20160909notice_of_application_order_no_33594.pdf

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
)
) CASE NO. AVU-G-16-02
)
Office of the Secretary
Service Date
September 9, 2016
IN THE MATTER OF A VISTA
CORPORATION'S APPLICATION TO
CHANGE ITS NATURAL GAS RATES AND
CHARGES (2016 PURCHASED GAS COST
ADJUSTMENT)
) NOTICE OF APPLICATION
)
-------------------
) NOTICEOF
) MODIFIED PROCEDURE
)
) ORDER NO. 33594
On August 29, 2016, A vista Corporation dba Avista Utilities filed its annual
Purchased Gas Cost Adjustment (PGA) Application. By way of summary, the PGA is a
Commission-approved mechanism that adjusts rates up or down to reflect changes in A vista's
costs to buy natural gas from suppliers-including changes in transportation, storage, and other
related costs. A vista defers these costs into its PGA account, and then passes them on to
customers through an increase or decrease in rates.
With this Application, A vista proposes to decrease its PGA rates by about $6.1
million (7.8% ). Application at 1. The proposal would decrease the average residential or small
commercial customer's rates by $4.65 per month (about 8.4%). Large commercial customers'
rates would decrease by about 7.7%. Avista's proposal would not affect Avista's earnings. Id.
at 17. A vista asks that the Commission process the Application by Modified Procedure, and that
the new rates take effect November 1, 2016. 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. A vista buys
natural gas and then transports it through pipelines for delivery to customers. In this PGA
Application, A vista 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
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:
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 33594 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 IOI $(0.01140) $0.0048 $(0.00660) $(0.06958) ($0.07618) (7.7%)
Lg. General 111 $(0.01140) $0.0048 $(0.00660) $(0.06958) ($0.07618) (7.7%)
Interruptible 131 $(0.01140) $(0.01140) $(0.07202) ($0.08342) 0.0%
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 A vista must buy natural gas. The weighted average cost of gas (W ACOG) is an
estimate of those costs. In this case, A vista estimates its commodity costs will decrease by
$0.0114 (1.14¢) per therm, from the currently approved $0.252 (25.2¢) per therm to $0.2406
(24.06¢) per therm. Id. at 4. In order to minimize exposure to potential rising gas costs, A vista
diversifies how it procures natural gas. Id. A vista's procurement strategy includes hedging, the
use of underground storage capacity, and estimating the cost of index purchases using a 30-day
historical average of forward prices for each supply basin. Id.
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 $0.0048 per therm
increase in the overall demand rate for customers on Schedules 101 and 111. A vista's proposed
demand rate includes the increased cost of transporting gas over TransCanada-Gas Transmission
Northwest, which is to take effect on January 1, 2017. See id. at 3-4.
C. Schedule 155
YOU ARE FURTHER NOTIFIED that tariff Schedule 155 reflects the amortization
of A vista's deferral account. With this Application, Avista proposes to decrease the amortization
rate for general and large general service customers by $0.06958 per therm. Avista explains that
lower than expected wholesale natural gas prices contributed to the proposed amortization rate
by causing A vista to collect revenues that exceeded its costs. Part of these revenues were offset
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 33594 2
by an under collection of fixed demand costs that resulted from a warmer-than-normal winter.
A vista notes that the decreased amortization rate it proposes would increase the rebate that
customers currently enjoy from $0.02886 per therm to $0.09844 per therm. The new
amortization rate will refund about $7.5 million dollars to customers through the Schedule 155
portion of the PGA. Id.
YOU ARE FURTHER NOTIFIED that A vista asserts it will notify customers of its
proposed tariffs by posting notice at each of its Idaho district offices, and through a press release.
Id. at 3. Also, Avista says it will send notice to each customer in bill inserts from September 2,
2016 through October 1, 2016. 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
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, ID APA 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 11, 2016. The comment must contain a statement of reasons supporting the
comment. Persons desiring a hearing must specifically request a hearing in their written
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 33594 3
comments. Written comments concerning this Application shall be mailed to the Commission
and A vista at the addresses reflected below:
Commission Secretary
Idaho Public Utilities Commission
PO Box 83720
Boise, ID 83720-0074
Street Address for Express Mail:
472 W. Washington Street
Boise, ID 83702-5918
Kelly 0. Norwood
Vice President of State and Federal Regulation
A vista Utilities
1411 E. Mission A venue
Spokane, WA 99220-3727
E-Mail: [e-mail]
David J. Meyer
Vice President and Chief Counsel for
Regulatory and Governmental Affairs
A vista Utilities
1411 E. Mission A venue
Spokane, WA 99220-3727
E-Mail: david.meyer(a)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 A vista at the e­
mail addresses listed above.
YOU ARE FURTHER NOTIFIED that Avista shall file reply comments, if
necessary, no later than October 14, 2016.
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.
ORDER
IT IS HEREBY ORDERED that Avista's PGA Application be processed under
Modified Procedure, ID APA 31.01.01.201-.204. Interested persons wishing to file written
comments must do so no later than October 11, 2016. Avista may file a reply, if any, no later
than October 14, 2016.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 33594 4
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of September 2016.
ATTEST:
ecretary
O:AVU-G-16-02_bk
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ERIC ANDERSON, COMMISSIONER
ORDER NO. 33594 5