20090526Decision Memo.pdf

DECISION MEMORANDUM 1
DECISION MEMORANDUM

TO: COMMISSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL

FROM: SCOTT WOODBURY
DEPUTY ATTORNEY GENERAL

DATE: MAY 26, 2009

SUBJECT: CASE NO. AVU-G-09-03 (Avista)
PURCHASED GAS COST ADJUSTMENT (PGA) –
PROPOSED JUNE 1, 2009 RATE DECREASE (SCHEDULE 155)

On May 19, 2009, Avista Corporation dba Avista Utilities (Avista; Company) filed an
Application with the Idaho Public Utilities Commission (Commission) proposing a decrease in
rates for the Company’s Idaho natural gas customers by 8.1¢ per therm, or about 6.7% for
residential and small commercial (Schedule 101) customers. Larger use gas customers served
under Schedule 111 would see an average decrease of 7.8%. The Company requests that the
proposed tariff change be made effective on June 1, 2009, under Modified Procedure, i.e., by
written filing rather than by hearing. IDAPA 31.01.01.201-204.
As reflected in the Company’s Application in January 2009, the Company reduced
natural gas rates by 4.7% for most customers, to amortize approximately 72% of the deferred
PGA balance at the end of November 2009 (AVU-G-09-02). This filing proposes to adjust the
amortization rates 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 WACOG approved in the September 2008 PGA
filing.
Avista 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.
DECISION MEMORANDUM 2
The proposed rate decrease in Schedule 155 amortization rate for both Schedule 101
and 111 is as follows:
Present amortization rate ($0.07711)
Decrease per therm ($0.08094)
Proposed amortization rate ($0.15805)
The proposed decrease would result in a monthly bill reduction of $5.26 for a residential
customer using an average of 65 therms per month, from a present bill of $78.23 to $72.97 per
month.
COMMISSION DECISION
Avista recommends a decrease in natural gas rates for residential, small commercial
and larger use customers for an effective date of June 1, 2009. Staff recommends that the
Commission issue an interlocutory order approving the Company’s Application for the proposed
effective date, and that the Commission establish a comment deadline to allow Staff and others
the opportunity to investigate the Company’s Application and file written comments. Following
the comment deadline the matter will be brought back to the Commission for final decision.
Does the Commission agree with Staff’s recommended procedure?

Scott Woodbury
Deputy Attorney General

bls/M:AVU-G-09-03_sw