20080613Application.pdf

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Corp.
Aijù-G-08-o~
Utilties Commssion
Washington
il 83702-5983
Attention: Ms. Jean D. Jewell, Commssion Secretary
RE: Application of A vista Corporation for an Accounting Order Authorizing Accounting
Entries Related to the Termination of the Gas Storage Release Agreement Between A vista
and Terasen Gas Inc.
Dear Ms. Jewell:
Enclosed is an original and seven copies of Avista's Application for an Accounting Order related
to the termnation of gas storage release agreement with Terasen Gas Inc.
Please direct any questions regarding this fiing to Brian Hirschkom at [phone].
Sincerely,~ ~#' i.
Kelly Norwood
Vice President, State & Federal Regulation
Ene.
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSld&CEIVED
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IN THE MATTR OF THE APPLICATION OF
AVISTA CORP., dba AVISTA UTILITIES FOR AN
ACCOUNTING ORDER AUTHORIZING ACCOUNTING
ENTRIES RELATED TO TERMINATION OF THE
AGREEMENT BETWEEN A VISTA UTILITIES AND
TERAS EN GAS INC.
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I. INTRODUCTION
Application is hereby made to the Idaho Public Utilities Commssion for an
Accounting Order authorizing A vista Corporation, doing business as A vista Utilties
(hereinafter A vista or Company), to record accounting entries to reflect the termnation of
a storage release agreement with Terasen Gas Inc. (Terasen). A vista requests that the
Commission authorize the recording of such entries beginning May 1,2008 and ending on
the date that rates are made effective as a result of the Company's present general natural
gas filing in A VU-G-08-1. In support of this Application, Applicant states as follows:
A vista Utilities is a public utility engaged in the distribution of natural gas in
certain portions of Eastern and Central Washington, Northern Idaho and Southwestern
and Northeastern Oregon, and further engaged in the generation, transmission, and
distrbution of electricity in Eastern Washington and Northern Idaho.
Communications in reference to this Application should be addressed to:
Kelly O. Norwood
Vice President - State & Federal Regulation
A vista Corporation
1411 E. Mission Avenue
Spokane, W A 99220-3727
Phone: [phone]
Fax: [phone]
E-mail: kelly.norwood(gavistacorp.com
David J. Meyer, Esq.
Vice President and Chief Counsel for Regulatory &
Governmental Affairs
A vista Corporation
1411 E. Mission Avenue
Spokane, W A 99220-3727
Phone: [phone]
Fax: [phone]
E-mail: david.meyer(gavistacorp.com
APPLICATION OF A VISTA CORP.1
II. BACKGROUN
The proposed request relates to the termnation of a release of a portion of the
Company's Jackson Prairie underground gas storage capacity. This capacity release was
to Terasen (formerly BC Gas) beginning in November 1982. The release was for
22,680,000 therms of seasonal capacity and 630,000 therms of deliverabilty to Terasen
at an annual cost of $2,293,456 ($191,121 monthly). Ofthe $191,121 revenue received
from Terasen each month, $54,388 ($652,656 annually) is included as a credit to the
Company's Idaho general/base rates as a result of the Company's last natural gas general
rate filng, A VU-G-04-0L. This amount was based on the Company's peak gas cost
allocation in effect at the time for Washington/Idaho.
Effective May 1, 2008, the agreement with Terasen (Agreement) was terminated
and the Company regained the use of this underground storage capacity to provide
service/benefits to its customers. The Company determned that the value of this storage
capacity exceeded the revenue received from Terasen under the Agreement, and staring
May 1, the Company began utilzing this recalled storage capacity to provide
service/benefits to its customers. The benefits associated with this recalled storage
capacity are directly passed on to customers through the Company's annual PGA fiing.
The termnation of the Agreement, and the corresponding reduction in revenue, is
reflected in the Company's current general natural gas filing, AVU-G-08-L. However,
until new general rates become effective, customers are receiving the credit of $54,388
each month through rates that is no longer received by the Company. Absent the
proposed accounting offset to the $54,388 of prior revenue included in base rates, the
Company would experience a corresponding reduction in operating income, until the new
general rates become effective.
The Company recalled a similar storage release from Cascade Natural Gas
(Cascade) effective May 1,2007. However, the revenue received from Cascade was
never included in the Company's general/base rates, but deferred each month and
credited to customers through the annual PGA filing. Therefore, when that agreement
was termnated, the Company simply ceased recording/deferrng the revenue. In order to
effectuate a similar fair operating result to the Company with respect to the termnation of
the Terasen agreement, it is necessary to record a deferred (gas) cost, in order to offset
the revenue included in customers' rates.
III. PROPOSED ACCOUNTING TREATMENT
Therefore, the Company requests that the Commission authorize the Company to
record an additional deferred gas cost to Account 191 in the amount of $54,388 each
month, beginning May 1, 2008 and ending on the date in which rates become effective as
a result of the Company's current general rate filing, A VU-G-08-1. The deferred cost
associated with a parial month (rates not effective on the first day of the month) would
APPLICATION OF AVISTA CORP.2
be prorated accordingly. Those amounts would then be included with all deferred gas
costs, proposed to be recovered through the rate to amortize those costs, as par of the
annual PGA filng(s).
iv. REQUEST FOR RELIEF
A vista respectfully requests that the Commssion issue an Accounting Order
allowing the Company to record a deferred gas cost in the amount of $54,388 each month
to reflect the termnation of the Agreement. A vista requests that the Order allow the
Company to begin recording this deferral effective May 1,2008, coincident with the
termination date of the Agreement, until new general natural gas rates resulting from the
Company's current filng, AVU-G-08-1, become effective. The Company requests that,
if appropriate, the Commssion adopt the procedures prescribed by Rule 201-210,
Modified Procedure. The Company stands ready for immediate consideration on its
Application.
Dated at Spokane, Washington, this 12th day of June 2008.
A VISTA CORPORATION
BY ~ ~#' ""
Kelly O. Norwood
Vice President, State and Federal Regulation
APPLICATION OF AVISTA CORP.3
STATE OF WASHIGTON )
) ss.County of Spokane )
Brian Hirschkorn, being first duly sworn, on oath deposes and says: that he is the
Manager of Retail Pricing of A vista Utilties; that he has read the above and foregoing
Application, knows the contents thereof, and believes the same to be true.
SUBSCRIBED and sworn to before me this 12th day of June 2008.
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Notary Public in and for the
State of Washington, residing in
Spokane.
APPLICATION OF A VISTA CORP.4