20210817Comments.pdf

JOHN R. HAMMOND, JR.
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
(208) 334-03s7
IDAHO BAR NO. 5470
IN THE MATTER OF THE APPLICATION
OF AVISTA UTILITIES FOR AN ORDER
APPROVING A CHANGE IN NATURAL GAS
RATES AND CHARGES TO REBATE
CERTAIN DEFERRED CREDIT BALANCES
-: Fi,i lfr. /'! I. ii i'jii/-'*1 I
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Street Address for Express Mail:
I I331 W CHTNDEN BLVD, BLDG 8, SUTTE 2OI-A
BOISE, TD 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
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cAsE NO. AVU-G-21-03
COMMENTS OF THE
COMMISSION STAFF
The Staff of the Idaho Public Utilities Commission ("Staff') submits the following
comments.
BACKGROUND
On July 2,2021, Avista Corporation dba Avista Utilities ("Company") applied for an
Order Approving a Change in Natural Gas Rates and Charges to Rebate Certain Deferred Credit
Balances asking to decrease its annualized revenues by about $1.9 million(2.9%). Application
at l. The Company proposes to refund to customers deferred credit balances associated with
depreciation expense, Accumulated Funds Used During Construction ("AFUDC"), and
Coronavirus AID, Relief, and Economic Security ("CARES") Act benefits. The proposed refund
to customers, if approved, would offset the Company's proposed Purchased Gas Cost
Adjustment ("PGA") rate increase in its application in Case No. AVU-G-21-04 if approved by
1STAFF COMMENTS AUGUST I7,2O2I
the Commission. The Company filed its application for a change in rates for the PGA and
amortization of gas-related deferral balances simultaneously with this application.
STAFF ANALYSIS
Staff reviewed the Company's Application and accompanying workpapers and supports
the Company's proposal to retum to natural gas customers in Idaho approximately $1.9 million
of deferred oedits. See Table No. l. After examining the Company's Application, prior Orders,
and reviewing the deferral balances, Staff recommends the Commission approve the Company's
proposed Tariff Schedule 178 and set the rebate rates as discussed below.
Table No. I - Credit Balances as of Aueust 31. 2021
Depreciation Expense $894 ,000
AFUDC Equity Tax Deferral (Estimated)393,000
CARES Act Tax Benefits Deferral 649,000
Total $ 1,935,000
Schedule 178 - Deferred Credit Balances
The Company has accumulated defened credit balances on its books and is proposing to
refund the balances to natural gas customers over a twelve-month period through Tariff Schedule
178. The first deferred credit is the Natural Gas Deferred Depreciation Expense. This credit
balance is a result of the Company deferring the benefit of reduced natural gas depreciation
expense recorded but not yet reflected in customer rates for the period December 1,2019,
through August 31,2021. See Order No. 34276 in Case Nos. AVU-E-I8-03 and AVU-G-18-02
(see Stipulation and Settlement at page 9, para. l4).
The second deferred credit is the AFUDC Equity Tax Deferral. AFUDC tax flow-
through deferral balances are the result of a change in how taxes associated with AFUDC Equity
are recognized for ratemaking purposes, specifically, changing from the normalization method to
the flow-through method, per Case No. AVU-G- 19-01 , Order No. 34326. The deferral balances
reflect amounts collected between January l, 2018 and August3l,202l (estimated), until such
time as the flow through method is embedded in base rates in the pending general rate case
filing. See Case No. AVU-G-21-01and AVU-E-21-01.
2STAFF COMMENTS AUGUST I7,2O2I
The third deferred credit is the CARES Act Deferral. The CARES Act Deferral balance
is a result of Order No. 34718 in Case No. GNR-U-20-03, which required Avista to defer the
benefits associated with the CARES Act. The CARES Act allows companies with taxable net
operating losses for years 2018 through2020 to carry those losses back to the five previous tax
years. The tax benefits were to be deferred and returned to customers in a future proceeding.
The Company proposes to return these tax benefits to natural gas customers, in this filing.
Staff reviewed the deferral balances, workpapers, and rate calculations, along with the
Commission's prior orders authorizing the deferred credits, and supports the Company's
proposed rates as found in the Application, see Table No. 2.
Table No. 2 - Tariff Schedule 178
Rate Per Therm
General Service - Schedule l0l (0.02286)
Large General Service-Schedules 111 & l12 (0.01444)
Intemrptible Service - Schedules l3l & 132 (0.0r444)
Transportation Service - Schedule 146 (0.00378)
SUMMARY OF CUSTOMER IMPACT
On July 2,2021, the Company simultaneously filed the Deferred Balance Credit
Application and its annual PGA Application, Case No. AVU-G-2I-04. If the Commission
approves both Applications, the net effect on natural gas revenue is an increase of approximately
$7.1M or 10.6 percent as shown in Table No. 3.
Table No. 3 - PGA and Deferred Balances Credit Summarv
J
Adjustment Revenue Impact $Revenue Impact o/o
PGA $9.0M 13.5%
Deferred Balances Credits ($l.eM)(2.e%)
Net Effect $7.1 10.6"
STAFF COMMENTS AUGUST I7,2O2I
CUSTOMER COMMENTS, NOTICE, AND PRESS RELEASE
The Company's press release and customer notice were included with its Application.
Each document addresses two cases: this case (AVU-G-2I-03) Defened Balances Credits
Applications and the PGA (AVU-G-21-04). Staff reviewed the documents and determined that
both meet the requirements of Rule 125 of the Commission's Rules of Procedure. See IDAPA
31.01.01.125.
The Commission set a comment deadline of August 17,2021. Because customer notices
were inserted into bills beginning July 8,2021, through August 5,2021, some customers in the
last billing cycle may not have adequate time to submit comments before the deadline.
Customers should have the opportunity to file comments and have those comments considered
by the Commission. Staff recommends that the Commission accept late-filed comments from
customers. As of August 17,2021, no customer comments had been filed.
STAFF RECOMMENDATION
Based upon its review of the Company's Application, Staff recommends the Commission
approve the Company's proposed Tariff Schedule 178 and set the rebate rates as presented in
Table No. l. Staff also recommends the Commission accept late-filed comments from
customers.
-1,{-' day of August 2021Respectfully submitted this
Technical Staff: Travis Culbertson
Kevin Keyt
Kathy Stockton
Curtis Thaden
i :umisc/commentVavug2 l.3jhtnckskklsct comments
J Hammond, Jr.
Attorney General
4STAFF COMMENTS AUGUST I7,2O2I
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS I7d' DAY OF AUGUST 202I,
SERVED THE FOREGOING COMMENTS OF TIIE COMMISSION STAFF, IN
CASE NO. AVU-G.21-03, BY E-MAILING A COPY THEREOF, TO THE
FOLLOWING:
PATRICK EHRBAR
DIR OF REGULATORY AFFAIRS
AVISTA CORPORATION
PO BOX3727
SPOKANE WA99220-3727
E-MAIL : [e-mail]
dockets@avi stacorp. com
DAVID J MEYER
VP & CHIEF COUNSEL
AVISTA CORPORATION
PO BOX3727
SPOKANE WA99220-3727
E-MAIL : [e-mail]
Y
CERTIFICATE OF SERVICE