20190701Application.pdf

Avista Corp.
141 1 East Mission P.O. Box 3727
Spokane, Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170
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;VIA OVERNIGHT MAIL
June 28, 2019
Diane Hanian
Commission Secretary
Idaho Public Utilities Commission
472W. Washington St.
Boise,lD 83702-5983
RE: CASE NOS. AVU-E-19-0& AND AVU-G-r9-03
IN THE MATTER OF THE APPLICATION OF AVISTA CORPORATION FOR TIIE
EXTENSION OF AVISTA'S ELECTRIC AND NATURAL GAS FIXED COST
ADJUSTMENT MECHANISMS IN THE STATE OF IDAHO
Dear Ms. Hanian:
Enclosed for filing with the Commission is Avista's Application for the Extension of its Electric
and Natural Gas Fixed Cost Adjustment Mechanisms. Thc filing consists of an original and seven
copies of Avista's Application and nine copies of prefiled testimony and exhibits. A computer
readable copy of the testimonies and exhibits, required under Rule 231.05, are included on an
enclosed compact disc.
Please direct any questions regarding this filing to me at [phone] or
natrick.ehrbar(0,avistacorD. com.
Patrick D. Ehrbar
Director of Regulatory Affairs
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Enclosures
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CERTIFICATE OF SERVICE
I HEREBY CERTIFY that I have this 28th day of June, 2019, served the foregoing application,
and Avista's Direct Testimony and Exhibits in Case Nos. AVU-E-19-0_ and AVU-G-19-0_, In
The Matter Of The Application Of Avista Corporation For The Extension Of Avista's Electric
And Natural Gas Fixed Cost Adjustment Mechanisms In The State Of Idaho, upon the
following parties, by mailing a copy thereof, properly addressed with postage prepaid to:
Diane Hanian, Secretary
Idaho Public Utilities Commission
472 W. Washington Street
Boise, lD 83720-0074
d [e-mail]
Karl Klein
Deputy Attorneys General
Idaho Public Utilities Commission
472 W. Washington Street
Boise,lD 83720-0074
karl.klein@ouc. idaho. gov
Larry Crowley
The Enerry Strategies Institute, Inc.
3738 S. Haris Ranch Ave.
Boise,lD 83716
[e-mail]
Dr. Don Reading
6070 Hill Road
Boise,ID 83703
drgading@.mindspring.com
Brad M. Purdy
Attomey at Law
2019 N lTth Street
Boise,lD 83702
[e-mail]
Peter J. Richardson
Greg M. Adams
Richardson Adams
5 l5 N. 27th Street
PO Box 7218
Boise, lD 83702
peter@ richardsonadams.com
gre [e-mail]
Ronald L. Williams
Williarns Bradbury, P.C.
P. O. Box 388
802 W. Bannock, Suite LP 100
Boise, lD 83702
ron@w i I I iamsbradbury.com
Benjamin J. Otto
ldaho Conservation League
710 N. 6th St.
Boise, ID 83702
botto@ idahoconservation.org
Patrick Ehrbar
f)irector of Regulatory Affairs
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DAVID J. MEYER
VICE PRESIDENT AND CHIEF COTINSEL FOR
REGULATORY & GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
I4II E. MISSION AVENUE
P . O. BOX 3727
SPOKANE, WASHINGTON 99220
PHONE: (509) 49s-4316
EMAIL: DAVID.MEYER@AVISTACORP. COM
IN THE MATTER OF THE APPLICATION
OF AVISTA CORPORATION FOR THE
EXTENSION OF AVISTA'S ELECTRIC
AND NATURAL GAS FIXED COST
ADJUSTMENT MECHANISMS IN THE
STATE OF IDAHO
RICEIVED
i$19 JUL : I AH t0, il
,,lrl?idi fi*l8r,o*
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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) CASE NO. AVU-E-19-09
) CASE NO. AVU-G-19-0j,
)) APPLICATION OF AVISTA
) CORPORATTON FOR
) EXTENSION AND MODIFICATION
) OF FCA MECHANISMS
2I I. INTRODUCTION
22 ln accordance with Idaho Code $61-502 andRP 052, Avista Corporation, doing
23 business as Avista Utilities (hereinafter "Avista" or "Company"), at 7411 East Mission
24 Avenue, Spokane, Washington, respectfully requests approval of its proposed
25 modifications to its electric and natural gas Fixed Cost Adjustment Mechanisms ("FCA"
26 or "FCA Mechanisms"). The FCA Mechanisms were made effective on January 1,
27 2076 and will expire atthe end of 2019, absent ourrequestto extendthe life of the
28 mechanisms in this proceeding.l The Company requests that the Commission authorize
29 the approval of changes to the Company's electric and natural gas FCA Mechanism
I In Order 34085 in Case No. AVU-E-15-05 and AVU-G-15-01, the Commission approved an all-party
settlement stipulation which extended the life of the FCA Mechanisms until the end of 2019.
AVISTA'S FCA EXTENSION APPLICATION PAGE I
1 tariff Schedule's 75 and 175, effective January 1,2020. These changes seek to:
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1) Extend the current FCA Mechanisms through March 31,2025;
2) Modify the upcoming deferral period to be from January 1,2020 through
June 30, 2021, so as to better align the deferral periods and the rate
adjustments;
3) Implement an annual true-up to the FCA Mechanisms; and
4) Extend the FCA Mechanism quarterly reporting requirement from 45 to 60
days.
13 Avista has provided testimony, sponsored by Company witness Mr. Ehrbar,
14 regarding the FCA Mechanisms history, performance, and proposed changes. He
15 sponsors two exhibits: Exhibit No. 1 is the "Avista Decoupling Evaluation - Final
16 Report" prepared by H. Gil Peach & Associates LLC. Exhibit No. 2 is a copy of the
17 PowerPoint presentation from the FCA Workshop held at the Idaho Public Utilities
18 Commission on March 27,2019.
19 The Company requests that this filing be processed under the Commission's
20 Modified Procedure Rules, through the use of written comments. Communications in
2l reference to this Application should be addressed to:
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David J. Meyer, Esq.
Vice President
Avista Corporation
P.O.Box3727
MSC-27
l411 E. Mission Ave
Spokane, WA 99220-3727
Phone: [phone]
Dav id. Meyer@avistacorp. corn
Electronically
[e-mail]
Patrick D. Ehrbar
Director of Regulatory Affairs
Avista Corporation
P.O.Box3727
MSC-27
1411 E. Mission Ave
Spokane, WA 99220-3727
Phone: [phone]
Patrick. Ehrbar@avi stacorp. corn
AVISTA' S FCA EXTENSION APPLICATION PAGE 2
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II. BACKGROUND
On December 18, 2015, the Commission issued Order 33437 in Case Nos. AVU-
E-15-05 and AVU-G-15-01, approving a Settlement Stipulation ("Stipulation").
Included in the approved Stipulation were electric and natural gas FCA Mechanisms,
which went into effect on January 1,2016, for a three year term through December 31,
2018. Later, in Order 34085, the Commission extended the mechanisms through
December 31,2019, so as to allow "Staff and interested parties additional information
and recommendations from the third-party evaluation of Avista's FCA mechanism in
Washington along with an additional year of data".2 That third-party evaluation has
been completed and appears as Exhibit No. 1.
The purpose of the FCA Mechanisms is to decouple the Company's
Commission-authorized revenues from energy sales, such that the Company's revenues
will be recognized based on the number of customers served under the applicable
service schedules. The FCA Mechanisms allow the Company to: I ) defer the difference
between acfual FCA-related revenue approved for recovery in the Company's last
general rate case; and 2) file a tariff to surcharge or rebate, by rate group, the total
deferred amount accumulated in the deferred revenue accounts for the prior January
through December time period.
III. PROPOSED MODIFICATIONS TO FCA MECHANISMS
As discussed in the direct testimony of Mr. Ehrbar, based on proven benefits to
2 Order 34085, p. I
AVISTA'S FCA EXTENSION APPLICATION PAGE 3
1 both the customer and the Company that the FCA Mechanisms have shown to date, as
2 validated in the Independent Final Report (Exhibit No. 1), and the lack of adverse
3 impacts associated with these mechanisms, the Company's first proposed modification
4 is for the Commission to approve the continuation of the FCA Mechanisms through
5 March 37,2025. By extending the mechanisms and providing some certainty to the
6 Company that it can recover a significant portion of its fixed costs of providing service,
7 the Company is able to maintain its central focus of being a trusted energy advisor to its
8 customers without adverse or uncertain financial impacts from evolving customer
9 choice in the future. The Company believes that the FCA Mechanisms continue to be
l0 in the public interest, promote the policy goals of increased conservation, and result in
1 1 fair, just, reasonable, and sufficient rates.
12 Also important to note, is that the Company is not seeking to make the FCA
13 Mechanisms perrnanent. The Company agrees with Commission Staff who, at the FCA
14 Workshop held in March 2019, stated that, for mechanisms like the FCA, having a more
l5 regular check-in is desirable, so that modifications, if any, can be made. That would be
16 more difficult if the mechanisms were made permanent. As such, the Company would
17 commit to having a similar workshop by June 30,2024 as was held in March 2019, and
18 would include any proposed modifications stemming from that workshop in a future
19 FCA Mechanism extension request.
20 The second proposed modification to the FCA Mechanisms is related to the
2l timing of the first deferral period, should the Commission approve the Company's
22 request. Presently, the FCA allows the Company to defer the difference between actual
23 FCA-related revenue received from customers through volumetric rates, and the FCA-
AVISTA'S FCA EXTENSION APPLICATION PAGE 4
1 related revenue approved for recovery in the Company's last general rate case, on a per-
2 customer basis, on a calendar-year basis. The Company can then file a tariff to
3 surcharge or rebate, by rate group, the total deferred amount accumulated in the deferred
4 revenue accounts for the prior January through December time period. The filing date
5 for tariff adjustments currently occurs at the end of June, for rate effective dates of
6 October I (electric) and November 1 (natural gas). There is quite a bit of lag between
7 the deferral period, and the rate-effective dates for any adjustment. Therefore, the
8 Company would like to shrink that rate lag by making a one-time adjustment. For the
9 first deferral period post-approval of this Application, that period would be 18-months,
l0 or January 2020 through June 30, 2021. The Company would then file a tariff
1 1 adjustment with the Commission by July 31,2021 (and each July 31 thereafter, along
12 with the annual Power Cost Adjustment filing), and would keep the same rate-effective
l3 dates of October 1 (electric) and November 1 (natural gas). This change simply reduces
14 the lag between the deferral period and the rate effective period.
l5 For the third proposed modification, presently under the mechanics of the FCA
16 Mechanisms, the annual revenue-per-customil is shaped based on the monthly kWh or
17 therm usage from the test year. The mechanisms use the resulting monthly percentage
18 of usage by month and multiply that amount by the annual FCA revenue-per-customer
19 to determine the 12 monthly values. The Company is proposing to add an additional
20 step that would, at the end of a l2-month deferral calculation, take the annual FCA
21 revenue-per-customer (multiplied by the average annual number of actual customers),
22 recompute the deferral, and compare that to the actual deferred revenue for the period.
23 The benefit of this calculation is that the method of monthly shaping (i.e., using
AVISTA'S FCA EXTENSION APPLICATION PAGE 5
I test period loads to shape FCA monthly revenues) is not necessarily a perfect
2 methodology. The proposed change in our view puts the actual results more on par with
3 the derivation of the authorized amounts - i.e., authorrzed annual revenue-per-customer
4 as compared to the sum of monthly revenue-per-customer. Mr. Ehrbar provides an
5 analysis showing the modest effect such a modification would have had over the past
6 three years of the mechanism.3
7 Finally, the fourth proposed modification would change when the Company files
8 its FCA Quarterly Reports. The Company currently files quarterly reports related to its
9 electric and natural gas FCA Mechanisms within 45 days of the end of each quarter,
10 pursuant to Section l3D of the Settlement in Case No AVU-E-15-05 and AVU-G-15-
11 01. Throughout the first two years of the FCA Mechanisms, there have been instances
12 where the Company has not released its financial earnings prior to the due date of the
13 quarterly reports. This circumstance necessitates the need to file the quarterly reports
14 confidentially prior to the release of the Company's earnings, and then re-filing the
15 quarterly report again without confidentiality after the earnings release. To alleviate the
16 need to file the quarterly reports twice in these instances, the Company proposes to file
17 the quarterly reports within 60 days after the end of each quarter.
3 Should the Commission approve the modified deferral period for the first "year" of the mechanisms
(i.e., January 1,2020 through June 30, 2021),the Company proposes to perform the true-up for the July
'1, 2020 through June 30, 2021 anmle,l period, and then for the subsequent July I through June 30 time
periods thereafter. Because this is an annual true-up, it would not make sense to compare an lS-month
actual time period to an annual base, hence the reason for essentially excluding the first six months from
the annual true-up calculation.
AVISTA'S FCA EXTENSION APPLICATION PAGE 6
1 IV. TBSTIMONY IN SUPPORT OF REOUESTED MODIFICATIONS
2 As stated earlier, Mr. Ehrbar provides testimony and exhibits in support of the
3 Company's request. In his testimony, Mr. Ehrbar not only describes the proposed
4 modifications, but also provides further background, and discusses the purpose and
5 benefits to both customers and the Company related to the FCA Mechanisms. He
6 provides an overview ofthe performance of the mechanisms through the first three years
7 of their existence, discusses issues related to risk mitigation, as well as a summary of
8 the independent, third-party analysis conducted by H. Gil Peach and Associates. He
9 also provides information from the Company's return on equity consultant, Mr. Adrien
l0 McKenzie, who provides information as to why adjustments to the Company's allowed
11 return on equity should not otherwise be made due to the presence of the FCA
12 Mechanisms.
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14 V. TARIFF MODIFICATIONS
15 In support of the Company's request, Avista has filed the following tariff sheets
16 for the Commission's approval:
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Second Revision Sheet 758 canceling First Revision Sheet 75B
Second Revision Sheet 75C canceling First Revision Sheet 75C
Second Revision Sheet 175B canceling First Revision Sheet l75B
Second Revision Sheet 175C canceling First Revision Sheet l75C
22 Please note that the Company could not hle Sheets 75 and 175 to modify the "TERM"
23 of the mechanisms, as those sheets also contain the "MONTHLY RATE". ln separate
24 filings also made coincident with this Case, the Company filed its annual FCA
25 Mechanism rate adjustments, and on Sheets 75 and 175 are the proposed rates. ln short,
AVISTA'S FCA EXTENSION APPLICATION PAGE 7
I the Company could not file the same sheets, with different modifications, in different
2 proceedings. As such, if the Commission approves the Company's Application, it
3 commits to making a Compliance Filing, prior to January l, 2020, modifuing the
4 "TERM" of the mechanisms to match the term approved by the Commission.
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6 VI, REQUEST FOR RELIEF
'l'he Company requests that the Commission issue an order approving the
extension of the Company's electric and natural gas Fixed Cost Adjustment
Mechanisms, effective January 1,2020, along with the following provisions:
1) Extend the current FCA Mechanisms through March 31,2025;
2) Modify the upcoming defenal period to be from January L,2020 through
June 30, 2A21, so as to better align the deferral periods and the rate
adjustments;
3) Implement an annual true-up to the FCA Mechanisms; and
4) Extend the FCA Mechanism quarterly reporting requirement from 45 to 60
daYs.
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The Company respectfully requests that this Case be processed under the
Commission's Modified Procedure rules through the use of written comments.
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DATED at Spokane, Washington, this]pf?ay of June 2019.
AVISTA CORPORATION
By:
Vice and Chief Counsel for
Regulatory & Govemmental Affairs
Avista Corporation
PAGE 8AVISTA'S FCA EXTENSION APPLICATION
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VERIFICATION
slATE OF WASHINGTON )
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County ofSpokane )
David J. Meyer, being first duly sworn on oath, deposes and says: That he is
the Vice President and Chief Counsel for Regulatory and Governmental Affairs for
Avista Corporation and makes this verification for and on behalf of said corporation,
being thereto duly authorized;
That he has read the foregoing filing, knows the contents thereof, and believes
the same to be true.
SIGNED AND SWORN to before me this ? B auy of June 2019,by David J.
Meyer
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PUBLIC in and for the State of
Waslri residing at Spokane.
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3l I t1'Commission Expires:Z3 Z{
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AVISTA'S FCA EXTENSION APPLICATION PAGE 9
DAVID J. MEYER
VICE PRESIDENT AND CHIEF COLiNSEL FOR
REGULATORY & GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
P.O. BOX 3727
141I EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220 -37 27
TELEPHONE: (509) 49s-4316
FACSIMILE: (s09) 495-88s I
DAVID.MEYER@AVIS TACORP. COM
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF AVISTA CORPORATION FOR THE
EXTENSION OF AVISTA'S ELECTRIC
AND NATURAL GAS FXED COST
ADJUSTMENT MECHANISMS IN THE
STATE OF IDAHO
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CASE NO. AVU-E-19-0r,
CASE NO. AVU-G- 19-03
TARIFF SHEETS
FOR AVISTA CORPORATION
(ELECTRIC AND NATURAL GAS)
l.P.U.C. No.28
Second Revision Sheet 75B
Canceling
First Revision Sheet 75B
AVISTA CORPORATION
dba Avista Utilities
SCHEDULE 758
FIXED COST ADJUSTMENT MECHANISM - ELECTRIC (continued)
Step 7 - Determine the Monthly FCA Revenue per Customer - to determine the Monthly
FCA Revenue per customer, the annual FCA Revenue per customer is shaped based on
the monthly kWh usage from the rate year. The FCA mechanism uses the resulting
monthly percentage of usage by month and multiplied that by the annual FCA Revenue
per Customer to determine the 12 monthly values.
Calculation of Monthly FCA Deferral:
Step 1 - Determine the actual number of customers each month.
Step 2 - Multiply the actual number of customers by the applicable monthly Allowed FCA
Revenue per Customer. The result of this calculation is the total Allowed FCA Revenue
for the applicable month.
Step 3 - Determine the actual revenue collected in the applicable month.
Step 4 - Calculate the amount of fixed charge revenue included in total actual monthly
revenue.
Step 5 - For existing customers, multiply actual kWh sales by the approved Load Change
Adjustment Rate. The result of this calculation is the total revenue collected related to
variable power supply. For new customers, multiply actual kWh sales by both the approved
Load Change Adjustment Rate and the approved Fixed Production and Transmission
Revenue rate. The result of this calculation is the total revenue collected related to fixed
and variable production and transmission costs.
Step 6 - For existing customers, subtract the basic charge revenue and the variable power
supply revenue from the total actual monthly revenue. The result is the Actual FCA
Revenue. For new customers, subtract the basic charge revenue and the fixed and variable
production and transmission revenue from the actual monthly revenue. The result is the
Actual FCA Revenue.
Step 7 - The difference between the Actual FCA Revenue (Step 6) and the Allowed FCA
Revenue (Step 2) is calculated, and the resulting balance is deferred by the Company.
lnterest on the deferred balance will accrue at the Customer Deposit Rate.
Step 8 - At the end of every 12 month deferral period, the annual FCA revenue per
customer, by Rate Group, will be multiplied by the average annual number of actual
customers). The result of that calculation will be compared to the actual deferred revenue
for the same 12 month period. The difference between the actual deferred revenue, and
the calculated value, will be added to, or subtracted from, the total deferred balance, by
Rate Group.
lssued June 28, 2019 Effective January 1,2020
lssued
Vgt-t-u Patrick Ehrbar, Director of Regulatory Affairs
Second Revision Sheet 75C
Canceling
First Revision Sheet 75C
AVISTA CORPORATION
dba Avista Utilities
SCHEDULE 75C
FIXED COST ADJUSTMENT MECHANISM - ELECTRIC (continued)
ANNUAL ELECTRIC FCA RATE ADJUSTMENT:
On or before July 31 each year, the Company will file a request with the Commission
to surcharge or rebate, by Rate Group, the amount accumulated in the deferred revenue
accounts for the prior July through June time period (the transition deferral period will be from
January 2020 through June 2021).
The proposed tariff revisions included with that filing would include a rate adjustment
that recovers/rebates the appropriate deferred revenue amount over a twelve-month period
effective on October 1st. The deferred revenue amount approved for recovery or rebate would
be transferred to a balancing account and the revenue surcharged or rebated during the period
would reduce the deferred revenue in the balancing account. Any deferred revenue remaining
in the balancing account at the end of the calendar year would be added to the new revenue
deferrals to determine the amount of the proposed surcharge/rebate for the following year.
After determining the amount of deferred revenue that can be recovered through a
surcharge (or refunded through a rebate) by Rate Group, the proposed rates under this
Schedule will be determined by dividing the deferred revenue to be recovered by Rate Group
by the estimated kWh sales for each Rate Group during the twelve month recovery period.
The deferred revenue amount to be recovered will be transferred to a FCA Balancing Account
and the actual revenue received under this Schedule will be applied to the Account to reduce
(amortize) the balance. lnterest will be accrued on the unamortized balance in the FCA
Balancing Account at the Customer Deposit Rate.
3% ANNUAL RATE INCREASE LIMITATION:
The amount of the incremental proposed rate adjustment under this Schedule cannot
reflect more than a 3o/o rale increase. This will be determined by dividing the incremental
annual revenue to be collected (proposed surcharge revenue less present surcharge
revenue) under this Schedule by the total "normalized" revenue for the two Rate Groups for
the most recent July through June time period (the transition deferral period will be from
January 2020 through June 2021). Normalized revenue is determined by multiplying the
weather-corrected usage for the period by the present rates in effect. lf the incremental
amount of the proposed surcharge exceeds 3%, only a 3% incremental rate increase will be
proposed and any remaining deferred revenue will be carried over to the following year.
There is no limit to the level of the FCA rebate, and the reversal of any rebate rate would not
be included in the 3% incremental surcharge test.
Effective January 1, 2020lssued June 28, 2019
By
ued by Avi
v Patrick Ehrbar, Director of Regulatory Affairs
l.P.U.C. No.28
First Revision Sheet 75B
Canceling
O+igin€l Sheet 75B
AVISTA CORPORATION
dba Avista Utilities
SCHEDULE 75B
FIXED COST ADJUSTMENT MECHANISM - ELECTRIC (continued)
Step 7 - Determine the Monthlv FCA Revenue per Customer - to determine the
Monthly FCA Revenue per customer, the annual FCA Revenue per customer is
shaped based on the monthly kWh usage from the rate year. The FCA mechanism
uses the resulting monthly percentage of usage by month and multiplied that by
the annual FCA Revenue per Customer to determine the '12 monthly values.
Calculation of Monthlv FCA Deferral:
Step 1 - Determine the actual number of customers each month.
Step 2 - Multiply the actual number of customers by the applicable monthly
Allowed FCA Revenue per Customer. The result of this calculation is the total
Allowed FCA Revenue for the applicable month.
Step 3 - Determine the actual revenue collected in the applicable month.
Step 4 - Calculate the amount of fixed charge revenue included in total actual
monthly revenue.
Step 5 - For existing customers, multiply actual kWh sales by the approved Load
Change Adjustment Rate. The result of this calculation is the total revenue
collected related to variable power supply. For new customers, multiply actual
kWh sales by both the approved Load Change Adjustment Rate and the approved
Fixed Production and Transmission Revenue rate. The result of this calculation is
the total revenue collected related to fixed and variable production and
transmission costs.
Step 6 - For existing customers, subtract the basic charge revenue and the
variable power supply revenue from the total actual monthly revenue. The result is
the Actual FCA Revenue. For new customers, subtract the basic charge revenue
and the fixed and variable production and transmission revenue from the actual
monthly revenue. The result is the Actual FCA Revenue.
Step 7 - The difference between the Actual FCA Revenue (Step 6) and the Allowed
FCA Revenue (Step 2) is calculated, and the resulting balance is deferred by the
Company. lnterest on the deferred balance will accrue at the Customer Deposit
Rate.
Effective Oetebe+-t-2+t7lssued June€$20{+
By
ed by Avista
Kell" Nerweed' Viee President' State & Federal Regulatien
l.P.U.C. No.28
lssued by Avista Corporation
By
First Revision Sheet 75C
Canceling
Sheet 75C
AVISTA CORPORATION
dba Avista Utilities
SCHEDULE 75C
FIXED COST ADJUSTMENT MECHANISM - ELECTRIC (continued)
ANNUAL ELECTRIC FCA RATE ADJUSTMENT:
On or before July {st each year, the Company will file a request with the
Commission to surcharge or rebate, by Rate Group, the amount accumulated in the
deferred revenue accounts for the prior January through Dre€embe+ time period.
The proposed tariff revisions included with that filing would include a rate
adjustment that recovers/rebates the appropriate deferred revenue amount over a twelve-
month period effective on October 1st. The deferred revenue amount approved for
recovery or rebate would be transferred to a balancing account and the revenue
surcharged or rebated during the period would reduce the deferred revenue in the
balancing account. Any deferred revenue remaining in the balancing account at the end
of the calendar yearwould be added to the new revenue deferrals to determine the amount
of the proposed surcharge/rebate for the following year.
After determining the amount of deferred revenue that can be recovered through a
surcharge (or refunded through a rebate) by Rate Group, the proposed rates under this
Schedule will be determined by dividing the deferred revenue to be recovered by Rate
Group by the estimated kWh sales for each Rate Group during the twelve month recovery
period. The deferred revenue amount to be recovered will be transferred to a FCA
Balancing Account and the actual revenue received under this Schedule will be applied to
the Account to reduce (amortize) the balance. lnterest will be accrued on the unamortized
balance in the FCA Balancing Account at the Customer Deposit Rate.
3% ANNUAL RATE INCREASE LIMITATION:
The amount of the incremental proposed rate adjustment under this Schedule
cannot reflect more than a 3o/o rale increase. This will be determined by dividing the
incremental annual revenue to be collected (proposed surcharge revenue less present
surcharge revenue) under this Schedule by the total "normalized" revenue for the two
Rate Groups for the most recent Jenuary through Deeember time period. Normalized
revenue is determined by multiplying the weather-corrected usage for the period by the
present rates in effect. lf the incremental amount of the proposed surcharge exceeds
3%, only a 3% incremental rate increase will be proposed and any remaining deferred
revenue will be carried over to the following year. There is no limit to the level of the
FCA rebate, and the reversal of any rebate rate would not be included in the 3%
incremental surcharge test.
lssued June€0;20{+Effective Oetebe+a;2Ol+
Kelly Nerweed, Viee President, State & Federal Regulatien
l.P.U.C. No.28
Second Revision Sheet 758
Canceling
First Revision Sheet 758
lssued by Avista
By
AVISTA CORPORATION
dba Avista Utilities
SCHEDULE 75B
FIXED COST ADJUSTMENT MECHANISM - ELECTRIC (continued)
Step 7 - Determine the Monthly FCA Revenue per Customer - to determine the Monthly
FCA Revenue per customer, the annual FCA Revenue per customer is shaped based on
the monthly kWh usage from the rate year. The FCA mechanism uses the resulting
monthly percentage of usage by month and multiplied that by the annual FCA Revenue
per Customer to determlne the 12 monthly values.
Calculation of Monthlv FCA Deferral:
Step 1 - Determine the actual number of customers each month
Step 2 - Multiply the actual number of customers by the applicable monthly Allowed FCA
Revenue per Customer. The result of this calculation is the total Allowed FCA Revenue
for the applicable month.
Step 3 - Determine the actual revenue collected in the applicable month
Step 4 - Calculate the amount of fixed charge revenue included in total actual monthly
revenue.
Step 5 - For existing customers, multiply actual kWh sales by the approved Load Change
Adjustment Rate. The result of this calculation is the total revenue collected related to
variable power supply. For new customers, multiply actual kWh sales by both the approved
Load Change Adjustment Rate and the approved Fixed Production and Transmission
Revenue rate. The result of this calculation is the total revenue collected related to fixed
and variable production and transmission costs.
Step 6 - For existing customers, subtract the basic charge revenue and the variable power
supply revenue from the total actual monthly revenue. The result is the Actual FCA
Revenue. For new customers, subtract the basic charge revenue and the fixed and variable
production and transmission revenue from the actual monthly revenue. The result is the
Actual FCA Revenue.
Step 7 - The difference between the Actual FCA Revenue (Step 6) and the Allowed FCA
Revenue (Step 2) is calculated, and the resulting balance is deferred by the Company.
lnterest on the deferred balance will accrue at the Customer Deposit Rate.
Step 8 - At the end of everv 12 month deferral period, the annual FCA revenue per
customer, bv Rate Group, will be multiplied by the averaqe annual number of actual
customers). The result of that calculation will be comoared to the actual deferred revenue
forthe same 12 month period. The difference between the actual deferred revenue. and
the calculated value. will be added to. or subtracted from. the total deferred balance, bv
Rate Group.
Effective Januarv 1. 2O2Olssued June 28, 2019
Patrick Ehrbar, Director of Requlatorv Affairs
l.P.U.C. No.28
Second Revision Sheet 75C
Canceling
Sheet 75C
AVISTA CORPORATION
dba Avista Utilities
SCHEDULE 75C
FIXED COST ADJUSTMENT MECHANISM - ELECTRIC (continued)
ANNUAL ELECTRIC FCA RATE ADJUSTMENT:
On or before July 31 each year, the Company will file a request with the Commission
to surcharge or rebate, by Rate Group, the amount accumulated in the deferred revenue
accounts for the prior Julv through June time period (the transition deferral period will be from
Januarv 2020 throuqh June 2021).
The proposed tariff revisions included with that filing would include a rate adjustment
that recovers/rebates the appropriate deferred revenue amount over a twelve-month period
effective on October 1st. The deferred revenue amount approved for recovery or rebate would
be transferred to a balancing account and the revenue surcharged or rebated during the period
would reduce the deferred revenue in the balancing account. Any deferred revenue remaining
in the balancing account at the end of the calendar year would be added to the new revenue
deferrals to determine the amount of the proposed surcharge/rebate for the following year.
After determining the amount of deferred revenue that can be recovered through a
surcharge (or refunded through a rebate) by Rate Group, the proposed rates under this
Schedule will be determined by dividing the deferred revenue to be recovered by Rate Group
by the estimated kWh sales for each Rate Group during the twelve month recovery period.
The deferred revenue amount to be recovered will be transferred to a FCA Balancing Account
and the actual revenue received under this Schedule will be applied to the Account to reduce
(amortize) the balance. lnterest will be accrued on the unamortized balance in the FCA
Balancing Account at the Customer Deposit Rate.
3% ANNUAL RATE INCREASE LIMITATION:
The amount of the incremental proposed rate adjustment under this Schedule cannot
reflect more than a 3oh rale increase. This will be determined by dividing the incremental
annual revenue to be collected (proposed surcharge revenue less present surcharge
revenue) under this Schedule by the total "normalized" revenue for the two Rate Groups for
the most recent July through June time period (the transition deferral period will be from
Januarv 2020 throuqh June 2021). Normalized revenue is determined by multiplying the
weather-corrected usage for the period by the present rates in effect. lf the incremental
amount of the proposed surcharge exceeds 3%, only a 3% incremental rate increase will be
proposed and any remaining deferred revenue will be carried over to the following year.
There is no limit to the level of the FCA rebate, and the reversal of any rebate rate would not
be included in the 3% incremental surcharge test.
lssued June 28. 2019 Effective Januarv1.2020
By
Avista
Patrick Ehrbar, Director of Requlatorv Affairs
l.P.U.C. No.27
Second Revision Sheet 1758
Canceling
First Revision Sheet 175B
AVISTA CORPORATION
dba Avista Utilities
SCHEDULE 1758
FIXED COST ADJUSTMENT MECHANISM - NATURAL GAS (continued)
Calculation of Monthly FCA Deferral
Step 1 - Determine the actual number of customers each month (see Note
1 below).
Step 2 - Multiply the actual number of customers by the applicable monthly
Allowed FCA Revenue per Customer. The result of this calculation is the
total Allowed FCA Revenue for the applicable month.
Step 3 - Determine the actual revenue collected in the applicable month.
For new customers only, also multiply actual therm sales by the approved
Fixed Production and Underground Storage Cost per Therm to determine
actual revenue collected related to fixed production and underground
storage costs.
Step 4 - Calculate the amount of fixed charge revenues included in total
actual monthly revenues.
Step 5 - Subtract the basic charge revenue (Step 4) from the total actual
monthly revenue (Step 3). For new customers, subtract the basic charge
revenue (Step 4) and the fixed production and underground storage
revenue (Step 3)from the total actual monthly revenue (Step 3). The result
is the Actual FCA Revenue.
Step 6 - The difference between the Actual FCA Revenue (Step 5) and the
Allowed FCA Revenue (Step 2) is calculated, and the resulting balance is
deferred by the Company. lnterest on the deferred balance will accrue at
the Customer Deposit Rate.
Step 7 - At the end of every 12 month deferral period, the annual FCA
revenue per customer, by Rate Group, will be multiplied by the average
annual number of actual customers). The result of that calculation will be
compared to the actual deferred revenue for the same 12 month period.
The difference between the actual deferred revenue, and the calculated
value, will be added to, or subtracted from, the total deferred balance, by
Rate Group.
lssued June 28, 2019 Effective January 1, 2020
orporation
By
c
7ghfi-L
Patrick Ehrbar, Director of Regulatory Affairs
l.P.U.C. No.27
Second Revision Sheet 175C
Canceling
First Revision_Sheet 1 75C
7
AVISTA CORPORATION
dba Avista Utilities
SCHEDULE 175C
FIXED COST ADJUSTMENT IVIECHANISM - NATURAL GAS (continued)
ANNUAL NATURAL GAS FCA RATE ADJUSTMENT:
On or before July 31 each year, the Company will file a request with the
Commission to surcharge or rebate, by Rate Group, the amount accumulated in the
deferred revenue accounts for the prior July through June time period (the transition
deferral period will be from January 2020 through June 2021).
The proposed tariff revisions included with that filing would include a rate
adjustment that recovers/rebates the appropriate deferred revenue amount over a twelve-
month period effective on November 1st. The deferred revenue amount approved for
recovery or rebate would be transferred to a balancing account and the revenue
surcharged or rebated during the period would reduce the deferred revenue in the
balancing account. Any deferred revenue remaining in the balancing account at the end
of the calendar year would be added to the new revenue deferrals to determine the amount
of the proposed surcharge/rebate for the following year.
After determining the amount of deferred revenue that can be recovered through a
surcharge (or refunded through a rebate) by Rate Group, the proposed rates under this
Schedule will be determined by dividing the deferred revenue to be recovered by Rate
Group by the estimated therm sales for each Rate Group during the twelve month recovery
period. The deferred revenue amount to be recovered will be transferred to a FCA
Balancing Account and the actual revenue received under this Schedule will be applied to
the Account to reduce (amortize) the balance. lnterest will be accrued on the unamortized
balance in the FCA Balancing Account at the Customer Deposit Rate.
3% ANNUAL RATE INCREASE LIMITATION:
The amount of the incremental proposed rate adjustment under this Schedule
cannot reflect more than a 3o/o rate increase. This will be determined by dividing the
incremental annual revenue to be collected (proposed surcharge revenue less present
surcharge revenue) under this Schedule by the total "normalized" revenue for the two Rate
Groups for the most recent July through June time period (the transition deferral period
will be from January 2020 through June 2021). Normalized revenue is determined by
multiplying the weather-corrected usage for the period by the present rates in effect. lf the
incremental amount of the proposed surcharge exceeds 3%, only a 3% incremental rate
increase will be proposed and any remaining deferred revenue will be carried over to the
following year. There is no limit to the level of the FCA rebate, and the reversal of any
rebate rate would not be included in the 3% incremental surcharge test.
Effective January 1, 2020lssued June 28, 2019
By Patrick Ehrbar, Director of Regulatory Affairs
l.P.U.C. No.27
lssued by Avista Corporation
By
First Revision Sheet 175B
Canceling
1758
AVISTA CORPORATION
dba Avista Utilities
SCHEDULE 175B
FIXED COST ADJUSTMENT MECHANISM - NATURAL GAS (continued)
Calculation of Mo lv FCA Deferral:
Step 1 - Determine the actual number of customers each month (see Note
1 below).
Step 2 - Multiply the actual number of customers by the applicable monthly
Allowed FCA Revenue per Customer. The result of this calculation is the
total Allowed FCA Revenue for the applicable month.
Step 3 - Determine the actual revenue collected in the applicable month.
For new customers only, also multiply actual therm sales by the approved
Fixed Production and Underground Storage Cost per Therm to determine
actual revenue collected related to fixed production and underground
storage costs.
Step 4 - Calculate the amount of fixed charge revenues included in total
actual monthly revenues.
Step 5 - Subtract the basic charge revenue (Step 4) from the total actual
monthly revenue (Step 3). For new customers, subtract the basic charge
revenue (Step 4) and the fixed production and underground storage
revenue (Step 3)from the total actual monthly revenue (Step 3). The result
is the Actual FCA Revenue.
Step 6 - The difference between the Actual FCA Revenue (Step 5) and the
Allowed FCA Revenue (Step 2) is calculated, and the resulting balance is
deferred by the Company. lnterest on the deferred balance will accrue at
the Customer Deposit Rate.
Effective ltevemge+-l-+Of+lssued June€Oreg+Z
ie+
l.P.U.C. No.27
First Revision Sheet 175C
Canceling
175C
AVISTA CORPORATION
dba Avista Utilities
SCHEDULE 175C
FIXED COST ADJUSTMENT MECHANISM - NATURAL GAS (continued)
ANNUAL NATURAL GAS FCA RATE ADJUSTMENT:
On or before July lst each year, the Company will file a request with the
Commission to surcharge or rebate, by Rate Group, the amount accumulated in the
deferred revenue accounts for the prior January through Deeember time period.
The proposed tariff revisions included with that filing would include a rate
adjustment that recovers/rebates the appropriate deferred revenue amount over a
twelve-month period effective on November 1st. The deferred revenue amount
approved for recovery or rebate would be transferred to a balancing account and the
revenue surcharged or rebated during the period would reduce the deferred revenue
in the balancing account. Any deferred revenue remaining in the balancing account at
the end of the calendar year would be added to the new revenue deferrals to determine
the amount of the proposed surcharge/rebate for the following year.
After determining the amount of deferred revenue that can be recovered
through a surcharge (or refunded through a rebate) by Rate Group, the proposed rates
under this Schedule will be determined by dividing the deferred revenue to be
recovered by Rate Group by the estimated therm sales for each Rate Group during
the twelve month recovery period. The deferred revenue amount to be recovered will
be transferred to a FCA Balancing Account and the actual revenue received under this
Schedule wlll be applied to the Account to reduce (amortize) the balance. lnterest will
be accrued on the unamortized balance in the FCA Balancing Account at the Customer
Deposit Rate.
3% ANNUAL RATE INCREASE LIMITATION:
The amount of the incremental proposed rate adjustment under this Schedule
cannot reflect more than a 3% rate increase. This will be determined by dividing the
incrementalannual revenue to be collected (proposed surcharge revenue less present
surcharge revenue) under this Schedule by the total "normalized" revenue for the two
Rate Groups for the most recent Janua+y through D€€emb€+ time period. Normalized
revenue is determined by multiplying the weather-corrected usage for the period by
the present rates in effect. lf the incremental amount of the proposed surcharge
exceeds 3%, only a3o/oincrementalrate increase will be proposed and any remaining
deferred revenue will be carried over to the following year. There is no limit to the
level of the FCA rebate, and the reversal of any rebate rate would not be included in
the 3% incremental surcharge test.
lssued Jsne€o,2o47 Effective Nevember42€{+
By
ued by Avista Corporation
Kelly Nerweed, Viee President, State & Federal Regulatien
LP.U.C. No.27
Second Revision Sheet 175B
Canceling
Sheet 1758
AVISTA CORPORATION
dba Avista Utilities
SCHEDULE 175B
FIXED COST ADJUSTMENT MECHANISM - NATURAL GAS (continued)
Calculation of Monthlv FCA Deferral:
Step 1 - Determine the actual number of customers each month (see Note
1 below).
Step 2 - Multiply the actual number of customers by the applicable monthly
Allowed FCA Revenue per Customer. The result of this calculation is the
total Allowed FCA Revenue for the applicable month.
Step 3 - Determine the actual revenue collected in the applicable month.
For new customers only, also multiply actual therm sales by the approved
Fixed Production and Underground Storage Cost per Therm to determine
actual revenue collected related to fixed production and underground
storage costs.
Step 4 - Calculate the amount of fixed charge revenues included in total
actual monthly revenues.
Step 5 - Subtract the basic charge revenue (Step 4) from the total actual
monthly revenue (Step 3). For new customers, subtract the basic charge
revenue (Step 4) and the fixed production and underground storage
revenue (Step 3)from the total actual monthly revenue (Step 3). The result
is the Actual FCA Revenue.
Step 6 - The difference between the Actual FCA Revenue (Step 5)and the
Allowed FCA Revenue (Step 2) is calculated, and the resulting balance is
deferred by the Company. lnterest on the deferred balance will accrue at
the Customer Deposit Rate.
Step 7 - At the end of everv 12 month deferral period. the annual FCA
revenue per customer, bv Rate Group. will be multiplied bv the averaqe
annual number of actual customers). The result of that calculation will be
compared to the actual deferred revenue for the same 12 month period.
Thediffer@ldeferredreVenue,andthecalculated
value. will be added to, or subt from the total deferred balance bv
Rate Group.
Effective Januarv 1, 2020lssued June 28, 2019
lssued by
By
Corporation
Patrick Ehrbar, Director of Requlatorv Affairs
Second Revision Sheet '175C
Canceling
First Revision Sheet 175Cl.P.U.C. No.27
lssued by Avista Corporation
By
AVISTA CORPORATION
dba Avista Utilities
SCHEDULE 175C
FIXED COST ADJUSTMENT MECHANISM - NATURAL GAS (continued)
ANNUAL NATURAL GAS FCA RATE ADJUSTMENT:
On or before July 31 each year, the Company will file a request with the
Commission to surcharge or rebate, by Rate Group, the amount accumulated in the
deferred revenue accounts for the prior Julv through June time period (the traLtsition
deferral period will be from Januarv 2020 throuoh June 2021).
The proposed tariff revisions included with that filing would include a rate
adjustment that recovers/rebates the appropriate deferred revenue amount over a twelve-
month period effective on November 1st. The deferred revenue amount approved for
recovery or rebate would be transferred to a balancing account and the revenue
surcharged or rebated during the period would reduce the deferred revenue in the
balancing account. Any deferred revenue remaining in the balancing account at the end
of the calendar yearwould be added to the new revenue deferrals to determine the amount
of the proposed surcharge/rebate for the following year.
After determining the amount of deferred revenue that can be recovered through a
surcharge (or refunded through a rebate) by Rate Group, the proposed rates under this
Schedule will be determined by dividing the deferred revenue to be recovered by Rate
Group by the estimated therm sales for each Rate Group during the twelve month recovery
period. The deferred revenue amount to be recovered will be transferred to a FCA
Balancing Account and the actual revenue received under this Schedule will be applied to
the Account to reduce (amortize) the balance. lnterest will be accrued on the unamortized
balance in the FCA Balancing Account at the Customer Deposit Rate.
3% ANNUAL RATE INCREASE LIMITATION:
The amount of the incremental proposed rate adjustment under this Schedule
cannot reflect more than a 3o/o rate increase. This will be determined by dividing the
incremental annual revenue to be collected (proposed surcharge revenue less present
surcharge revenue) under this Schedule by the total "normalized" revenue for the two Rate
Groups for the most recent Julv through June time period (the transition deferral period
will be from Januarv 2020 throuoh June 2021). Normalized revenue is determined by
multiplying the weather-corrected usage for the period by the present rates in effect. lf the
incremental amount of the proposed surcharge exceeds 3%, only a 3% incremental rate
increase will be proposed and any remaining deferred revenue will be carried over to the
following year. There is no limit to the level of the FCA rebate, and the reversal of any
rebate rate would not be included in the 3% incrementalsurcharge test.
lssued June 28. 2019 Effective Januarv 1, 2020
Patrick Ehrbar, Director of Requlatorv Affairs