20130813notice_of_application_order_no_32874.pdf

Office ofthe Secretaty
Service Date
August 13,2013
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MAflER OF AVISTA
CORPORATION’S APPLICATION TO )CASE NO.AVU-G-13-01
CHANGE ITS RATES AND CHARGES (2013 )
PURCHASED GAS COST ADJUSTMENT).)NOTICE OF APPLICATION
)
)NOTICE OF
)MODIFIED PROCEDURE
)
______________________________
)ORDER NO.32874
On July 31,2013,Avista Corporation dba Avista Utilities (“Company”or “Avista”)
filed its annual Purchased Gas Cost Adjustment (PGA)Application asldng to increase its
annualized revenues by about $4.9 million (7.5%).Application at 1.The Company says its
proposal will not affect its earnings and will increase the average,residential or small
commercial customer’s rates by $3.80 per month (6.8%).Id at 4.The Company asks that its
Application be processed by Modified Procedure,and that the new rates take effect October 1,
2013.kL at 4-5.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that Avista distributes natural gas in northern
Idaho,eastern and central Washington,and southwestern and northeastern Oregon.id at 2?
The Company buys natural gas and then transports it through pipelines for delivery to customers.
id at 2.The Company defers the effect of timing differences due to implementation of rate
changes and differences between the Company’s actual weighted average cost of gas (WACOG)
purchased and the WACOG embedded in rates.Id The Company also defers various pipeline
refunds or charges and miscellaneous revenue received from natural gas related transactions,
including pipeline capacity releases.Id In its annual PGA filing,the Company proposes to:(1)
pass to customers any change in the estimated cost of natural gas for the next 13 months
‘The PGA mechanism is used to adjust rates to reflect annual changes in the Company’s costs for the purchase of
natural gas from suppliers -including transpottation,storage,and other related costs.
2 Company also generates,transmits,and distributes electricity in northern Idaho and eastern Washington.Id
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32874 1
(Schedule 150);and (2)revise the amortization rates to refund or collect the balance of deferred
gas costs (Schedule 155).Id.at 2,4.
YOU ARE FURTHER NOTIFIED that the Company’s present PGA filing would
impact customers as follows:
Commodity Demand Total Amortization Total Rate 1 Overall
Schedule Change Change Sch.150 Change Change Percent
Service No.per Therm per Therm Change per Therm per Therm Change
General 101 $004066 $000471 $004537 $001800 $006337 6.8%
Lg.General I I I $004066 $0.00471 $004537 $0.0 1800 $006337 9.7%
Interruptible 131 $004066 $0.00000 $0.04066 $0.0062l $004687 8.3%
YOU ARE FURTHER NOTIFIED that Avista estimates that the commodity cost
(i.e.,the WACOG)will increase by $0.041 per therm,from the currently approved $0.333 per
therm to $0374 per therm.Id,at 3.
YOU ARE FURTHER NOTIFIED that Avista says it periodically hedged gas
throughout 2013 for the coming PGA year (13 months).and that it will hedge about 38%of its
estimated annual load requirements for the PGA year (October 2013 —October 2014)at a fixed
price comprised of:(1)12%of volumes hedged for a term of one-year or less;and (2)26%of
volumes from prior multi-year hedges.Id Through June,the planned hedge volumes for the
PGA year have been executed at a weighted average price of $0.452 per therm.Id.Avista says
underground storage capacity represents about 19%of its annual load requirements.with the
estimated weighted average cost for all storage volumes being $0325 per therm.Id.
YOU ARE FURTHER NOTIFIED that Avista says lower overall demand,increased
production,and record high storage impacted the 2012 natural gas market and drove natural gas
prices to 10-year lows.But these prices trended upward for most of 2013.According to the
Company,the late,colder than normal winter increased demand,reduced excess supply,and
decreased storage balances to levels below the five-year average.The Company explains that
this return to a more balanced market added to the uplift of natural gas prices and increased the
WACOG components (hedges,index,and storage)for the upcoming PGA year above the prior
year and what is currently included in rates.Id.at 4-5.
YOU ARE FURTHER NOTIFIED that Avista’s demand costs primarily represent the
cost to transport gas through interstate pipelines to the Company’s distribution system.The
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32874
Company proposes increasing demand costs principally to account for the inclusion of the new
Northwest Pipeline transportation rates.Id.at 5.
YOU ARE FURTHER NOTIFIED that Avista proposes increasing the amortization
rate by $0.01800 per therm (from $0.0l785 per therm in the rebate direction to $0.03775 per
therm in the surcharge direction).This increase is the result of fully amortizing the $1.6 million
rebate deferral balance approved in the 2012 PGA (the Company says the amortization balance
actually was over-amortized by about $0.1 million).The Company says this surcharge balance
was mostly offset by current 2012-2013 deferrals,resulting in a deferral balance,in the surcharge
direction,of about $12,000.Id.
YOU ARE FURTHER NOTIFIED that Avista asserts that it has notified customers of
its proposed tariffs by posting notice at each of its Idaho district offices and issuing a press
release.Further,the Company says it will send notice to each customer in a bill insert before the
changes take effect.Id.at 2.
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.Click on the
“File Room”tab at the top of the page,scroll down to “Open Gas Cases,”and then click on the
case number as shown on the front of this document.
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.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 3 1.01.01.000 et seq.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the
public interest may not require a formal hearing in this matter and will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission’s Rules
of Procedure,IDAPA 31.01.01.201 through .204.The Commission notes that Modified
Procedure and written comments have proven to be an effective means for obtaining public input
and participation.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32874 3
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 by
September 11,2013.The comment must contain a statement of reasons supporting the
comment.Persons desiring a hearing must specifically request a hearing in their written
comments.Written comments concerning this Application shall be mailed to the Commission
and the Applicant at the addresses reflected below:
Commission Secretary Kelly 0.Norwood
Idaho Public Utilities Commission Vice President of State &Federal
P0 Box 83720 Regulation
Boise,ID 83720-0074 Avista Utilities
1411 F.Mission Avenue
Street Address for Express Mail:Spokane,WA 99220-3727
E-mail:kelly,norwood@;avi stacorp.com
472 W.Washington Street
Boise,ID 83702-5918 David J.Meyer
Vice President and Chief Counsel of
Regulatory and Government Affairs
Avista Utilities
1411 E.Mission Avenue
Spokane,WA 99220-3 727
E-mail:[e-mail]
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 “Utility Case Comment or
Question Form”under the “Consumers”tab,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 the
Company 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.32874 4
ORDER
IT IS HEREBY ORDERED that the Company’s Application be processed by
Modified Procedure.Interested persons may file comments no later than September 11,2013.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of August 2013.
ATTEST:
(ian D.Jewe
Commission Secretary
PAUL KJ LLAND ,PRESIDENT
LZL J&5L
MARSHA H.SMITH,COMMISSIONER
O:AVU-G-13-Olkk
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.32874
OMMISSIONER
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