20090929notice_of_application_order_no_30912.pdf

Office of the Secretary
Service Date
September 29, 2009
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF A VISTA CORPORATION DBA A VISTA
UTILITIES FOR AUTHORITY TO CHANGE
ITS NATURAL GAS RATES AND CHARGES
(2009 PURCHASED GAS COST
ADJUSTMENT).
CASE NO. A VU-09-
NOTICE OF APPLICATION
NOTICE OF
MODIFIED PROCEDURE
ORDER NO. 30912
On September 15, 2009, Avista Corporation dba Avista Utilities (Avista; Company)
filed its annual Purchased Gas Cost Adjustment (PGA) Application requesting authority to
decrease its annualized revenues by approximately $14.7 million. Application at 1. The PGA
mechanism is used to adjust rates to reflect annual changes in A vista s costs for the purchase of
natural gas from suppliers - including transportation, storage, and other related costs. A vista
earnings will not be decreased as a result of the proposed changes in prices and revenues. The
Company requests that its Application be processed by Modified Procedure and that its rates
become effective on November 1 2009.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that the Company states that if the proposed
changes are approved its annual revenue will decrease by approximately $14.7 million or 17.8%.
The average residential or small commercial customer using 66 therms per month will see a
decrease of$12.74 per month.
YOU ARE FURTHER NOTIFIED that the Company states that it purchases natural
gas for customer usage and transports this gas over various pipelines for delivery to customers.
The Company defers the effect of timing differences due to implementation of rate changes and
differences between the Company s actual Weighted Average Cost of Gas (WACOG) purchased
and the W ACOG embedded in rates. The Company states that it also defers the revenue
received from the release of its storage capacity as well as various pipeline refunds or charges
and miscellaneous revenue received from gas-related transactions.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30912
YOU ARE FURTHER NOTIFIED that Avista proposes decreasing the WACOG
from the currently approved $0.760 per therm to $0.491 per thermo The Application asserts that
wholesale gas prices have fallen dramatically since July 2008 and the Company has been
hedging gas on a periodic basis throughout 2009 for the coming PGA year. The Company states
that approximately 64% of its estimated annual load requirements for the PGA year will be
hedged at a fixed price comprised of: (1) 42% of volumes hedged for a term of one year or less;
(2) 10% of prior multi-year hedges; and (3) 12% from underground storage. The Company
states that through August 2009, most of the planned hedge volumes for the PGA year have been
executed at a weighted average price of $0.582 per thermo
YOU ARE FURTHER NOTIFIED that the demand costs included in the Company
Application primarily represent the costs of pipeline transportation to the Company s system.
Avista s proposal includes essentially no change in the demand cost included in rates.
Application at 4.
YOU ARE FURTHER NOTIFIED that the Company is also proposing a change in
the present amortization rate that is used to refund or surcharge customers the difference between
actual gas costs and projected gas costs from the last PGA filing through the past year. The
present amortization rate for firm sales customers is a $0.1580 per therm refund. A vista is
proposing a $0.760 per therm increase in the amortization rate for firm sales customers. In order
to mitigate a potential 2010 PGA increase, the Company proposes to refund the deferral balance
over a two-year period, rather than one. Application at 4.
YOU ARE FURTHER NOTIFIED that Avista asserts that it has notified customers of
its proposed decrease in rates by posting a notice at each of the Company s district offices in
Idaho, by means of a press release distributed to various informational agencies, and by separate
notice to each of its Idaho gas customers via a bill insert. The Company requests that this matter
be handled under Modified Procedure pursuant to Rules 201-210 of the Commission s Rules of
Procedure.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the
public interest may not require a formal hearing in this matter and will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission s Rules
of Procedure IDAPA 31.01.01.201 through .204.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30912
The Commission notes that Modified
Procedure and written comments have proven to be an effective means for obtaining public input
and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application may file a written comment in support or opposition with the Commission no later
than October 16, 2009. The comment must contain a statement of reasons supporting the
comment.Persons desiring a hearing must specifically request a hearing in their written
comments. Written comments concerning this Application shall be mailed to the Commission
and the Applicant at the addresses reflected below:
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
Street Address for Express Mail:
Kelly O. Norwood
Vice President - State & Federal Regulation
A vista Utilities
PO Box 3727
Spokane, W A 99220-3727
Mail: kelly.norwood(fYavistacorp.com
472 W. Washington Street
Boise, ID 83702-5918
David 1. Meyer
Vice President and Chief Counsel for
Regulatory & Governmental Affairs
A vista Utilities
PO Box 3727
Spokane, W A 99220-3727
Email: david.meyer(fYavistacorp.com
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Commission s home page located at www.puc.idaho.gov. Click the "Comments and Questions
icon and complete the comment form using the case number as it appears on the front of this
document. These comments must also be sent to A vista at the e-mail addresses listed above.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are
received within the time limit set, the Commission will consider this matter on its merits and
enter its Order without a formal hearing. If written comments are received within the time limit
set, the Commission will consider them and, in its discretion, may set the same for formal
hearing.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30912
YOU ARE FURTHER NOTIFIED that the Application, supporting workpapers and
exhibits have been filed with the Commission and are available for public inspection during
regular business hours at the Commission offices. The Application and other workpapers are
also available on the Commission s web site at www.puc.idaho.gov by clicking on "File Room
and then "Gas Cases.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be held
pursuant to the Commission s jurisdiction under Title 61 of the Idaho Code, and specifically
Idaho Code 99 61-307, 61-313, 61-503 and 61-622. The Commission may enter any final Order
consistent with its authority under Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be
conducted pursuant to the Commission s Rules of Procedure, IDAPA 31.01.01.000 et seq.
ORDER
IT IS HEREBY ORDERED that this case be processed under Modified Procedure.
Interested persons and parties may file written comments no later than October 16, 2009.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this c2.9-th
day of September 2009.
~;/.
rL~, RESIDENT
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SHA H. SMITH, COMMISSIONER
ATTEST:
f#D. e~eCommission Secretary
O:A VU-09-
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 30912