20140923notice_of_application_order_no_33133.pdf

Office of the Secretary
Service Date
September 23.2O4
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA )
CORPORATION’S APPLICATION TO )CASE NO.AVU-G-14-04
CHANGE ITS RATES AND CHARGES (2014 )
PURCHASED NATURAL GAS COST )NOTICE OF APPLICATION
ADJUSTMENT))
)NOTICE OF
)MODIFIED PROCEDURE
)
_____________________________
)ORDER NO.33133
On September 15.2014,Avista Corporation dba Avista Utilities filed its annual
Purchased Gas Cost Adjustment (PGA)Application.The PGA is a rate mechanism used to
adjust rates up or down to reflect changes in the market price of natural gas,and changes in
transportation and storage costs.These changes in Avista’s natural gas costs are deferred to the
PGA account.In this Application,Avista proposes to decrease its PGA rates an average of
2.1%.or about $1.6 million per year.Application at 1.As set out in greater detail below,
Avista’s proposal will decrease the average residential or small commercial customer’s rates by
$1.16 per month (about 2%).Id.at 4.Avista also proposes that large commercial customers’
rates decrease by about 2%,but Avista’s sole interruptible customer’s PGA rate increase by
about 0.2%.Id.at 3.Avista’s proposal will not affect its earnings.Avista asks that its
Application be processed by Modified Procedure,and that the new rates take effect November 1.
2014.Id.at5.
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.
Avista buys natural gas and then transports it through pipelines for delivery to customers.Id.In
this PGA Application,Avista proposes to:(1)pass any change in the estimated cost of natural
gas for the next 12 months to customers (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 Avista proposes to change its PGA rates for
its three customer classes as follows:
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDERNO.33133 1
Commodity Demand Total Amortization Total Rate Overall
Schedule Change per Change per Sch.150 Change per Change per Percent
Service No.Therm Therm Change Therm Therm Change
General 101 $001160 ($000022)$001138 ($003071)($001933)(1.91%)
Lg.General 1 11 $0.01 160 ($000022)$0.01 138 ($003071)($001933)(2.49%)
Interruptible 131 $0.01l60 0.00000 $001160 $000119 $001279 0.20%
YOU ARE FURTHER NOTIFIED that “commodity costs”are a company’s variable
costs for natural gas.The weighted average cost of gas (WACOG),which also includes other
variable administrative costs,approximates a company’s commodity costs.Avista estimates that
its commodity costs will increase $0.0 116 per therm from the currently approved $0.374 per
therm to $0.3 85 per therm.Id.at 3.
YOU ARE FURTHER NOTIFIED that Avista periodically hedged gas throughout
2014 for use during the coming PGA year (12 months).Utilities engage in “hedging”to
minimize the price volatility of natural gas and other fossil fuels.Order No.32697 at 37.Avista
states that it will hedge about 35%of its estimated annual load requirements for the PGA year
(November 2014 —October 2015)at a fixed price comprised of:(1)13%of volumes hedged for
a term of one year or less;and (2)22%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 $0.425 per term.Id.
YOU ARE FURTHER NOTIFIED that Avista’s demand —or fixed —costs are
primarily costs to transport gas on interstate pipelines to Avista’s local distribution system.Id.at
4.Avista proposes decreasing demand costs due to high projected-usage for fixed-demand costs
which more than offset expiring short-term capacity release credits on Northwest Pipeline and
increasing summer capacity on TCPL-Alberta pipeline.Id.
YOU ARE FURTHER NOTIFIED that Avista proposes decreasing the amortization
refund rate by $0.03071 per therm (from a $0.00015 per therm surcharge to a $0.03056 per
therm rebate).Id.at 4.This decrease is driven by changes in the demand portion of the
amortization rate,including:(1)colder than normal weather during the 2013-2014 winter,
resulting in higher demand cost collections;(2)Avista entered into a new Deferred Exchange
contract,effective April 2014,for which Avista charges a fixed per therm charge;and (3)an
error regarding allocation of Avista’s transport costs between power supply operations and
natural gas distribution operations,resulting in a net benefit to customers.Id.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDERNO.33133 2
YOU ARE FURTHER NOTIFIED that Avista asserts it has notified customers of its
proposed tariffs by posting notice at each of its Idaho district offices,and through a press release.
Id.at 2.Also,Avista says it will send notice to each customer in bill inserts from September 17
through October 15,2014.Id.
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.
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 17,2014.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 Avista at the addresses reflected below:
Commission Secretary Kelly 0.Norwood
Idaho Public Utilities Commission Vice President State and Federal
P0 Box 83720 Avista Utilities
Boise,ID 83720-0074 P0 Box 3727
Spokane,WA 99220-3727
Street Address for Express Mail:E-Mail:kelly.norwood@,avistacorp .com
472 W.Washington Street David J.Meyer
Boise,ID 83702-5918 Vice President and Chief Counsel of
Regulatory and Governmental Affairs
Avista Utilities
P0 Box 3727
Spokane,WA 99220-3727
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 “Case Comment or Question
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDERNO.33133 3
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 Avista 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.
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 exhibits are also
available on the Commission’s web site at yy puc.i hogov.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 and specifically
Idaho Code §61-118,61-119,61-502,and 61-503.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.
ORDER
IT IS HEREBY ORDERED that Avista Corporation’s PGA Application be processed
under Modified Procedure,IDAPA 31.01.01.201 -.204.Interested persons may file written
comments regarding this matter no later than October 17,2014.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDERNO.33133 4
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this 2
day of September 2014.
PkU1KJELLAND,PRESIDENT
MACK A.REDFORD,C MMISSIONER
N
MARSHA H.SMITH,COMMISSIONER
ATTEST:
/1
Jean D.Jewell
Commission Secretary
O:AVU-G-14-O4djh
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDERNO.33133 5