20080808Decision Memo.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER RED FO RD
CO MMISSI 0 NER SMITH
COMMISSIONER KEMPTON
COMMISSION SECRETARY
COMMISSION STAFF
FROM:SCOTT WOODBURY AND KRISTINE SASSER
DEPUTY ATTORNEYS GENERAL
DATE:AUGUST 7, 2008
SUBJECT:CASE NOS. A VU-08-0l/A VU-08-01 (Avista)
SE TTLEMENT STIPULA TI 0 N
On April 3 , 2008, A vista Corporation dba A vista Utilities (A vista; Company) filed an
Application with the Idaho Public Utilities Commission (Commission) for authority to increase
revenue for electric and natural gas service in Idaho by averages $32.3 million (16.7%) and $4.
million (5.8%), respectively. Intervening parties to this case are Potlatch Corporation and
Community Action Partnership Association of Idaho.
Public workshops for Avista customers were held on July 23 , 2008 in Moscow and
July 2008 in Coeur d' Alene for the purpose of explaining the Company s Application and in
order to provide an opportunity for customers to ask questions of Commission Staff.
On July 28, 2008 , Commission Staff filed with the Commission a Notice of Intent to
Engage in Settlement Discussions. RP 272. A settlement conference was subsequently held on
July 31 , 2008 and was attended by all parties to the case.
Pursuant to discussions, the parties have entered into a Stipulation and negotiated
settlement that purports to resolve all issues raised in this proceeding. The Stipulation was filed
with the Commission on August 8, 2008. The parties represent that the Stipulation is in the
public interest and that all of its terms and conditions are fair, just and reasonable.
Under the terms of the Stipulation, Avista would be authorized to recover $23.163
million (11.98%) in additional annual electric revenue and $3.878 million (4.7%) in additional
annual natural gas revenue.
DECISION MEMORANDUM
The Stipulation summarizes the adjustments made by the parties to the Company
general rate case filing and discusses specific accounting treatment for (a) Spokane River
relicensing, (b) confidential litigation, (c) Montana riverbed litigation, and (d) revenues
associated with sale of carbon financial instruments (CFls).
Other issues addressed by the parties in the Stipulation are test year adjustments
power cost adjustment (PCA) authorized level of expense, prudency of the Company energy
efficiency expenditures from November 1 , 2003 to December 2007 rate spread (a uniform
percentage increase for all classes except electric Schedule 25P), rate design (changes in
commodity and non-commodity rate components), low-income DSM funding (increase of
$125 000), low-income conservation funding for outreach (increase of $25,000), and a proposal
for a Commission-established workshop for examining issues related to energy affordability.
The parties recommend that the Commission approve the Stipulation for an October
, 2008 effective date. RP 274. The parties recognize that the proposed settlement is not binding
on the Commission (RP 276), and that the parties to the settlement carry the burden of showing
that the settlement is reasonable, in the public interest, and is otherwise in accordance with law
or regulatory policy. RP 275.
In furtherance of the Stipulation, Staff recommends that the following scheduling be
adopted.
August 28 , 2008
Deadline for filing by parties of testimony in support
of Stipulation
Public testimony - Sandpoint, Idaho (evening
hearing)
Technical hearing on settlement Stipulation - Boise
Idaho
Public testimony - Lewiston, Idaho (evening
hearing)
August 22, 2008
August 27, 2008
September 5 , 2008 Deadline for filing written comments
The parties also agree that the previously scheduled August 15 , 2008 deadline for prefile of Staff
and Intervenor direct testimony be vacated.
DECISION MEMORANDUM
COMMISSION DECISION
A settlement Stipulation in Case Nos. A VU-E/G-08-01 has been presented. Does the
Commission agree with the settlement Stipulation related scheduling proposed by Staff?
Scott D. Woodbury
Deputy Attorney General
blslM:A VU-O8-01/A VU-O8-01 sw2
DECISION MEMORANDUM