20170921notice_of_application_order_no_33886.pdf

Office of the Secretary
Service Date
Septerner 21,2017
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION )CASE NO.AVU-G-17-04
OF AVISTA CORPORATION DBA AVISTA )
UTILITIES FOR AN ORDER APPROVING A )NOTICE OF APPLICATION
CHANGE IN NATURAL GAS RATES AND )
CHARGES )NOTICE OF
)MODIFIED PROCEDURE
)
______________________________
)ORDER NO.33886
On August 31,2017,Avista Corporation dba Avista Utilities applied to the
Commission for an Order authorizing Avista to decrease its Purchased Gas Cost Adjustment
(PGA)rates by about $1.7 million.The PGA is a Commission-approved mechanism that adjusts
rates up or down each year to reflect changes in Avista’s costs to buy natural gas from
suppliersincluding changes in transportation,storage.and other related costs.Avista defers
these costs into its PGA account,and then passes them on to customers through an increase or
decrease in rates.
If approved.Avista’s Application would decrease the average residential or small
commercial custorners rates by $1.23 per month (about 2.4%).Application at 4.The proposed
decrease would not affect Avista’s earnings.See Transmittal Letter accompanying Application
(August 31,2017).Avista asks that the Commission process the Application by Modified
Procedure,and that the new rates take effect November 1,2017.Application at 5.
The Commission now issues this Notice of Application and Notice of Modified
Procedure setting deadlines for interested persons to file written comments on Avista’s
Application.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that Avista is a public utility that distributes natural
gas in northern Idaho,eastern and central Washington.and southwestern and northeastern
Oregon.Application at 2.Avista buys natural gas and then transports it through pipelines for
delivery to customers.
YOU ARE FURTHER NOTIFIED that Avista’s rates for natural gas service in Idaho
include a base rate component and a gas-related cost component.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33886
YOU ARE FURTHER NOTIFIED that the base rate component is intended to cover
Avista’s fixed costs to serve its Idaho customers —for example,the Company’s costs for
equipment and facilities to provide service.The current base rates were approved in Order No.
33437,Case No.AVU-G-15-Ol.Separately from this Application,the Company has applied to
this Commission for an Order allowing Avista to increase its base rates for natural gas service.
See Case No.AVU-G-17-01.
YOU ARE FURTHER NOTIFIED that the gas-related cost component of Avista’s
rates is at issue here.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 (through Tariff Schedule 150);
and (2)revise the amortization rates to refund or collect the balance of deferred gas costs
(through Tariff Schedule 155).Application at 2-3.The Company summarizes the effect of the
revised rates (that is,the change from current rates)as follows:
Service Schedule Commodity Demand Total Amortization Total Rate Overall
No.Change Change Schedule Change Change Percent
per therm per therm 150 per therm per therm Change
Change
General 101 $(0.02167)$(0.00831)$(0.02998)$0.00982 $(0.02016)-2.5%
Lg.11 1 $(0.02167)$(0.00831)$(0.02998)$000982 $(0.02016)-3.8%
General
Id.at3.
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)is an
estimate of those costs.Here,Avista estimates its commodity costs will decrease by $0.022 per
therm,from the currently approved $0.24 1 per therm to $0.2 19 per therm.Id.Avista states that
the overall reduction is generally the result of continued high natural gas production levels and
an abundance of natural gas in storage.Id.Avista estimates the cost of index purchases using a
30-day historical average of forward prices for each supply basin and has a diversified natural
gas procurement strategy that includes hedging.Id.
YOU ARE FURTHER NOTIFIED that Avista’s demand costs reflect the cost of
pipeline transportation to the Company’s system and fixed costs associated with natural gas
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33886
storage.Id.at 4.In this Application,Avista proposes a $0.0083 1 per therm decrease in the
overall demand rate,Id.The proposed decrease is primarily due to new transportation rates for
Williams Northwest Pipeline effective on January 1,2018 and October 1,2018.Id.
YOU ARE FURTHER NOTIFIED that Tariff Schedule 155 reflects the amortization
of Avista’s deferral account.This schedule applies to general and large general service
customers (residential and certain commercial customers).Id.at 3-4.Other commercial
customers (those taking service under Tariff Schedule 112),and High Annual Load Factor Large
—Interruptible Service customers under Tariff Schedule 132 do not participate in the
amortization,but receive a one-time rebate or surcharge.Id.at 4 and n.1.With this Application,
Avista proposes to decrease the amortization rate in Tariff Schedule 155 by $0.00982 per therm.
Id.at 4.The existing rate is $0.09844 per therm in the rebate direction;the proposed rate is
$0.08 862 in the rebate direction.Id.Avista explains that it replaced most of the present rebate
“due,in part,to a combination of lower actual natural gas prices versus the embedded WACOG,
as well as through optimization efforts (both storage as well as fixed transportation contract)[.j”
Id.
YOU ARE FURTHER NOTIFIED that Avista will notify 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 states it will send notice to each customer in bill inserts in the September-October
timeframe.Id.
YOU ARE FURTHER NOTIFIED that,as part of its Application,the Company has
filed its proposed rate schedules and tariff sheets,and its workpapers,pipeline tariffs,customer
notice,press release,and bill inserts.See Exhibits A-E to the Application.
YOU ARE FURTHER NOTIFIED that the Application and supporting
documentation 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 p.id1gpy.Click on the “File Room”tab at the top of
the page,then select “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
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO,33886 3
Idaho Code §61-502 and 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.
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 that it will proceed under
Modified Procedure pursuant to Rules 201 through 204 of the 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.
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 20,2017.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 shall be mailed to the Commission
and the Company at the addresses reflected below:
Commission Secretary Patrick D.Ehrbar
Idaho Public Utilities Commission Senior Manager,Rates and Tariffs
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:
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 99220-3727
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 Click the “Case Comment or Question
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33886 4
Form”under the ‘Consumers”tab,and complete the comment form using the case number as it
appears on the front of this document.
YOU ARE FURTHER NOTIFIED that the Company shall file reply comments,if
necessary,no later than October 25,2017.
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 the Application of Avista Utilities be processed by
Modified Procedure,Rule 201-204 (IDAPA 31.01.01.201-.204).Persons interested in
submitting written comments must do so no later October 20,2017.The Company may file a
reply no later than October 25,2017.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.33886
ATTEST:
Diane M.Hanian
Commission Secretary
STONERKRIS’FINE RAPE
O:AVU-G-1 7-04cc
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDERNO,33886
jDONEbyOrderoftheIdahoPublicUtilitiesCommissionatBoise,Idaho this LI
day of September 2017.
PAUL PRESIDENT
ERIC ANDERSON,
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