20090630Application.pdf

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\DAHO P-
UTILITIES CO
June 30, 200
Jea D. Jewell, Secta
Idao Public Utilities Commssion
Statehouse Mai
W. 472 Washigton Strt
Boise, Idao 83720
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AVU - b'~ ë)cy-c1
Advice No. ADV -09-Q-E and ADV -0-02-0
Dear Ms. Jewell:
Atthed for filig with the Commssion is an origial and seven copies of the Company's
Application and proposed revisions to the following taff sheets, I.P.U.C. No. 28 and I.P.U. C. No.
29.
Sixth Revision Sheet 91
Four Revision Sheet 191
Cancelig Fift Revision Sheet 91
Canceling Thd Revision Sheet 191
Ths filng reuests approval of an incree to Schedules 91 and 191 rates, "Public Puses Rider
Adjustment," also known as the "energy effciency taff riders." Schedules 91 and 191 are designed
to reover the costs incur by the Company associated with providing electrc and nat gas
energy effciency services to customers.
Pleae dit any questions on ths mattr to Lida Gervais at [phone] or Bruce Folsom at
[phone].
-:' .J,.~
Kelly Norwoo
Vice Prsident, State & Federa Regulation
Enclosurs
DAVID J. MEYER
VICE PRESIDENT AND CHffF COUNSEL FOR
REGULATORY AN GOVERNENTAL AFFAIRS
AVISTA CORPORATION
P.O. BOX 3727
1411 EAST MISSION AVENU
SPOKA, WASHINGTON 99220-3727
TELEPHONE: [phone]
FACSIMILE: [phone]
ReCEIVED
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U-,t'PrA1CHO)'VSUC, 1..$ l.Ofi~ii(;:tir'idVl ltl r ~...' l \.ftl
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF AVISTA CORPORATION FOR THE
REQUEST TO INCREASE ITS ENERGY
EFFICffNCY PUBLIC PUROSE RIER
SCHEDULES 91 AN 191
)
)
)
)
)
CASE NO. A VU-E-09-.Q
AN A VU-G-09- ol.
APPLICATION OF AVISTA CORPORATION
1 I. INTRODUCTION
2 A vista Corporation, doing business as A vista Utilities (hereinafter A vista or
3 Company), at 1411 East Mission Avenue, Spokane, Washington, respectfully requests
4 approval of an increase to Schedules 91 and 191 rates, "Energy Efficiency Rider
5 Adjustment," also known as the "energy efficiency tariff riders." Schedules 91 and 191 are
6 designed to recover the costs incurred by the Company associated with providing electrc and
7 natural gas energy efficiency services to customers. Now in its fourteenth year, the energy
8 efficiency tarff riders were the Country's first distribution charge to fund demand side
9 management (DSM) and are now replicated in many other states. The proposed increase in
10 Schedules 91 and 191 rates is necessar to continue to fund ongoing electric and natural gas
11 efficiency programs consistent with Avista's most recent electric and natural gas Integrated
12 Resource Plans (IRs). It wil also serve to amortize a deficiency balance within the electric
13 and natural gas efficiency tarff riders resulting from the Company's response to higher than
14 expected customer demand for services. The proposed increase in revenues for DSM wil
15 not increase or decrease the earnings of the Company. Also included in this filing are
16 proposed procedural modifications to reduce the likelihood of significant positive or negative
17 balances in the future.
18 The Company requests that this fiing be processed under the Commission's Modified
19 Procedure rules.
20 Communications in reference to this Application should be addressed to:
21
22
23
24
25
26
27
David J. Meyer, Esq.
Vice President and Chief Counsel for
Regulatory and Governental Affairs
A vista Corporation
P.O. Box 3727
1411 E. Mission Avenue, MSC-13
Spokane, W A 99220-3727
Kelly Norwood
Vice President - State and Federal Regulation
A vista Corporation
P.O. Box 3727
1411 E. Mission Avenue, MSC-7
Spokane, WA 99220-3727
Phone: [phone]
Application of A vista Corporation
Case No. A VU-E-09- and A VU-G-09
Page 1
1
2
3
Phone: [phone]
Fax: [phone]
Fax: [phone]
4 II. BACKGROUND
5 The Company's energy efficiency targets are established in the process of developing
6 its electrc and natural gas IRs. The electric IR efficiency goal for Idaho and Washington
7 in 2008 was 53.0 milion kWhs, not including regionally-delivered programs. The results of
8 Avista's energy efficiency programs continue to exceed targets. Avista's 2008 energy
9 efficiency savings amount was 74.4 milion kWhs (approximately 8.5 aMW) or 137% of the
10 Company's annual target. Over 138 aMW of cumulative savings have been achieved
11 through Avista's energy efficiency efforts in the past thirty years; over 110 aMW ofDSM is
12 currently in place on the Company's system. By comparison, Avista's total retail load for
13 2008 was approximately 1,100 aMW; therefore, the total DSM energy savings represent a
14 meaningful reduction to the retail load that A vista would otherwise serve. The 2008 natural
15 gas savings targets for Idaho and Washington was 1.425 milion therms. Over 1.9 milion
16 therms were saved last year which was 136% of the 2008 target.
17 Avista's energy efficiency programs are supported by 23 full-time equivalents (FTE)
18 spread over 34 staff. (This does not include Company support from the Contact Center,
19 Accounting and other direct and indirect support.) The 2008 total DSM budget was over
20 $18 milion.
21 Of the Company's revenues collected under Schedules 91 and 191 last year, 72.0%
22 were paid out to customers in direct incentives pursuant to the cost-effectivenèss tests
23 described below. This does not include additional benefits such as technical analyses and
24 education provided to customers by the Company's DSM engineering staff.
Application of A vista Corporation
Case No. A VU-E-09- and A VU-G-09
Page 2
1 Customers continue to look to the Company's DSM programs for assistance in
2 responding to increased retail electric and natural gas prices. Existing and planed
3 programmatic expenditures are exceeding tariff rider revenues. As of the close of May 2009,
4 A vista's electric DSM tariff rider balance for Idaho is a negative $2,361,178 and the natural
5 gas DSM tariff rider balance for Idaho is a negative $1,036,753 (past expenditures have
6 exceeded tarff rider revenues). The proposed tariff rider increase is estimated to eliminate
7 this current negative balance by the end of 2010 and to fund estimated future expenditures.
8 The proposed increase in the DSM surcharge is approximately 2.73% of present electric rates
9 and 1.01 % of present natural gas rates.
10 Additional drivers that continue to add to increases in the tariff rider balances include:
11
12 · increased demand for demand-side management programs;
13 · increasing avoided costs which leads to a higher number of cost-effective14 energy efficiency programs;
15 · higher level of energy effciency acquisition identified in the IR leads to
16 increased dollars per unit as higher cost measures are selected on the supply17 curve; and
18 · expected increase in subscription to Avista's conservation programs due to
19 increased customer funding for energy efficiency from the American
20 Recovery and Reinvestment Act and related tax credits.
21
22 All Schedule 91 and 191 DSM fuds wil remain within the electric and natural gas
23 efficiency programs either offered by the Company directly or through designated
24 contractors, or as par of cooperative regional electrc and natural gas efficiency programs.
25 The Company wil continually assess the demand for services and program financial balances
26 and propose revisions to Schedules 91 and 191 as necessary. Schedule 91 and 191 funds
27 support DSM programs described in Schedules 90 and 190. These programs include but are
28 not limited to the following measures:
29
30
31
· Appliance measures
· Compressed air measures
· HV AC measures
Application of A vista Corporation
Case No. A VU-E-09- and A VU-G-09
Page 3
1 · Industrial measures
2 · Lighting measures
3 · Maintenance measures
4 · Motors measures
5 · Renewable Technologies
6 · Northwest Energy Efficiency Alliance participation
7 · Shell measures
8 · Sustainable Building measures
9
10 The Company's programs are based on providing financial incentives, or "rebates,"
11 for cost-effective efficiency measures installed by customers with a simple payback of
12 greater than one year. This includes over 300 measures that are packaged into over 30
13 programs for customer convenience.
14 Avista has long encouraged the direct-use of natural gas by its electric custoiners.
15 The Company is continuing this effort with residential rebates for the conversion of electrc-
16 to-natural gas space and water heat loads as well as a broad program for any non-residential
17 electric-to-natural gas conversions meeting specified criteria for relative British Thermal Unit
18 (BTU) efficiency. The cost-effective potential for these measures have been incorporated
19 into Avista's IR effort and are contained within the identified acquisition goal. Avista's
20 residential programs include high efficiency equipment, electric-to-natural gas conversions,
21 coinpact fluorescent lights (CFLs), "second" refrigerator recycling, weatherization, rooftop
22 dampers, as well as providing educational assistance through various community events.
23 For non-residential customers, in addition to prescriptive programs, Avista offers
24 "site-specific" programs. Site-specific programs are customized to the customer premise.
25 The site-specific offering provides incentives on commercial and industrial energy efficiency
26 measure with a simple financial payback exceeding one year. This is implemented through
27 site analyses, customized diagnoses, and incentives determined for savings generated by the
28 customers' premise or process. Commercial and industrial programs available to Avista
29 customers include:
Application of A vista Corporation
Case No. A VU-E-09- and A VU-G-09
Page 4
1 · Energy Smart commercial refrgeration
2 · lighting and controls
3 · commercial food service equipment
4 · building retro-commissioning
5 · premium efficiency motors
6 · power management for personal computer (PC) networks
7 · LEED certification, commercial HV AC variable frequency drives (VFDs)
8 · refrgerated warehouses
9 · vending machine controllers10 · demand controlled ventilation11 · side-stream filtration
12 · steam trap replacement and repair
13 · multifamily development14 · LED traffic signals
15 · electric to natural gas water heater conversions
16 · commercial clothes washers
17
18 In addition to Avista's prescriptive and site-specific programs, the Company funds,
19 and participates in the activities of the Nortwest Energy Effciency Alliance (NEA).
20 NEEA focuses on using a regional approach to obtain electric efficiency through the
21 transformation of markets for efficiency measures and services. An exarple of NEEA-
22 sponsored programs that benefit A vista customers is decreasing the cost of CFLs and high-
23 efficiency appliances by working through manufacturers. For some measures, a large-scale,
24 cross-utility approach is the most cost-effective means to achieve energy efficiency savings.
25 This approach is paricularly effective for markets composed of large numbers of smaller
26 usage homogeneous consumers, such as the residential and small commercial markets. The
27 results from NEEA programs are reported in March of the following year. Historically,
28 Avista has received approximately 1.5 aMW of savings in its service territory from NEEA
29 programs. For 2008, Avista's portion of the regional savings amounted to 2.1 aMW or over
30 18 milion kWh.
31 The Company provided $1.5 milion for low-income weatherization in 2008 in Idaho
32 and Washington. Effective October 1, 2008, in Order No. 30647 in Docket Nos. AVU-E-08-
33 01 and AVU-G-08-01, $465,000 was directed to Idaho electric and natual gas low-incomeApplication of Avista Corporation Page 5
Case No. A VU-E-09- and A VU-G-09
1 customers and $25,000 was provided to Idaho (CAP) agencies for the purpose of
2 underwting agency personnel assisting in low-income outreach and conservation education.
3 The low-income weatherization portfolio represents approximately 8% of our total energy
4 efficiency budget.
5 The Company also actively paricipated in the energy affordability workshops in Case
6 No. GNR-U-08-01. In that Case, workshop participants are exploring ways to address energy
7 affordability and the difficulty some customers experience in paying their energy bil. Avista
8 supports the Commission's Order in that Case that favors legislation that would allow
9 utilities to propose "programs, policies and rates" that may assist low-income customers in
10 their effort to pay energy bils. The Commission specifically identified Avista's Low-Income
11 Rate Assistance Program (LIR), as a means to provide funds to help low-income residents
12 in Washington and Oregon pay their energy bils. The LIR program (if implemented in
13 Idaho) would allow A vista to collect through a small monthly charge to all customers,
14 additional dollars that would be directed to customers least able to pay their energy bils.
15 The local community actions agencies that are already in place would administer these
16 dollars. The Company is committed to working with the Commission Staff and interested
17 paries to support this legislation in 2010.
18
19 III. STAKEHOLDER INVOLVEMENTIRVISED PROCEDURES
20 The Company has regularly convened a stakeholder's forum known as the External
21 Energy Efficiency Board (Triple E). These meetings have included customer representatives,
22 Commission staff members, and individuals from the environmental communities. These
23 stakeholder meetings review the Company's program offerings as well as the underlying
24 cost-effectiveness tests and results. The programs have been cost-effective from both a Total
Application of A vista Corporation
Case No. A VU-E-09- and A VU-G-09
Page 6
1 Resource Cost (TRC) and Program Administrator Cost Test (PACT) (formally known as the
2 Utility Cost Test (UCT)) perspectivel. The increased funding requested herein wil continue
3 to be subject to the cost-effectiveness tests prescribed by the Commission.
4 To reduce the likelihood of significant positive or negative balances in the future,
5 A vista proposes that a schedule be established for the revision of the DSM components of
6 Schedules 91 and 191. Avista proposes to file on or before February 15th of each year to
7 revise the DSM portions of the Schedule 91 and 191 tarff rider mechanisms to establish
8 tariff riders that are sufficient to fud the following twelve months of DSM as well as
9 amortize any tarff rider imbalance. It is understood that discussions with interested paries
10 may, from time to time, lead to modifications of this process in the event that the projected
11 change to the tarff rider is very small or when changes to the period of time that an
12 imbalance is to be recovered are deemed appropriate.
13 Further, Avista wil circulate drafts of any tarff revision, affecting the Company's
14 DSM portfolio to our Triple-E Board at least 30 days prior to filing said revision. Avista also
15 proposes to provide the Triple-E Board with a quarterly report on the Schedule 91 and 191
16 tarff rider balances. Triple-E Board members wil receive an e-mail alert if either of these
17 balances exceeds 20% of the forecasted annual revenue, either positive or negative, at any
18 month-end. A vista has not and does not currently earn any interest upon any positive
19 (customer owes shareholder) balance in the tariff rider. Avista wil complete and circulate an
20 analysis of the results in the prior calendar year to the Board by March 31 st of each year.
1 The Total Resource Cost Test measures the net costs of a demand-side management program
as a resource option based on the total costs of the program, including both the paricipants'
and the utility's costs. The Program Administrator Cost Test measures the net costs of a demand-side
management program as a resource option based on the costs incurred by the program administrator
(including incentive costs) and excluding any net costs incurred by the paricipant. The
benefits are similar to the TRC benefits. Costs are defined more narowly.
Application of A vista Corporation
Case No. A VU-E-09- and A VU-G-09
Page 7
1 The protocols described above wil manage the balances of the tarff rider mechanism
2 and ensure that sufficient fundìng is available for the completion of programmatic measures.
3 The reasons that the tarff rider balances have been negative are because Avista has acquìred,
4 and wil continue to acquire, cost-effective energy-efficiency resources as an important
5 component of our overall resource portfolio. This includes meeting customer demand for
6 energy efficiency financial rebates in advance of tariff rider recovery.
7
8 iv. REQUEST FOR APPROVAL
9 In summary, installng energy efficiency measures is a direct action customers can
10 take to respond to a period of increasing energy prices facing the Pacific Northwest and the
11 Country as a whole. Avista's energy efficiency programs are being used by customers at
12 unprecedented levels. Customer paricipation continues to exceed current funding. The
13 Company's request trues-up its electric and natural gas tarff riders to a level to meet
14 customer demand and reduce existing negative balances, while providing funding for future
15 energy efficiency programs. Energy efficiency remains the lowest cost new resource and all
16 customers benefit by its acquisition.
17 The estimated annual revenue change associated with this filing is approximately $5.4
18 milion for electric and $1 milion for natural gas, or an increase of 2.73% and 1.01%
19 respectively.
20 V. CUSTOMER NOTIFICATION
21 Notice to the public of the proposed rates and charges, pursuant to IDAP A
22 31.21.02.1 02, wil be given simultaneously with the filing of the Application by posting a
23 notice at each of the Company's district offices in Idaho, and by a news release, both of
24 which are attached as Exhibit A. Notice of proposed rates wil also be given to all Idaho
Application of A vista Corporation
Case No. A VU-E-09- and A VU-G-09
Page 8
1 customers by individual bil insert as required by rule. The proposed effective date is August
2 1,2009.
3 WHEREFORE Applicant respectfully requests the Commission issue its
4 Order finding the proposed rates and charges in Schedules 91 and 191 attached to this
5 Application as Exhibit B to be fair, just, reasonable and nondiscriminatory, and effective for
6 electric and natual gas service rendered on and after August 1, 2009, with this application
7 being processed under Modified Procedure.
8
9 DATED at Spokane, Washington, this 29th day of June, 2009.
10
11 AVISTA CORPORATION
12
13
By tr1
15 David J. Meyer
14
16 Vice President and Chief Counsel for17 Regulatory and Governental Affairs
Application of Avista Corporation Page 9
Case No. A VU-E-09- and A VU-G-09
STATE OF WASHINGTON)
ss
County of Spokane )
David J. Meyer, being duly sworn, on oath deposes and says:
That he is the Vice President and Chief Counsel for Regulatory and Governental
Affairs of A vista Corporation;
That he has read the foregoing Application, knows the contents thereof, and believes the
same to be true.
9: ¿-~¿;
David J. Meyer
Subscribed and sworn to before me this 29th day of June, 2009.
Washington, residing in Spokane
~~~Notary Public in and for the State
Application of A vista Corporation
Case No. AVU-E-09 and A VU-G-09
DSM Tariff Rider Projection with Current Rider Amounts Exhibit B
Electric Gas
Projected Tariff Rider Revenue at Current Surcharge
$370,000 $83,000 June - July 2009 budgeted revenues
$1,024,000 $699,000 August - December 2009 budgeted revenues
$2,479,000 $1,600,000 Calendar year 2010 budgeted revenues
Budgeted DSM Expenditures
$861,171 $270,960 June - July 2009 budget
$2,152,928 $677,400 August - December 2009 budget
$6,150,829 $1,950,913 Calendar year 2010 budget
$ (2,361,178) $
$ (491,171) $
$ (2,852,349) $
$ 11,156,106 $
$ 3,503,000 $
318%
218%
1.25%
Tariff Rider Balances
(1,036,753) Actual end-ot-month May 2009 tariff rider balance
(187,960) Projected change in tariff rider balance, June - July 2009
(1,224,713) Projected end-ot-month July 2009 tariff rider balance
Revenue required to tund budgeted DSM expenditures August 2009 to December 2010 plus
3,853,027 projected end-ot-month July 2009 negative tariff rider balance
2,299,000 Budgeted revenue at current tariff rider surcharge tor August 2009 to December 2010
168% Required revenue above divided by the budgeted revenue at the current tariff rider surCharge
68% Percent increase in the tariff rider surcharge level
1.50% Current surcharge as a percent ot base retail rates at the last filing
Old DSM Rate
$ 0.00081
$ 0.00095
$ 0.00073
$ 0.00052
$ 0.00046
$ 0.00076
1.25%
$
$
$
$
0.02063 $
0.01817 $
$
0.01523 $
Proposed surcharge as a percent ot base retail rates comparable to the current surcharge
Increase in the surcharge as a percent ot base retail rates
New DSM Rate Rate Schedule
$ 0.00258 Schedule 1
$ 0.00303 Schedule 11 & 12
$ 0.00232 Schedule 21 & 22
$ 0.00166 Schedule 25
$ 0.00146 Schedule 25P
$ 0.00242 Schedule 31 & 32
3.98% Schedule 41-48
0.03458 Schedule 101
0.03045 Schedule 111 & 112
Schedule 121 & 122
0.02552 Schedule 131 & 132
1,000
Expected change in annual (calendar year 2010) revenue as a result ot the increase in the
tariff rider surcharge
65 Typical residential monthly usage
Change in typical residential customer monthly bill