20190913notice_of_application_order_no_34436.pdf

Office of the Secretary
Service Date
September 13,2019
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA )CORPORATION'S APPLICATION TO )CASE NO.AVU-G-19-06
CHANGE ITS NATURAL GAS RATES AND )CHARGES (2019 PURCHASED GAS COST )NOTICE OF APPLICATION
ADJUSTMENT))
)NOTICE OF
)MODIFIED PROCEDURE
)ORDER NO.34436
On August 23,2019,Avista Corporation dba Avista Utilities filed its annual Purchased
Gas Cost Adjustment (PGA)Application.The PGA is a Commission-approved mechanism that
adjusts rates up or down to reflect changes in Avista's costs to buy natural gas from suppliers-
includingchanges 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.
Avista states its proposal will increase rates for an average residential or small
commercial customer by $2.26 per month (4.8%).Id.at 5.The Company states it issued notice of
this change via news release on August 23,2019.Id at 2.The Company asks that its Application
be processed by Modified Procedure,and that the new rates take effect November 1,2019.Id.at
5.
NOTICE OF APPLICATION
A.Overview ofProposed Rates
YOU ARE HEREBY NOTIFIED that Avista distributes natural gas in northern Idaho,
eastern and central Washington,and southwestern and northeastern Oregon.Avista buys natural
gas and then transports it throughpipelines for delivery to customers.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 (Tariff Schedule 150);and (2)revise the amortization rates to refund or collect the
balance of deferred gas costs (Tariff Schedule 155).Avista proposes to change its PGA rates for
its customer classes as follows:
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34436 1
Commodity Demand Total Amortization Total Rate Overall
Schedule Change per Change per Sch.150 Change per Change per Percent
Service No.Therm Therm Change Therm Therm Change
General 101 $(0.01697)$(0.00290)$(0.01987)$0.05520 $0.03533 5.2%
Lg.General lll $(0.01697)$(0.00290)$(0.01987)$0.05520 $0.03533 4.9%
Lg.General 112 $(0.01697)$(0.00290)$(0.01987)$-$(0.01987)-2.6%
Interruptible 131 $(0.01697)$-$(0.01697)$-$(0.01697)-4.6%
Transportation 146 $-$-$-$0.00265 $0.00265 2.1%
Id.at 3.Avista's proposed changes to Schedules 150 and 155 and Avista's rates are further
explained below.
B.Schedule 150
YOU ARE FURTHER NOTIFIED that the Tariff Schedule 150 portion of the PGA
has two parts:the "commoditycosts"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 is an estimate of
those costs.Here,Avista estimates its commodity costs will decrease by $0.01697per therm,from
the currentlyapproved $0.17025 per therm.To minimize exposure to potential rising gas costs,
Avista diversifies how it procures natural gas.Avista's procurement strategy includes hedging and
estimating the cost of index purchases using a 30-day historical average of forward prices for each
supply basin.Id.at 3.
YOU ARE FURTHER NOTIFIED that Avista's "demand costs"are its fixed-capacity
costs for interstate transportation and underground storage.The demand costs primarily are costs
to transport gas on interstate pipelines to Avista's local distribution system.Avista proposes a
$0.00290 per therm decrease in the overall demand rate for customers on Schedules 101,111,and
112.This reduction is caused by several factors,includingthe Canadian exchange rate,an updated
demand forecast,and changes arising from federal tax reform for Gas Transmission Northwest.
Id.at 4.
C.Schedule 155
YOU ARE FURTHER NOTIFIED that Tariff Schedule 155 reflects the amortization
of Avista's deferral account.With this Application,Avista proposes to increase the amortization
rate for general and large general service customers by $0.05520 per therm.Avista explains this
increase is largely due to volatile wholesale natural gas prices during the winter of 2018-2019,
which was mostlycaused by the West Coast Pipeline rupture in October 2018.Id at 4.The new
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34436 2
rate would cause a 4.8%increase for residential or small commercial customers using an average
of 64 therms per month.Id at 5.
YOU ARE FURTHER NOTIFIED that Avista asserts it will notify customers of its
proposed tariffs by posting notice at each of its Idaho district offices,and througha press release.
Also,Avista states it will send notice to each customer in bill inserts from September to October.
Id.at 2.
YOU ARE FURTHER NOTIFIED that the Application and its exhibits 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
www.puc.idaho.gov.Click on the "File Room"tab at the top of the page,scroll down to "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 Idaho
Code §§61-501,-502,and -503.The Commission may enter any final Order consistent with its
authorityunder Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
pursuant to the Commission's Rules of Procedure,IDAPA 31.01.01.000et seq.
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 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
Applicationmay file a written comment in support or opposition with the Commission by October
9,2019.The comment must contain a statement of reasons supporting the comment.Persons
desiring a hearingmust specifically request a hearing in their written comments.Written comments
concerning this Application shall be mailed to the Commission and Avista at the addresses
reflected below:
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34436 3
For the Commission:For the Company:
Commission Secretary Patrick D.Ehrbar
Idaho Public Utilities Commission David J.Meyer
PO Box 83720 Avista Utilities
Boise,ID 83720-0074 1411 E.Mission Avenue
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.Scroll to the "Consumers"tab,click the
"Utility Case Comment or Question Form,"and complete the form using the case number as it
appears on the front of this document.These comments must also be sent to Avista at the e-mail
addresses listed above.
YOU ARE FURTHER NOTIFIED that Avista shall file reply comments,if necessary,
by October 16,2019.
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.
ORDER
IT IS HEREBY ORDERED that Avista's PGA Application be processed under
Modified Procedure,IDAPA 31.01.01.201-.204.Interested persons wishing to file written
comments must do so by October 9,2019.Avista may file a reply,if any,by October 16,2019.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34436 4
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this i 3
day of September 2019.
PAUL KTELLAN R,PRESIDENT
KRI INE RAPER,C MMISSIONER
ERIC ANDERSON,COMMISSIONER
Diane M.HaÁian
Commission Secretary
I:\Legal\GAS\AVU-G-19-06\orders\AVUGl906nteapp_mh.docx
NOTICE OF APPLICATION
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ORDER NO.34436 5