20190805notice_of_application_order_no_34393.pdf

Office of the Secretary
Service Date
August 5,2019
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA )CASE NO.AVU-G-19-04
CORPORATION'S APPLICATION TO )IMPLEMENT FIXED COST ADJUSTMENT )NOTICE OF APPLICATION
RATES FOR NATURAL GAS SERVICE )FROM NOVEMBER 1,2019,THROUGH )NOTICE OF
OCTOBER 31,2020 )MODIFIED PROCEDURE
)ORDER NO.34393
On July 1,2019,Avista Corporation ("Company"or "Avista")applied to the
Commission for authorization to implement Fixed Cost Adjustment("FCA")rates for natural gas
service customers from November 1,2019,through October 31,2020,and to approve its
corresponding modifications to Schedule 175,"Fixed Cost Adjustment Mechanism -Natural
Gas."Application at 1.Avista also asks that the Commission approve the level ofnatural gas FCA
revenue deferred during calendar year 2018.The Company proposes per therm FCA surcharge
rates for its residential customer group and rebate rates for its non-residential customer group.Id.
The Company's Application,if approved,would increase overall natural gas revenues by $1.2
million.See Id at 2,12.The monthly bill of an average residential gas customer would increase
by about $1.05,or 2.3%.Id.at 2,l1.Avista asks that its Application be processed by Modified
Procedure,and requests an effective date of November 1,2019.Id.at 2,l1-12.
With this Order,the Commission issues a Notice of Application and Notice of Modified
Procedure and establishes a public comment period and Company reply deadline.
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.
I "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
ORDER NO.34393 1
YOU ARE FURTHER NOTIFIED that the Commission approved Avista's FCA as a
three-year pilotprogram,and part of the approved settlement of Avista's 2015 general rate case.
See Case Nos.AVU-E-15-05,AVU-G-15-01;Application at 3;and Order No.33437 at 10.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.On June 15,2018,the Commission approved an addendum to the settlement stipulation
approved in AVU-E-15-05 and AVU-G-15-01,which extended the term of the Company's FCA
pilot for an additional year.See Order No.34085;Application at 3-4.Pursuant to the addendum
to the settlement stipulation,the Company,Commission Staff,and interested parties met on March
27,2019 to review the effectiveness of the FCA mechanisms.Application at 4 n.2.
YOU ARE FURTHER NOTIFIED that in its natural gas FCA filing Avista proposes
FCA surcharge rates for its residential customer group and FCA rebate rates for its non-residential
customer groups based on the amount of deferred revenue recorded for January throughDecember
2018.The Company mostly attributes these proposed changes to warmer than usual weather in
January,May,and December 2018,and FCA revenue shortfall associated with energy efficiency
programmatic savings in 2018.Id.at 6-7.According to the Company's Application,other drivers
are not easily quantifiable but include,among other things,the effects of non-programmatic energy
efficiency and changes in business cycles.Id.at 7.
YOU ARE FURTHER NOTIFIED that Avista recorded $557,464 in the surcharge
direction in deferred revenue for its natural gas residential customer group in 2018.Id.at 7.After
taking into account the 2017 carry over balance of approximately $27,000,the Company proposes
to recover $601,306,at a proposed rate of 0.951 cents per therm,from the Company's residential
natural gas customers served under rate Schedule 101.Id.at 7-8;Exhibit B.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 surcharge received under the tariff.Id.at 8.
YOU ARE FURTHER NOTIFIED that for its non-residential customer groups,Avista
recorded $137,897 in the rebate direction in deferred revenue in 2018.Id.After taking into account
the 2017 carry over balance of ($853),the Company proposes to rebate $142,949,at a proposed
rate of -0.554 cents per therm,to the Company's natural gas customers served under rate Schedules
111 and 112.Id.8-9;Exhibit B.If approvedby the Commission,the Company would record this
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34393 2
amount in a regulatory liabilitybalancing account and reduce the account balance each month by
the rebate received by customers under the tariff.Id.at 9.
YOU ARE FURTHER NOTIFIED that the Application,Exhibit A (the Company's
proposed tariffs),Exhibit B (FCA rate calculation),Exhibit C (2018 FCA deferral),and Exhibit D
(customer communications)have been filed with the Commission and are available for public
inspection during regular business hours at the Commission's office.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 "Open Gas Cases,"and then click on the
case number as shown on the front of this document.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determinedthat 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 October 8,2019.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 Corporation at the addresses reflected below:
Commission Secretary David J.Meyer,Esq.
Idaho Public Utilities Commission Avista Corporation
PO Box 83720 P.O.Box 3727
Boise,ID 83720-0074 1411 E.Mission Ave,MSC-27
Spokane,WA 99220-3727
Street Address for Express Mail:email:[e-mail]
472 W.Washington Street Patrick D.Ehrbar
Boise,ID 83702-5918 Avista Utilities
P.O.Box 3727
1411 E.Mission Ave,MSC-27
Spokane,WA 99220-3727
email:[e-mail]
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34393 3
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 15,2019.
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 jurisdictionunder 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,
Rule 201-204 (IDAPA 31.01.01.201 -.204).Parties and persons shall have until October 8,2019,
to file written comments,and the Company shall have until October 15,2019,to file a reply,if
any.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34393 4
DONE by order of the Idaho Public Utilities Commission at Boise,Idaho this i
day of August 2019.
PAUL KJELLANÍ)ER,PRESIDENT
KRIS E RAPER,COMMISSIONER
ERIC ANDERSON,COMMISSIONER
ATTEST:
Diane M.Hanian
Commission Secretary
1:\LegahGAS\AVU-G-l9-04\orders\AVUGl904 Ntc App.Mod_dh docx
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34393 5