20220902Final_Order_No_35520.pdf

ORDER NO. 35520 1

Office of the Secretary
Service Date
September 2, 2022
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

On March 1, 2022, Avista Corporation dba Avista Utilities (“Company”) applied for
authority to implement a new tariff Schedule 195—Optional Renewable Gas (“Schedule 195”).
The Company proposes to implement a voluntary Renewable Natural Gas (“RNG”) program that
provides customers an opportunity to purchase RNG as part of their regular monthly service. The
Company requested a May 1, 2022, effective date.
On March 25, 2022, the Commission issued notice of the Company’s Application and set
a 21-day intervention deadline for persons wishing to be joined as parties. The Commission further
suspended the Company’s proposed effective date of May 1, 2022, in accordance with Idaho Code
§ 61-622(4). Order No. 35355. No parties intervened.
On May 2, 2022, the Commission issued a Notice of Modified Procedure establishing
public comment and Company reply deadlines. Order No. 35391. Staff filed the only comments to
which the Company replied.
Having reviewed the record in this case, we now issue this final Order approving the
Company’s Application.
BACKGROUND
The Company conducted a commercial customer research project in 2019 focused
exclusively on energy and the environment plus internal research geared at residential customers’
RNG programs. Application at 2. With ample RNG supply available to support a voluntary RNG
program for its natural gas customers, positive customer sentiment towards an RNG program, and
increased customer enrollments amongst its Washington gas customers, the Company believes
offering a voluntary RNG program in Idaho is important for its interested customers. Id. at 3.
THE APPLICATION
The Company plans to offer customers the opportunity to purchase blocks of RNG where
each block includes environmental attributes represented by the equivalent to 1.5 therms of RNG
for $5.00 per block (the “Program”). Id. The Company states that the charges would be separated
IN THE MATTER OF AVISTA
CORPORATION’S PROPOSED TARIFF
SCHEDULE 195—OPTIONAL RENEWABLE
NATURAL GAS
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CASE NO. AVU-G-22-01

ORDER NO. 35520
ORDER NO. 35520 2

on customer’s monthly bills and would be in addition to the customer’s regular natural gas charges.
Id. The Company states it has structured the price to confine the costs and benefits strictly to
Program participants, including the supply of RNG attributes and Program administration costs.
Id.; see also Attachment A to the Company’s Application.
The Company signed an agreement with Puget Sound Energy (“PSE”) to acquire the
necessary RNG to support the Program. PSE has signed a contract for RNG with Klickitat Public
Utility District to acquire an estimated 550,000 dekatherms (“Dth”) annually for the first three
years with significantly more RNG in the years following. Application at 3.
Interested customers may enroll online or over the phone. Id. Customers may participate
in the Program with no contract and may cancel participation at any time. Id. at 4. Natural gas
customers will be notified of the Program on the effective date of Commission approval. Id.
The Company identified key performance indicators and will establish baseline metrics to
track Program performance to meet its primary objectives of customer satisfaction, customer
awareness, and customer participation. Id. The Company will monitor customer awareness through
external web traffic on the Program’s page and participation will be measured by customer
enrollment. Id. For participating customers, the Company states it will utilize the Midwest
Renewable Energy Tracking System (“M-RETS”) for purposes of the Program and retiring
environmental attributes on behalf of participating customers. Id.
THE COMMENTS
Staff Comments
Staff evaluated the Company’s filing to understand if the proposed RNG Program provides
benefits to Idaho customers and that non-participants will not bear the cost of the voluntary RNG
Program. Staff recommended Commission approval because the RNG Program is voluntary,
funded by its participants, and will not harm non-participating customers.
Staff discussed the Company’s plans for the RNG it purchases for customers, noting that
it will be unbundled—a process that separates the commodity or energy from the thermal
certificate associated with the RNG.1 According to Staff, “the unbundled cost of the energy will

1 The environmental attribute associated with RNG—Renewable Thermal Certificate (“RTC”)—is the environmental
value component of the RNG. Without the RTC, the RNG would be valued at the current natural gas commodity cost.
Staff Comments at 3.
ORDER NO. 35520 3

not be included in the RNG Program costs and the thermal certificate is then held to be retired on
behalf of RNG Program participants.” 2 Staff Comments at 3.
Staff reviewed the Company’s contract with PSE and believes it provides the Company
reliable access to gas to satisfy customer demand, and also protects the Company because it
requires the Company to purchase only the gas that is required to meet RNG Program enrollment.
Staff encouraged the Company to monitor the future availability of RNG from PSE’s supplier—
Klickitat PUD—because Klickitat PUD is currently selling the majority of its RNG to the market,
not PSE.
Staff Concerns
Staff discussed its concern regarding the Company’s adoption of the M-RETs trading
platform and use of RTCs. Staff believes that using RTCs for the RNG Program is unnecessary
and the more standardized Renewable Identification Numbers would have provided the same result
for the Company. Since the Company is currently using RTCs for its Oregon and Washington State
RNG programs, Staff concluded that it makes economic sense for the Company to use the same
tracking system for all jurisdictions, including Idaho. According to Staff, “the M[-]RET’s tracking
system will verify that the RTCs the Company is purchasing from PSE have not been sold to any
other party or used for any other program prior to their transfer to the Company.” Id. at 4. Staff
believes the Company should develop and implement processes that validate the RTC data
provided by PSE and Klickitat PUD, as well as information contained in M-RETS.
Although the Company will measure customer satisfaction, awareness, and participation,
Staff believes the Company should also file an annual RNG Program report that includes: “(1) the
[RNG Program] budget from the previous year, (2) operating expenses, (3) RNG Program
participation by month, (4) all RTC purchases made and retired for Idaho customers, and (5) where
those RTCs were produced.” Id. at 5. Staff also recommends the Company distribute notification
to its customers with Idaho specific information, including an effective date.

2 “The Company stated that it will use the M-RETS for the proposed RNG Program. M-RETS is an online platform
that provides certificate management similar to Renewable Energy Certificate (“REC”) tracking systems. RECs
represent the environmental and non-power attributes of renewable electricity. For thermal technologies, the M-RETS
system issues one RTC for every Dth of Renewable Thermal generation.” Id.

ORDER NO. 35520 4

Tariff Discrepancies
In its review of the Company’s proposed tariff, Staff discovered several discrepancies,
notably: (1) the inclusion of language that claims the RNG sourced for the RNG Program should
be tracked as required by the “Idaho State Legislature;” (2) language regarding “renewable
hydrogen;” and (3) the omission of the new tariff on its tariff index page. Staff suggests that if
approved the Company should file a conforming tariff that removes the incorrect language and
includes the updated tariff index page.
Company Reply Comments
The Company filed reply comments noting that it would submit the updated tariff sheet
upon Commission approval and proposed that the annual reports be provided annually by April
30th. The Company also addressed Staff’s concerns about the M-RETS clarifying that it does have
a process in place to verify RNG and the attached RTCs are transferrable from PSE to the Company
at the time of purchase. The Company states:
Gas Schedulers will purchase appropriate amounts of RNG to support the
customers enrolled in its Optional RNG Program. Once the purchase is made the
RTCs (for each Dth of gas purchased) will be transferred to Avista’s MRETs
account upon delivery of the RNG. The Gas Scheduler will then verify the RTCs
have been transferred from PSE to Avista, ensuring that no other party is utilizing
the same RTCs or being used under any other greenhouse gas reduction program.
Company Reply at 1.
The Company also clarified Staff’s statistic claiming the Company only had 69
Washington State customers signed up for the voluntary RNG program, noting that it has 517
customers enrolled as of June 21, 2022.3
COMMISSION DISCUSSION AND FINDINGS
The Company is a gas utility subject to the Commission’s regulation under the Public
Utilities Law. Idaho Code §§ 61-117 and 61-129. The Company’s rates, charges, classifications,
and contracts for gas service in the State of Idaho are subject to the Commission’s jurisdiction.
The Commission has jurisdiction over this matter under Idaho Code §§ 61-501, 61-502, and 61-
503. The Commission is empowered to investigate rates, charges, rules, regulations, practices, and
contracts of public utilities and to determine whether they are just, reasonable, preferential,

3 378 customers in Washington State and 139 in Oregon.
ORDER NO. 35520 5

discriminatory, or in violation of any provision of law, and to fix the same by order. Idaho Code
§§ 61-502 and 61-503.
We have reviewed the record, including the Application and comments. Based on our
review, we approve the Company’s Application. We appreciate the Company seeking to make the
RNG Program available to interested customers in Idaho. Our approval is based on the Program
being optional and our understanding that customers who elect to participate will cover the RNG
costs and administrative costs, meaning no Program costs will be passed along to non-participating
customers.
We find the annual Idaho-specific report proposed by Staff would be beneficial for the
Commission given the nature of the Program and our desire to ensure that no costs are passed on
to non-participating customers. The report will provide valuable insight into trends in the natural
gas market and Idaho customers’ demands for RNG. This report shall be filed annually by April
30th. After issuance of this Order, the Company shall also provide notice to Idaho customers with
information on the Program.
Finally, we direct the Company to file updated tariffs correcting the errors contained in the
proposed tariffs, as discussed in Staff’s Comments.
O R D E R
IT IS HEREBY ORDERED that the Company’s Application is approved pending its
submission of corrected tariffs.
IT IS FURTHER ORDERED that the Company shall file an Idaho-specific RNG Program
report by April 30th annually.
IT IS FURTHER ORDERED that the Company shall distribute notification to Idaho
customers informing them of the optional RNG Program.
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 regarding any matter
decided in 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.
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ORDER NO. 35520 6

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 2nd day
of September 2022.

ERIC ANDERSON, PRESIDENT

JOHN CHATBURN, COMMISSIONER

JOHN R. HAMMOND JR., COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\GAS\AVU-G-22-01\orders\AVUG2201_final_dh.docx