20210625Notice_of_Hearings_Order_No_ 35087.pdf

NOTICE OF PROPOSED SETTLEMENT
NOTICE OF TELEPHONIC CUSTOMER HEARING
NOTICE OF TECHNICAL HEARING
ORDER NO. 35087 1
Office of the Secretary
Service Date
June 25, 2021
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION
OF AVISTA CORPORATION FOR
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC AND
NATURAL GAS SERVICE TO ELECTRIC
AND NATURAL GAS CUSTOMERS IN
THE STATE OF IDAHO
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CASE NO. AVU-E-21-01
AVU-G-21-01

NOTICE OF
PROPOSED SETTLEMENT

NOTICE OF PUBLIC
WORKSHOP

NOTICE OF TELEPHONIC
CUSTOMER HEARING

NOTICE OF TECHNICAL
HEARING

ORDER NO. 35087

On January 29, 2021, Avista Corporation dba Avista Utilities (“Avista” or the
“Company”) applied to increase its electric and natural gas rates for Idaho customers through a
“Two Year Rate Plan”. Application at 1. In “Rate Year 1,” Avista requested an electric base rate
increase of $24.8 million (10.1 percent) and a natural gas base rate increase of $0.1 million (0.1
percent), effective September 1, 2021. Id. In “Rate Year 2,” Avista requested an electric base rate
increase of $8.7 million (3.2 percent) and a natural gas base rate increase of $1.0 million (2.2
percent), effective September 1, 2022. Id. Avista represented that these proposed rate increases
would be offset by the effect of Tax Customer Credit Tariff Schedules 76 (electric) and 176
(natural gas)1 and the Deferred Depreciation Credit Tariff Schedule 177 (natural gas). Id. 2022.
Id. at 1-2.
On February 23, 2021, the Commission issued a Notice of Application and Notice of
Intervention Deadline. See Order No. 34930. The Idaho Conservation League (“ICL”), Walmart
Inc. (“Walmart”), Community Action Partnership Association of Idaho (“CAPAI”), Idaho Forest

1 The proposed offset to the requested rate increases in Tariff Schedules 76 and 176 come from Case Nos. AVU-E-
20-12 and AVU-G-20-01 wherein the Commission approved Avista’s request to change its accounting method. See
Order No. 34906. The Commission found that this accounting change could provide immediate benefits to customers,
subject to similar approvals in other jurisdictions where Avista provides services. Order No. 34906 at 3.

NOTICE OF PROPOSED SETTLEMENT
NOTICE OF TELEPHONIC CUSTOMER HEARING
NOTICE OF TECHNICAL HEARING
ORDER NO. 35087 2
Group LLC (“IFG”), and Clearwater Paper Corporation (“Clearwater”) intervened as parties
(collectively the “Parties”). See Order Nos. 34940, 34953, 34958 and 34967. On April 23, 2021,
the Commission issued a Notice of Scheduling and Notice of Technical Hearing which set a date
for the Parties to attend a settlement conference, deadlines for the Parties to file testimony and
exhibits, and scheduled a technical hearing. See Order No. 35010.
On June 14, 2021, Avista and the Commission Staff (“Staff”) filed a joint Motion for
Approval of Stipulation and Settlement (“Motion”) notifying the Commission that the Parties had
reached a stipulation and settlement (“Stipulation”) resolving all issues. The Stipulation was
signed by all Parties and was filed with the Motion. The Motion requests that the Commission
amend the case schedule to allow for review and approval of the proposed Stipulation.
With this Order, we provide notice of the proposed settlement and amend the case
schedule as set forth below.
NOTICE OF PROPOSED SETTLEMENT
YOU ARE HEREBY NOTIFIED that if the Commission approves the Stipulation, the
Stipulation will fully resolve the case as follows:2
1. Overview of Settlement, Revenue Requirement and Effective Date
Avista would increase annual base electric revenue by $10.6 million, or 4.3%, effective
September 1, 2021, and increase base electric revenue by $8.0 million, or 3.1%, effective
September 1, 2022. For natural gas, Avista would decrease natural gas base revenue by $1.6
million, or 3.7%, effective September 1, 2021, and increase natural gas base revenue $0.9 million,
or 2.2%, effective September 1, 2022.
2. Tax Customer Credit
Avista would return to customers, tax customer credits of approximately $31.3 million
for electric and $12.1 million for natural gas, through separate Tariff Schedules 76 (electric) and
176 (natural gas). For Year 1 electric, an amount equal to the base rate increase set forth in the
Stipulation would be returned to customers. For Year 2 electric, the remaining balance of the tax
customer credit, offsetting the overall base rate increase set forth in the Stipulation, effective
September 1, 2022. In addition, the $250,000 of the tax customer credit applicable to Schedule 11

2 Interested persons may view the actual Stipulation and Settlement on the Commission’s web site at
www.puc.idaho.gov.

NOTICE OF PROPOSED SETTLEMENT
NOTICE OF TELEPHONIC CUSTOMER HEARING
NOTICE OF TECHNICAL HEARING
ORDER NO. 35087 3
would be allocated to Schedule 25. For natural gas, the tax customer credit would begin to be
returned starting September 1, 2021, over a ten-year period.
3. Capital Structure and Cost of Capital
Avista’s capital structure and weighted-average cost of capital (rate of return) would
be:

Component

Capital
Structure

Cost

Weighted-
Average Cost
of Capital
Debt 50% 4.70% 2.35%
Common Equity 50% 9.40% 4.70%
Total 100% 7.05%

4. Percentage Increase by Service Schedule
The resulting percentage increases to Avista’s base rates, increase in billing revenue
before tax customer credits and change in billing revenue with the tax customer credit offset:

Resulting Percentage Increase by Electric Service Schedule

4. Cost of Service
In the Stipulation, the Parties did not agree on any particular cost of service
methodology. Recognizing that certain rate schedules are well above their cost of service, the
Parties agreed that Schedules 11/12 and 21/22 would receive a revenue decrease above the overall
percentage base rate change to move them closer to cost-of-service parity. The remaining
schedules would also receive revenue decreases below the overall percentage base rate change, at
varying levels, to move most of them closer to their cost of service.
5. Low-Income Issues

Effective September 1, 2021 (Rate Year 1)
Rate Schedule
Increase in Base
Revenue
Increase in Billing
Revenue before
Offset
Change in Billing
Revenue with
Offset
Residential Schedule 1 4.9%4.9%0.6%
General Service Schedules 11/12 4.3%4.1%0.0%
Large General Service Schedules 21/22 4.3%4.1%0.0%
Extra Large General Service Schedule 25 4.3%4.2%0.0%
Clearwater Paper Schedule 25P 1.1%1.0%-3.1%
Pumping Service Schedules 31/32 4.3%4.2%0.0%
Street & Area Lights Schedules 41-48 4.3%4.2%0.0%
Overall 4.3%4.2%0.0%
NOTICE OF PROPOSED SETTLEMENT
NOTICE OF TELEPHONIC CUSTOMER HEARING
NOTICE OF TECHNICAL HEARING
ORDER NO. 35087 4

6. Energy Effici
sulting Percentage Increase by Natural Gas Service Schedule

Resulting Percentage Increase by Natural Gas Service Schedule

Effective September 1, 2022 (Rate Year 2)
Rate Schedule
Increase in Base
Revenue
Increase in Billing
Revenue before
Offset
Change in Billing
Revenue with
Offset
Residential Schedule 1 4.3%4.4%0.3%
General Service Schedules 11/12 0.8%0.8%-2.5%
Large General Service Schedules 21/22 3.1%3.1%-0.8%
Extra Large General Service Schedule 25 3.1%3.1%-2.2%
Clearwater Paper Schedule 25P 0.8%0.8%-3.2%
Pumping Service Schedules 31/32 3.1%3.1%-0.8%
Street & Area Lights Schedules 41-48 3.1%3.1%-0.8%
Overall 3.1%3.2%-0.8%
Effective September 1, 2021 (Rate Year 1)
Change in
Change in Billing
Revenue
Change in
Billing Revenue
Rate Schedule Margin Revenue before Offset with Offset
General Service Schedule 101 -3.7%-2.6%-4.6%
Large General Service Schedules 111/112 -3.7%-2.1%-3.7%
Transportation Service Schedule 146 -3.7%-3.7%-6.5%
Overall -3.7%-2.5%-4.5%
Effective September 1, 2022 (Rate Year 2)
Change in Change in
Rate Schedule Margin Revenue Billing Revenue
General Service Schedule 101 2.2%1.6%
Large General Service Schedules 111/112 2.2%1.3%
Transportation Service Schedule 146 2.2%2.3%
Overall 2.2%1.5%
NOTICE OF PROPOSED SETTLEMENT
NOTICE OF TELEPHONIC CUSTOMER HEARING
NOTICE OF TECHNICAL HEARING
ORDER NO. 35087 5
5. Cost of Service
In the Stipulation, the Parties did not agree on any cost-of-service methodology.
Recognizing that certain rate schedules are generally above their relative cost of service, the Parties
agree that Schedule 25P should receive 25% of the overall percentage base rate changes for the
September 1, 2021, and September 1, 2022, base rate increases. In addition, Schedules 11/12
should receive 25% of the overall percentage base rate change for the September 1, 2022, increase.
All other schedules, except Schedule 1, should receive a uniform percentage of the overall base
rate revenue increase. The remaining revenue requirement should be spread to Schedule 1.
For natural gas, the Parties agreed to a uniform percentage of distribution margin
increase on September 1, 2021, and September 1, 2022.
6. Agreed Upon Workshops and Meetings
Avista will work with the interested parties to set a schedule for workshops and
meetings by October 15, 2021, concerning the foregoing matters:
(a) Cost of Service Workshops;
(b) Basic Charge Discussion;
(c) Long-Term Ownership of Colstrip;
(d) Weather Normalization Discussion;
(e) Neilson Substation and Interconnection Discussion; and,
(f) Customer Service Metrics/Customer Facing Technologies.
7. Signing Parties
The Company, Staff, Clearwater Paper, Idaho Forest, CAPAI, ICL, and Walmart have
signed the Stipulation, and assert it is in the public interest and is fair, just, and reasonable.
COMMISSION SETTLEMENT RULES
YOU ARE FURTHER NOTIFIED that the Commission will review the Stipulation
under Commission Rules 271-280. See IDAPA 31.01.01.271-280.
YOU ARE FURTHER NOTIFIED that the Stipulation does not bind the Commission.
The Commission will independently review the Stipulation to decide whether to approve it, reject
it, or state conditions under which to accept it. The Stipulation’s proponents ultimately must prove
it is just, fair, and reasonable, in the public interest, or otherwise in accordance with law or
regulatory policy.
NOTICE OF PROPOSED SETTLEMENT
NOTICE OF TELEPHONIC CUSTOMER HEARING
NOTICE OF TECHNICAL HEARING
ORDER NO. 35087 6
YOU ARE FURTHER NOTIFIED that the Stipulation, Application, and supporting
work papers, testimony, and exhibits are available for public inspection during regular business
hours at the Commission’s office. They also may be viewed on the Commission’s web site at
www.puc.idaho.gov by clicking on the “Electric” or “Natural Gas” icon, select “Open Cases,” and
click on the case number (Case No. AVU-E-21-01 for electric or AVU-G-21-01 for natural gas)
as shown on this document.
PREFILED DIRECT TESTIMONY
YOU ARE FURTHER NOTIFIED that the Parties of record in the case have until July
19, 2021, to file their prefiled testimony with the Commission regarding the Stipulation. The
June 23, 2021, date for filing of Staff and Intervenor testimony and the July 26, 2021, date for the
filing of Avista rebuttal testimony are vacated. The Parties’ prefiled testimony and exhibits must
conform to Rules 231, 266 and 267 of the Commission’s Rules of Procedure. Reference IDAPA
31.01.01.231 and .266-.267. E-copy service on Parties of record should be made on the same date,
with full service of testimony and exhibits provided to Parties of record by the next business day.
PUBLIC COMMENTS
YOU ARE FURTHER NOTIFIED that persons desiring to state a position on the case
and the Stipulation may file a written comment explaining their position. Persons who would like
a hearing must specifically request a hearing in their written comments. Persons shall have until
the close of business on August 3, 2021, to file written comments. Comments must be filed by
e-mail unless e-mail is unavailable. To comment by e-mail, please access the Commission’s home
page at www.puc.idaho.gov. Click the “Consumers” tab and then “Case Comment or Question
Form” and complete the form using the case number as it appears on the front of this document.
Comments filed by e-mail must also be e-mailed to the Company at the e-mail addresses listed
below. If e-mail is unavailable, then comments may be mailed to the Commission and Company
at these addresses:
Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074
[e-mail]

David J. Meyer, Esq.
Vice President and Chief Counsel for
Regulatory & Governmental Affairs
Avista Corporation
P.O. Box 3727
1411 E. Mission Avenue
Spokane, WA 99220-3727
[e-mail]
NOTICE OF PROPOSED SETTLEMENT
NOTICE OF TELEPHONIC CUSTOMER HEARING
NOTICE OF TECHNICAL HEARING
ORDER NO. 35087 7
Street Address for Express Mail:

11331 W. Chinden Blvd.
Building 8, Suite 201-A
Boise, Idaho 83714

NOTICE OF TELEPHONIC CUSTOMER HEARING
YOU ARE FURTHER NOTIFIED that the Commission previously set a telephonic
customer hearing in this matter for WEDNESDAY, JULY 14, 2021, AT 6:00 PM (PDT). See
Order No. 35010. The purpose of the telephonic customer hearing is to take testimony from
members of the public and customers of Avista. To participate, please call 1-415-655-0001 and
enter the passcode 133 481 5766 when prompted. Those planning on testifying are encouraged to
join the hearing at 5:45 PM (PDT).
NOTICE OF TECHNICAL HEARING
YOU ARE FURTHER NOTIFIED that the Commission will conduct a technical
hearing on MONDAY, AUGUST 2, 2021, COMMENCING AT 9:30 A.M. (MDT) IN THE
COMMISSION HEARING ROOM, 11331 W. CHINDEN BLVD, BUILDING 8, SUITE
201A, BOISE, IDAHO 83714 AND CONTINUING ON TUESDAY, AUGUST 3, 2021, IF
NECESSARY.
YOU ARE FURTHER NOTIFIED that the workshop and all hearings in this case will
be held in facilities meeting the accessibility requirements of the Americans with Disabilities Act.
Persons needing the help of a sign language interpreter or other assistance to participate in or to
understand testimony and argument at a public hearing may ask the Commission to provide a sign
language interpreter or other assistance at the workshop or hearings. The request for assistance
must be received at least five (5) working days before the hearing by contacting the Commission
Secretary at:
IDAHO PUBLIC UTILITIES COMMISSION
P.O. BOX 83720
BOISE, IDAHO 83720-0074
[phone] (Telephone)
[phone] (FAX)
[e-mail]

NOTICE OF PROPOSED SETTLEMENT
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ORDER NO. 35087 8
YOU ARE FURTHER NOTIFIED that the record in this matter is available for public
inspection during regular business hours at the Commission offices. The record is available on the
Commission’s web site at www.puc.idaho.gov. Click on the “Electric” or “Natural Gas” icon,
select “Open Cases,” and click on the case number (Case No. AVU-E-21-01 for electric or AVU-
G-21-01 for natural gas) as shown on 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 that 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.
O R D E R
IT IS HEREBY ORDERED that an amended schedule, as set forth above, is adopted.
IT IS FURTHER ORDERED that the Parties to the Stipulation have until July 19, 2021,
to file prefiled testimony and any exhibits with the Commission about the Stipulation.
IT IS FURTHER ORDERED that anyone may file written comments with the
Commission about the case and the Stipulation through the close of business on August 3, 2021.
IT IS FURTHER ORDERED that the Commission will hold a telephonic customer
hearing at which customers and interested members of the public may testify on Wednesday, July
14, 2021, at 6:00 PM (PDT).
IT IS FURTHER ORDERED that the Commission will hold a technical hearing for the
Parties to offer evidence and examine witnesses on Monday, August 2, 2021, at 9:30 AM (MDT).
The technical hearing will continue Tuesday, August 3, 2021, if necessary.
IT IS FURTHER ORDERED that Parties should continue to comply with Order No.
35058, issued June 3, 2021. All pleadings should be filed with the Commission electronically and
shall be deemed timely filed when received by the Commission Secretary. See Rule 14.02. Service
between Parties should also be accomplished electronically. Voluminous discovery-related
documents may be filed and served on CD-ROM or a USB flash drive.
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NOTICE OF PROPOSED SETTLEMENT
NOTICE OF TELEPHONIC CUSTOMER HEARING
NOTICE OF TECHNICAL HEARING
ORDER NO. 35087 9
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 25th day
of June 2021.

PAUL KJELLANDER, PRESIDENT

KRISTINE RAPER, COMMISSIONER

ERIC ANDERSON, COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

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