20100409notice_of_application_order_no_31038.pdf

Office of the Secretary
Service Date
April 9, 2010
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF A VISTA CORPORATION DBA A VISTA
UTILITIES FOR AUTHORITY TO
INCREASE ITS RATES AND CHARGES FOR
ELECTRIC AND NATURAL GAS SERVICEIN IDAHO
CASE NOS. A VU-10-
A VU-10-
NOTICE OF APPLICATION
NOTICE OF
INTERVENTION DEADLINE
ORDER NO. 31038
On ~arch 23, 2010, Avista Corporation dba Avista Utilities filed an Application
seeking authority to increase the Company s general rates for electric and natural gas service in
Idaho by averag~s of 14% and 3.6%, respectively. If approved, the Company s revenues for
electric base rates ,would increase by $32.1 million annually. Company revenues for natural gas
rates would increase by $2.6 million annually. The Company requests an effective date of April
2010, for its proposed electric and natural gas rate increases.
NOTICE OF APPLICATION
A vista is a public utility primarily engaged in the generation, transmission and
distribution of electric power and the distribution of natural gas in portions of eastern and central
Washington and northern Idaho, as well as distribution of natural gas in northeast and southwest
Oregon. Avista serves about 121 000 customers in Idaho. The Company s existing Idaho rates
and charges for electric and gas service were approved by the Commission on July 17, 2009, and
became effective on August 1 2009. Order No. 30856.
The Company maintains that its proposed revenue increases are driven primarily by
increased power supply costs, increased costs to meet additional compliance requirements, the
need to replace aging infrastructure, and changes in other various costs of providing electric and
natural gas services to its customers. Application at 3. The Company anticipates capital
expenditures of approximately $420 million over the next two years to assure reliability in
serving its current customers and meeting customer growth. Id. at 6. The Company asserts that
it has taken measures to cut costs and increase operating efficiencies in an effort to mitigate a
portion of its cost increases. Id. at 5.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 31038
Evidence in support of the Company s need for a rate increase for electric and natural
gas is based on a 12-month test year ending December 31 , 2009. Id. at 4. The Company is
requesting an overall rate of return of 8.55% with a proposed 10.9% return on equity. Id. at 6.
A vista asserts that it will notify each customer of the proposed rate increases through a bill
stuffer during a billing cycle and by issuing a news release.
A. Electric Service
The Company contends that its proposed increase in electric rates is primarily driven
by an increase in production and transmission expenses. The Company maintains that 80% of its
overall request for an increase is due to the additional costs of the Lancaster plant Power
Purchase Agreement, the termination of some low-cost power purchases, reduced hydro
generation, and increased fuel costs and higher retail loads. Morris Direct at 9.
The proposed increase for a residential customer using an average of 964 kilowatt-
hours (kWh) per month is $11.40 per month, or a 14.6% increase. This includes a Company-
proposed increase in the basic/customer charge from $4.60 to $6.75 per month. Ehrbar Direct at
4. The Company is not proposing any changes to the present rate structures within its electric
schedules. Id. at 5.
B. Gas Service
A vista asserts that its proposed increase in natural gas rates is primarily driven by the
inclusion in this case of the increased plant investment and inventory associated with the transfer
of additional capacity and deliverability in the Jackson Prairie Storage facility from Avista
Energy to Avista Utilities effective May 1 2011. Morris Direct at 10. The proposed increase for
a residential customer using an average of 63 therms of gas per month would be $2.77 per
month, or a 4.9% increase. As part of this increase, the Company is proposing an increase in the
monthly customer charge from $4.00 to $6.75 per month, to recover a more reasonable level of
fixed costs. Ehrbar Direct at 6. The Company is not proposing any changes to the present rate
structures within its gas service schedules. Id. at 29.
The proposed percentage increases by rate schedules for electric and natural gas
service are reflected in the tables below.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 31038
Proposed Electric Increase by Percentage
Residential (Sch. I)
Commercial (Sch. II)
Large Commercial (Sch. 21)
Industrial (Sch. 25)
Clearwater Paper (Sch. 25P)
15.
14.2%
14.
12.
10.
Proposed Natural Gas Increase by Percentage
Residential & General Service (Sch. 101) 4.4%
Large Commercial (Sch. Ill) 1.0%Interruptible Service (Sch. 131) 1. 9%
YOU ARE HEREBY NOTIFIED that A vista s intrastate revenue requirement, and
every component of it, both rate base and expense, are at issue. The Commission may grant
deny, or modify the revenue requirement requested and may find a revenue requirement different
from that proposed by any party is just, fair and reasonable. IDAP A 31.01.01.124.01.
YOU ARE FURTHER NOTIFIED that the rates and charges of all Avista retail
customers, both recurring and non-recurring, including those of special contract customers, are at
issue, and every component of every existing and proposed rate and charge is at issue. The
Commission may approve, reject or modify the rates and charges proposed and may find that
rates and charges different from those proposed by any party are just, fair and reasonable.
IDAPA 31.01.01.124.02.
YOU ARE FURTHER NOTIFIED that the Commission may approve, reject or
modify existing or proposed relationships between and among rates and charges within, between
or among customer classes or rate groupings and may approve , reject or modify existing or
proposed relationships among and between customer classes or rate groupings.IDAPA
31.01.01.124.02.
YOU ARE FURTHER NOTIFIED that the Commission may abolish, reduce or
create rate blocks or categories of rates and charges, abolish, create or reduce components of
rates and charges , abolish, reduce or create customer classes or rate groupings, and abolish
reduce or create absolute or relative differences among and between existing classes or rate
groupings of customers. IDAPA 31.01.01.124.02.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 31038
YOU ARE FURTHER NOTIFIED that the tariffs, practices, rules and regulations
servIce, instrumentalities, equipment, facilities, classifications, and customer relations of the
utility are at issue, and the Commission may address any of them in its order.IDAPA
31.01.01.124.02.
YOU ARE FURTHER NOTIFIED that all hearings and prehearing conferences in
this matter will be held in facilities meeting the accessibility requirements of the Americans with
Disabilities Act (ADA). Persons needing the help of a sign language interpreter or other
assistance in order to participate in or to understand testimony and argument at a public hearing
may ask the Commission to provide a sign language interpreter or other assistance at the hearing.
The request for assistance must be received at least five (5) working days before the hearing by
contacting the Commission Secretary at:
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone] (Telephone)
[phone] (FAX)
E-mail: secretary~puc.idaho.gov
SUSPENSION
After reviewing the Application in this matter, the Commission finds it will be unable
to consider the Application before the proposed effective date of April 23, 20 I 0, because of other
demands on the Commission s time and the complexity of the issues. The Commission further
finds that the Application is of sufficient importance to require the Commission s investigation
of the reasonableness of the proposed increase in rates and charges. Consequently, the proposed
rate changes subject to this Application are suspended for a period of thirty (30) days plus five
(5) months from the proposed effective date of April 23, 2010. Idaho Code 99 61-622 and 61-
623.
YOU ARE FURTHER NOTIFIED that the Application and supporting workpapers
testimonies 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
testimonies are also available on the Commission s web site at www.puc.idaho.gov by clicking
on "File Room" and then "Electric Cases" and/or "Gas Cases.
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 31038
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission s jurisdiction under Title 61 of the Idaho Code and specifically
Idaho Code 99 61-502 , 61-622, and 61-623. 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.
NOTICE OF INTERVENTION DEADLINE
YOU ARE FURTHER NOTIFIED that persons desiring to intervene in this matter
for the purpose of presenting evidence or cross-examining witnesses at hearing must file a
Petition to Intervene with the Commission pursuant to this Commission s Rules of Procedure
72 and 73 , IDAPA 31.01.01.072 and -073. Persons intending to participate at the hearing must
file a Petition to Intervene no later than fourteen . (14) days from the service date of this
Order. Persons desiring to present their views without parties' rights of participation and cross-
examination are not required to intervene and may present their comments without prior
notification to the Commission or the parties.
YOU ARE FURTHER NOTIFIED that the Commission Secretary shall issue a
Notice of Parties after the deadline for intervention has passed. The Notice of Parties shall
assign exhibit numbers to each party in this proceeding.
YOU ARE FURTHER NOTIFIED that once the Notice of Parties is issued, the Staff
counsel will convene an informal prehearing conference for the purpose of discussing a schedule
to process this case, the service of discovery, and other issues raised by the parties. Parties
desiring to participate by phone should contact Staff counsel for teleconference instructions.
YOU ARE FURTHER NOTIFIED that the following persons are designated as
Avista s representatives in this matter:
DAVIDJ. MEYER
VICE PRESIDENT & CHIEF COUNSEL, REG. & GOV'T AFFAIRS
A VISTA CORPORATION
PO BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, W A 99220-3727
E-mail: david.meyer~avistacorp.com
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINE
ORDER NO. 31038
KELL Y NOR WOOD
VICE PRESIDENT - STATE & FEDERAL REGULATION
A VISTA UTILITIES
PO BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, W A 99220-3727
E-mail: kelly.norwood~avistacorp.com
ORDER
IT IS HEREBY ORDERED that the proposed increase in rates and charges submitted
by Avista is suspended for a period of thirty (30) days plus five (5) months from the proposed
effective date of April 23, 2010, or until such time as the Commission issues an Order accepting,
rejecting, or modifying the proposed schedules in this matter.
IT IS FURTHER ORDERED that persons desiring to intervene in this matter for the
purpose of presenting evidence or cross-examination at hearing shall file a Petition to Intervene
with the Commission no later than fourteen (14) days from the service date of this Order.
IT IS FURTHER ORDERED that discovery is available in these consolidated cases
pursuant to the Commission s Rules of Procedure, ID AP A 31.0 1.01.221-234.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this ?-f".
day of April 2010.
MPTON, P SIDENT
~Q~ JJ&~
:A.RSHA H. SMITH, COMMISSIONER
ATTEST:~f).~
. D. Jewell
Commission Secretary
~A' t
A. RE FORD, CO ISSIONER
bls/O:A VU-lO-A VU-lO-
NOTICE OF APPLICATION
NOTICE OF INTERVENTION DEADLINEORDER NO. 31038