20150901notice_of_application_order_no_33371.pdf

Office of the Secretary
Service Date
September 1,2015
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA )
CORPORATION’S APPLICATION TO )CASE NO.AVU-G-15-02
CHANGE ITS NATURAL GAS RATES AND )
CHARGES (2015 PURCHASED GAS COST )NOTICE OF APPLICATION
ADJUSTMENT))
)NOTICE OF
)MODIFIED PROCEDURE
)
______________________________
)ORDER NO.33371
On August 27,2015,Avista Corporation dba Avista Utilities filed its annual
Purchased Gas Cost Adjustment (PGA)Application.The PGA is,in summary,a Commission-
approved mechanism that adjusts rates up or down to reflect changes in Avista’s costs to buy
natural gas from suppliers—including changes in transportation,storage,and other related costs.
Avista defers these costs into its PGA account,and then passes them to customers through an
increase or decrease in rates.
With this Application,Avista proposes to decrease its PGA rates by about $10.3
million (14.5%).Application at 1.As detailed below,Avista’s proposal would decrease the
average residential or small commercial customer’s rates by $7.94 per month (about 13.4%).
Large commercial customers’rates would decrease by about 18%,and the rate of Avista’s sole
customer receiving interruptible service would decrease by about 24.6%.Avista’s proposal
would not affect Avista’s earnings.Id.at 2-3.Avista asks the Commission to process the
Application by Modified Procedure,and that the new rates take effect November 1,2015.Id.at
5.
NOTICE OF APPLICATION
A.Overview of Proposed Rates
YOU ARE HEREBY NOTIFIED that Avista distributes natural gas in northern
Idaho,eastern and central Washington,and southwestern and northeastern Oregon.Avista buys
natural gas and then transports it through pipelines for delivery to customers.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 (Tariff Schedule 150);and (2)revise the amortization rates to
NOTICE OF APPLICATION
NOTICE OF MODWIED PROCEDURE
ORDER NO.33371 1
refund or collect the balance of deferred gas costs (Tariff Schedule 155).Avista proposes to
change its PGA rates for its three customer classes as follows:
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 $(0.013312)$000133 $(0.13179)$0.00170 ($013009)(13.4%)
Lg.General 111 $(0.013312)$000133 $(0.13179)$000170 ($013009)(18.0%)
Interruptible 13 1 $(0.0 13312)0.00000 $(0.13312)$(0.02097)($0.1 5409)(24.6)%
Id.at 2-4.Avista’s proposed changes to Schedules 150 and 155 and Avista’s rates are further
explained below.
B.Schedule 150
YOU ARE FURTHER NOTIFIED that the tariff Schedule 150 portion of the PGA
has two parts:the “commodity costs”and the “demand costs.”
YOU ARE FURTHER NOTIFIED that Avista’s “commodity costs”are the variable
costs at which Avista must buy natural gas.The weighted average cost of gas (WACOG),which
also includes other variable administrative costs,approximates a company’s commodity costs.
In this case,Avista estimates that its commodity costs will decrease by $0.0133 (13.30)per
therm,from the currently approved $0.385 (38.50)per therm to $0.252 (25.20)per therm.Id at
3.In an effort to minimize its and its customers exposure to volatile and potentially rising
natural gas commodity costs,Avista has used a diversified approach to procure natural gas,
including “hedging”strategies,the use of underground storage capacity,and estimating the cost
of index purchases using a 30-day historical average of forward prices and supply basins.Id.at
3-4.
YOU ARE FURTHER NOTIFIED that Avista’s “demand costs”are its fixed-
capacity costs for interstate transportation and underground storage,as well as capacity releases
that are credited back to customers.The demand costs primarily are costs to transport gas on
interstate pipelines to Avista’s local distribution system.Avista proposes a $0.0013 per therm
increase in the overall demand rate for customer Schedules 101 and 111.Avista’s proposed
demand rate includes the new cost of transporting gas over TransCanada-Gas Transmission
Northwest,which is to take effect on January 1,2016.See Id.at 4.
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NOTICE OF MODIFIED PROCEDURE
ORDERNO.33371 2
C.Schedule 155
YOU ARE FURTHER NOTIFIED that tariff Schedule 155 reflects the amortization
of Avista’s deferral account.With this Application,Avista proposes to increase Schedules 101
and 111 amortization rate by $0.03071 per therm,from the current $0.03056 per therm rebate
rate to a $0.02886 per therm rebate rate.Id.at 4.Avista explains that lower than expected
wholesale natural gas prices contributed to the proposed amortization rate by causing Avista to
collect revenues that exceeded its costs.Avista notes,however,that part of the benefit from
reduced wholesale gas prices was offset by an under collection of fixed-demand costs that
resulted from a warmer-than-normal winter.Id.
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 3,
2015 through October 2,2015.Id.
YOU ARE FURTHER NOTIFIED that the Application and its exhibits have been
filed with the Commission and are available for public inspection during regular business hours
at the Commission offices.These documents 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
“Natural Gas Cases,”and 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 §61-501,-502,and -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 31.01.01.000 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.33371 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 no later
than October 9,2015.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 of State and Federal Regulation
P0 Box 83720 Avista Utilities
Boise,ID 83 720-0074 1411 E.Mission Avenue
Spokane,WA 99220-3 727
Street Address for Express Mail:E-Mail:kell y.norwood(avistacorp.com
472 W.Washington Street David J.Meyer
Boise,ID 83702-5918 Vice President and Chief Counsel for
Regulatory and Governmental Affairs
Avista Utilities
1411 E.Mission Avenue
Spokane,WA 99220-3 727
E-Mail: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.Scroll to the “Consumers”tab,click
the “Utility Case Comment or Question Form,”and complete the 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 Avista shall file reply comments,if
necessary,no later than October 15,2015.
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.33371 4
ORDER
IT IS HEREBY ORDERED that Avista’s PGA Application be processed under
Modified Procedure,IDAPA 31.O1.01.201-.204.Interested persons wishing to file written
comments must do so no later than October 9,2015,Avista may file a reply,if any,no later than
October 15,2015.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this /
day of September 2015.
ATTEST:
ommission Secretary
O:AVU-G-1 5-O2kk
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33371
I)>iA4L
MARSHA H.SMITH,COMMISSIONER
KRIS INE RAPER,COMMISS$NER
PRESIDENT
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