20170726notice_of_application_order_no_33816.pdf

Office of the Secretary
Service Date
July 26,2017
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE FIXED COST )CASE NO.AVU-G-17-03
ADJUSTMENT MECHANISM (FCA))
ANNUAL RATE ADJUSTMENT FILING )NOTICE OF APPLICATION
OF AVISTA CORPORATION FOR )
NATURAL GAS SERVICE FROM )NOTICE OF
NOVEMBER 1,2017 THROUGH )MODIFIED PROCEDURE
OCTOBER 31,2018 )
__________________________
)ORDER NO.33816
On July 3,2017,Avista Corporation (“Avista”or “the Company”)filed an
Application asking the Commission for authorization to implement Fixed Cost Adjustment
(FCA)rates for natural gas service from November 1,2017 through October 31,2018,and to
approve its corresponding modifications to Schedule 175,“Fixed Cost Adjustment Mechanism —
Natural Gas.”The Company separately applied to implement FCA rates for electric service,in
Case No,AVU-E-17-04.The Company proposes per therm FCA surcharge rates for both
residential and non-residential groups in this case.Avista asks that its Application be processed
by Modified Procedure,and requests an effective date of November 1,2017.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that the FCA is a rate adjustment mechanism
designed to break the link between the amount of energy a utility sells and the revenue it collects
to recover fixed costs’of providing service,thus decoupling the utility’s revenues from its
customers’energy usage.Order No.33437 at 3.This decoupling removes a utility’s incentive
to increase sales as a means of increasing revenue and profits,and encourages energy
conservation.Id.at 3-4;Application at 4.
YOU ARE FURTHER NOTIFIED that the Commission approved Avista’s FCA as a
three-year pilot program,and part of the approved settlement of Avista’s 2015 rate case,Case
Nos.AVU-E-15-05,AVU-G-15-01.Application at 3;Order No.33437 at 10.In the Order
approving the FCA program,the Commission noted that the parties to Avista’s rate case agreed
to review the program’s effectiveness at the end of its second full year,to ensure it is functioning
“Fixed costs”are a utility’s costs to provide service that do not vary with energy use,output,or production,and
remain relatively stable between rate cases —for example,infrastructure and customer service.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDERNO.33816 1
as intended.Id.at 3-4.The Order also set forth how the FCA mechanism works,including
treatment of existing versus new customers,quarterly reporting.annual filings,interest,
accounting,and 3%rate increase cap.Id.at 4-6.
YOU ARE FURTHER NOTIFIED that,in its natural gas FCA filing,Avista proposes
to increase rates for each rate group based on the amount of deferred revenue recorded for
January through December 2016.The Company mostly attributes the natural gas FCA
surcharges to abnormally warm weather and savings from energy efficiency programs in 2016.
Application at 7-8.
YOU ARE FURTHER NOTIFIED that Avista recorded $2,626,654 in surcharge
deferred revenue for its natural gas residential customer group in 2016,which is affected by the
3%rate increase cap.Id.at 9 (table includes interest and revenue-related expenses),12-14.The
Company proposes to increase residential rates by 2.466 cents per therm,to recover $1,440,064
from residential customers.Id.at 9.If approved by the Commission,the Company would
record this amount in a regulatory asset balancing account and reduce the account balance each
month by the revenue collected under the tariff.Id.at 10.The remaining deferral balance of
$1,233,698 would be carried over to be recovered or potentially offset in a future period.Id.
YOU ARE FURTHER NOTIFIED that,for its non-residential group,Avista recorded
$500,253 in surcharge deferred revenue in 2016,which is also affected by the 3%rate increase
cap.Id,(table includes interest and revenue-related expenses),12-14.The Company proposes to
increase non-residential rates by 1.615 cents per therm,to recover $383,369 from commercial
and industrial customers.Id.at 10-11.If approved by the Commission,the Company would
record this amount in a regulatory asset balancing account and reduce the account balance each
month by the revenue collected under the tariff.Id.at 11.The remaining deferral balance of
$125,952 would be carried over to be recovered or potentially offset in a future period.Id.
YOU ARE FURTHER NOTIFIED that the Application,the Company’s rate
calculations,supporting documents,and the proposed tariff Schedule 175 have been filed with
the Commission and are available for public inspection during regular business hours at the
Commission offices.The Application and attachments 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 the type of “Open Gas Cases,”and then click on the case number as shown on the front of this
document.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDERNO.33816 2
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-.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 in opposition with the Commission by no
later than September 27,2017.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 may be mailed to the Commission
and Avista at the addresses reflected below:
Commission Secretary David Meyer
Idaho Public Utilities Commission Vice President and Chief Counsel for
P0 Box 83720 Regulatory &Governmental Affairs
Boise,ID 83720-0074 Patrick Ehrbar
Senior Manager —Rates &Tariffs
Street Address for Express Mail:Avista Corporation
P0 Box 3727
472 W.Washington Street MSC-27
Boise,ID 83702-5918 1411 E.Mission Ave.
Spokane,WA 99220-3727
E-mail:[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
Form”under the “Consumers”tab,and complete the form using the case number as it appears on
the front of this document.These comments must also be sent to the Company at the e-mail
addresses listed above.
YOU ARE FURTHER NOTIFIED that Avista may file reply comments,if necessary,
no later than October 11,2017.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDERNO.33816 3
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 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 -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.
ORDER
IT IS HEREBY ORDERED that this case be processed under Modified Procedure,
Rules 201-204 (IDAPA 31.01.01.201-.204).Interested persons shall have until September 27,
2017 to file written comments,and the Company shall have until October 11,2017 to file a
reply,if any.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDERNO.33816 4
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of July 2017.
ATTEST:
7 ///
PAU’L 1JELJANOF&PRSIDENT
Diane M.Hanian
Commission Secretary
O:AVU-G-I 7-O3cIjh
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDERNO.33816
ERIC COMMISSIONER
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