20151224final_order_no_33444.pdf

Office of the Secretary
Service Date
December 24,2015
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA )
CORPORATION’S APPLICATION TO )CASE NO.AVU-G-15-03
RESUME NATURAL GAS EFFICIENCY )
PROGRAMS AND INCREASE THE RIDER )
SURCHARGE IN SCHEDULES 190 AND 191.)ORDER NO.33444
)
On October 28,2015,Avista Corporation dba Avista Utilities filed an Application for
authority to:(1)resume its energy efficiency programs for natural gas customers under Schedule
190;and (2)fund these programs by increasing its “Energy Efficiency Rider”surcharge rates in
tariff Schedule 191.Application at 1.Avista asked that the case be processed by Modified
Procedure,and that new Schedule 191 Rider rates take effect on January 1,2016.Id.at 2.
On November 20,2015,the Commission issued a Notice of Application and Notice
of Modified Procedure that solicited written comments on the Application and suspended the
proposed effective date until March 1,2016.Order No.33422.Written comments were due no
later than December 10,2015,and the Company was to file reply comments (if necessary)by
December 17,2015.Id.The Commission received timely comments from Commission Staff
and from four citizens.The Company filed reply comments on December 18,2015.1
Based upon our review of the Application and the comments,and after consideration
of circumstances surrounding the suspension of Avista’s natural gas DSM programs in 2012,we
approve Avista’s Application as modified below.
BACKGROUND
In 2012,Avista filed and the Commission approved an Application to suspend
Avista’s natural gas demand-side management (DSM)programs.At the time,Avista advised the
Commission that natural gas costs were about 50%lower than existing avoided costs and that
“these lower gas costs render the natural gas energy efficiency portfolio cost-ineffective going
forward.”Order No.32650 at 1.While suspending the programs,Avista committed to a
continual review of the DSM programs with the objective of restoring all or portions of the DSM
The Company filed brief reply comments on December 18,2015,one day after the reply comment deadline.
Those comments have nonetheless been considered.Going forward,we encourage Avista to review Commission
Rule 61 regarding required printed materials and Rule 65 regarding late-filed pleadings.IDAPA 31.01.01.061 and
.065.
ORDER NO.33444 1
portfolio.Avista re-evaluated its DSM programs and made revisions to make them cost-
effective.Application at 3.
THE APPLICATION
Avista seeks to resume its suspended natural gas DSM programs (Schedule 190),and
to resume collecting a tariff rider surcharge to pay for the DSM programs (Schedule 191).
Application at 1.Avista proposed to offer several types of DSM programs such as rebates for
weatherization,improvements for eligible customers,high-efficiency equipment measures,and
custom incentives for non-residential projects.Id.Avista claims that changes made to the
avoided cost calculation methodology used in the previously-discontinued DSM programs now
make the natural gas DSM projects in the Company’s energy efficiency portfolio more cost-
effective.Id.at 3.
In its Application,Avista claims that its historic method of measuring cost-
effectiveness for DSM programs,the Total Resource Cost test (TRC),is potentially biased
against conservation programs.Id.at 2,n.2.Thus,the Company proposed to utilize the Utility
Cost Test (UCT)as the chief measurement of cost-effectiveness.The Company uses analytical
tests (such as the TRC and UCT)to measure the cost-effectiveness of its various DSM programs.
The TRC compares program administrator costs and customer costs to utility resource savings,
and assesses whether the total resource cost of energy in a utility’s service territory will decrease.
The UCT compares program administrator costs to supply-side resource costs,and assesses
whether utility bills will increase.Avista explained it will now emphasize the UCT over the
TRC because the TRC “typically includes the full costs,but not the full benefits to customers
because the risk reduction value of conservation and many non-energy benefits are difficult to
quantify.”Id.
Avista also proposed three changes to its historic avoided cost methodology for
natural gas:
1.Total Cost of Delivery:Avista claimed “the demand portion of Schedule
150 is a more accurate representation of the total costs to deliver natural
gas from the wellhead to the customer meter,and therefore,that should be
a component of the natural gas avoided cost calculation.”Application at
4-5.Thus,Avista proposed inclusion of a $2.69/MWh long-term firm
wheeling charge,based on the electric forward market prices of the Mid-C
market hub in its avoided cost calculation.fri
ORDER NO.33444 2
2.Future Carbon Cost Assumptions:Avista is unable to accurately estimate
future carbon cost assumptions.It stated that there are a range of
legitimate projections from $0/metric ton to over $240/metric ton.Id.
Facing this uncertainty,the Company proposed using an estimate of
$10/metric ton starting in 2020 with a 3%annual escalation.Id.
3.Discount Rate:Avista argued that the most appropriate method of
measuring the cost-effectiveness of its conservation programs is its
Weighted Average Cost of Capital (WACC).Id.However,the Company
also claimed that the tax benefits of debt financing and inflation
adjustment should be included in any discount rate.Id.Accordingly,
Avista has proposed to move from a nominal WACC to a real WACC.Id.
Avista proposed to revise Schedule 190 to “provide customers with a levelized incentive of
$3.00 per first-year therm savings for any project with a simple payback less than 15 years and
capped at 70%of the project cost.”Id.at 8.
Finally,Avista requested authority to resume collecting an Energy Efficiency Rider
surcharge (Schedule 191).It claimed that so doing will increase the monthly bill of the average
residential natural gas customer using 61 therms by about $1.11 per month.Avista calculates
this will generate approximately $1.25 million in revenue,resulting in an increase in overall
billed natural gas rates by 1.7%.Id.at 1-2.Avista estimates that resuming its energy efficiency
programs and measures for 2016-2017 will save 233,000 therms in Idaho during the program’s
first year.Id.
THE COMMENTS
The Commission received comments from four members of the public,Commission
Staff,and reply comments from the Company.One public commenter endorses the Company’s
Application.Another public commenter opposes the resumption of the Schedule 191 surcharge,
pointing to the impacts on fixed-income customers and objecting to CEO compensation
packages.The other two public commenters provided highly detailed and technical comments
opposing the Application and requesting a hearing.Their comments largely address the same
points.For the purposes of this Order,their remarks are summarized together as “Technical
Commenters.”2
2 By way of summary,they generally assert that the Application warrants heightened scrutiny,and recommend that
the Application be denied pending a more detailed analysis of the proposal.See Powell Comments at 1;Anderson
Comments at 1.Avista noted in its reply comments that these individuals “are not Avista Idaho natural gas
customers,and are therefore not affected by the Company’s Application.”Reply Comments at 1.
ORDER NO.33444 3
Generally,the comments address three major issues (avoided cost methodology;cost-
effectiveness tests;and net-to-gross assumptions),along with a number of peripheral issues
(expense allocations;and class equity).These issues are discussed in greater detail below.
We greatly appreciate the comments provided by the public.The efforts of the
Technical Commenters in particular are laudable and provided additional analysis and
perspective for the Commission’s consideration.
THE ISSUES
A.Requestfor Tecluticat Hearing
We first turn to the suggestion from the Technical Commenters that the Commission
schedule an evidentiary hearing in this mailer.The Technical Commenters object to the use of
Modified Procedure to process this Application and request that the Commission schedule a
technical hearing to further develop an evidentiary record.See Rule 241.04.a,IDAPA
31.01.01.241.04.a.They express concerns regarding answers to Staff production requests,
unfavorable precedent,deficient customer notice,and generally complain that the timelines set
by the Commission were too short.They suggest that the Commission require Avista to amend
its Application with supporting testimony,exhibits and other information,and notify all Idaho
utilities and Avista’s customers of the Company’s proposal regarding the UCT.They argue
generally for a process more similar to Avista’s IRP filing.
In its reply,Avista stated that it appreciates the comments filed in this case,and notes
a refined product created through the process.See Reply at 4.The Company stated that it has
“worked with Commission Staff over the past six months and reached agreement related to the
new philosophy around the avoided costs used in the Company’s filing.”Id.at 2.
Commission findings:The Commission’s Rules of Procedure allow for the use of
Modified Procedure,i.e.,the consideration of issues based on written submissions (i.e.,
comments)rather than by hearing.Rule 201,IDAPA 31.01.01.201.Even if a hearing is
requested,the Commission “may decide the matter and issue its order on the basis of the written
positions before it.”Rule 204,IDAPA 3 1.01.01.204.Based upon our review of the record,we
decline the Technical Commenters request to conduct a technical hearing for several reasons.
As evidenced by the well-argued and detailed comments,sufficient opportunity and
time were given for any interested person to provide comments.There were approximately six
weeks between when the Application was filed and the comment deadline.During that time the
ORDER NO.33444 4
Technical Commenters had access to and time to review Staff’s discovery.See Anderson
Comments at 1.Although they allege there were “deficiencies”in the Company’s responses,the
Technical Commenters did not seek to intervene in this case,and Staff did not express concern
about the discovery responses.Finally,this case concerns Avista’s gas DSM program.While
comparisons of other utilities’programs add value to our deliberations,they are ultimately not
determinative for the issues in this case.
The Commission utilizes Modified Procedure for the majority of cases that it
considers.Modified Procedure has proven to be an effective means for obtaining public input
and participation in cases.This case is no exception.We find that the use of Modified
Procedure here has produced substantial and competent evidence in the record.
B.Avoided Cost
There are several components to the comments regarding the proposed avoided cost
methodology.
1.Total Cost of Delivery.At the outset,Avista stated in its Application that it
“locks in enough firm transmission capacity for a peak day and thus has very little variable
natural gas transmission costs,approximately 0.1 percent of total retail cost.”Application at 4.
The Company claimed that this is not an accurate representation of the total cost of natural gas
service.Thus,Avista seeks to include the “demand”portion of Schedule 150 (Purchase Gas
Cost Adjustment)3 as a component of the natural gas avoided cost calculation,claiming it is a
more accurate representation of the total cost of natural gas service,from wellhead to meter.
Staff supported inclusion of the demand portion of Schedule 150 as “a reasonable
input because these costs can be offset by the sales of excess transportation capacity.”Staff
Comments at 3.Staff asserted that this is largely consistent with how other utilities calculate
avoided cost.Id.Staff commented that this change and supplementary efforts by the Company
could provide additional capacity benefits,and through improved efficiency,the deferring of
future projects.Id.at 4.
2.Carbon and Conservation Adders.As outlined above,Avista proposed using a
$10/metric ton carbon adder starting in 2020 with a 3%annual escalation.Both Staff and the
Technical Commenters take issue with this inclusion as speculative.See Staff Comments at 4;
The Purchase Gas Cost Adjustment (PGA)is a mechanism designed to recover or rebate deferred changes in the
cost of natural gas purchased by the utility to service customer loads.
ORDER NO.33444 5
Powell Comments at 2.Staff cautioned that “an estimate of direct costs to utilities from future
carbon regulation is currently too speculative to be included in cost effectiveness calculations.”
Staff Comments at 4.Though,after analyzing the effect of removing the carbon adder from the
calculation,Staff found that “it did not significantly change the cost-effectiveness for any
program or the portfolio.”Id.
The Technical Commenters also take umbrage with a perceived inclusion of a 10%
conservation adder in the Company’s avoided cost calculations,arguing that it is an attempt to
manipulate higher cost-effectiveness results.Anderson Comments at 4.However,this concern
is misplaced as Avista does not include a conservation adder in its avoided cost calculations
under the UCT.See Staff Comments at 4,n.4 (“The UCT excludes the 10 percent Northwest
Power Planning and Conservation adder.”)
3.Discount Rate.The Company continues using the Weighted Average Cost of
Capital (WACC)as the discount rate for its cost-effectiveness tests,but replaces the nominal
value with the “real”WACC using beginning-of-the-year values.
The Technical Commenters object to Avista’s application of a real (inflation
adjusted)discount rate from a nominal avoided cost forecast.They argue this practice will
artificially inflate the cost-effectiveness of the DSM portfolio.They further note that the
Company’s present value of avoided costs are calculated by applying the discount rate to
“beginning-of-year values”rather than more conventional “end-of-year values.”“{W]hile a
deviation from the end-of-year industry standard to a mid-year discounting convention might be
justifiable,a beginning-of-year assumption presumes that the annual savings from a measure
occurs entirely on the first day of each year.”Powell Comments at 3.
Staff believes that Avista’s proposal is broadly consistent with discounting
methodologies employed by other utilities.However,like the Technical Commenters,Staff
expresses a concern regarding timing of the discount rate application.Thus,Staff recommended
that “Avista apply the discount rate to the mid-year estimate of benefits rather than the beginning
of the year to more closely reflect the timing of benefits realized each year.”Id.
In reply,Avista agreed to Staff’s recommendation to apply a mid-year discount rate
to program benefits.
4.Comparison to IRP.Generally,the Technical Commenters take issue with
Avista’s decision to base its cost-effectiveness projections on an avoided cost projection that is
ORDER NO.33444 6
higher than the projection contained in Avista’s 2014 natural gas Integrated Resource Plan
(WP).4 They allege that by favoring the higher avoided cost projection the Company has its
finger on the scale—favoring one resource (natural gas)over other resources—deviating
substantially from the resources and plan set out in the Company’s WP.Powell Comments at 2.
Staff noted that there has in fact been “an increase in avoided costs over the long
term”due to favorable commodity pricing,since the DSM programs were discontinued in 2012.
Staff Comments at 5.Staff pointed to “an increase [in avoided costs produced by the Company]
of approximately 31 percent in the first year and 10 percent in the last year”as reasonable
justification for the Company’s request.Id.at 4.
Avista does not directly address the alleged deviation from the avoided cost estimates
contained in its RP,but reiterates that its new approach to avoided cost was thoroughly
reviewed and vetted by the Avista Energy Efficiency Advisory Group,and the proposal
compared favorably to a number of peer utilities for best practices.Avista Reply at 2.
Commission findings:Based upon our review of the avoided cost methodology,we
find the record generally supports the proposed revisions to the Company’s avoided cost
methodology,with some modifications.The Commission finds that the inclusion of the demand
portion of Schedule 150 is an appropriate component of the avoided cost calculation.The
inclusion of Schedule 150 is a better representation of the total cost of service,especially
compared to the previous iteration of the DSM programs.This finding is buoyed by the possible
effect of the sale of excess capacity and possible deferrals of future projects,which would both
lower the overall expense to all customers.
We decline to adopt the Company’s proposed carbon adder because we find it is too
speculative at this time.We note that this has no practical effect on the DSM programs as it was
not scheduled to take effect for another five years.Moreover,the DSM programs are cost
effective with or without the adder.Should the issue of a carbon adder move from theoretical to
more certain,the Commission may revisit such a proposal at that time.We also note that unlike
the TRC,the UCT excludes the 10%conservation adder referenced by the Technical
Commenters.Therefore,consideration of a conservation adder is unnecessary.
The IRP describes Avista’s plans to meet its customers’future natural gas needs.An IRP is developed with
considerable public involvement.
ORDER NO.33444 7
We next find the agreed-upon mid-year discount rate to program benefits to be
reasonable,as well as the Application of real WACC.This method should more accurately
account for tax benefits and inflation in the Net Present Value calculation,and applied mid-year
will more closely reflect when benefits are actually realized.
With regard to the comparisons between the DSM cost-effectiveness projections and
the avoided cost estimates in the Company’s IRP,we find that the proposed DSM programs do
not so significantly deviate from the Company’s IRP that they render this DSM Application
untenable.The Company’s IRP is a general guide intended to “cover a broad range of
possibilities.”See Order No.32698.Furthermore,we fully expect Avista to incorporate the
DSM programs and their effects in its upcoming IRP filing.Finally,it is worth noting the
Technical Commenters do not allege that the proposed programs are cost-ineffective.
C.Cost-Effectiveness Tests
As noted above,Avista has proposed shifting away from the TRC as its threshold test
for cost-effectiveness in favor of the UCT.Avista argues that the TRC has a “disconnect in that
the benefits are primarily based off the utilities’avoided costs,which do benefit customers,but
the costs are primarily driven by the cost the customers pay for the individual conservation
measure.”Application at 6.
The Technical Commenters argue that abandoning the TRC in favor of the UCT will
produce a skewed cost-effectiveness outcome,which prevents consumers from accurately
assessing whether the DSM portfolio is beneficial.Instead,they argue that Avista’s historical
methodology—the TRC test—has a potential for bias in either direction,which is important for
the utility to consider in its evaluation.They further claim that Avista’s cost-effectiveness
metrics are not compliant with industry standards.Powell Comments at 1.
Staff supported the move to the UCT,asserting that “the most accurate analysis of
system cost-effectiveness compares utility benefits to utility costs,rather than comparing utility
benefits to a combination of utility and customer costs.”Staff Comments at 5.
In its reply comments,Avista stated that it is not doing away with the TRC,but is
“simply taking a more balanced,tandem approach to measuring cost-effectiveness.”Reply at 2.
The Company says that it proposed this change only after evaluating the approach with peer
utilities,and found it to be “in-line with the practices of others.”Id.Avista stated that going
ORDER NO.33444 8
forward it will evaluate its programs under both the TRC and UCT,and will continue to report
multiple cost-effectiveness tests to the Commission to demonstrate prudency.Id.
Commission findings:We understand that the rationale behind those favoring the
TRC seems to be driven by a concern for appropriate use of ratepayer funds.On the other hand,
we also recognize Avista’s desire to avoid bias against conservation programs or the need for
studies to value non-energy benefits.Under the circumstances,we find Avista’s preference for
the UCT reasonable.Use of the UCT will appropriately consider demand-side resources and
supply-side resources.Furthermore,Avista has committed to reporting and evaluating numerous
cost-effectiveness tests when examining the DSM programs’cost-effectiveness (including the
TRC).
As a practical matter,this shift may result in more DSM resources being selected as
cost-effective in future IRP cases,thereby addressing the underlying concerns of the Technical
Commenters.Finally,we find that the proposed programs appear cost-effective under either the
TRC or the UTC.See Staff Comments at 4.Likewise,we approve of utilization of the UCT as a
threshold test for the proposed DSM programs.There will be further opportunity to address the
effectiveness of this approach in upcoming prudency filings.
D.Net to Gross Adjustments
The Company is using “gross”rather than “net”savings estimates in its cost-
effectiveness calculations.In other words,Avista is proposing an assumed 100%net-to-gross
for the purpose of calculating cost-effectiveness when accounting for “freeriders.”
The Technical Commenters argue that the Company’s cost-effectiveness estimates
are inflated because they do not include net-to-gross (NTG)adjustments to account for
freeriders.They argue that the NTG adjustments should be performed prior to implementation
of any DSM program.They allege that the proposed 100%NTG will create more of a wealth
redistribution than an energy efficiency program.
Staff commented that there is no dispute that it is important to modify or discontinue
incented measures with high freeridership.Staff noted that there are a range of opinions
Freeriders are customers who participate in the DSM programs,but would have bought program-sponsored
products without utility intervention via the DSM programs.Net-to-gross is the percentage of non-freerider
participants (i.e.,the number of customers who purchased a product only because of the program and its benefits)
divided by total program participants (i.e.,people receiving a rebate).For example,if it is estimated that nine out of
ten program participants participated only to capture the benefits promoted by the DSM,and only because of the
program,then the net-to-gross ratio for that program is 90%.The one out of ten is considered a freerider because
they would have purchased the program-sponsored product regardless ofthe DSM program.
ORDER NO.33444 9
regarding how to best apply the NTG,noting that the Commission has previously-approved
DSM programs that include 100%NTG that included a sensitivity analysis to monitor the
programs going forward.Staff performed such sensitivity analysis in this case,and found that
“the portfolio remained UCT cost-effective even when a 60 percent NTG ratio was applied (i.e.
40 percent freeridership).”Staff Comments at 6.
Avista stated in its reply that “the Company believes net-to-gross studies can be a
useful tool to help influence program design to ensure that ratepayer funds are being spent
prudently on measures that require utility intervention.”Reply Comments at 3.Avista argued
the approach suggested by the Technical Commenters is ineffectual because it uses NTG after
the fact to reduce cost-effectiveness.Instead,the Company suggested that NTG studies should
be used to influence program designs going forward.
Commission findings:NTG is a critical component of DSM program evaluations as
it allows the utility to determine what portion of energy savings are attributable to its DSM
programs.Freeriders are a concern to any DSM program as they reduce savings attributable to
those programs.There are a variety of methods that can be used to estimate NTG.Avista’s
approach to this issue is to assume,for purposes of calculating cost-effectiveness,that there are
no freeriders.However,this does not mean that NTG is actually 100%.Rather,the Company
conducts a sensitivity analysis to calculate a minimum NTG for the programs to remain cost-
effective.Then,as it is implemented,the Company evaluates NTG studies and adjusts the
program to account for freeriders.We find this approach is consistent with the approach adopted
by Idaho Power:
Capturing the effects of Idaho Power’s energy efficiency efforts on free
ridership and spillover is difficult.Due to the uncertainty surrounding NTG
percentages,Idaho Power used the NTG of 100 percent for all the measure
cost-effectiveness analysis.For the program cost-effectiveness analysis,the
B/C ratios shown are based on a 100 percent NTG.A sensitivity analysis was
conducted to show what the minimum NTG percentage needs to be for the
programs to remain (or become)cost-effective.
Idaho Power 2014 Annual DSM Report,p.5.Thus,this approach is not novel to this
Application.With the safeguards of a sensitivity analysis prior to implementation of any DSM
programs and a continual re-evaluation of those programs to cull potential freeridership,we are
satisfied with the approach proposed in the Application,Further,given the more fluid and
ORDER NO.33444 10
ongoing approach,we find it is appropriate to require that the Company provide annual DSM
reports to better account for true NTG beginning in 2017.
E.Other Issues
1.Overhead Expense Allocation.In its comments,Staff reported changes Avista
has made in the allocation of overhead expenses between the electric and gas DSM portfolios.
Specifically,rather than assigning costs on a Btu basis (historic method),the Company proposed
to base the cost allocation on the ratio of “present value”benefits between the two portfolios
rather than assume that an avoided electric Btu is equivalent to an avoided gas Btu.Staff
endorsed this change,and found it to “reduce the portion of overhead costs assigned to the gas
portfolio from 24 percent to $percent.”Id.
The Company explained that a kWh is currently more costly to produce on a Btu
basis.In other words,it is more costly to produce electricity with natural gas than it is to utilize
gas directly through appliances and other facilities that use natural gas directly.Notably,
expansion of Avista’s electric-to-gas fuel conversion since the suspension of the DSM portfolio
has also helped absorb overhead costs.
Commission findings:We find that this approach is well-reasoned and fair.It is
clear that selling gas directly to customers is more cost-effective to the Company and its
customers than selling electricity made with natural gas.We support this approach and all
continued efforts by the Company to reduce overhead expenses.
2.Class Equity.Staff expressed concern that residential customers could end up
providing most of the tariff rider funds,while the commercial and industrial class receive most of
the benefits in the form of incentive payments and offset costs.However,Staff is encouraged by
Avista’s proposed commercial and industrial measures,intended to reduce space heating
requirements,which in turn reduces future investments for all customer classes.Nonetheless,
Staff urged Avista to explore and expand residential natural gas DSM programs to promote
equity between customer classes.
Commission findings:Concerns regarding a potential disparity between tariff rider
funding and benefits are not new to this Commission.We have previously observed that “[a]n
exact matching of costs and benefits for an individual DSM program is a worthy,albeit
unrealistic goal ...,[but t]here will always be some level of cross-subsidization of DSM
programs occurring amongst and between a utility’s various customer classes.”See Order No.
ORDERNO.33444 11
32113.We direct Avista to create and implement a balanced portfolio of DSM programs for all
customer classes over the long-term,especially as DSM funds become more available.We
anticipate that DSM expenditures will balance out among the customer classes,and Staff will
review DSM expenditures annually to ensure such fairness.Avista should continually explore
new and expand current residential natural gas DSM programs when practical.
3.Specific Changes.Finally,Staff also recommended that Avista analyze the
benefits of natural gas DSM programs deferring distribution costs and strike “from a Total
Resource Cost perspective”under “5.Budget &Reporting”in Schedule 190.
In their brief reply,Avista acknowledged that Staff’s recommendations are well-
founded and agreed to make those changes.
Commission findings:Based upon our review and the parties’agreement,we find
that these changes are just and reasonable.
SUMMARY
Having reviewed the arguments advanced by the Application,public comments,Staff
comments,and the history underlying Avista’s suspension of its DSM programs,the
Commission finds that Avista has met its burden of showing that approval of the Application is
fair,just and reasonable;and re-establishing Avista’s natural gas DSM programs is in the public
interest.The DSM programs offered by the Company appear cost-effective based on the Utility
Cost (UCT)as well as the Total Resource Cost (TRC)tests.Further,the proposed changes to the
Company’s avoided cost methodology are reasonable and conform to industry standards.The
proposed shift to the UCT is an appropriate measure of cost-effectiveness,considering that
additional measures of cost-effectiveness will also be analyzed.We find that the Company’s
100%NTG is suitable for measuring cost-effectiveness so long as such a process is tempered by
actual and ongoing NTG evaluation to curb potential freeridership.
We conclude that Avista customers will ultimately benefit through resumption of its
DSM programs.See Application at 8.Based on our review,we find the Company’s proposed
Application,as more fully described in this Order,to be fair,just,and reasonable.Accordingly,
we find it is in the public interest for the Commission to approve the Application to authorize
resumption of the gas DSM programs (Schedule 190),and to resume collecting a tariff rider
surcharge to pay for the DSM programs (Schedule 191).
ORDER NO.33444 12
ORDER
IT IS HEREBY ORDERED that the Company’s Application,as modified above,is
granted.Effective January 1,2016,the proposed programs in Schedule 190 and the rates and
charges in Schedule 191 are approved.
IT IS FURTHER ORDERED that tariff Schedules 190 and 191 filed on December
21,2015,are approved effective January 1,2016.
IT IS FURTHER ORDERED that Avista shall provide annual natural gas DSM
reports beginning in 2017.
THIS IS A FINAL ORDER.Any person interested in this Order may petition for
reconsideration within twenty-one (21)days of the service date of this Order.Within seven (7)
days after any person has petitioned for reconsideration,any other person may cross-petition for
reconsideration.See Idaho Code §6 1-626.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of December 2015.
17L&/tL4Ld
MARSHA H.SMITH,COMMISSIONER
KRI [NE RAPER,CO MISSIONER
ATTEST:
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ommission Secretary
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ORDER NO.33444 13