20210824Notice_of_Application_Order_No_35145.pdf

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35145 1
Office of the Secretary
Service Date
August 24, 2021
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF AVISTA’S
APPLICATION TO IMPLEMENT FCA
RATES FOR NATURAL GAS SERVICE
FROM NOVEMBER 1, 2021 THROUGH
OCTOBER 31, 2022
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CASE NO. AVU-G-21-06

NOTICE OF APPLICATION

NOTICE OF
MODIFIED PROCEDURE

ORDER NO. 35145

On July 30, 2021, Avista Corporation dba Avista Utilities (“Company”) applied to the
Commission for authorization to implement Fixed Cost Adjustment (“FCA”) rates for natural gas
service effective from November 1, 2021, through October 31, 2022, and approve its
corresponding modifications to Schedule 175 “Fixed Cost Adjustment Mechanism – Natural Gas.”
The Company also asks that the Commission approve as prudently incurred the level of natural
gas FCA revenue deferred during the 18 month deferral period ended June 30, 2021.1 The
Company separately applied to implement FCA rates for electric service in Case No. AVU-E-21-
08. The Company proposes per therm FCA rebate rates for its residential and non-residential gas
customers. The Company’s Application, if approved, would increase overall natural gas revenues
by about $250,000. The monthly bill of an average residential gas customer would increase by
about $0.18, or 0.4%. The Company asks that its Application be processed by Modified Procedure
and requests an effective date of November 1, 2021.
With this Order, the Commission issues a Notice of Application and Notice of Modified
Procedure establishing a public comment period and Company reply deadline.
BACKGROUND
The FCA is a rate adjustment mechanism designed to break the link between the energy
a utility sells and the revenue it collects to recover fixed costs2 of providing service, thus
decoupling the utility’s revenues from its customers’ energy usage. Order No. 33437 at 3. This
decoupling removes a utility’s incentive to increase sales to increase revenue and profits and

1 In Order No. 34502, the Commission authorized the Company to modify its electric and natural gas deferral periods
one-time to run from January 1, 2020, through June 30, 2021.
2 “Fixed costs” are a utility’s costs to provide service that do not vary with energy use, output, or production, and
remain relatively stable between rate cases – for example, infrastructure and customer service.

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35145 2
encourages energy conservation. Id. at 3-4. The Commission originally approved the Company’s
FCA as a three-year pilot program, and part of the approved settlement of its 2015 rate case. See
Case Nos. AVU-E-15-05; AVU-G-15-01; Application at 3; and Order No. 33437 at 10. In the
order approving the FCA program, the Commission noted that the parties to the Company’s rate
case agreed to review the program’s effectiveness at the end of its second full year, to ensure it is
functioning as intended. Application at 3-4. The settlement stipulation in those cases and Schedule
175 also set forth how the FCA mechanism works, including treatment of existing versus new
customers, quarterly reporting requirements, annual filings, interest, accounting, and a 3% rate
increase cap. Id. at 4.
On June 15, 2018, the Commission approved an addendum to the settlement stipulation
approved in AVU-E-15-05 and AVU-G-15-01, which extended the term of the Company’s FCA
pilot for an additional year. See Order No. 34085. On December 13, 2019, the Commission
authorized the Company to: (1) extend its FCA mechanism for both gas and electric through March
31, 2025; (2) alter the first deferral period of the FCA extension by using a one-time, 18-month
deferral period from January 1, 2020 through June 30, 2021; and (3) alter its quarterly FCA
reporting requirement to 60-days after the end of each quarter. Order No. 34502; Case Nos. AVU-
E-19-06 and AVU-G-19-03.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that in its filing, the Company proposes a rate rebate
for its residential and non-residential gas customer groups based on the amount of deferred revenue
recorded for each group between January 1, 2020, and June 30, 2021. The Company mostly
attributes the proposed changes to drivers including warmer than normal weather during 18 months
ended June 30, 2021, energy efficiency, and “other” drivers.
YOU ARE FURTHER NOTIFIED that the Company recorded $324,456 in the rebate
direction in deferred revenue for its residential natural gas customer group for the 18 months ended
June 30, 2021. After considering the prior year residual balance of $6,663 and other adjustments,
the Company proposes a rebate of $334,866, at a proposed rate of 0.493 cents per therm, to the
Company’s residential natural gas customers served under rate Schedule 101. See Exhibit B. If
approved by the Commission, the Company would record this amount in a regulatory liability

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35145 3
balancing account and reduce the account balance each month by the rebate received by customers
under the tariff.
YOU ARE FURTHER NOTIFIED that for its non-residential natural gas customer
groups, the Company recorded $130,431 in the rebate direction in deferred revenue for the 18
months ended June 30, 2020. After considering the prior year residual balance of $918 and other
adjustments, the Company proposes to rebate $132,916, at a proposed rate of 0.490 cents per
therm, to the Company’s commercial and industrial natural gas customers served under rate
Schedules 111 and 112. See Exhibit B. If approved by the Commission, the Company would record
this amount in a regulatory liability balancing account and reduce the account balance each month
by the rebate received by customers under the tariff.
YOU ARE FURTHER NOTIFIED that with its Application, the Company submitted
its residential and non-residential rate calculations, support for its deferrals, and its proposed FCA
Schedule 175.
YOU ARE FURTHER NOTIFIED that the Company’s Application and Exhibits,
including the proposed tariff sheets, are available for public inspection during regular business
hours at the Commission’s office. The Application is also available on the Commission’s web site
at www.puc.idaho.gov. Click on the “NATURAL GAS” tab in the left-hand column of the home
page, then select “Open Cases” and then locate 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. 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
under the Commission’s Rules of Procedure, IDAPA 31.01.01.000, et seq.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determined that the public
interest may not require a formal hearing in this matter and it will review the case through written
submissions under the Commission’s Rules of Modified Procedure Rules 201 through 204 of the
Idaho Public Utilities Commission’s Rules of Procedure, IDAPA 31.01.01.201-204. The

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35145 4
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 persons desiring to state a position on this
Application may file a written comment explaining why the person supports or opposes the
Application. Persons who would like a hearing must specifically request a hearing in their written
comments. Persons shall have until October 6, 2021, to file written comments. Comments
must be filed by e-mail unless e-mail is unavailable. To comment electronically, please access the
Commission’s home page at www.puc.idaho.gov. Click the “Case Comment Form” and complete
the form using the case number as it appears on the front of this document. To file by e-mail, the
customer must e-mail the comments to the e-mail addresses listed below. In addition to submitting
the comments to the Commission Secretary, the customer must also e-mail the Company at the e-
mail addresses listed below. If computer access is unavailable, then comments may be mailed to
the Commission and Company at these addresses:
For the Idaho Public Utilities
Commission:

Commission Secretary
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074
[e-mail]

Street Address for Express Mail:

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

For Avista Corporation:

David J. Meyer, Esq. (MSC-10)
Patrick Ehrbar (MSC-27)
P.O. Box 3727
1411 E. Mission Ave
Spokane, WA 99220-3727
[e-mail]
[e-mail]
[e-mail]

YOU ARE FURTHER NOTIFIED that the Company must file any reply comments
by October 13, 2021.
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.
O R D E R

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35145 5
IT IS HEREBY ORDERED that this case be processed by Modified Procedure, Rule
201-204 (IDAPA 31.01.01.201 - .204). Persons shall have until October 6, 2021, to file written
comments, and the Company shall have until October 13, 2021, to file a reply, if any.
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.
DONE by order of the Idaho Public Utilities Commission at Boise, Idaho this 24th day
of August 2021.

__________________________________________
PAUL KJELLANDER, PRESIDENT

__________________________________________
KRISTINE RAPER, COMMISSIONER

__________________________________________
ERIC ANDERSON, COMMISSIONER

ATTEST:

_
Jan Noriyuki
Commission Secretary

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