20190913Comments.pdf

DAYN HARDIE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 9917
Street Address for Express Mail:
472W. WASHINGTON
BOISE, IDAHO 83702.5918
Attorney for the Commission Staff
BEFORB THE IDAHO PUBLIC UTILITIES COMMISSION
RECEIVED
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IN THE MATTER OF THE APPLICATION OF
AVISTA TO MODIFY SCHEDULES 131,132,
146, AND 182 AND TO ADD SCHEDULE 181 IN
ORDER TO CLARIFY PROVISIONS
APPLICABLE TO INTERRUPTIBLE AND
TRANSPORTATION CUSTOMERS AND
UPDATE ITS CURTAILMENT PROCESS
CASE NO. AVU.G.19-05
COMMENTS OF THE
COMMISSION STAFF
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STAFF OF the Idaho Public Utilities Commission, by and through its Attorney of
record, Dayn Hardie, Deputy Attorney General, submits the following comments.
BACKGROUND
On August 14,2019, Avista ("Avista" or "Company") submitted Tariff Advice
No. 19-01-G ("Tariff Advice"), requesting to modify its Schedules l3l, 132,146, and 182, plus
create a Schedule 181. The Company proposed to: 1) clarify the curtailment process and order if
a curtailment event occurs; and2) increase the curtailment penalty from $l per therm to $10 per
therm for customers who have their service curtailed but continue to use gas.
Because the Company's proposed Tariff Advice would increase the curtailment penalty
from $1 per therm to $10 per therm, Staff recommended that the public have the opportunity to
comment on the proposed increase. Order No. 34430 converted the Tariff Advice into an
1STAFF COMMENTS SEPTEMBER 13,2019
Application to be processed by Modified Procedure, suspended the Company's proposed
effective date, and established public comment and Company reply deadlines.
STAFF REVIEW
Staff reviewed the Company's proposal to establish a new schedule, Schedule 181-
Natural Gas Transportation Service Terms and Conditions, revise language in Schedules 131 and
132-Interruptible Service to ensure consistency with the language from Schedule 181, change
the name of Schedule 182 to "Plan for Natural Gas Curtailment," and move language from
Schedule 146 to Schedule 181 to eliminate redundancy. The Company's proposed tariff
modifications are designed to clarify provisions that apply to Interruptible and Transportation
customers, and the curtailment processes for all natural gas customers. Staff believes that
language in Schedul e 182 makes curtailment prioritiesl clear and concise and should prevent
confusion about the order curtailment would be implemented if necessary. Staff believes the
proposed changes will not affect base rates paid by customers.
Following the October 9,2018 rupture of a natural gas transmission pipeline located
north of Prince George B.C., the Company activated its emergency operations plan due to a
shortage of natural gas. The Company deployed its curtailment procedures and a number of
customers were curtailed. Two days later, on October 11,2018, curtailments were lifted for all
customers. After the event, the Company analyzed its emergency response and plans to identify
and address process and communication improvement opportunities. Staff appreciates the
approach used by the Company to learn from this emergency event and initiate improvements.
In its Customer Notification Letter, the Company stated that; "The proposed penalty is
consistent with other utilities in the Region and is intended to motivate customers to quickly
curtail their usage of natural gas, if necessary."
Staff examined curtailment penalties of other natural gas companies and determined that
a variety of methods are used to determine curtailment penalty rates. Some companies use a
formula based methodology which adds a multiplier to supply basin gas prices at a given point in
time. Other companies use a fixed-per-therm penalty methodology similar to Avista's. Staff
I The order of curtailment in the Company's proposed Tariff 182 is as follows: l) Schedule 146-transportation of customer-owned gas; 2)
Schedule I I I and I l2-Larye General Service customers; 3) Schedule l0l-General Service customers; and 4) Essential Human Needs
customers.
2STAFF COMMENTS SEPTEMBER 13,2019
believes that fixed-per-therm penalties are easier to deploy and provide customers greater
transparency in understanding consequences of noncompliance to curtailment. In examination of
curtailment penalties for other natural gas companies, Staff found per therm rates from $ I to $20.
Staff found multiple companies with a $10 per therm penalty and believes that the Company's
proposed penalty rate of $10 per therm is reasonable.
Staff believes that penalties can be used to financially motivate curtailment action if set at
a high enough level. Conversely, when penalties are low or insufficient, customers may not
choose to curtail consumption and accept the financial consequences of a penalty. Staff believes
that it would be beneficial for the Company to confirm that affected Interruptible and
Transportation customers are aware of the proposed changes and have had an opportunity to
validate curtailment procedures and contact information with the Company prior to
implementation, if approved.
Staff also reviewed ldaho Code $$ 6l-531 through 6l-531to determine if the Company's
proposals fall under the Commission's statutory authority. Staff believes that the Company's
proposed changes are not limited by or inconsistent with Idaho Code.
CUSTOMER NOTICE AND PRESS RELEASE
The Company included a customer letter with its Application. Appendix A. The purpose
of the letter was to inform customers about the Company's proposal to update its tariffs and why
the changes are needed. On August 27,2019, the letter was mailed to affected Interruptible and
Transportation customers, providing them a reasonable opportunity to file comments with the
Commission by the September 19,2019 deadline. As of September 12,2019, no customer
comments have been filed.
STAFF RECOMMENDATION
Staff recommends that the Commission approve the Company's Application and accept
Tariffs submitted with Advice No. AVU-19-01-G.
Staff recommends that the Company contact each affected customer (Transportation
Schedule 146 and Intemrptible Schedules 131 and 132), verify receipt of curtailment penalty
change information, and validate emergency contact information.
3STAFF COMMENTS SEPTEMBER I3,20I9
Respectfully submitted this l3t( day of September 20rg.
Dayn Hardie
Deputy Attorney General
Technical Staff: Kevin Keyt
Kathy Stockton
Curtis Thaden
i :umisc/comments/avug1 9. 5dhkskkls comments
4STAFF COMMENTS SEPTEMBER 13,2019
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 13TH DAY OF SEPTEMBER 2019,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. AVU-G-19-05, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
LINDA GERVAIS
MGR REGULATORY POLICY
AVISTA CORPORATION
PO BOX3727
SPOKANE W A 99220-3727
E-MAIL: [e-mail]
avistadockets@avistacorp. com
-b,r)CocstatuT"Evl-
CERTIFICATE OF SERVICE