20110909Norwood Support of Stipulation.pdf

Avlsta Corp.
1411 East Mission P.O. Box 3727
Spokane. Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170
RECEIVEr)
ioii SEP -9 AM 10: 26
~~I'V'STJI'
Corp.
September 8, 2011
Jean D. Jewell
Commission Secretar
Idaho Public Utilties Commission
472 W. Washington St.
Boise, il 83702
RE: Docket Nos. A VU-E-11-01 and A VU-G-11-01
A vista hereby encloses for filing an original and nine copies of the Testimony of Kelly Norwood in
support of the Stipulation and Settlement in the above referenced cases. Questions regarding this filing
should be directed to Patrck Ehrbar at [phone].
Sincerely,~ ~,.i.
Kelly Norwood
Vice President, State & Federal Regulation
Enclosures
cc: Service list
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that I have this 8th day of September, 2011, served the Testimony
of Kelly O. Norwood in support of the Stipulation and Settlement in Case Nos. AVU-E-
11-01 and AVU-G-11-01, upon the following parties, by mailng a copy thereof, properly
addressed with postage prepaid to:
Jean D Jewell, Secretary
Idaho Public Utilities Commission
Statehouse
Boise, ID 83720-5983
Jean. jewellCãpuc. idaho.gov
Brad M. Purdy
Attorney at Law
2019 N 1 ih Street
Boise, ID 83720
bmpurdyCãhotmail.com
Donald Howell
Deputy Attorneys General
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83702-0659
kristine.sasserCãpuc. idaho.gov
donald. howellCãpuc. idaho .gov
Peter J. Richardson
Greg M. Adams
Richardson & O'Leary PLLC
515 N. 2ih Street
PO Box 7218
Boise, ID 83702
peterCãrichardsonandoleary.com
gregCãrichardsondoleary. com
Marv Lewallen
Clearwater Paper
601 W. Riverside Avenue
Suite 1100
Spokane, WA 99201
marv .lewallenCãclearwaterpaper. com
Dean J. Miler
McDevitt & Miler, LLP
420 W. Bannock St.
PO Box 2564-83701
Boise,ID 83701-2564
joeCãmcdevitt-miler. com
Scott Atkison
Idaho Forest Products
171 Highway 95 N.
Grangevile, ID 83530
scottaCãidahoforestgroup. com
Dr. Don Reading
6070 Hil Road
Boise, ID 73703
dreadingCãmindspring. com
Benjamin J. Otto
Idaho Conservation League
710 N. 6th Street, P. O. Box 844
Boise, ID 83702
bottoCãidahoconservation.org
Patrick Ehrbar
Manager, Rates and Tariffs
R,cr.\. !..~ li..DAVID J. MEYER
VICE PRESIDENT, CHIEF COUNSEL
GOVERNENTAL AFFAIRS
AVISTA CORPORATION
P.O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: [phone]
FACSIMILE: [phone]
FOR REGULA1~lrsEf-9 10: 27
u
BEFORE THE iDAHO PUBLiC UTiLiTiES COMMiSSiON
IN THE MATTER OF THE APPLICATION
OF AVISTA CORPORATION FOR THE
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC AND
NATURA GAS SERVICE TO ELECTRIC
AND NATURAL GAS CUSTOMERS IN THE
STATE OF IDAHO
CASE NO. AVU-E-11-01
CASE NO. AVU-G-11-01
DIRECT TESTIMONY
OF KELLY O. NORWOOD
IN SUPPORT OF THE
STIPULATION AND
SETTLEMENT
FOR AVISTA CORPORATION
(ELECTRIC AND NATURAL GAS)
1 i . iNTRODUCTiON
2 Q.Please state your name, emloyer and business
3 address.
4 A.My name is Kelly O. Norwood and I am employed as
5 the vice-President of State and Federal Regulation for
6 Avista Utilities ("Company" or "Avista"), at 1411 East
7 Mission Avenue, Spokane, washington.
8 Q.Would you briefly describe your educational
9 background and professional experience?
10 A.Yes.I am a graduate of Eastern Washington
11 University with a Bachelor of Arts Degree in Business
12 Administration, majoring in Accounting.I joined the
13 Company in June of 1981.Over the pas t 30 years, I have
14 spent approximately 19 years in the Rates Department with
15 involvement in cost of service, rate design, revenue
16 requirements and other aspects of ratemaking.I spent
17 approximately 11 years in the Energy Resources Department
18 (power supply and natural gas supply) in a variety of roles,
19 with involvement in resource planning, system operations,
20 resource analysis, negotiation of power contracts, and risk
21 management.I was appointed Vice-President of State &
22 Federal Regulation in March 2002.
23 Q.Are you sponsoring any Exhibits that accomany
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Avista Corporation
1 your testimony?
2 A.Yes.I am sponsoring Exhibi t No. 1 which is a
3 copy of the Stipulation and Settlement filed on August 26,
4 2011 with the Commission.
5 Q.What is the scope of your pre-filed testimony in
6 this proceeding?
7 A.The purpose of my testimony is to describe and
8 support the Stipulation and Settlement ( "Stipulation" or
9 "Settlement"), filed on August 26, 2011 between the Staff of
10 the Idaho Public Utili ties Commission (" Staff" ), Clearwater
11 Paper Corporation ("Clearwater"), Idaho Forest Group, LLC
12 ( "Idaho Forest" ) ,the Community Action Partnership
13 Association of Idaho ("CAPAI"), the Idaho Conservation
14 League ("Conservation League"), and the Company, which, if
15 approved by the Commission, would resolve all of the issues
16 in the Company's f i ling.These entities are collectively
17 referred to as the "Parties," and represent all parties in
18 these cases (AVU-E-11-01 and AVU-G-11-01) that participated
19 in settlement discussions.
20 The Stipulation is the product of settlement
21 discussions that began in the Commission offices on August
22 1 7, 2011 , and conc 1 uded on Augus t 26th wi th agreement among
23 all parties.The Stipulation between the Parties resolved
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Avista Corporation
1 all issues associated with the calculation of the Company's
2 requested revenue requirement, all issues related to rate
3 spread and rate design, and provides additional funding for
4 low income energy efficiency education.
5 The Parties agree that this Settlement is not
6 contingent upon any specific methodology for individual
7 components of the revenue requirement determination, but all
8 Parties support the overall increase to the Company's
9 revenue requirement, and agree that the overall increase
10 represents a fair, just and reasonable compromise of the
11 issues in this proceeding and that this Stipulation is in
12 the public interest.
13 The Parties understand that the Stipulation is subject
14 to approval by the Idaho Public Utilities Commission (IPUC).
15 Q.Please explain how the Parties arrived at the
16 Stipulation in thi s proceeding.
17 A.The Stipulation is the end result of audit work
18 conducted through the discovery process and hard bargaining
19 by all Parties in this proceeding. I would like to express
20 my appreciation to all Parties involved in this proceeding
21 for their efforts in arriving at this Stipulation and to
22 this Commission for its willingness to hear this matter
23 promptly, in light of the proposed OCtobe 1 effective date.
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Avista Corporation
1 Q.Would you briefly sumrize the Stipulation?
2 A.Yes.Under the terms of the Settlement, Avista
3 would be allowed to implement revised tariff schedules
4 effective October 1, 2011 designed to recover $2.8 million
5 in additional annual electric revenue, which represents a
6 1.1% increase in electric annual base tariff revenues.
7 Avista would also be allowed to implement revised tariff
8 schedules on October 1, 2011 designed to recover $1.1
9 million in additional annual natural gas revenue, which
10 represents a 1.6% increase in natural gas annual base tariff
11 revenues.As discussed in more detail later in my
12 testimony, and in the Stipulation, several other proposed
13 rate adjustments will serve to more than offset the proposed
14 base rate increases on October 1, 2011.
15 In addition, the Company agrees that it will not seek
16 to make effective a change in base electric or natural gas
17 rates prior to April 1, 2013, by means of a general rate
18 filing.This will not prevent the Company, however, from
19 otherwise seeking to implement other rate changes affecting
20 the rates billed to customers, including, but not limited
21 to, adjustments under the power cost adjustment (PCA)
22 mechanism, purchased gas cost adjustments (PGA); DSM tariff
23 rider adjustments; etc.
Norwood, Di 4
Avista Corporation
1 Q.Would you briefly sumrize the net impact on
2 customers of all rates proposed to take effect on October 1,
3 2011?
4 A.Yes.By means of separate filings, several
5 other rate adjustments are proposed to also take effect on
6 October 1, 2011.Wi th respect to electric service, these
7 adjustments include the following:a decrease of $2.2
8 million in Schedule 59 for Residential Exchange benefits
9 for residential and small farm customers; a decrease of
10 $15.6 million in Schedule 66 Power Cost Adjustment (PCA)
11 rates; and an increase of $8.7 million for the previously-
12 approved adjustment for Deferred State Income taxes (DSIT)
13 in Schedule 99, as part of the Settlement approved in Case
14 No. (s) AVU-E-10-01 and AVU-G-10-01.After taking into
15 account the agreed-upon increase of $2.8 million in
16 electric general rate increase revenues in this case, the
17 net overall reduction resulting from all of the proposed
18 aforementioned adjustments would total approximately $6.2
19 million. 1 Attachment A to the Stipulation sets forth these
20 proposed October 1 adjustments in more detail, and by
i As part of this Settlement, Avista has also agreed to withdraw its
filed-for decrease of $0.74 million in electric Demand-Side Management
(DSM) Tariff Schedule 91, and did so by means of a separate filing
made on August 29, 2011.
Norwood, Di 5
Avista Corporation
1 service schedule.The following table sumarizes these
2 proposed revenue adjustments:
3
4 Electrc - Pr sed October 1 2011 Revenue Cha e
chedule 99 - DSIT Increase $ 8,698,8
edule 59 - Residentil Exchage t~(2,207 1.9
hedule 66 - PCA Decrease $ ...(15,si 7,~~~2
C Rate Increase $ 2,800,000
otal Revenue Change 1 $ (6,225,727)1........................_..............................._...._~__......_.~..~~.....__._.i__....._... ~......:.7
5
6
8 with respect to natural gas service, the following
9 rate adjustments, by means of separate filings, are
10 proposed to take effect on October 1, 2011:an increase
11 of $0.8 million in Schedules 150/155 for Purchased Gas
12 Costs (PGA) 2; a decrease of $2.9 million in Demand-Side
13 Management (DSM)tariff rider Schedule 191; and an
14 increase of $0.5 million for the previously-approved
15 adjustment for Deferred State Income Taxes (DSIT) in
16 Schedule 199, as part of the Settlement approved in Case
17 No. (s) AVU-E-10-01 and AVU-G-10-01.After taking into
18 account the agreed-upon increase of $1.1 million in
19 natural gas general rate revenues,the net overall
20 decrease resulting from all of the proposed aforementioned
21 adjustments would be $0.525 million.At tachment A to the
2 On August 25,2011, Avista updated its pending PGA (Case No. A VU-G-II-04) to reflect a decline in
forward natural gas prices since the August 15,2011 PGA fiing which, if approved by the Commission,
would result in a 0.98% overall increase versus the previously-filed 1.53% increase.
Norwood, Di 6
Avista Corporation
1 Stipulation sets forth these proposed October 1, 2011
2 adjustments in more detail, and by service schedule.The
3 following table sumarizes these proposed revenue
4 adjustments:
8
(C Rate Increase $ 1,100,000~~'~'"'-'-'-"'-"'''-'''-i Total Revenue Change 1 $ . (524,623)1k",,,~"~_.--~~__,,_.~..,,.~,,,,~,,_~~,__~~~,~,,"=,,N===_=====",,~_,"~'~'~""~_~~''''~
5
6
7
9
10 ii. HiSTORY OF FiLiNG
11 Q.Please describe the Company's general rate case
12 request, as filed.
13 A.On July 5, 20ll, Avista filed an Application with
14 the Commission for authority to increase revenue for
15 electric and natural gas service in Idaho by 3.7% and 2.7%,
16 respectively.If approved, the Company's revenues for
17 electric base retail rates would have increased by $9.0
18 million annually; Company revenues for natural gas service
19 would have increased by $1.9 million annually.
20 The Company proposed to spread the electric revenue
21 increase by rate schedule on a uniform percentage basis.
22 The Company also proposed to raise the monthly electric
Norwood, Di 7
Avista Corporation
1 residential basic charge to $5.50 from the current $5.00
2 charge.
3 The Company proposed utilizing the results of the
4 natural gas cost of service study as a guide in spreading
5 the overall revenue increase to its natural gas service
6 schedules and proposed to raise the natural gas residential
7 basic charge to $4.50 from the current $4.00.
8 Q.What are the primary factors causing the Company's
9 request for an electric rate increase in this filing?
10 A.Approximately 90% of the Company's revenue
11 requirement requested in this case is due to an increase
12 in Net Plant Investment (including return on investment,
13 depreciation and taxes, and offset by the tax benefit of
14 interest). This increase is due in part to an increase of
15 approximately $21.0 million in net plant rate base for the
16 Idaho jurisdiction.The remaining 10% of our request is
17 due to increases in distribution,operation and
18 maintenance (O&M) , and administrative and general (A&G)
19 expenses, offset by a reduction in net power supply and
20 transmission expenditures.
21 Q.What are the primary factors driving the Comany's
22 request for a natural gas rate increase?
Norwood, Di 8
Avista Corporation
1 A.The Company's natural gas request is driven by
2 changes in various operating cost components, approximately
3 two-thirds of which are distribution O&M and A&G
4 expendi tures, such as increased costs in employee benefits,
5 i . e. wages and medical insurance expenses, and one-third
6 represent increased net plant investment, due to additional
7 Company investment in underground storage facilities,
8 distribution and general plant.
9
10 iii. ELEMS OF THE STiPULATiON
11 Q.Please describe the remining terms of the
12 Stipulation entered into by the Parties.
13 A.The Parties to the stipulation agreed that under
14 the terms of the Settlement no party has accepted a specific
15 methodology for certain elements of the revenue requirement
16 determination. The Stipulation does, however, specify an
17 agreed-upon level of power supply costs upon which to set
18 the new base power supply costs for the monthly Power Cost
19 Adjustment (PCA) calculation purposes, and it identifies
20 other specific items that I will address in my testimony
21 below.
22 Q.Where is the new level of power supply costs for
23 the PCA calculation found in the agreement?
Norwood, Di 9
Avista Corporation
1 A.The power supply costs for the monthly PCA
2 calculation are provided in Attachment B to the Stipulation.
3 Q.What is the proposed effective date of the
4 Stipulation?
5 A.The Parties have requested implementation of new
6 rates from the Stipulation on October 1, 2011.This
7 proposed effective date is an integral part of the
8 Stipulation that was part of the negotiated resolution of
9 all of the issues. As discussed above, this October 1 date
10 will synchronize with the several other rate adjustments
11 also proposed to take effect on October 1, and by doing so,
12 will avoid multiple rate changes over a short period of time
13 that may cause customer confusion.
14 Q.Please explain the Settlement terms relating to
15 cost of service and rate spread.
16 A.As part of this rate case, the Company prepared an
17 analysis of using a peak credit method of classifying
18 production costs, allocating 100% of transmission costs to
19 demand, and allocating transmission costs to reflect any
20 peak and off-peak seasonal cost differences on a weighted
21 twelve month basis.The Parties have agreed to exchange
22 information and convene a public workshop prior to the
23 Company's next general rate case, with respect to the
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Avista Corporation
1 possible use of a revised peak credit method for classifying
2 production costs, as well as consideration of the use of a
3 12 Coincident Peak (CP) (whether "weighted" or not) versus a
4 7 CP or other method for allocating transmission costs.
5 This workshop will also address the merits of inclining or
6 declining block rates for all service schedules.The
7 Parties agreed, however,to spread the electric rate
8 increase on a uniform percentage basis for purposes of this
9 Settlement.
10 As for natural gas, the Company prepared a cost of
11 service study and proposed that all rate schedules be
12 moved to uni ty .For settlement purposes, the Parties
13 agreed to spread the natural gas rate increase on a
14 uniform percentage basis.
15 The table on Page 2 of Attachment C of the Stipulation
16 shows the impact on the energy rates under each service
17 schedule of the agreed-upon electric increase.The
18 proposed electric revenue increase of $2.8 million
19 represents an overall increase of 1.1% in base rates.As
20 was discussed earlier, after the application of the other.
21 rate adjustments proposed to also be effective on October
22 1, the Company would have an overall revenue reduction of
23 $6.2 million or 2.4%.
Norwood, Di 11
Avista Corporation
1 Page 4 of of Attachment C shows the impact on each
2 service schedule of the agreed-upon natural gas increases.
3 The increased natural gas revenue requirement of $1.1
4 million represents an overall increase of 1.6% in base
5 rates. After the application of the other rate adjustments
6 proposed to be effective also on October 1, the Company
7 would have an overall revenue reduction of $0.525 million
8 or 0.8%.
9 Q.What is the basis of the Stipulation relating to
10 the rate design?
11 A.The Stipulation provides for increases in the
12 basic charges, monthly minimum charges, and demand charges
13 in Schedules 11, 21, 25, and 31, as shown in Attachment C,
14 page 2 of the Stipulation. Otherwise, a uniform percentage
15 increase is applied to each energy rate within each
16 electric service schedule excluding Schedule 1, residential
17 service where block differentials remain constant.In
18 addition, the second block in Schedule 11 would be reduced
19 by $0.00773 as contemplated in the Company's original
20 filing, and the remaining revenue requirement, after
21 accounting for the changes in the basic charge and demand
22 charge, would be applied to the first energy block.
Norwood, Di 12
Avista Corporation
1 The Parties also agreed that the current residential
2 electric basic charge of $5.00 would be increased to $5.25
3 per month, and the residential natural gas basic charge of
4 $4.00 per month would be increased to $4.25.
5 Q.Please describe the customer service-related
6 portion of the Stipulation.
7 A.There are two areas that were addressed in the
8 Stipulation, as follows:
9 (a)Funding for Outreach for Low-Income Conservation.
10 The Parties agree to annual funding of $50,000 to CAPAI for
11 purposes of providing low-income outreach and education
12 concerning conservation (representing an increase of $10,000
13 from previous funding levels).This amount will be funded
14 through the Energy Efficiency Tariff Rider (Schedules 91 and
15 191), and will be in addition to the $700,000 of Low-Income
16 Weatherization funding currently in place.
17 (b)Collaboration on Low-Income Weatherization.The
18 Company and interested parties will meet and confer prior to
19 the Company's next general rate filing in order to assess
20 the Low Income Weatherization and Low Income Energy
21 Conservation Education Programs and discuss appropriate
22 levels of low-income weatherization funding in the future.
Norwood, Di 13
Avista Corporation
1 Q.Does the Company have other programs in place to
2 mi tigate the impacts on customers of the proposed rate
3 increase?
4 A.Yes. We have a history of making it a priority
5 within our Company to maintain meaningful programs to assist
6 our customers that are least able to pay their energy bills.
7 We also have programs to assist our entire customer base,
8 i. e., not just our low-income customers.Some of the key
9 programs that we offer or support are as follows:
10 Programs designed to assist customers include:
11 . DSM Energy Efficiency Programs and Funding. Thé12 Company offers a broad array of energy efficiency
13 program measures that provides customers with inc.reased14 opportunity to manage their energy bills.
15
16 . Project Share. Project Share is a voluntary program17 allowing customers to donate funds that are distributed
18 through community action agencies to customers in need.19 In addition to the customer contributions in 2010 of
20 $316,600 (system) , the Company also contributed21 $126,227 (Idaho's share) to the program.
22
23 . Comfort Level Billing. The Company offers the option
24 for all customers to pay the same bill amount each25 month of the year by averaging their annual usage.
26 Under this program, customers can avoid unpredictable27 winter heating bills.
28
29 . Payment Arrangements. The Company's Contact Center
30 Representatives work with customers to set up payment31 arrangements to pay energy bills.
3233 . CARS Program. Customer Assistance Referral and34 Evaluation Services provides assistance to special-
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Avista Corporation
1 needs customers through access to specially trained
2 (CARES) representatives who provide referrals to area
3 agencies and churches for help with housing, utilities,
4 medical assistance, etc.
5
6 · Senior Energy OUtreach: Avis ta has developed
7 specific strategic outreach efforts to reach our more
8 vulnerable customers (seniors and disabled customers)
9 with bill paying assistance and energy efficiency
10 information that emphasizes comfort and safety. Some11 examples of this effort are as follows:
1213 · Senior Publications: Avista has created a one-14 page advertisement that has been placed in15 senior resource directories and targeted senior16 publications to reach seniors with information17 about energy efficiency, Comfort Level Billing,
18 Avista CARES and energy assistance. A brochure19 with the same information has also been created20 for distribution through senior meal delivery
21 programs and other senior home-care programs.
22
23 · Senior Energy Workshops: wi th the help of24 additional workshop presenters, 22 Senior Energy
25 Workshops were held during the 2010/2011 heating
26 season in Idaho and Washington. Over 160027 seniors were reached and were gi ven Senior28 Energy Efficiency kits along with learning about29 low-cost/no-cost ways to reduce energy use.
30
3132 Q. Please describe the accounting treatment agreed to
33 by the Parties for two specific issues.
34 A.The Parties agree to the following accounting
35 treatment for certain items:
36 (a) Costs Associated with Acquisition From Palouse
37 wind, LLC - The Company has signed a 30-year power purchase
38 agreement with Palouse Wind, LLC, to acquire all of the
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Avista Corporation
1 power produced by a wind project that is expected to produce
2 approximately 40 aMW. Deliveries are expected to begin in
3 the second half of 2012. The annual cost of the Idaho share
4 of the purchased power under the contract is expected to be
5 approximately $6.5 million. Under terms of this Settlement,
6 the Company would include 100% of the costs associated with
7 power purchases from the wind project through the Power Cost
8 Adjustment (PCA) until such costs, subject to prudence
9 review, are reflected in general rates.
10 (b)- The Parties agree beginning in 2011 the Company
11 would be allowed to defer changes in O&M costs related to
12 its Coyote Springs 2 (CS 2) natural gas-fired generating
13 plant located near Boardman, Oregon, and its fifteen (15)
14 percent ownership share of the Colstrip 3 & 4 coal-fired
15 generating plants located in southeastern Montana, and, as
16 explained below, amortize the deferred amount over a three-
17 year period.
18 Q.Please explain the need for the deferred
19 accounting treatment for the Coyote Springs 2 and Colstrip 3
20 & 4 plants.
21 A.The Company experiences large variability in year-
22 to-year O&M costs for these two plants specifically (CS2 and
23 Colstrip) because major maintenance is scheduled every third
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Avista Corporation
1 or fourth year, resulting in large cost swings for these
2 plants in any given year.This fluctuation in maintenance
3 costs is typically not experienced by the Company's other
4 hydro operating facilities or its Kettle Falls generating
5 plant.For example, each unit at Colstrip has a regularly
6 scheduled overhaul every third year.Since we have two
7 units, this means that two out of every three years will
8 have a scheduled major maintenance outage and its associated
9 costs. Whereas the maintenance interval at Coyote Springs 2
10 is based on hours of operation.These major outages are
11 scheduled in accordance with Original Equipment Manufacturer
12 (OEM) guidelines on wear patterns and cycles for key plant
13 equipment,and we expect maj or maintenance to occur
14 approximately every four-years.
15 Therefore, depending on when the outages for each of
16 these plants fall, we can have as much as two scheduled
17 outages in one year or no scheduled outages, providing the
18 potential for large cost fluctuations on a year-to-year
19 basis.Unexpected outages also cause costs to fluctuate
20 as more costs are incurred to repair the plant.The use
21 of deferred accounting would smooth out these costs.
Norwood, Di 17
Avista Corporation
1 Q.What is the amount of actual,non-fuel,
2 operations and maintenance costs for the Coyote Springs 2
3 and Colstrip 3 & 4 plants included in the 2010 test period
4 compared to that expected in 2011 and beyond?
5 A.The system amount of actual,non-fuel,
6 operations and maintenance costs for the 2010 test period
7 for the indicated plants is shown below (millions):
8
9 Coyote Springs 2 $ 4.5
10 Colstrip 3 & 4 $11.0
11 Total (System)$15.5
12 The following illustration shows the system forecast
13 of non-fuel, operations and maintenance costs for the
14 plants separately, and in total, for the five-year period
15 of 2011 through 2015, as well as the actual costs for the
16 2010 test period.The system forecast shows major
17 maintenance occurring for Coyote Springs 2 in 2012 and
18 2015, and for Colstrip 3 & 4 occurring in 2013 and 2014.
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Avista Corporation
1 illustration 1: CS2/Colstrip Non-fuel O&M (System)
2
3
CS2/Colstrp Non-fuel O&M Projedions
2010 -2015
II CS2 Total Non-Fuel O&M
. Colstrip Total Non-Fuel O&M
e Total Joint Project Non-Fuel O&M
4
$5,000
$25,000
5
$20,000
6
7 $15,000
8 $10,000
9
10
$0
11 2010 2011 2012 2013 2014 2015
12
13 Q.Please discuss how this deferral and
14 amortization will occur.
15 A.The Company will compare actual, non-fuel, O&M
16 expenses for the Coyote Springs 2 and Colstrip 3 & 4 plants
17 with the amount of expenses authorized for recovery in base
18 rates in the applicable deferral year, and defer the
19 difference from that currently authorized.The deferral
20 will occur annually, with no carrying charge, with deferred
21 costs being amortized over a three-year period, beginning in
22 January of the year following the period costs are deferred.
23 The amount of expense to be included for recovery in future
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Avista Corporation
1 general rate cases would be the actual O&M expense recorded
2 in the test period, less any amount deferred during the test
3 period, plus the amortization of previously deferred costs.
4 Q.Please describe the accounts that would be used
5 to record the deferrals.
6 A.The Company would defer the operations and
7 maintenance expenses referenced above in Account 182.3
8 Other Regulatory Assets.The deferrals would be allocated
9 to the Idaho and Washington jurisdictions based on the
10 Production / Transmission allocation percentages in place at
11 the time the deferrals are made, and placed in separate
12 Idaho and Washington sub-accounts. Account 182.3 - Other
13 Regulatory Assets would be debited, and Account 407.4
14 Regulatory Credits will be credited as the deferrals are
15 recorded. Amortization will be recorded by debiting Account
16 407.3 - Regulatory Debits, and crediting Account 182.3 -
17 Other Regulatory Assets.
18 iV. CONCLUSiON
19 Q.What is the effect of the Stipulation?
20 A.The Stipulation represents a negotiated
21 compromise on a variety of issues among the Parties.The
22 Parties have agreed that no particular party shall be
23 deemed to have approved the facts, principles, methods, or
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Avista Corporation
1 theories employed by any other in arriving at these
2 stipulated provisions, and that the terms incorporated
3 should not be viewed as precedent setting in subsequent
4 proceedings except as expressly provided.
5 Q.in conclusion, why is this Stipulation in the
6 public interest?
7 A.This Stipulation strikes a reasonable balance
8 between the interests of the Company and its customers,
9 including its low-income customers. As such, it represents
10 a reasonable compromise among differing interests and
11 points of view.
12 The Parties have agreed tha t the Company has
13 demonstrated need for a revenue requirement increase for
14 both its electric and natural gas service. The Stipulation
15 provides for recovery of these costs.In the final
16 analysis, however, any settlement reflects a compromise in
17 the give-and-take of negotiations.The Commission,
18 therefore, has before it a Stipulation that is supported by
19 sound analysis and supporting evidence, the approval of
20 which is in the public interest.
21 Q.Does this conclude your pre-filed direct
22 testimony?
23 A.Yes, it does.
Norwood, Di 21
Avista Corporation
DAVID J. MEYER
VICE PRESIDENT AND CHIEF COUNSEL FOR 2011 SEP -9 M'; 10: 26
REGULATORY & GOVERNENTAL AFFAIRS
AVISTA CORPORATION
P.O. BOX 3727
1411 EAST MISSION AVENUE
SPOKAE, WASHINGTON 99220-3727
TELEPHONE: [phone]
FACSIMILE: [phone]
DAVID. MEYERgAVISTACORP. COM
BEFORE THE iDAHO PUBLiC UTiLiTiES COMMiSSiON
IN THE MATTER OF THE APPLICATION
OF AVISTA CORPORATION FOR THE
AUTHORITY TO INCREASE ITS RATES
AN CHARGES FOR ELECTRIC AN
NATURAL GAS SERVICE TO ELECTRIC
AND NATURA GAS CUSTOMERS IN THE
STATE OF IDAHO
CASE NO. AVU-E-l1-01
CASE NO. AVU-G-11-01
EXHIBIT NO. 1
KELLY O. NORWOOD
FOR AVISTA CORPORATION
(ELECTRIC AND NATURA GAS)
David J. Meyer, Esq.
Vice President and Chief Counel of
Reguatory and Governenta Afairs
A vist Corpration
141 1 Mission Avenue
P.O. Box 3727
Spokan~ Washingon 99220
Phone: [phone]~ Fax: [phone]
Donad L. Howell, II
Krste Sasse
Deuty Attrn Geera
Idao Pulic UtUiûeCommission Sta
P.O. Box 83720
Boise, il 83120-0074
Phone: [phone]i2~ Fax: [phone]
BEFORE TH IDAHO PUBLIC UTILITIES COMMSSION
IN TH MA TtE OF THE APPLICATION )
OF AVISTACORPORATIONDBAAVISTA ) CASE NOS. AVU-E-ll-Ol
UTILll1ES FOR AUTHORIY TO ) AVU-G-II-01
INCREASE ITS RATES AN CHARGES )
FOR ELECTRC AN NATU GAS )
SERVICE IN IDAHO ) STIPULATION AN SETTLEMENT
Ths Stipulation is ente into by an anong Avist Corpraon, doiig business as
Avist Utities ("Avist" or "Compay"), the Sta of the Ida Public Utilities Commssion
("Sta). Clemvater Pape Corpaton ("Cleaat"), Ida Forest Group~ LLC (nida
Foresll), th Community Action Parp Assoiation of Idao (IlCAPAIlI),. and th Idao
Consation Leag (UConseration Leell), Thes entities ar collecvely refer to as the
"Pares," and reresent all paes in the above-efereiced eaes th paicipated..insettenen
discusions. The Pares understd ths Stipulaton is subject to aproval by the Ida Public
Utiities Commssion ("IPUC" or th "Commssiontt).
STIPULATION AN SETTEMENT - AVU-E/G-l i-01 Page 1
Exhibit NO.6
Case No. AVU-ElG-11-01
K. Norwood. Avista
Page 1 of 27
I. INTRODUCTON
1. The terms an condìtiollof ths Stiulation ar . set fort hein. The Pares ..ag
tht this Stipulaton resets a fai, jus and reonable compromise of al the issues rase in
the proedng and th ths Stipulation and its aceptace by the Commission reprsent a
rele resolution of the multiple issues identifi in ths Stipulation. The Paries, therefore,
recommend tht the Commssion, in accordace with RP 274, approve the Stipuaton an al of
its term and conditions without material chan or codition.
ß. BACKGROUND
On July 5, 2011, A vist filed an Application with th Commission for aurity to
incre revenue from elecc and natu gas servce in Idao by 3.7% and 2.7%, respetively.
If approved, the Company's revenues for electrc ba rel rates would have increed by $9.0
mil1on anualy; Compay revenues for nat gas servce would have increa byS 1.9
million anually. The Compay reuested an effective dae of Augu 5, 2011 for its propose
electrc an naal gas tate inreas. By Orer No. 32292, da July 14, 2011, th Comiission
suspeed the proposed scheules of rates and charges for electrc and natu gas seice for a
peod of th (30) days plus five (5) mon, from Augut 5, 2011.untjl such .tias the
Commssion enter an Order acceng, rejecng or modifYg the Application in this maer.
3. Petitions to intervene in ths prQCeeing were filed by Cleater, Idaho Forst
CAPAI and th Idao Conseraton Lea. By varous order, th Commssion grted thes
interventions. See, IPUC Or Nos. 32296 an 32317.
4. A setement. confence wa notice and held in the Commission offces on
Augu i 7, 2011, and was attended by signtories to ths Stipulaton; furterdìscusions enue.
STIULATION AND SETILEMENT - A VU-ElG-l1-01 Page 2
Exhibit NO.6
Case No. AVU-E1G-11-01
K. Norwood, Avista
Page 2 of 27
Based upn the seement discussion among the Pares, as Ii compromise of positions in ths
ca, and for other consderation as set fort below, the Pares ag to the followi ter:
ßL TERMS OF THE STIPULATION AN SETTEMENT
5. Overew of Setteme an Revenue Reuiement. The Pares ag thtl A vist
should be allowed to implement revise taff schedules design torever $2.8 millon in
additiona an'U electrc revenue, an $1.1 miion in additiona anua natural gas revenue,
whch repset Ii 1.1 % an 1.6% incras in electrc and na gas anua bae taff revenue,
respetively. New electrc and na gas ra would beme effective October 1,2011.
The Pares age that ths Settlement is not contingent upon any spifc methodology
for individua components the revenue requirement determination, but al Pares supprt the
overall inreas to the Compay's revenue requient, and ag tht the over increae
repreents a fai, just and reasonle compromise of th issues in ths proceeg and th th
Stipulation is in the public inteest.
6. Net Impact of All Propose Revenue Adjusts. onQcobe 1. 291 L By mea
of separte filings, several other rate. adjusents ar prpose to also tae effect on October 1,
2011. With respe to electrc sece, thseptopose adjusents include th foUowig1:a
decre of $2.2 millon in Schede 59 fur Residential Exchae benefits for residential an
sml fa customers; a decreas of $15.5 milion in Schedul 66 Power Cost Adjustmen (PeA)
rates. In . addition, an incree of $8.7 millon for the previously-approved adjustment for
Defer State Income taes (DSIT in Schedule 99, as par of the .settenentapprovedin.ca
No.(s) AVU-E-iO..i and AVU-G-lO..i will tae effec OIl Octobe 1,201 L Afrta intø
acunt the agreed-upon incras of $2.8 milion in electc gener ra increa revenues, the
net over reducton reulting frm all of the propo aforeentioned adjusen~ if approved
i These pro ra ch ar include for ilusve pu an ar not pa of this Stilaton.
STIULA nON AND SETTEMET -AVU-E/G-l 1 -01 Page 3
Exhibit NO.6
Case No. AVU-E1G-11-01
K. Norwood, Avista
Page 3 of 27
as filed would tota apptoxintely $6.2 milion.! Atthment A sets fort these prposed
Octobe 1 adjustments in more detal, an by serice schedule. The followig tale sumarze
these proposed revenue adjustments:
,Elet - Ocober 1, 20U RevcDl Clge
Scheul 99 - DSIT Incre
Scheul 59 - Resident Exhang
Scheul 66 - PCA Dere"""'"""'''' , C~'~._'
ORC Rate Inre
Total ReveDl ClDge.......d........,.,............................"'...,......,."...,.__...........,...........,.__...._,...,..,.
$
$
$" ._.'~.""""~,,,_.~,_" .,
$
S
8,698,844 ,.w......u_"._"'''''__,,__''""__~'
(2,207,088)
, , 05,~51 ~~S3)
2,800,00
(6,225,727)
With rect tonatul gas servce, the following rate adjUsents, by meas of sepate
filigs,arpropose to tae effectonOctobe1?20113: å1 increas of SO. 8 milion in Schedules
1501155 for Purchad Ga Costs (POA)4;a decreas of $2.9 millon in De-Side
Management (DSM) taff rider Schedule 191. In addition, an incre of $0.5 millon for the
previously-approved adjustent for Deferd State Income Taxes (DSIT) in Scheule 199, as
pa of the' Setement approved in Cas No.(s) AVU-E-IO-Ol and AVU-G-IO-Ol wiUtaeeffect
on Ocobe I,Aftr tag into accoun the aged-upn incre of S1.1 milion in
na ga gener rate renues, the net overa deas resutig from al of the prpose
aforementione adjusents, if apprved as fied, would be SO.525 milion. Atthment A se
fort thes proposed October I, 2011 adjustents in more detail, and by service schedule. Th
following table,sumares these proposed revenue adjustments:
~ Aspa.otth$ Seement, AvÌ$tahas alsoag.to witldrwits. tiled"fot de~ ot$O.74 millon in elecc
Dømad..Side Maemet (DSM) TarftSeliule 91, and wiU.dosobymeasofaseparte filing.3 Thse prora changes arincludedforilblvepuise andarnotpaof this Stipulation.
4 On Augll26, 201 I. Avi$U will upda its
peding POA (Cas No. AVU-G-Il-64) to retloota delin in forar
natu ga prces since tle Augit 15, 20U POAñlingwhich, if approved by.tl Commission, would result in a
0.98% overl incre versus the previouly-fied 1.53% inerea. Th. revised pro rates have ben
inco into the net proposed Oce 1, 201 i Revenue.Cbage.aM.AttJunts A and.C to ths Stlaton.
STIPULATION AND SETTMENT - AVU-EfG-II-01 Page 4
Exhibit NO.6
Case No. AVU-E1G-11-01
K. Norwood, Avista
Page 4 of 27
;Natl Ga - October 1.2011 Revenu Chae
. Schedul 199 - DSIT In $
Schedul i 50/1 55 - PGA Inc $Scheul 191 - DSM Dere $GRC Ra Inre $W.,..m,""".,___"_~._U"_,"_=_~_,"'__ "'_""=w ","W",,", __.-~Tota Revenue Che $
470,423.
776,190
(2,871,2~6)!
1,100,000
(52.623)
7. Efftive. Date for New Ras In 11s Prgceding. ThParesagr,as an
integr pa of the Settement, tht the effective date for new electrc and natual ga rates should
be Ocobe I, 2011.
8. Limitaion on Effective Dat of Any New Ras Estalished By Subst
General Rate Filing. The Compay agres that it will not seek to mae effective a chage in
bas elecc or na gas rates pror to April 1, 2013, by meas of a gene rae fiing. (Any
fil of a general rae ca, however, may be made prior to Aprl 1, 2013, but shl not reuest
an efecve date pror to Apr 1, 2013.) Ths will not prevent th. Company, however, from
otherse seking to implement other rate chas afectng the rates biled to customer,
includig, but not limite to, adjustments uner the power cost adjustent (PCA) mechasm,
purhad gas cost adjustments (pGA); DSM taff rider adjustments; etc.
9. PCA Authorize Level of Expense. The new level of power suply expense, rel
load and Cleate Pape genertion, and Load Chage Adjusen Rate reulting from the
settement revenue requient for purose of the monthy peA mechaism caculations, ar
deted in Atthment B.
10. Cost of Serce. As par of this ra cas, the Compay prar an anysis of
using a peak crt method of classifying production costs, allocatig i 00% of trmission costs
to demand, and allocating transmssion cost to refleetany peak and off-peak seasna COst
differences on a weighted twelve month bais. The Parties have aged to exchage information
and convene a public workshop, pror to th Company's next genera rate case, with respect to
STIULATION AND SEITEMENT -AVU-ElG-1 1-01 Page 5
Exhibit NO.6
Case No. AVU-ElG-11-01
K. Norwood, Avista
Page 5 of 27
the method of alloçtion of demd and energy among the cuomer classes such as the possible
us of a revised pea credit method for classifying proucton cost, as well as consideon of
th us of a 12 Coincident Pea (CP) (whether '\veighted" or not) verus a 7 CP or other metod
for allocatg transsion cost. Ths workshop will also addrss the merts of incling or
declinig block rates for sece schedules II, 21, 25 and 31. The Pare$ agr however. to
spread the electrc rae incre on a unform peentae bais forparse of ths. Setement.
As for natu gas, the Compay preared a cost of servèe stdy and propose tht all
rate schedules be moved to unty. For setlenentparses, the Pares agreed to sprea the
natu gas rate incre on a unform percentae basis.
11. Ra Sprte Deign.
(a) As indicate above, the Pares agree th th incras. in bas revenue would
be spre to all electrc and natu gas rate sehedules on a unorm percetae basis.
(b) The Pares agr that there will beanincæa in the baic .chaes, monthy
mium charges, and demad charges in Schules 11,21, 25 and 146, as shown in
Atthment C.
A unform pege incr win be aplied to each energy rate with eah
electrc serice schedule excluding Schedule I, residential servce, . wher th block
dierential rema constat. In addition, the seond bloc in Schedule II will be
reuce by $0.00773 as contemplated in the Compay's origi filingS, and th
remaning revenue reuirement, afer accountig for the chages in the baic chage an
demad charge, will be aplied to the fi energy block.
5 See Dirt Tesony of Patk Ebr, Pae 15.
STIULATION AND SETIEMENT - A VU-E/G- i 1-01 Page 6
Exhibit No.6
Case No. AVU-E/G-11-01
K. Norwood, Avista
Page 6 of 27
(d) The Paries ag th the cuent residential electrc basic chage of $5.00 pe
month will be incre to $5.25. and th residential naal gas baic charge of $4.00 pe
month will be incresed to $4.25.
(e) Atthment C provides a suar of the curt and revise ratand
chaes (as per th Seement) for electrc and natu gas sece.
Reulti Perenta Incre by Schedule. The following tales reflect the
aged-upn pecentae incre by scheule for electrc and na gas service:
Elct lDreaie PelUllebY Sclldu
lDrease ùi Bas.e Net 1Jase ùi
Rate Schedue Rates BiI Rates*
Residen Scheul i 1 .1%-2.1%
Geìa Sere Schedul 1 1/1 2 1.1 %-1 .1%
La Geal Serve Scheul 21/22 1.1%-1 .4%
&i. ùiGe$m Sere Scheul 25 1.1%-3.9%Cler PapSchedul25P 1 .1%-5.2%-.S~eScheul 31/32 1.1%0.(),4.
~=~!ž...ArLjgScheul 1 1%2.7%
Overal 1.1%..2.4%
* Net Incas inlOes th efts of th propose cha in Scheul 59 (R
Exha). Scheul 66 (powe Cost Adji.). Sche 99 (D Sta Inim
Tax).~nd~. Genera Ra~ ~, aD ~tion Octoberl,~01 lif ~l'ved. .
Natm Gas lDrease PercBtgeby Schedu
Inrease ùiBase Net Inrease il
Rate Selldu Rates Bi1Ratesi/*
Geneìa Serve Schedul 101 1 .6%-0.5%
ùi GeneìaSere Scheul 1 1 11112 1 .6%"'1.8%
Inrmtile Sals Ser Scheul 131/132 1.6%-10.6%
Tl'porttin.SeScheul 146 1 .6%3.00/Ó
Overa i.6%-0..8"10
** Net Inas inlOes th etr of th proposed chas in Scheul 150/155
(pGA), Scheul 191 (Erg Effiey Rier), Scheul 199 (DÊrr Sta Inim
Tax) an th Ge Ra Increas, an eftcti on October 1. 2011 if apved.
STIULATION AND SETTLEMENT- AVU.E/G-I1-01 Pag 7
Exhibit NO.6
Case No. AVU-E/G-11-01
K. Norwood, Avista
Page 70f27
13. Customer Servce-Related Issues.
(a) Funding for OUtrh for Low-Income Consrvaton. The Pares agree to
anua fudi of $50,000 to CAP AI for purses of providing low-income outach an
edtion concerng consrvaton (reesentig an inreas of $10,00 frm previous
fudig levels). Ths amount willbefudedthug the Energy Effciency Tarff Rider
(Schedules 91 and 191), and wil be in addition to the $700,00 of Low..lncome
Weatherition fudig curently in place.
(b) Collabraton.ò:n Low-Income Weaerition. Th Company and interest
paes will meet and confer prior to the Company's nex general rate filig in order to
asss th Low Income Weatherzaon and Low Income Energy Consrvaton Educon
Programs and discus apprprate levels of low..income weathenzon fuding. in th
future.
14. Other Accounting Matferrs. The Pares age to the follawing
accoung tratent for the following ite:
(a) Cost Asciate With Acquisition From Palouse Wind, LLC. Th Compay
ha signed a 30-ye pewe purha agrment with Palous Wind, LLC, to acuie all
of the power produc by a wid prject th is expete to pruc approximatly 40
aMW. Deliveries ar ex to begin in the secnd ha of 2012. The anua cost of
the Idao ..$hofthpurchas power under the contrt is expeted to be
apximately $6.5 milion. Und term of ths Settement, th Campay shal include
100% of the costs asciated with power purhas frm the wind project though the
Power Cost Adjustment (PCA) until suchcosts,.subject ta prudece review, ar reflecte
in genera rates.
STIULATION AN SETTLEMENT - A VU-E/G- 11-01 PageS
Exhibit NO.6
Case No. AVU-ElG-11-01
K. Norwood, Avista
Page 8 of 27
(b) Defer AQUlg Treent For The Varabilty In Cer Geneng
Pla Opration aDd Mantean (O&M) Costs. In ord to adess the large varabilty
in yea-to-year O&Mcost, beginnng in 20 i 1 th Company will be allowed to defer
chages in O&M costs related to its. Coyote Sprngs 2 (CS2) natu gas-fire geerng
plant locte near Boardma, Oregon, and its fiftee (15) percent ownerhip sha oCthe
Colstrp 3 & 4 coal-fied generag plants located in southearn Monta.
Th CompaDY will compar actu, non-ful, O&M expns for the Coyote
Sprigs 2 an Colstp 3 & 4 plants with the amount of expes aurize for rever
in base raes in. the applicable deferral year, and defer the difference from tht curtly
authrid. The defer willocur anualy, with no carng chage, with deferr cost
beng amørtzedove a th-yea peøcbegig in Janua of the yea following th
peod êostare defered. Th amount of expse to beinêluded for recvery in fue
general rate cases would be th ac O&M expens recorded in th test peod less any
amount deferred durng the test peod plus the amorton of previøusly deferrd coots.
The Compay would defer the opeons and manKmexpe reference
abve in Accunt i 82.3 - Other Regulatory Assts. The defers would be allocte to
the Idao and Wasingtn jursdctons ba on th Production I Transmssion allocation
perctaes in . place at th tie the deferrs are .nie, an plac in searte Idao an
Washigton sub-accoun. Account 182.3 -Oter Reguatory Asse would be debite
and Aceount 407.4 - Regutory Crets will be crted as th deferrs ar reorded.
Amortzanøn win be rerded by debiting Accunt 407.3 - Reguatory Debits, an
crting Accunt 182.3 - Oth Reguat Assets
STIULATION AND SETTLEMENT- AVU-E/G-l1-01 Page 9
Exhibit NO.6
Case No. AVU-ElG-11-01
K. Norwood, Avista
Page 9 of 27
IV. OTH GENERA lROVISIONS
15. The Pares ag that ths Stipulation rerets8eomprmise of the pOsitions of
the Pares in ths case. As provided in RP 272, other than any testmony filed in supprt of the
approva of ths Stipution, an excet to the extnt necessa for a Par to explai before the
Commision it own staents and position with repet to the Stipuation, all stateme mae
and positions taen in negotiatons relatng to ths Stipulation shall be confidenti and will not
be adissible in evidence in this or any other proceg.
16. The Pars submit ths Stipulaton to the Commssion and recmmend approval
in its entity puruat to RP 274.Pariessh support ths Stipulation before the Commssion,
and no Par shal app a CQrnission Order approvin the Stipulation or an issue resolved by
the Stipulation. If ths Stipulation is. chalenge by any pen not a pary to th Stiulation the
Pares .to . ths Stipulatiooreseethe right to .file testiony,cross-exam witness and put on
suc ca as they deem approprite to respnd fuly to the isses prte, includg the right to
rase issues tht ar incorpra. in the settlement ten embodiedin thStipulaton.
Notwthdig this reation of rights, the Pares to ths Stipulaton ag th they will
contnue to support the Commssion's adoption of the te of ths Stipulatin.
17. If the Commission rejects any par or all of ths Stipulation or imposes any
additiona material conditions on approval of ths Stipulaton. eah Par resees the right, upon
wrtt notice to the Commission and the other Pares to ths prog, with 14 days of the
dae of such action by the Commssio~ to withdrw from ths Stipulation. In suh ca, no Par
sh be bound or prjudiced by the term of ths Stipulaton, and each Par sha be entitled to
se rensideration of the Commission's orde, file testny as it chooses, cross-examine
witnesses, and do al other thgs neessa to put . on such ca as it deems apprat. In such
STIULATION AND SETILEMENT - AVU-E/G-II-Ol Page 10
Exhibit NO.6
Case No. AVU-E/G-11-01
K. Norwood, Avista
Page 10 of 27
ca, the Pares imediately will reques th prmpt reconvening of a prehearng conferce for
purpses of estblishig a prcedural schedule for the completon of the cas. The Pares ag
to coopee in developmentof a schedule tht concludes theproeeing on the ealie.st pos$iblé
date. tang into acunt the nees of th Paries in parcipatig in heas and preparg
testmony and briefs.
18. The Pares ag tht this Stipultion is in the public interest an tht alI of its
tens and conditions ar fair, just and reasble.
19. No Par shl be bound. beefited or prejudìce by any position assertd in th
negotitiol1of ths Stipulation, except to the extent expressly sta herein, nor shal ths
Stipulaton be cod as a waiver of the rights of any Pary uness such rights ar expresly
waved hein. Execution th Stipulation shal not be demed to constute an
acknwledgm by any Par of the valdity or invalidity of any parcular method theory or
principle of regua.tionorcost revery. No 'Par shal be deemed to have ag that any
metod, theory or priciple of reguation or cost recover employed in arvi at ths Stipulation
is approprate for resolving any issues in any other proceeng in the futue. No fmdigsof fac
or conclusions of law other th thos st herin sha be deeed to be implicit in ths
Stipultion.
20. The obligatons the Pares under ths Stipulation are subject to the
Commssion's apprval of ths Stipulation in acord with its term and conditions and . up
suh approval beng upheld on app. if any.bya cour of compettjursdiction~
21. Ths Stipuation may be execu in counte.and each signed counte
sha constitu an origi document.
STIULATION AND SETTEMNT - AVU..ElG-ll-Ol Page 11
Exhibit NO.6
Case No. AVU-ElG-11-01
K. Norwood. Avista
Page 11 of 27
08126/2011 20B3344El45
~DA Tl tl -: day of Aug 2011.
A vist Corpon
By, 6LÍi'
Att fo Avi Corpraon
CJuaretPne Corp
By:
Pet RiclinAttor for ClearPap
Comunty Acon Par Ason
By:
Bre M. Pi
Attor for CAPAI
:.
I PU PAG 01/Ð2
Idaho Public lJJities Commssion Sta
13y:'U ..-- - ..C
DodL. Hawii. 11W.ldo. StuDepu AttOrn Oe
Ida PorGrup
B)":
De .r. Miller
Attey fo Idaho Forst Grup LLC
Ida Consaton Le
By:
STIPUTION AND SETTEM - AVU-e/O..ll-oi
Be 1. Ot
Attrn for tCL
Pa 12
Exhibit NO.6
Case No. AVU-ElG-11-01
K. Norwood, Avista
Page 12 of 27
~
DATB tm. 'j, day of Aug 2011.
A'r Coon
By:Da J. MeAt fo Avist Coon
Pet RichAttrn for Clea Pap
Co Acton Par Asiaoo
By:
Br M. Puy
Att fo CAM
IdaPuliç Uties CoOn Sta
By:
Dod L. HoweUt n
Kr A. SaDe Att Gc
Ida Fore.Gr
By:
De J. Mill
Att fo Id Fore .Gi. LLC
Ida Co Le
By:
Beamin J. Ot
Att fo rCL
STIULTION.A SETf - AVU..EJG-l 1-01 '.12
Exhibit NO.6
Case No. AVU-E/G-11-01
K. Norwood. Avista
Page 13 of27
DATED this _ day of Au~ 201 1.
Avi Coon
By:
David J. MeyAtt fo A vist Coon
Clwa hp~n
By Peter Richn
Att fo Clat Pap
Commty Act Par Ason
By Bra M. Puy
Atm fo CAPAI
By:
Ida Public Utities.Qmi0. Sta
Dod L. Howe, n
K: A. SaDe Ati Ge
J. Miler
Atto fo Ida FORt Gr LLC
Id Coaton Lep
By:
Bajam J. Ot
STIPULATION AN SETTLET -AVU-ElG-ll..l Pa 12
Exhibit NO.6
Case No. AVU-ElG-11-01
K. Norwood. Avista
Page 140f27
DAI'ED th _ da of Aug 2011.
A vi Co
By:DadJ. MeAt. fo Avi Co
Cl Pa Co
By:Pe Ri
At1 fo Ciewa Pap
BnM.Puy
Auofo CAPAI
Id. Pulic Utiti CoilSoi.Sta
By:
Do L. HoweL, IIWel StDe. Au 0e
Ida For om
By:Da J. Mü
Aty fo Id Fore om LLC
Id ~.Le
By:
Beam J. OtAt1 for ICL
STTlON AN SE' - AVU-FJG-II-Ol ,.i
Exhibit NO.6
Case No. AVU.E1G.11.01
K. Norwood, Avista
Page 15 of 27
DATE th,.) da of Aug 201 1.
A vi Coon
By:
Da J. MeAtteyfo Avist Co
CI Pa Cor
By:Pe :RobAtt fo Cl Pap
County Acton Pa Astion
By:
BrM.Pmy
At fo CAAI
Ida Pu Utilites Co. Sta
By:Do L. ~ii. IIWel StuDe AtysGa
Ida For Gr
By:
DeJ. MileAtt for Ida For Gr LL!.T ieBY:_~
Benjøi J..OttAtt for iei.
STTION AN SET - A VU-ElG-ll..l Pqe 12
Exhibit NO.6
Case No. AVU-ElG-11-01
K. Norwood, Avista
Page 16 of 27
CERTICATE OF IE.RYICE
I HEREBY CERTIFY that I have this 26th day of August, 2011, served the Stipulatin
and settleent in Case Nos. AVU-E-11-o1 and AVU-G-11-o1, upon the follwing
parties, by mailing a copy thereof, prperly addressed wih postage prepaid to:
Jean 0 Jewell, Secretar
Idaho Public Utlits Commission
Statehouse
Boise, 10 8372Q.5983
Jen.jewelc.ìdah.gov
Doald Howell
Deputy Attomeys Genel
Idaho Public UtUlties Commission
472 W. Washington
Boise, 10 83702-ü59
kristine.sasseræÐpuc.idaho.gov
donald.howellfWuc.idaho.gov
Brd M. Purdy
Attorny at Law
2019 N 11" Stre
Boise, 10 83720
bmpurgQbotmil.com
Peter J. Ricson
Gre M. Adams
Richardson & O'Leary PLLC
515 N. 21" Street
PO Box 7218
Boise, 10 83702
peteræÐnchardSQnandoleary.co
gregftnchardSQndolear.C9
Marv Lewlle
Clearwter Paper
601 W. Riverside Avenue
Suite 1100
Spokane, WA 99201
marv.lewallentmarwterpaper.co
Dean J. Miller
Mcvitt & Mlller, UP
420 W. Bannoc St.
PO Box 2564-3701
Boise, 10 83701-2564
joelìcdevimlUer.com
Scott Atkisn
Idaho Forest Products
171 Highwa 95 N.
Grangeville, 10 83530
scottæÐidahoforestgroup.oam
Or. OOn Reading
6070 Hill Road
Bose, ID 73703
dreadirimindspring.com
Patrick Ehrbar
Manager, Rate and Tari
Exhibit NO.6
Case No. AVU.E1G.11.01
K. Norwood, Avista
Page 17 of 27
STIPULATION AND SETTLEMENT
Case Nos. AVU-E-ll-Ol & AVU-G-ll-Ol
ATTACHMENT A
Summary of Proposed Net Rate Changes
Electric and Natural Gas
Exhibit NO.6
Case No. AVU-ElG-11-01
K. NOlwood, Avista
Page 18 of27
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l
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8
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

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d
,

A
v
i
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t
a
Pa
g
e

20

of

27
STIPULATION AND SETILEMENT
Case Nos. AVU-E-ll-Ol & AVU-G-ll-Ol
ATTACHMENT B
Electric PCA Authorized Expense and
Retail Sales
Exhibit NO.6
Case No. AVU-E/G-11-01
K. Norwood. Avista
Page 21 of27
Av
i
s
t
a
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o
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2
7
STIPULATION AND SETILEMENT
Case Nos. AVU-E-ll-Ol & AVU-G-ll-Ol
ATIACHMENTC
Electric and Natural Gas Rate Design
Exhibit NO.6
Case No. AVU-E/G-11-01
K. Norwood, Avista
Page 23 of27
AV
I
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7
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AVISTA UTILITIES
IDAHO ELECTRIC, CASE NO. AVU.E.11-G1
PRESENT AND PROPOSED RATE COMPONENTS BY SCHEDULE
Present General Biling Proposed Proposed
Base Tariff ERM&Present Rate Rate Biling Base Tariff
Sch. Rate Other Adj.C1 Billng Rate IncJ(Decr)Decrease (2)Rate Rate
(a)(b)(c)(d)(e)(f)(g)(h)
Residential Service. Schedule 1
Basic Charge $5.00 $5.00 $0.25 $5.25 $5.25
Energy Charge:
First 600 kWhs $0.07775 $0.00128 $0.07903 $0.00073 ($0.00287)$0.07689 $0.07848
All over 600 kWhs $0.08691 $0.00128 $0.08819 $0.00073 ($0.00287)$0.08605 $0.08764
General Services. Schedule 11
Basic Charge $9.50 $9.50 $0.50 $10.00 $10.00
Energy Charge:
First 3,650 kWhs $0.09063 $0.00476 $0.09539 $0.0275 ($0.00207)$0.09607 $0.09338
All over 3,650 kWhs $0.07731 $0.00476 $0.08207 ($0.00773)($0.00207)$0.07227 $0.06958
Demand Charge:
20 kW or less no charge no charge no charge no charge
Over 20 kW $4.75/kW $4.75/kW $0.50/kW $5.25/kW $5.25/kW
Large General Service. Schedule 21
Energy Charge:
First 250,000 kWhs $0.06109 $0.00393 $0.06502 ($0.0070)($0.0198)$0.06234 $0.06039
All over 2 (2) Includes all presen $0.05214 $0.00393 $0.05607 ($0.00060)($0.00198)$0.05349 $0.05154
Demand Charge:
50 kW or less $325.00 $325.00 $25.00 $350.00 $350.00
Over 50 kW $4.25/kW $4.25/kW $0.50/kW $4.75/kW $4.75/kW
Primary Voltage Discount $0.20/kW $0.20/kW $0.20/kW $0.20/kW
Extra Large General Service. Schedule 25
Energy Charge:
First 500,000 kWhs $0.05065 $0.00447 $0.05512 ($0.00018)($0.00283)$0.05211 $0.05047
All over 500,000 kWhs $0.04290 $0.00447 $0.04737 ($0.00015)($0.00283)$0.04439 $0.04275
Demand Charge:
3,000 kva or less $12,000 $12,000 $500 $12,500 $12,500
Over 3,000 kva $4.00/kva $4.00/kva $0.50/kva $4.50Ika $4.50Ika
Primary Volt. Discount $0.20/kW $0.20/kW $0.20/kW $0.20/kW
Annual Minimum Present:$662,400 $666,570
Clearwater. Schedule 25P
Energy Charge:
all kWhs $0.04166 $0.00485 $0.04651 ($0.0020)($0.00326)$0.04305 $0.04146
Demand Charge:
3,000 kva or less $12,000 $12,000 $500 $12,500 $12,500
Over 3,000 kva $4.00/kva $4.00/kva $0.50/kva $4.50/kva $4.50Ika
Primary Volt. Discount $0.20/kW $0.20/kW $0.20/kW $0.20/kW
Annual Minimum Present:$602,260 $606,060
Pumping Service. Schedule 31
Basic Charge $7.50 $7.50 $0.50 $8.00 $8.00
Energy Charge:
First 165 kW/kWh $0.08852 $0.00227 $0.09079 $0.00087 ($0.00074)$0.09092 $0.08939
All additional kWhs $0.07546 $0.00227 $0.07773 $0.0074 ($0.0074)$0.07773 $0.07620
(1) Includes all present rate adjustments: Schedule 59 - Residential & Farm Energy Rate Adjustment, Schedule 66 - Temporary
Power Cost Adjustment, Schedule 91 - Energy Effciency Rider Adjustment, and Schedule 99 - Deferred State Income Tax
Adjustment.
(2) Includes proposed rate adjustments: Schedule 59 - Residential & Farm Energy Rate Adjustment, Schedule 66 - Temporary Power
Cost Adjustment, and Schedule 99 - Deferred State Income Tax Adjustment.
Stipulation and Settlement
Case No. AVU-E-11-01 and AVU-G-11-01
Exhibit NO.6 Avista
Attachment C Case No. AVU-ElG-11-01 Page 2 of4
K. Norwood. Avista
Page 25 of27
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AVISTA UTILITIES
IDAHO GAS. CASE NO. AVU.G.11001
PRESENT AND PROPOSED RATE COMPONENTS BY SCHEDULE
General Proposed Other Proposed Proposed
Base Present Present Rate PGA.Gas Cost Rate BIllng Base
Rate (1)Rate Adj.2) Billng Rate Increase Rate Change (2)Rate (2)Rate (1)
(a)(b)(c)(d)(e)(f)(g)(h)(I)
General Service. Schedule 101
Basic Charge $4.00 $4.00 $0.25 $4.25 $4.25
Usage Charge:
All therms $0.94102 ($0.02549)$0.91553 $0.00656 ($0.03106)$0.01603 $0,90706 $0.91652
Large General Service. Schedule 111
Usage Charge:
First 200 therms $0.96103 ($0.02905)$0.93198 $0.00272 ($0.03106)$0.00970 $0.91334 $0.93269
200.1,000 therms $0.82865 ($0.02905)$0.79960 $0.00889 ($0.03106)$0.00970 $0.78713 $0.80648
1,000 - 10,000 therms $0.75404 ($0.02905)$0.72499 $0.00763 ($0.03106)$0.00970 $0.71126 $0.73061
All over 10,000 therms $0.70488 ($0.02905)$0.67583 $0.00680 ($0.03106)$0.00970 $0.66127 $0.68062
Minimum Charge:
per month $79.03 $79.03 $1.56 $80.59 $80.59
per therm $0.56587 ($0.02905)$0.53682 ($0,00508)($0.03106)$0.00970 $0.51038 $0.52973
Interrptible Service. Schedule 131
Usage Charge:
All Therms $0.62748 ($0.04357)$0.58391 $0.00471 ($0.03796)$0.01903 $0.56969 $0.59423
Transporttion Servce. Schedule 146
Basic Charge $200.00 $200.00 $25.00 $225.00 $225.00
Usage Charge:
All Therms $0.10559 ($0.00159)$0.10400 $0.00112 $0.00159 $0.10671 $0.10671
(1) Includes Schedule 150 . Purchased Gas Cost Adjustment
(2) Includes Schedule 155 - Gas Rate Adjustment, Schedule 191 . Energy Effciency Rider Adjustment and Schedule 199 - Deferred State Income
Tax Adjustment
Attachment C
Stipulation and Settlement
Case No. AVU-E.11-01 and AVU-G-11-01
AvistaExhibit NO.6 Page 4 of 4
Case No. AVU-ElG-11-01
K. Norwood, Avista
Page 27 of 27