20090625final_order_no_30851.pdf

Office of the Secretary
Service Date
June 25 , 2009
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF A VISTA CORPORATION DBA A VISTA
UTILITIES FOR AUTHORITY TO
DECREASE ITS NATURAL GAS RATES ORDER NO. 30851
CASE NO. A VU-09-
On May 19, 2009, Avista Corporation dba Avista Utilities (Avista; Company) filed
an Application with the Idaho Public Utilities Commission (Commission) requesting authority to
adjust its natural gas tariff Schedule 155 amortization rates to refund additional deferred amounts
in its Purchased Gas Cost Adjustment (PGA) balancing account.
More specifically, the Company seeks to increase its monthly Schedule 155
amortization rate by 8.1~ per therm from 7.711~ to 15.805~ for Schedules 101 (General Service)
and 111 (Large General Service) customers. Schedule 101 residential and small commercial
customers using an average of 65 therms per month will see a monthly bill reduction of $5.26 (or
7%), from a present bill of $78.23 to a bill of $72.97 per month. Large interruptible customers
(Schedule 131) will see a decrease in gas rates as their Schedule 155 amortization rate increases
from 6.574~ to 12.033~ per thermo The Company requested that the proposed tariff changes be
made effective on June 1 2009. The Commission on May 29 2009, in Interlocutory Order No.
30826, approved the rate decrease and established a schedule that allowed for investigation and
written comment. The Commission in this Order reaffirms its prior Interlocutory Order and
decrease in natural gas rates.
BACKGROUND
On September 30, 2008, the Commission in Avista s annual Purchased Gas Cost
Adjustment (PGA) filing authorized the use of a $0.78646 per therm weighted average cost of
gas (WACOG) for the Company s Schedule 150 tariff. The Commission also approved an
amortization rate of 1.727~ per therm for the Schedule 155 tariff used to refund the credit
amount in the deferred gas cost balancing account to customers. Case No. A VU-08-, Order
No. 30646.
Since September 30, 2008, wholesale natural gas prIces have fallen below the
projected prices used to calculate the approved W ACOG. As a result of lower cost gas
purchases, deferred gas cost (i., the refund balance) due customers has grown significantly.
ORDER NO. 30851
On January 6, 2009, the Commission approved the Company s request to increase
the Schedule 155 amortization rate from 1.727~ per therm to 7.711~ per therm to refund an
increase of approximately $4 million in the credit balance for customers through October 2008.
A vista states that it has received considerable feedback from customers regarding
lower wholesale natural gas prices. Given this feedback, higher winter heating bills, and the
ongoing recession, the Company believes that it is appropriate to again reduce natural gas rates.
In this filing, the Company proposes to adjust the amortization rate to refund additional deferred
amounts accumulated since November 2008 (December-April) to customers over a 12-month
period. These additional deferred amounts result in an incremental balance of approximately
$6.4 million accumulated since November. The Company is not proposing to change the
W ACOG approved in 2008.
On May 29, 2009, the Commission issued a Notice of Application and Interlocutory
Order No. 30826 in Case No. A VU-09-03 approving the Company s request for an increase in
its Schedule 155 amortization rate and related reduction in natural gas rates for the proposed
June 2009 effective date.
The Commission on May 29 also issued a Notice of Modified Procedure and
established a June 19, 2009, comment deadline. Commission Staff was the only party to file
comments. Staff recommends that the Commission affirm its Interlocutory Order No. 30826
approve the Company-proposed natural gas rate decrease and accept the filed tariffs that
accompanied the Company s Application. Staff recommends that the Commission reserve
judgment on the Company s natural gas purchases and gas procurement policies until the annual
PGA filing when these costs and policies are normally thoroughly reviewed.
Staff reviewed the Company s Application and supporting workpapers and believes
the proposed decrease in retail natural gas rates is appropriate. Staff notes that the Company has
currently locked in approximately 40% of its estimated winter load for the 2009-2010 heating
season. The Jackson Prairie storage facility is approximately 45% full with a weighted average
cost of gas (W ACOG) in storage under $.30 per therm, compared to the current W ACOG
embedded in rates of $0.78646 per thermo Barring any unforeseen natural disaster or pipeline
catastrophe, Staff believes that customers should be able to expect a significant decrease in rates
when A vista files its 2009 annual PGA in September 2009.
ORDER NO. 30851
COMMISSION FINDINGS
The Commission has reviewed the filings of record in Case No. A VU-09-
including the Company s Application and the comments and recommendations of Commission
Staff. Avista requests a Commission Order decreasing gas rates to refund $6 461 830 in the
Company s Schedule 155 balance account due to customers. We find the proposed adjustment
to be reflective of a decline in wholesale natural gas prices and in the public interest. The
following chart illustrates the impact of the Company s request on the individual customer
classes.
Proposed Average
Change to Proposed Percentage
Current Rate Amortization Rate per Billing
Schedule Description per Therm Rate Therm Chan2:e
101 General $1.14206 $0.08094 $1.06112 72%
111 Large General $1.12569*$0.08094 $1.04475 - 7.79%
131 Large Interruptible $0.88688 $0.05459 $0.83229 15%
*denotes retail rate for the first block of usage.
Staff has reviewed the Company s Application and supporting workpapers and
recommends approval of the Company s Application. Based upon our review and consideration
of the record in this case, we find it reasonable to reaffirm our Interlocutory Order No. 30826
approving the Company-proposed natural gas rate decrease for a June 1 , 2009, effective date.
We find the resultant rates to be just, reasonable and sufficient. Idaho Code 9 61-502. We note
that the Company s filing is only a mid-course adjustment to its Schedule 155 balancing account
and not its annual PGA filing. As such the Commission in this case has not conducted a review
of the Company s natural gas purchases and gas procurement policies.
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over A vista Corporation dba
Avista Utilities, a natural gas utility, and its Application in Case No. AVU-09-03 pursuant to
Idaho Code, Title 61 , and the Commission s Rules of Procedure, IDAPA 31.01.01.000 et seq.
ORDER
In consideration of the foregoing and as more particularly described above, IT IS
HEREBY ORDERED and the Commission by this Order reaffirms its Interlocutory Order No.
30826 approving a change in the amortization rate for Schedule 155 from 7.711~ per therm to
ORDER NO. 30851
15. 805 ~ per therm and a resultant decrease in natural gas rates for an effective date of June 1
2009. We find the tariffs filed in conformance with Interlocutory Order No. 30826 to be correct.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code 9 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this Xf4
day of June 2009.
~t-JI . K MPTO SIDENT
MARSHA H. SMITH, COMMISSIONER
MACK A. REDFORD, COMMISSIONER
ATTEST:
bls/O:A VU-09-03 sw2
ORDER NO. 30851