20171103Ehrbar Direct.pdf

ldaho Public trtiiitres Commission
Otfice of the SecretarvRECEIVED
Nov 0 3 20t7
DAVID J. MEYER
VICE PRESIDENT AND CH]EF COUNSEL FOR
REGULATORY & GOVERNMENTAL AFFAIRS
AV]STA CORPORATION
P.O. BOX 3121
1477 EAST MISSION AVENUE
SPOKANE, WASHTNGTON 99220-3121
TELEPHONE: [phone]
EACSIMILE: ( 509) 495-8851
DAV] D . MEYERGAV] STACORP . COM
BEEORE THE IDAHO PT'BLIC UTILITIES COMMISSTON
rN THE MATTER OF THE APPLICAT]ON
OE AV]STA CORPORATION FOR THE
AUTHOR]TY TO INCREASE ]TS RATES
AND CHARGES FOR ELECTR]C AND
NATURAL GAS SERV]CE TO ELECTRIC
AND NATURAL GAS CUSTOMERS ]N THE
STATE OE IDAHO
CASE NO.
CASE NO.
AVU-E-71 -07
AVU-c-11 -07
DIRECT TEST]MONY
OF PATRICK D. EHRBAR
IN SUPPORT OF
ST I PULAT ION
EOR AVISTA CORPORAT]ON
(ELECTR]C AND NATURAL GAS)
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I. INTRODUCTION
A. Please state your name, ernfloyer and business
address.
A. My name is Patrick D. Ehrbar and I am employed
as the Director of Rates for Avista Uti-Iities ("Company"
or "Avista"), at 74IL East Mission Avenue, Spokane,
Washington.
A. Have you previously filed direct testimony in
this proceeding?
A. Yes.
the spread of
naturaf gas
electric and
My testimony in this proceeding covered
the proposed 20lB and 2019 el-ectric and
revenue increases among the Company's
natural gas general service schedul-es. My
rates withinl4 testimony also described the changes to the
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9. What is the scope of this
gas servj-ce schedules.
testimony?
A. The purpose of my testimony is to describe and
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support the
Stipulation
October 20,
Utilities
Corporation
non-revenue requirement portions of the
and Settlement ("Stipulation"), filed on
20L1 between the Staff of the Idaho Publ-ic
Commission ("Staff'), Clearwater Paper
( "Clearwater" ) , Idaho Forest Group, LLC
Partnership("Idaho Eorest"), the Community Action
Association of Idaho ("CAPAI"), and the Company. These
Ehrbar, Di 1
Avista Corporation
I entities are coll-ectively referred to as the "settling
2 Parties. "
fn my testimony I will explain the following
Settlement components :
1. Rate Spread and Rate Design
2. Other Settlement Items
A. Are you sponsoring any exhibits?
A. No, I am not. Company witness Ms. Andrews i-s
aJ
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sponsoring
StipuJ-ation
Exhibit No. lf, which is a copy of the
and Settlement filed on October 20, 2011 ,
with the Commission.
A. Please e:rplain the settlement ter:ms relating, to
electric and natural. gas cost of service.
A. In thi-s case, the Company prepared an electric
cost of service analysis that i-ncorporated, among other
things, a system load factor peak credit method of
classifying production costs, allocating l-00? of
transmission costs to demand, and al-Iocating transmission
costs on a twel-ve-month coincident peak allocation
factor. The Settling Parties do not agree on any
particular cost of service methodology. In recognition,
however, that certain rate schedules are generally above
Ehrbar, Di 2
Avista Corporation
rI. RJATE SPRTAD & RJATE DESIGN
1 their relatj-ve cost of service (or could be with modest
2 modifications to aflocation methodofogy), the Settling
Parties agree that
15% of the overalf
Schedules 25 and 25P should receive
percentage base rate changes for the
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January 1-,
schedules,
allocation
remaining
Schedufe 1
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agreed
natural
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2078 and January 7, 20L9 increases. AII- other
except Schedule I, should receive a pro-rata
of the Company's original request. The
revenue requirement shoul-d be spread to
to use a pro-rata allocation of the Company's
originalgas rate spread
for purposes of
l0 For natural gas operations, the Company proposed
11 that all rate schedul-es be moved approximateJ-y one-third
12 towards unity. For settlement purposes, the Parties
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percentages from its
spreading the revised revenue
requirement.
9. How did the Stipulation address rate desig'n?
A. Eor settlement
21 Charge
testimony.
(Schedule 7),
Eor
purposes the Parties agreed to
proposed by the Company in My
the electric Resi-dential Basic
the Parties agreed on an increase
month, an increase of
gas General Service
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natural23 $0.25 per month. Eor the
24 Basic Charge (Schedule 101), the Parties agreed on an
Ehrbar, Di 3
Avista Corporation
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increase from $5.25 per month to $6.00 per month, an
increase of $0.75 per month. Appendix F of the
StipuJ-ation (Exhibit No . 71 ) provides a suflrmary of the
current and proposed rates and charges for both el-ectric
and natural gas service.
A. I[hat is the effect on retail rates, by rate
schedule, of the proposed settlement?
A. The following tables reflect the agreed-upon
percentage increases by schedule for electric service:1
l1 Effective January 1,2018
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Incrcase in
Base Rates
Increase in
Billing RatesRate Schedule
ResidentialSchedule I
GeneralService Schedules I l/12
l,arge General Service Schedules 2 I /22
Extra Large GeneralService Scheduh 25
Clearwater Paper Scheduh 25P
Pumping Service Schedules 3ll32
Street & Area Lights Schedules 4l-48
Overall
5.7%
5.0%
5.4%
3.9%
3.9%
5.9%
5.2%
52%
s.9%
s.2%
5.7%
4.7%
4.8o/o
6.t%
5.t%
5.6%
' The Settling Parties agreed with the proposal to offset the current Schedule 97 (Electric Earnings
Test Deferral) rebate of $2.7 million, which expires on December 31,2017, with $1.5 million
related to the electric earnings test for calendar year 2015.
Ehrbar, Di 4
Avista Corporation
I Effective January 1,2019
Rate Schedule
ResidentialSchedule I
GeneralService Scheduhs I l/12
Large General Service Schedules 2l /22
Extra Large GeneralService Schedule 25
Clearwater Paper Schedule 25P
Pumping Service Schedules 3l /32
Street & Area Lights Schedules 4l-48
Overall
Rate Schedule
General Service Schedule I 0l
Large General Service Schedules I I 1 11 12
Intemrptible Service Schedules 1 31 I | 32
Transportation Service Schedule I 46
Special Conffacts Schedule 148
Overall
Effective January 1,2019
Rate Schedule
General Service Schedule I 0 I
Large General Service Schedules 1 I I 11 12
Intemrptible Service Schedules I 3 I I | 32
Transportation Service Schedule 1 46
Special Contracts Schedule 148
Overall
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Increase in
Base Rates
Increase in
B Rates
t9%
1.7%
t.8%
1.3%
1.3%
2.0%
1.8%w
2.3%
2.lo/o
2.3%
2.2o/o
2.2o/o
2.4Yo
1.gYoru
The foJ-Iowing tables reflect the agreed-upon percentage
increases by schedule for natural gas service:
Effective Januaty 1, 2018
Incrcase in
Base Rates
Increase in
Billing Rates
2.20
0.7%
0.0%
3.0%
0.0%w
Increase in
Billing Rates
2.1%
0.7%
0.0%
2.7%
0.0%
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Ehrbar, Di 5
Avista Corporation
3.2%
1A%
0.0o/o
3.0o/o
0.0%
M
Incrcase in
Base Rates
3.0%
1.3%
0.00h
2.7%
0.0%m
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A. I[trat are the residential bill irtpacts if the
Comnission approves the Settlement Stipulation?
A. Effective January 7,2078 an electric
residential- customer using an average of
$5.22, or 5.9%,
910 kilowatt
hours per
month for
January 1
month would see a
a revised monthly
2019 an electric
biIl of $93.34.
increase per
Effective
residential customer would
see a $2.16, or 2.3%, increase per month for a revised
monthly bill of $95.50.
Effective January 1-, 2078 a natural gas residentj-al
customer using an average of 63 therms per month woufd
see a $1.13r or 2.7%, increase per month for a revised
monthly biII of $53.74. Effectj-ve January 7, 2079 a
natural gas residential customer would see a $1.09, or
2.0%, increase per month for a revised monthly bill of
$s4.83.
III. OTHER ELEI.TENTS OE THE STIPIILATION
A. P1ease e:q>lain the settlement terms reJ.ating'to
the Power Cost Adjustment (PCA) authorized level of
e:(Penses.
A. The new level of power supply revenues,
expenses, retail Ioad and Load Change Adjustment Rate
resulting from the January l, 2078 settlement revenue
requirement, for purposes of monthly PCA mechanism
Ehrbar, Di 6
Avista Corporation
I calculations, are detailed j-n Appendix A of the
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Stipulation (Exhibit No. 71).
9. Please e:rplain the settlement ter:ms reJ.ating to
the authorized base for the Electric and Natural Gas
Eixed Cost Adjustment Mechanism.
A. The new level of basel-ine values for the
efectric and natural gas fixed cost adjustment mechanism
resulting from the January 1, 2078 and January l, 2079
settlement revenue requirement are detailed in the
10 Stipulation as foll-ows (Exhibit No. 1'7) :
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. Appendi-x B
. Appendix C
. Appendix D
. Appendix E
Electric ECA Base
Electric FCA Base
Natura.l- Gas FCA Base
Natural Gas ECA Base
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2OTB
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A. Please e:qrlain the other issues agreed upon in
the Settlenent Stipulation.
A. The Parties agreed to meet and confer, prior to
the Company's next general rate case filing, regarding
the Company's electric cost of service study. The purpose
of the workshop will be to dj-scuss the merits of
differing cost of service methodol-ogies. Based on the
input from the workshop, the Company agrees to provide,
at a minimum, three cost of service studies reflective of
the differing methodologies in its next general rate
case. The Company wil-I provide available information,
Ehrbar, Di 1
Avista Corporation
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I studies and data requested by any of the SettJ-ing Parties
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so as to enabl-e meaningful workshop participation and
discussion of issues. Unl-ess it decides to do sor a Party
shal-l- not be bound by workshop discussions and may
contest cost of service and rate spread issues in
subsequent proceedings.
Second, the Company and
meet and confer to consider
interested parties wiII
whether the Low Income
Energy ConservationandWeatherization Program
Education Program funding should be increased from the
current Commission-approved Ievels of
$50,000 respectively.
the need for additional
Discussion topics
funding, how additional funds
wi l- I be used,how much additional funding will be
what impact the increase wil-l- have onnecessary,
the energy
$700,000 and
wil-I include
and
efficiency tariff rider (Schedules 9l and
191) balance. If partici-pants agree that a funding
increase is necessary, the Company agrees to make any
necessary filing(s) with the Commission on or before
December 31, 2071.
Third, the Company and interested parti-es wj-l-I
meet and confer to review the Commission's Service
Rules for Gas Utilities ( IDAPA 31. 31. 01 ) to determine
which provi-sions should be retained and/or modified,
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Avista Corporation
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and, if the participants agree, incorporate those
changes into the Company's tariff. Any changes
requiring Commission approvalr e.9., tariff revisions,
will- be submitted by the Company on or before July 7,
2018.
Eourth, the Company and interested parties wiII
meet and confer to review its meter placement and
protection policies
on the
l0 should
agreement of
be taken
and practices and determine, based
the parties, what additional- steps
to revise the Company's current
1 I policies and practices. Any necessary changes
l2 Commission approval r e.g., tariff revisions,
requiring
will be
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submitted by the Company on or before JuIy L, 2078.
Lastly, by way of background, Avista has
establ-ished Service Quality Performance, Customer
Guarantees and a Service Quality Measure Report Card
for its customers in Washington. The Company and
interested parties will- work to develop similar
performance standards,
reporting mechanism for
those discussions, the
customer guarantees
its Idaho customers.
and a
FolIowing
wil-1 f ile its proposaJ-
implementation on or
Company
with the Commission requesting
before July 1, 2018.
Ehrbar, Di 9
Avista Corporation
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9. Does this conclude your direct testimony?
A. Yes, it does.
Ehrbar, Di 10
Avista Corporation