20130731Application.pdf

Avista Corp.
1411 East Mission P.O.Box3727
Spokane. Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170
frinstl.W?fllr Jtil- 3 i 3l
July 30,2013
State of Idaho
Idaho Public Utilities Commission
47 2 W. Washington Street
Boise, Idaho 837 02-5983
Case No. AVU-G-13-0!Advice No. 13-01-G
Attention: Ms. Jean D. Jewell
I.P.U.C. No. 27 - Natural Gas Service
Enclosed for filing with the Commission are the following revised tariffsheets:
Nineteenth Revision Sheet 150 canceling Eighteenth Revision Sheet 150
f ifteenth Revision Sheet 155 canceling Substitute Fourteenth Revision Sheet 155
The Company requests that the proposed tariffsheets be made effective October 1,2013. These
tariff sheets reflect the Company's annual Purchased Gas Adjustment (PGA). If these tariff
sheets are approved as filed, the Company's annual revenue wlrll increase by approximately $4.9
million or approximately 7.5%. The proposed changes have no effect on the Company's
earnings. Detailed information related to the Company's request is included in the attached
Application and supporting workpapers.
If the Company's request is approved, a residential or small commercial customer using an
average of 60 therms per month will see an increase of $3.80 per month, or approximately 6.8Yo.
The present bill for 60 therms is $55.37 while the proposed bill is $59.17.
If you have any questions regarding this filing, please contact Patrick Ehrbar at [phone]
orAnnette Brandon at [phone].
Sincerely,
Kelly Norwood
Vice President, State and Federal Regulation
Enclosures
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that I have served Avista
filing ADV 13-01-G (Tariff IPUC No. 27 Natura!
postage prepaid to the following:
Jean D Jewell, Secretary
ldaho Public Utilities Commission
472W . Washington Street
Boise, lD 83720-5983
Chad Stokes
Cable Huston Benedict Haagensen &
Lloyd, LLP
1001 SW Sth, Suite 2000
Portland, OR 97204-1136
Edward A. Finklea
Northwest lndustrial Gas Users
326 Fifth Street
Lake Oswego, OR 97034
Curt Hibbard
St. Joseph Regiona! Medical Center
PO Box 816
Lewiston, lD 83501
Corporation dba Avista
Gas Service) by mailing
Utilities' Advice
a copy thereof,
Patrick Ehrbar
Manager, State & Federa! Regulation
)
)
)
Application is hereby made to the Idaho Public Utilities Commission for an Order approving a
revised schedule of rates and charges for natural gas service in the state of Idaho. The Applicant
requests that the proposed rates included in this Purchased Gas Adjustment ("PGA") filing be made
effective on October 1,2013. If approved as filed, the Company's annual revenue will increase by
approximately $4.9 million or about 7.5o/o. In support of this Application, Applicant states as follows:
I.
The name of the Applicant is AVISTA CORPORATION, doing business as AVISTA
UTILITIES (hereinafter Avista, Applicant or Company), a Washington corporation, whose principal
business office is l4l I East Mission Avenue, Spokane, Washington, and is qualified to do business in
the state of Idaho. Applicant maintains district offices in Moscow, Lewiston, Coeur d'Alene, and
Kellogg, Idaho. Communications in reference to this Application should be addressed to:
Kelly O. Norwood
Vice President of State & Federal Regulation
Avista Utilities
l4l I E. Mission Avenue
Spokane, WA 99220-3727
Phone: [phone]
Fax: [phone]
II.
Attorney for the Applicant and his address is as follows:
David J. Meyer
Vice President and Chief Counsel for Regulatory
And Governmental Affairs
Avista Utilities
1411 E. Mission Avenue
Spokane, WA 99220-3727
Phone: [phone]
Fax: [phone]
BEFORE Tm rDAHO PUBLTC UTILITIES COMMTSSTO\.I1
.Jl.:L 3 I i,ti I I : 3?
TN THE MATTER OF THE APPLTCATION OF
AVISTA UTILITTES FOR AN ORDER APPROVTNG
A CHANGE IN NATURAL GAS RATES AND CHARGES
ii,-i
CASE: AVU-G-13-0 I
Page I of5
m.
The Applicant is a public utility engaged in the distribution of natural gas in certain portions of
Northern Idaho, Eastern and Central Washington, and Southwestern and Northeastern Oregon, and
further engaged in the generation, transmission, and distribution of electricity in Northern Idaho and
Eastern Washington.
TV.
Nineteenth Revision Sheet 150, which Applicant requests the Commission approve, is filed
herewith as Exhibit "A". Additionally, Fifteenth Revision Sheet 155, which Applicant requests the
Commission approve, is also filed herewith as Exhibit "A". Also included in Exhibit I'A'r is a copy of
Nineteenth Revision Sheet 150 and Fifteenth Revision Tariff Sheet 155 with the changes underlined
and a copy of Eighteenth Revision Sheet 150 and Substitute Fourteenth Revision TariffSheet 155 with
the proposed changes shown by lining over the current language or rates.
V.
The existing rates and charges for natural gas service on file with the Commission and
designated as Applicant's Tariff IPUC No. 27, which will be superseded by the rates and charges filed
herewith, are incorporated herein as though fully attached hereto.
u.
Notice to the Public of Applicant's proposed tariffs is to be given simultaneously with the filing
of this Application by posting, at each of the Company's district offrces in ldaho, a Notice in the form
attached hereto as Exhibit "B" and by means of a press release distributed to various informational
agencies, a draft copy attached hereto as Exhibit "E". fn addition, a notice will be sent to customers as
a bill insert prior to October 1,2013, a copy of which is also included in Exhibit "E".
VIII.
The circumstances and conditions relied on for approval of Applicant's revised rates are as
follows: Applicant purchases natural gas for customer usage and transports it over Williams
Northwest Pipeline, Gas Transmission Northwest (GTN), TransCanada (Alberta), TransCanada (BC)
and Spectra Energy Pipeline systems, and defers the effect of timing differences due to
implementation of rate changes and differences between Applicant's actual weighted average cost of
gas (WACOG) purchased and the WACOG embedded in rates. Applicant also defers various pipeline
refunds or charges and miscellaneous revenue received from natural gas related transactions including
pipeline capacity releases.
x.
This filing reflects the Company's proposed annual PGA to: l) pass through changes in the
estimated cost of natural gas for the forthcoming thirteen months (Schedule 150), and 2) revise the
amortization rate(s) to refund or collect the balance of deferred gas costs (Schedule 155). Below is a
table summarizingthe proposed changes reflected in this filing.
Page 2 of5
Service
General
Lg. General
Intemrptible
Commodity Demand Total Amortization Total Rate OverallSch. Change Change Sch.150 Change Change PercentNo. per therm per thm Chanee per therm per therm Chanse101 S0.04066 $0.00471 $0.04537 S0.01800 S0.06337 6.80/"
I I I $0.04066 S0.00471 $0.04s37 $0.01800 $0.06337 9.70/0l3l s0.04066 s0.00000 $0.04066 $0.00621 s0.04687 8.30/0
x.
Commoditv Costs
As shown in the table above, the estimated commodity cost (WACOG) change is an increase of
4.1 cents per therm. The proposed WACOG, including the revenue conversion factor, is 37 .4 cents per
therm compared to the present WACOG of 33.3 cents per therm included in rates.
The Company's natural gas Procurement Plan ("Plan") uses a diversified approach to procure
natural gas for the coming PGA year. While the Plan generally incorporates a more structured
approach for the hedging portion of the portfolio, the Company exercises flexibility and discretion in
all areas of the plan based on changes in the wholesale market. The Company typically meets with
Commission Staff semi-annually to discuss the state of the wholesale market and the status of the
Company's Plan. In addition, the Company communicates with Staffwhen it believes it makes sense
to deviate from its Plan and/or opportunities arise in the market.
Avista has been hedging natural gas on both a periodic and discretionary basis throughout 2013
for the forthcoming PGA year (thirteen months). Approximately 38Yo of estimated annual load
requirements for the PGA year (October 2013 through October 2014) will be hedged at a fixed-price
derived from the Company's Plan. These volumes are comprised of: l) 12% of volumes hedged for a
term of one year or less, 2) 26% of volumes from prior multi-year hedges. Through June, the planned
hedge volumes for the PGA year have been executed at a weighted average price of $4.52 per
dekatherm ($0.452 per therm).
Available underground storage capacity at Jackson Prairie represents approximately l9%o of
annual load requirements (37% of load requirements during the December to March withdrawal
period). The estimated weighted average cost for all storage volumes is $3.25 per dekatherm. The
Company utilizes its underground storage to capture seasonal price spreads (differentials), improve the
reliability of supply, increase operational flexibility, mitigate peak demand price spikes and capture
other economic benefits for customers through asset optimization.
The Company used a 30-day historical average of forward prices and supply basins (ending
July 15, 2013) to develop an estimated cost associated with index purchases. The estimated monthly
volumes to be purchased by basin are multiplied by the 30-day average forward price for the
corresponding month and basin. These index purchases represent approximately 43%o of estimated
annual load requirements for the coming year. The annual weighted average price for these volumes is
$3.44 per dekatherm.
For 2012, the natural gas market was impacted by lower overall demand, increased production,
and record high storage levels. This drove natural gas prices to lows not seen in the last decade.
However, for most of 2013 prices have moved on an upward trend from these lows. Nationally, the
Page 3 of5
late, colder than normal winter increased demand. This increased demand reduced excess supply and
decreased storage balances to levels below the five-year average. This retum to a more balanced
market added to the uplift on natural gas prices. As a result, all components (hedges, index, and
storage) of the commodity WACOG for the upcoming PGA year are higher than the previous year and
what is currently included in customer's rates.
K.
Demand Costs
Demand costs primarily represent the cost of transporting natural gas on interstate pipelines to
the Company's local distribution system. As shown in the table above, there is a slight increase in the
overall demand rate. One of the reasons forthe increase in demand costs is the inclusion of the new
Northwest Pipeline transportation rates. As these rates were approved by FERC effective January l,
2013, the Company only included l0-months of the increased rates in its2012 PGA filing. The new
rates have been included for the full term in this filing. Further, several Canadian pipelines had rate
cases resulting in net higher overall rates as well.
XII.
Schedule 155 / Amortization Rate Chanee
As shown in the table above, the proposed change in the amortization rate is an increase of
$0.01800 per therm. The current rate for Schedule 155 is $0.01785 per therm in the rebate direction;
the proposed rate is $0.00015 per therm in the surcharee direction. The primary reason for the increase
in the Schedule 155 amortization rate is the result of fully amortizing $1.6 million rebate defenal
balance approved in the 2012 PGA. In fact the amortization balance was over-amortized by
approximately $0.1 million. This surcharge balance was mostly offset by current 2012-2013 deferrals.
The result is a deferral balance, in the surcharge direction, of approximately $ 12,000.
xm.
Assuming the Company's applications are approved effective October l, 2013, residential or
small commercial customers using an average of 60 therms per month would see an increase of $3.80
per month, or approximately 6.8Yo. The present bill for 60 therms is $55.37 while the proposed bill is
$s9.17.
XIV.
Exhibit "C" affached hereto contains support workpapers for the rates proposed by Applicant
contained in Exhibit "A".
xv.
Avista requests that the rates proposed in this filing be approved to become effective on
October l, 2013, and requests that the matter be processed under the Commission's Modified
Procedure rules through the use of written comments. Avista stands ready for immediate consideration
on its Application.
Page 4 of 5
xu.
WHEREFORE, Avista requests the Commission issue its Order finding its proposed rates to be
jus! reasonable, and nondiscriminatory and to become effective for all natural gas service on and after
October 1,2013.
Dated at Spokane, Washington" this 30fr day of July 2013.
AVISTA UTILITIES
BY
ru Au,art
KellyNorwood
Vice-President State and Federal Regulation
Page 5 of5
VERIFICATION
STATE OF WASHTNGTON )
)
County ofSpokane )
Kelly Norwood, being frst duly sworn on oath, deposes and says: That he is the Vice President of State and
Federal Regulation of Avista Utilities and makes this verification for and on behalf of Avista Corporation, being
thereto duly authorized;
That he has read the foregoing filing, knows the contents thereof, and believes the same to be true.
SIGNED AND SWORN to before me this 30ft day of July 20l3,by Kelly Norwood.
s"$:i%:' i NoTARy b:
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