and November 15. The Company states that it has completed
approximately 80% of its scheduled hedges for the upcoming PGA year, November through
October.
YOU ARE FURTHER NOTIFIED that the Company is also proposing a change in
the present amortization rate, which is used to refund or surcharge customers the difference
between actual gas costs and projected gas costs from the last PGA filing over the past year.
Avista proposes to increase the amortization rate from the present surcharge of 3.093 cents per
therm to 5.027 cents per thermo The Company states it has a deferred gas cost balance of
approximately $3.5 million as of June 30, 2005, reflecting higher gas costs than projected during
the past year. The proposed increase in the amortization rate is expected to recover this balance
over 12 months.
YOU ARE FURTHER NOTIFIED that the Company states that notice of its
proposed increase in price has been accomplished by posting a notice at each of the Company
district offices in Idaho, a press release distributed to various informational agencies, and a
separate notice to each of its Idaho gas customers included in their billing. A vista attached
copies of these notices to its Application.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 29876
YOU ARE FURTHER NOTIFIED that the Application together with supporting
workpapers, testimonies and exhibits (if any), have been filed with the Commission and are
available for public inspection during regular business hours at the Commission offices. The
Application and supporting documents are also available on the Commission s website at
www.puc.idaho.gov under the "File Room" icon and then "Gas Cases.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has reviewed the filing of
record in Case No. A VU-05-2. The Commission has preliminarily determined that the public
interest may not require a hearing to consider the issues presented in this case and that issues
raised by the Company s filing may be processed under Modified Procedure, i., by written
submission rather than by hearing. IDAPA 31.01.01.201-204. In so doing, the Commission
notes that Modified Procedure and written comments have proven to be an effective means for
obtaining public input and participation.
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. IDAPA 31.01.01.203.
YOU ARE FURTHER NOTIFIED that if no protests or written comments are
received within the deadline, the Commission will 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, in its discretion, set the matter for hearing or decide the matter and issue
its Order on the basis of the written positions before it. IDAPA 01.01.01.204.
NOTICE OF COMMENTIPROTEST DEADLINE
YOU ARE FURTHER NOTIFIED that the deadline for filing written comments
or protests with respect to the Application and the Commission s use of Modified Procedure in
Case No. A VU-05-2 is October 20, 2005. Persons desiring a hearing must specifically
request a hearing in their written protests or comments.
YOU ARE FURTHER NOTIFIED that written comments concerning. this case
should be mailed to the Commission and to the Company at the addresses reflected below.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 29876
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
Street Address For Express Mail:
472 W. Washington Street
Boise, ID 83702-5983
Kelly O. Norwood
Vice President, State & Federal Regulation
A vista Utilities
PO Box 3727
Spokane, W A 99220-3727
E- mail: kelly .norwood~avistacorp. com
David J. Meyer
Vice President and Chief Counsel for
Regulatory and Governmental Affairs
A vista Utilities
PO Box 3727
Spokane, W A 99220-3727
E-mail: david.meyer~avistacorp.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 homepage located at www.puc.idaho.gov. Click the "Comments and Questions
icon, and complete the comment form, using the case number as it appears on the front of this
document. These comments must also be sent to the Applicant at the e-mail addresses listed
above.
FINDINGS/CONCLUSIONS
The Idaho Public Utilities Commission has jurisdiction over A vista Utilities, its
Application for an Order approving a change in natural gas rates and charges, and the issues
involved in this case by virtue of Title 61 , Idaho Code, specifically Idaho Code ~~ 61-129 61-
117 and 61-307, and the Commission s Rules of Procedure, IDAP A 31.01.01.000 et seq.
The Commission has preliminarily determined that the public interest may not
require a hearing to consider the issues presented in this case, and that issues raised by the
Company s filing may be processed under Modified Procedure , by written submission
rather than by hearing. IDAPA 31.01.01.201-204. In so doing, the Commission notes that
Modified Procedure and written comments have proven to be an effective means for obtaining
public input and participation.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 29876
ORDER
IT IS HERBY ORDERED that this case be processed under Modified Procedure.
Persons interested in submitting written comments regarding this case or protesting the use of
Modified Procedure should do so no later than October 20, 2005.
IT IS FURTHER ORDERED that pursuant to Rule 125 IDAPA 31.01.01.125
Commission Staff is directed to conduct a public workshop in Coeur d' Alene, Idaho in order to
dispense information concerning the Company s Application and to receive written or oral
comments from the public prior to the Staff filing its comments in this case. A separate Notice
of Public Workshop will be issued with a specific date, time, and meeting place.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this q.,.h
day of September 2005.
MARSHA H. SMITH, COMMISSIONER
ATTEST:
I ~.
Jea ID. Jewell
Co mission Secretary
O:A VU-05-02 dw
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 29876