HomeMy WebLinkAbout20201028Final_Order_No_34825.pdfNOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 34825 1
Office of the Secretary
Service Date
October 28, 2020
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA
CORPORATION’S APPLICATION TO
CHANGE ITS NATURAL GAS RATES AND
CHARGES (2020 PURCHASED GAS COST
ADJUSTMENT)
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CASE NO. AVU-G-20-04
ORDER NO. 34825
On June 30, 2020, Avista Corporation dba Avista Utilities (“Avista”) 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—including 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.
Avista’s proposal will increase rates for an average residential or small commercial
customer by $0.31 per month (0.6%). Avista asked that the new rates take effect November 1,
2020.
On July 20, 2020, the Commission issued a Notice of Application and Modified
Procedure, setting an October 6, 2020 comment deadline and an October 13, 2020 reply comment
deadline. The Commission also set an August 7, 2020 intervention deadline. No persons
intervened. Commission Staff filed the only comments, and Avista did not file reply comments.
No customer comments were received.
Now, based on the record, the Commission approves the Application as set forth below.
THE APPLICATION
A. Overview of Proposed Rates
Avista distributes natural gas in northern Idaho, eastern and central Washington, and
southwestern and northeastern Oregon. Avista buys natural gas and then transports it through
pipelines for delivery to customers. In this PGA Application, Avista proposed 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 proposed to change its PGA rates for its customer classes as follows:
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 34825 2
Service
Schedule
No.
Commodity
Change per
Therm (a)
Demand
Change per
Therm (b)
Total
Sch. 150
Change
(c=a+b)
Amortization
Change per
Therm (d)
Total Rate
Change per
Therm
(e=c+d)
Overall
Percent
Change
General 101 $0.00955 $(0.00345) $0.00610 $(0.00129) $0.00481 0.7%
Lg. General 111 $0.00955 $(0.00345) $0.00610 $(0.00129) $0.00481 0.7%
Lg. General 112 $0.00955 $(0.00345) $0.00610 $ - $0.00610 0.8%
Interruptible 131 $0.00955 $ - $0.00955 $ - $0.00955 2.5%
Transportation 146 $ - $ - $ - $ - $ - 0.0%
Application at 3. Avista’s proposed changes to Schedules 150 and 155 and Avista’s rates are
further explained below.
B. Schedule 150
The Tariff Schedule 150 portion of the PGA has two parts: the “commodity costs” and
the “demand costs.” 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. Avista
estimated its commodity costs will increase by $0.00955 per therm, from the currently approved
$0.15328 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.
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 proposed a $0.00345 per therm decrease in the overall
demand rate for customers on Schedules 101, 111, and 112. This reduction is caused by factors
including the Canadian exchange rate, an updated demand forecast, and new rates for Avista’s
Canadian pipelines.
C. Schedule 155
Tariff Schedule 155 reflects the amortization of Avista’s deferral account. In its
Application, Avista proposed to decrease the amortization rate for general and large general
service customers by $0.00129 per therm. To put it another way, general and large general service
customers will receive a $0.00129 per therm increase to their current rebate under this schedule.
If Avista’s Application is approved as filed, Avista’s annual revenue will increase by
$0.4 million (0.7%). Avista asserted in its Application that it would notify customers of its
proposed tariffs by posting notice at each of its Idaho district offices, and through a press release.
Also, Avista sent notice to each customer as a bill insert during the July 2020 timeframe.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 34825 3
STAFF COMMENTS
Staff reviewed Avista’s Application and accompanying submissions and supports
Avista’s request. To assess the reasonableness of the proposed changes, Staff examined Avista’s
gas purchases for the year, its fixed price hedges, pipeline transportation and storage costs, and
estimates of future commodity prices. Staff reviewed Avista’s jurisdictional allocations and the
reasonableness of its Lost and Unaccounted for Gas volumes. Staff also verified that Avista’s filing
will not change Avista’s earnings, and confirmed the proposed changes to Schedules 150 and 155
accurately capture Avista’s demand and commodity costs.
Staff recommended the Commission a) approve Avista’s proposed Tariff Schedules
150 and 155, and b) direct Avista to continue filing quarterly WACOG reports and monthly
deferred cost reports with the Commission on an ongoing basis.
COMMISSION FINDINGS AND DECISION
The Commission has reviewed the record, including the Application and comments.
Avista is a gas corporation and public utility, and the Commission has jurisdiction over it and the
issues in this case under Title 61 of the Idaho Code, and more specifically, Idaho Code §§ 61-117,
61-129, 61-307, 61-501, and 61-502. The Commission must establish just, reasonable, and
sufficient rates for utilities subject to its jurisdiction. Idaho Code § 61-502.
Based on our review of the record, we find Avista’s proposed commodity cost and
demand cost rates in Schedule 150 reasonably capture Avista’s costs. We thus find it fair, just, and
reasonable to approve Avista’s proposed Schedule 150. We approve Avista’s proposed WACOG
of $0.16283 per therm, a 6.2% increase from the currently approved WACOG. We recognize that
the cost of gas has stabilized after many years of steady decline, resulting in this increase.
We further find the proposed $0.00129 per therm amortization rate decrease for general
and large general service customers is fair, just, and reasonable. Therefore, we approve Avista’s
proposed Schedule 155.
We also find that quarterly WACOG reports and monthly deferred cost reports provide
useful information and assist Staff with determining whether to audit earlier than planned, and
whether an interim filing might be needed.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 34825 4
O R D E R
IT IS HEREBY ORDERED that Avista’s Application to change its natural gas rates
and charges is approved. Avista’s proposed Tariff Schedules 150 and 155 are approved as filed,
effective November 1, 2020.
IT IS FURTHER ORDERED that Avista continue filing quarterly WACOG reports
and monthly deferred cost reports on an ongoing basis.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for reconsideration
within twenty-one (21) days of the service date of this Order. Within seven (7) days after any
person has petitioned for reconsideration, any other person may cross-petition for reconsideration.
See Idaho Code §§ 61-626 and 62-619.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 28th
day of October 2020.
PAUL KJELLANDER, PRESIDENT
KRISTINE RAPER, COMMISSIONER
ERIC ANDERSON, COMMISSIONER
ATTEST:
Jan Noriyuki
Commission Secretary
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