20070927notice_of_application_order_no_30444.pdf

Office of the Secretary
Service Date
September 27 2007
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF A VISTA UTILITIES FOR AUTHORITY
TO CHANGE ITS NATURAL GAS RATES
AND CHARGES (2007 PURCHASED GAS
COST ADJUSTMENT)
NOTICE OF APPLICATION
CASE NO. A VU-07-
NOTICE OF
MODIFIED PROCEDURE
ORDER NO. 30444
On September 17, 2007, A vista filed its annual Purchased Gas Cost Adjustment
(PGA) Application with the Commission requesting authority to place new rate schedules in
effect as of November 1 , 2007 that would decrease its annual natural gas revenues by
approximately $4 million (4.6%). 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. A vista s 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 written comment/protest deadline.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that Avista states if the proposed changes are
approved its annual revenue will decrease by approximately $4 million or 4.6%. The average
residential or small commercial customer using 65 therms per month would see an estimated
decrease of$3.65 per month (4.6%).
YOU ARE FURTHER NOTIFIED that the Company 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 (WACOG) purchased
and the W ACOG embedded in rates. The Company states that it also defers the revenue
received from the release of its storage capacity as well as various pipeline refunds or charges
and miscellaneous revenue received from gas-related transactions.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30444
YOU ARE FURTHER NOTIFIED that Avista requests a decrease in the WACOG
from its present $0.76085 cents-per-therm to $0.75544 cents-per-therm, a decrease of
approximately $0.005 per thermo The Company states that approximately 70% of its estimated
annual load requirements for the PGA year will be hedged at a fixed price comprised of: (1)
approximately 41 % of volumes hedged for a term of one year or less; (2) approximately 18%
hedged for a three-year term; and (3) 11% of volumes in Jackson Prairie storage. This planned
level of hedging is similar to the prior year. During 2006, the Company began incorporating
three-year fixed price hedges into its portfolio to provide additional rate stability. Through the
end of August, approximately 2/3 of planned hedge volumes for the PGA year have been
executed at a weighted average price of$7.94 per decatherm ($0.794 per therm).
YOU ARE FURTHER NOTIFIED that the demand costs included in the Company
Application primarily represent the costs of pipeline transportation to the Company s system.
Overall, total demand costs reflected in this PGA filing were essentially flat, as compared to the
total costs reflected in the 2006 PGA filing. However, projected firm sales volumes are
substantially lower in this filing as compared to the projected volumes in the 2006 filing.
Therefore, a similar level of dollars is recovered over a lower level of volumes, thus resulting in
a proposed increase per thermo The Company s proposed rates in this filing include a decrease
that reflects the settlement of the Northwest Pipeline s (NWP) FERC rate case. However, this
decrease is offset by the inclusion of higher rates for Gas Transmission Northwest (GTN), whose
FERC rate case is still pending, as well as increases in Canadian pipeline charges. Additionally,
during 2007 the Company terminated its agreement related to the Plymouth LNG peaking
facility, resulting in a savings of$124 000 per year in fixed demand costs.
YOU ARE FURTHER NOTIFIED that the Company is also proposing a change in
the present amortization rate that 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. The present
amortization rate for firm-sales customers is approximately a 3.4 cents-per-therm surcharge. The
proposed decrease in the amortization rate results in a refund rate of approximately 2.4 cents-per-
therm to pass back estimated over-collected gas costs of approximately $1.7 million as of
November 1 2007.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30444
YOU ARE FURTHER NOTIFIED that the Company states that notice of its
proposed decrease 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 has attached
copies of these notices to its Application.
YOU ARE FURTHER NOTIFIED that the Company s Application to decrease 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 public utility, pursuant to the authority and power granted under
Title 61 of the Idaho Code and the Commission Rules of Procedure, ID AP A 31.01.01.000 et seq.
YOU ARE FURTHER NOTIFIED that the Application and supporting workpapers
testimonies, and exhibits have been filed with the Commission and are available for public
inspection during regular business hours at the Commission offices. The Application and
testimonies are also available on the Commission s Web site at www.puc.idaho.gov under the
File Room" 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-07-02. 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 Le., 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. IDAP A 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. IDAP A 31.01.01.204.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30444
NOTICE OF COMMENT/PROTEST 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-07-02 is October 24, 2007. 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.
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 and Federal Regulation
A vista Utilities
PO Box 3727
Spokane, W A 99220-3727
E-mail: kellv.norwoodCfYavistacorp.com
David 1. Meyer
Vice President and Chief Counsel for Regulatory
& Government Affairs
A vista Utilities
PO Box 3727
Spokane, W A 99220-3727
E-mail: david.meverCfYavistacorp.com
document.
These comments should contain the case caption and case number shown on the first page of this
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 A vista at the e-mail addresses listed above.
FINDINGS/CONCLUSIONS
The Idaho Public Utilities Commission has jurisdiction over A vista Utilities, its
Application for authority to change rates and prices, and the issues involved in this case by virtue
of Title 61 , Idaho Code, specifically Idaho Code 99 61-129, 61-117 and 61-307, and the
Commission s Rules of Procedure, IDAPA 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, Le., by written submission
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30444
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.
ORDER
IT IS HEREBY 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 must do so no later than October 24 2007.
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f.4..DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
;?-(~
dayof2007.
PAUL
~ SM~~ONER
ATTEST:
J a~ D. Jewell
Commission Secretary
O:A VU-07-02 dw
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30444