20080627Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER REDFORD
COMMISSIONER SMITH
CO MMISSI 0 NER KEMPTON
COMMISSION SECRETARY
COMMISSION STAFF
FROM:DON HOWELL
DEPUTY ATTORNEY GENERAL
DATE:JUNE 25, 2008
SUBJECT:A VISTA'S APPLICATION FOR AN ACCOUNTING ORDER
REGARDING TERMINATION OF ITS GAS STORAGE AGREEMENT
WITH TERASEN GAS, CASE NO. A VU-08-
On June 13, 2008, Avista Corporation filed an Application requesting an accounting
order related to the termination of a Gas Storage Agreement between the Company and Terasen
Gas, Inc. In 1982, A vista and T eras en (formerly known as BC Gas) entered into an agreement
for the storage and release of natural gas at Avista s Jackson Prairie underground storage facility.
Under the Agreement, T eras en paid A vista $191 121 per month for the storage and eventual
delivery of gas to Terasen. The Idaho jurisdictional revenue from Terasen, $54 388 per month
is embedded in the current rates paid by Idaho customers.
THE APPLICATION
The Agreement with T erasen was terminated May 1 , 2008. On May 1 , A vista began
using the Terasen storage capacity to serve its own customers. "The benefits associated with this
recalled storage capacity are directly passed on to customers through the Company s annual
PGA filing." Application at
The termination of the Terasen Agreement is incorporated in the Company s current
general rate case (A VU-08-01). However, until the general rates become effective, Idaho
customers are currently receiving a credit of $54 388 each month although the revenue is no
longer being received. Consequently, the Company requests that the Commission approve an
accounting order for the Company to record the additional deferred gas costs to Account 191 in
the amount of $54 388 each month beginning May 1 , 2008 and ending on the date in which its
new gas rates become effective. The deferred costs associated with a partial month "would be
DECISION MEMORANDUM
prorated accordingly.Id. at 3. This deferred amount would be included with all other deferred
gas costs and be recovered through the rates as part of the Company s annual PGA filing.
The Company recommends that its request for an accounting order be processed via
Modified Procedure. Staff concurs with the Company s request that this Application for an
accounting order be processed by Modified Procedure with a 21-day comment period.
COMMISSION DECISION
Should Avista s Application for an accounting order to record its deferred gas cost in
the amount of $54 388 each month in Account 191 be processed by Modified Procedure?
tJ~
Don Howell
Deputy Attorney General
bls/M:A VU-O8-02 dh
DECISION MEMORANDUM