20100930notice_of_application_order_no_32081.pdf

Office of the Secretary
Service Date
September 30, 2010
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF A VISTA UTILITIES FOR AUTHORITY
TO CHANGE ITS NATURAL GAS RATES
AND CHARGES (2010 PURCHASED GAS
COST ADJUSTMENT).
NOTICE OF APPLICATION
CASE NO. AVU-10-
NOTICE OF
MODIFIED PROCEDURE
ORDER NO. 32081
On September 15, 2010, Avista Corporation dba Avista Utilities filed its annual
Purchased Gas Cost Adjustment (PGA) Application requesting authority to increase its
annualized revenues by approximately $3.1 million, or about 4.3%. 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 increased 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 , 2010.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that the Company states that if the proposed
changes are approved its annual revenue will increase by approximately $3.1 million, or 4.3%.
The average residential or small commercial customer using 63 therms per month will see an
increase of$2.75 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 (W ACOG) purchased
and the W ACOG embedded in rates. The Company states that it also defers various pipeline
refunds or charges and miscellaneous revenue received from gas-related transactions, including
pipeline capacity releases. Application at 2.
YOU ARE FURTHER NOTIFIED that Avista proposes decreasing the WACOG
from the currently approved $0.491 per therm to $0.461 per thermo The Application asserts that
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32081
daily wholesale natural gas prices have been higher this year than last year, thus impacting the
cost of purchased natural gas for storage pricing. However, prices in the forward market have
been lower this year than what is currently embedded in rates. The decrease in forward market
prices offset the increase in storage prices, leading to a drop in the proposed W ACOG.
YOU ARE FURTHER NOTIFIED that the Company has been hedging gas on a
periodic basis throughout 20 I 0 for the coming PGA year. The Company states that
approximately 70% of its estimated annual load requirements for the PGA year will be hedged at
a fixed price comprised of: (1) 41 % of volumes hedged for a term of one year or less; (2) 19% of
prior multi-year hedges; and (3) 10% from underground storage. The Company states that
through August 2010 , the planned hedge volumes for the PGA year have been executed at a
weighted average price of $0.542 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.
Application at 3. A vista proposes a slight increase in demand charges due to a change in tariffs
on the TransCanada (Alberta) and TransCanada (BC) pipelines. Id.
YOU ARE FURTHER NOTIFIED that the Company is also proposing an
amortization rate of $0.035 per therm for interruptible service customers and a rate of $0.062 per
therm for general and large general service customers. The change in amortization rates is a
result of the large 2009 refund amortization rate. Included in the proposed refund rate is a
substantial deferral balance that the Company was recovering over the past year through
Schedule 155 that was not fully refunded to customers as natural gas loads for the winter
2009/20 I 0 were softer than projected. As a result, the proposed amortization rate still reflects
some level of previous deferrals, allowing for a lower proposed rate for customers.
YOU ARE FURTHER NOTIFIED that Avista asserts that it has notified customers of
its proposed increase 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.
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
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32081
of Procedure IDAPA 31.01.01.201 through .204.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 21 , 2010. 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:
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: kel1y.norwood~avistacorp.com
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
472 W. Washington Street
Boise, ID 83702-5918
David J. Meyer
Vice President and Chief Counsel for
Regulatory & Governmental Affairs
A vista Utilities
PO Box 3727
Spokane, W A 99220-3727
Email: david.meyer~avistacorp.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. 32081
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 21 2010.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32081
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this J O-f4'
day of September 20 I
MARSHA H. SMITH, COMMISSIONER
~wd,
MACK A. REDFORD, COMMISSIONER
ATTEST:
t#r f) €(-lJ
D. Jewell
Commission Secretary
O:A VU-I 0-03 ks
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 32081