20230201Miller Direct.pdf

DAVID J. MEYER
VICE PRESIDENT AND CHIEF COUNSEL FOR
REGULATORY & GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
P.O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: [phone]
[e-mail]

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION ) CASE NO. AVU-E-23-01
OF AVISTA CORPORATION FOR THE ) CASE NO. AVU-G-23-01
AUTHORITY TO INCREASE ITS RATES )
AND CHARGES FOR ELECTRIC AND )
NATURAL GAS SERVICE TO ELECTRIC ) DIRECT TESTIMONY
AND NATURAL GAS CUSTOMERS IN THE ) OF
STATE OF IDAHO ) JOSEPH D. MILLER

FOR AVISTA CORPORATION

(ELECTRIC AND NATURAL GAS)

Miller, Di 1
Avista Corporation
I. INTRODUCTION 1
Q. Please state your name, business address and present position with 2
Avista Corporation? 3
A. My name is Joseph D. Miller and my business address is 1411 East Mission 4
Avenue, Spokane, Washington. I am presently assigned to the Regulatory Affairs 5
Department as Senior Manager of Rates and Tariffs. 6
Q. Would you briefly describe your educational background and 7
professional experience? 8
A. Yes. I am a 1999 graduate of Portland State University with a Bachelor’s 9
degree in Business Administration, majoring in Accounting. In 2005, I graduated from 10
Gonzaga University with a Master’s degree in Business Administration. I joined the 11
Company in March 2008, after spending eight years in both the public and private 12
accounting sector. I started with Avista as a Natural Gas Accounting Analyst in the 13
Company’s Resource Accounting Department. In January 2009, I joined the State and 14
Federal Regulation Department as a Regulatory Analyst. My primary responsibility was 15
coordinating discovery for the Company’s general rate case filings. In my current role as 16
Senior Manager of Rates and Tariffs, I am responsible for the Company’s electric and 17
natural gas rate design, customer usage and revenue analysis, and tariff administration, 18
among other things. 19
Q. What is the scope of your testimony in this proceeding? 20
A. My testimony in this proceeding will cover the spread of the proposed 2023 21
and 2024 electric and natural gas base revenue increases among the Company’s electric and 22
natural gas general service schedules. For the 2023 rate change, on a total billed revenue 23
basis the Company is proposing to increase electric customer billed rates of $37.5 million 24
Miller, Di 2
Avista Corporation
or 14.7% and an increase to natural gas customer billed rates of $2.8 million or 2.7%. For 1
the 2024 rate change, on a total billed revenue basis the Company is proposing an increase 2
to electric customer billed rates of $13.2 million, or 4.5% and an increase to natural gas 3
customer billed rates of $0.1 million or 0.1%. My testimony will also detail the proposed 4
changes to the electric and natural gas Basic Charges for electric residential rate schedule 5
1, and natural gas general service schedule 101. 6
Q. Would you please provide an overview of the Company’s electric and 7
natural gas rate requests? 8
A. Yes. As discussed by Company witness Mr. Vermillion, the Company is 9
proposing a Two-Year Rate Plan for years 2023 and 2024, with proposed rate changes 10
effective September 1 of each year. The Company is proposing a Two-Year Rate Plan, to 11
once again, avoid annual rate cases in its Idaho jurisdiction, providing benefits to all 12
stakeholders. A Two-Year Rate Plan, with rate changes in 2023 and 2024, would provide 13
benefits by providing a level of rate predictability to customers over this two-year period. 14
A two-year window also provides Avista with the opportunity to manage its business in 15
order to achieve a fair rate of return within known price changes. Finally, relief is provided 16
to all stakeholders (customers, the Commission and its Staff, intervenors, and the 17
Company) from the administrative burdens and costs of litigation of annual general rate 18
cases. 19
Accordingly, the Company has filed two sets of tariffs for each of the electric and 20
natural gas service schedules. The first tariff for each rate schedule provides for an effective 21
date of March 1, 2023; however, in the Company’s Application in this case, Avista has 22
requested that the tariffs related to the 2023 rate request be suspended with a proposed 23
effective date of September 1, 2023. The second set of tariffs filed for each of the electric 24
Miller, Di 3
Avista Corporation
Rate Schedule Description
2023 Billing
Change
2024 Billing
Change
Residential Service Schedule 1 15.3%4.7%
General Service Schedules 11 & 12 14.2%4.4%
Large General Service Schedules 21 & 22 14.1%4.3%
Extra Large General Service Schedule 25 14.2%4.4%
Extra Large General Service 25P Schedule 25P 14.0%4.3%
Pumping Service Schedules 31 & 32 14.2%4.4%
Street & Area Lights Schedules 41 - 49 13.8%4.2%
Total 14.7%4.5%
Rate Schedule Description
2023 Billing
Change
2024 Billing
Change
General Service Schedule 101 3.5%0.1%
Large General Service Schedules 111 & 112 0.0%0.0%
Interruptible Service Schedules 131 & 132 0.0%0.0%
Transportation Service Schedule 146 0.0%0.0%
Total 2.7%0.1%
and natural gas service schedules have an effective date of September 1, 2024, consistent 1
with the Company’s second-step rate change proposal. 2
Provided below in Table Nos. 1 & 2 is a summary of the proposed change, by rate 3
schedule, on a billing basis (inclusive of all base and billing rate components): 4
Table No. 1 – 2023 & 2024 Electric Rate Request by Schedule 5
6
7
8
9
10
11
12
Table No. 2 – 2023 & 2024 Natural Gas Rate Request by Schedule 13
14
15
16
17
18
Q. Are you sponsoring any Exhibits that accompany your testimony? 19
A. Yes. I am sponsoring Exhibit No. 18, Schedules 1 through 3 related to the 20
proposed electric increase, and Schedules 4 through 6 related to the proposed natural gas 21
increase. These exhibits were prepared by me, or under my supervision. A table of contents 22
for my testimony is as follows: 23
Miller, Di 4
Avista Corporation
Table of Contents Page 1
I. Introduction 1 2
3
II. Proposed Electric Revenue Increase 4 4
Summary of Rate Schedules and Tariffs 4 5
Proposed Rate Spread (Increase by Schedule) 6 6
Proposed Rate Design (Rates within Schedules) 8 7
8
III. Proposed Natural Gas Revenue Increase 18 9
Summary of Rate Schedules and Tariffs 19 10
Proposed Rate Spread (Increase by Schedule) 20 11
Proposed Rate Design (Rates within Schedules) 22 12
13
IV. Residential Basic Charge 26 14
15
16
II. PROPOSED ELECTRIC REVENUE INCREASE 17
Summary of Electric Rate Schedules and Tariffs 18
Q. Would you please explain what is contained in Schedules 1 and 2 of 19
Exhibit No. 18? 20
A. Yes. Schedule 1 is a copy of the Company’s present and proposed electric 21
tariffs for 2023 and 2024, showing the changes (strikeout and underline) proposed in this 22
filing. Schedule 2 contains the proposed (clean) electric tariff sheets for 2023 and 2024 23
incorporating the proposed changes included in this filing. 24
Q. What is contained in Schedule 3 of Exhibit No. 18? 25
A. Schedule 3 contains information regarding the proposed spread of the 26
electric revenue increase among the service schedules and the proposed changes to the rates 27
within the schedules. Page 1 shows the 2023 and 2024 proposed general revenue and 28
percentage increases by rate schedule compared to the present revenue under base tariff and 29
billing rates. Page 2 shows the rates of return and the relative rates of return for each of the 30
schedules before and after application of the proposed 2023 general increase. Pages 3 and 31
Miller, Di 5
Avista Corporation
Rate Schedule No. of Customers
Residential Schedule 1 113,144
General Service Schedules 11/12 22,959
Large General Service Schedules 21/22 891
Extra Large General Service Schedule 25 11
Clearwater Paper Schedule 25P 1
Pumping Service Schedules 31/32 1,520
4 show the present rates under each of the rate schedules, the proposed changes to the rates 1
within the schedules, and the proposed rates after application of the 2023 and 2024 rate 2
changes. These pages will be referred to later in my testimony. 3
Q. Would you please describe the Company's present rate schedules and 4
the types of electric service offered under each? 5
A. Yes. The Company presently provides electric service under Residential 6
Service Schedule 1, General Service Schedules 11 and 12, Large General Service Schedules 7
21 and 22, Extra Large General Service under Schedule 25 and Schedule 25P (Clearwater 8
Paper’s Lewiston Plant), and Pumping Service Schedules 31 and 32. Additionally, the 9
Company provides Street Lighting Service under Schedules 41-46, and Area Lighting 10
Service under Schedules 47-49. Schedules 12, 22, 32, and 48 cover residential and farm 11
service customers who qualify for the Residential Exchange Program operated by the 12
Bonneville Power Administration. The rates for these schedules are identical to the rates 13
for Schedules 11, 21, 31, and 47, respectively, except for the Residential Exchange rate 14
credit. 15
The following table shows the type and number of customers served in Idaho (as of 16
June 2022 – the Company’s test year) under each of the electric service schedules: 17
Table No. 3 – Customers by Service Schedule 18
19
20
21
22
23
Miller, Di 6
Avista Corporation
Rate Schedule
Increase in Base
Rates
Increase in
Billing Rates
Residential Schedule 1 13.6%15.3%
General Service Schedules 11/12 13.6%14.2%
Large General Service Schedules 21/22 13.6%14.1%
Extra Large General Service Schedule 25 13.6%14.2%
Clearwater Paper Schedule 25P 13.6%14.0%
Pumping Service Schedules 31/32 13.6%14.2%
Street & Area Lights Schedules 41-48 13.6%13.8%
Overall 13.6%14.7%
Proposed Electric Rate Spread 1
Q. For 2023, what is the proposed electric revenue increase, and how is the 2
Company proposing to spread the increase by rate schedule? 3
A. For 2023, the proposed electric increase is $37,462,000, or 13.6% over 4
present base tariff rates in effect. The proposed general increase over present billing rates, 5
after including all other rate adjustments (such as DSM and Residential Exchange), is 6
14.7%. The proposed percentage change by rate schedule is as follows: 7
Table No. 4 – Proposed % Electric Increase by Schedule - 2023 8
9
10
11
12
13
14
This information is shown with more detail on page 1 of Exhibit No. 18, Schedule 3. 15
Q. What rationale did the Company use to develop the proposed spread 16
the total 2023 general revenue increase request of $37,462,000 among its various rate 17
schedules? 18
A. The Company believes that the results of the electric cost of service study 19
(sponsored by Company witness Mr. Garbarino) could be used as a guide to spread the 20
general increase. However, given the relative size of the proposed base revenue increase, 21
Avista is proposing to spread the revenue increase on a uniform percent of revenue basis at 22
the proposed levels. The spread of the proposed increase still results in the rates of return 23
for the various electric service schedules moving closer to the overall rate of return (unity). 24
Miller, Di 7
Avista Corporation
Present Proposed
Relative Relative
Rate Schedule ROR ROR
Residential Schedule 1 0.87 0.91
General Service Schedules 11/12 1.24 1.16
Large General Service Schedules 21/22 0.88 0.90
Extra Large General Service Schedule 25 1.22 1.19
Clearwater Paper Schedule 25P 1.59 1.49
Pumping Service Schedules 31/32 0.75 0.80
Street & Area Lights Schedules 1.70 1.28
Overall 1.00 1.00
The Company may propose additional movement toward unity in future proceedings. 1
Table No. 5 below shows the relative rates of return before and after application of the 2
proposed general increase: 3
Table No. 5 – Present & Proposed Relative Rates of Return 4
5
6
7
8
9
10
11
This information is shown in detail on Page 2, Schedule 3 of Exhibit No. 18. 12
Q. If the Commission were to order a revenue requirement lower than the 13
Company’s request, how does the Company propose to spread the revenue increase? 14
A. If the Commission were to order a lower revenue requirement than filed for, 15
the Company proposes to allocate the same increase as the Company’s initial filing to 16
Residential Service Schedule 1, Large General Service Schedules 21/22, and Pumping 17
Service Schedules 31/32. The remaining revenue should then be applied equally to 18
Schedules 11/12, Schedule 25, Schedule 25P and the Street and Area Lights Schedules as 19
those schedules are providing significantly more than their relative cost of service as 20
discussed by Mr. Garbarino. 21
Q. For 2024, what is the proposed electric revenue increase, and how is the 22
Company proposing to spread the increase by rate schedule? 23
A. For 2024, the proposed electric increase is $13,150,000, or 4.2% over base 24
Miller, Di 8
Avista Corporation
Rate Schedule
Increase in Base
Rates
Increase in
Billing Rates
Residential Schedule 1 4.2%4.7%
General Service Schedules 11/12 4.2%4.4%
Large General Service Schedules 21/22 4.2%4.3%
Extra Large General Service Schedule 25 4.2%4.4%
Clearwater Paper Schedule 25P 4.2%4.3%
Pumping Service Schedules 31/32 4.2%4.4%
Street & Area Lights Schedules 41-48 4.2%4.2%
Overall 4.2%4.5%
tariff rates. The proposed general increase over billing rates, including all other rate 1
adjustments (such as DSM and Residential Exchange), is 4.5%. Consistent with the 2023 2
rate spread, the Company used a uniform percentage of revenue for purposes of spreading 3
the proposed 2022 electric revenue increase. The proposed percentage increase by rate 4
schedule is as follows: 5
Table No. 6 – Proposed % Electric Increase by Schedule - 2024 6
7
8
9
10
11
12
This information is shown with more detail on page 1 of Exhibit No. 18, Schedule 3. 13
Proposed Rate Design 14
Q. Where in your Exhibit do you show a comparison of the present and 15
proposed rates within each of the Company’s electric service schedules? 16
A. Pages 3 (for 2023) and 4 (for 2024) of Schedule 3 in Exhibit No. 18 shows 17
a comparison of the present and proposed rates within each of the schedules, which I will 18
describe below. Column (a) shows the rate/billing components under each of the schedules, 19
column (b) shows the present base tariff rates within each of the schedules, column (c) 20
shows the present rate adjustments applicable under each schedule, and column (d) shows 21
the present billing rates. Column (e) shows the proposed general rate increase to the rate 22
components within each of the schedules, column (f) shows the proposed billing rates and 23
column (g) shows the proposed base tariff rates. 24
Miller, Di 9
Avista Corporation
Q. Is the Company proposing any changes to the existing rate structures 1
within its rate schedules? 2
A. No. The Company is not proposing any changes to the present rate 3
structures within its electric schedules. 4
Q. Turning to Residential Service Schedule 1, could you please describe 5
the present rate structure under this schedule? 6
A. Yes. Residential Schedule 1 has a present customer or basic charge of $7.00 7
per month and two energy rate blocks: 0-600 kWhs and over 600 kWhs. The present base 8
tariff rate for the first 600 kWhs per month is 9.234 cents per kWh and 10.378 cents for all 9
kWhs over 600. 10
Q. How does the Company propose to spread Schedule 1’s proposed 2023 11
general revenue increase of $18,298,000 to the rates within that schedule? 12
A. The Company proposes to apply an equal percentage increase to the two 13
energy blocks and increase the Basic Charge from $7.00 per month to $15.00 per month. 14
The proposed increase for the first 600 kWhs used per month under the schedule is 0.536 15
cents per kWh, and an increase of 0.601 cents per kWh for usage over 600 kWhs per month. 16
I will discuss the justification and rationale for the increase in the basic charge later in my 17
testimony. 18
Q. How does the Company propose to spread Schedule 1’s proposed 2024 19
general revenue increase of $6,422,000 to the rates within that schedule? 20
A. The Company proposes to increase the monthly customer charge from 21
$15.00 per month to $20.00 per month. The remaining revenue for the schedule is proposed 22
to be recovered through a uniform percentage decrease of approximately 0.4% applied to 23
the two energy block rates. The proposed decrease for the first 600 kWhs used per month 24
Miller, Di 10
Avista Corporation
under the schedule is 0.036 cents per kWh, and a decrease of 0.040 cents per kWh for usage 1
over 600 kWhs per month. 2
Q. For 2023, what is the proposed increase for a residential electric 3
customer with average consumption? 4
A. Inclusive of the increase to the basic charge, the proposed bill change for a 5
residential customer using an average of 927 kWhs per month is $13.18 per month, or an 6
15.4% change in their electric bill. The present bill for 927 kWhs is $85.40, and that would 7
increase to $98.58. 8
Q. For 2024, what is the proposed increase for a residential electric 9
customer with average consumption? 10
A. The proposed increase for a residential customer using an average of 927 11
kWhs per month is $4.66 per month, or a 4.7% increase in their electric bill, resulting in an 12
overall bill of $103.24, including all rate adjustments. As noted above, this includes a $5 13
per month increase in the monthly basic charge, offset by a reduction in volumetric rates. 14
Q. Turning to General Service Schedules 11/12, could you please describe 15
the present rate structure and rates under those schedules? 16
A. Yes. General Service Schedules 11/12 are the service schedules typically 17
applicable to customers with an average demand of less than 20 kW per month, such as 18
small retail establishments (Schedule 11), or shops for residential customers which require 19
a separate service (Schedule 12). The present rate structure under the schedules includes a 20
monthly customer charge of $15.00, an energy rate of 9.293 cents per kWh for all usage up 21
to 3,650 kWhs per month, and an energy rate of 6.513 cents per kWh for usage over 3,650 22
kWhs per month. There is also a demand charge of $6.00 per kW for all demand in excess 23
of 20 kW per month. There is no charge for the first 20 kW of demand. 24
Miller, Di 11
Avista Corporation
Q. How is the Company proposing to apply Schedule 11/12’s proposed 1
2023 general revenue increase of $5,960,000 to the rates within those schedules? 2
A. The Company is proposing that the customer charge of $15.00 per month 3
increase to $18.00 per month and the variable demand rate of $6.00/kW per month increase 4
to $6.50/kW. The remaining revenue increase for those schedules is proposed to be 5
recovered through a uniform percentage increase applied to the two energy rates. The 6
increase in the first block rate is 1.226 cent per kWh (the first 3,650 kWhs used per month), 7
and a 0.858 cent per kWh increase to the second energy block. 8
Q. How is the Company proposing to apply Schedule 11/12’s proposed 9
2024 general revenue increase of $2,095,000 to the rates within those schedules? 10
A. The Company is proposing that the customer charge increase by $2.00 per 11
month, from $18.00 to $20.00. The Company is also proposing that the variable demand 12
rate increase from $6.50/kW to $7.00/kW. The remaining revenue increase for those 13
schedules is proposed to be recovered through a 0.334 increase to the first energy block 14
(the first 3,650 kWhs used per month), and a 0.233 cent per kWh to the second energy 15
block. 16
Q. Why is the Company proposing an 16.7% increase to the demand 17
charge for Schedule 11/12 over the rate plan? 18
A. The system allocated demand cost from the cost of service study is 19
approximately $13.18 per kilowatt (kW) month.1 The Company’s present monthly demand 20
charges range from $5.00–$6.00/kW, depending on service schedule. While the exact level 21
of costs classified as demand-related can be debated, clearly the levels of demand charges 22
will continue to be well below demand-related costs. 23

1 Exhibit No. 16, Schedule 3, page 3, line 21
Miller, Di 12
Avista Corporation
In addition, the Company’s transmission and distribution system is constructed to 1
meet the collective peak demand of its customers. Further, the Company must have 2
adequate resources available to meet peak demand. If customers reduce their peak demand, 3
it will reduce the need for additional investment in these facilities and resources. Customers 4
need to receive the proper price signal to encourage a reduction in their peak demand, i.e., 5
higher demand charges. 6
For these reasons, the Company believes that it is important to increase the demand 7
charge in this case for Schedule 11/12, as well as for Schedules 21/22 and 25, by a 8
percentage greater than that applied to the energy rates. If demand charges are not increased 9
at least proportionately with energy charges over the rate plan, customers who have a poor 10
load factor (high peak demand compared to average energy use) would see a lower 11
percentage increase in their bill than a comparable customer with a good load factor (low 12
peak demand compared to average energy use). This result would not send the appropriate 13
price signal to commercial and industrial customers, nor would it reflect the fact that the 14
Company’s demand charges are well below the costs associated with meeting customers’ 15
peak demand. 16
Q. Turning to Large General Service Schedules 21/22, would you please 17
describe the present rate structure under those schedules and how the Company is 18
proposing to apply Schedule 21/22’s 2023 increase of $6,394,000 to the rates within 19
the schedules? 20
A. Yes. Large General Service Schedules 21/22 are the service schedules 21
applicable to customers with monthly demands over 50 kW, but less than 3,000 kW. 22
Typical customers served are grocery stores, schools, and office buildings on Schedule 21, 23
with retirement homes and other qualified residential load served on Schedule 22. 24
Miller, Di 13
Avista Corporation
These schedules consist of a minimum monthly charge of $425 for the first 50 kW 1
or less, a demand charge of $5.50 per kW for monthly demand in excess of 50 kW, and two 2
energy block rates: 6.583 cents per kWh for the first 250,000 kWhs per month, and 5.548 3
cents per kWh for all usage in excess of 250,000 kWhs. 4
The Company is proposing that the minimum demand charge for the first 50 kW of 5
$425 per month increase to $500 per month and the demand charge of $5.50/kW per month 6
increase to $6.50/kW per month. The remaining revenue increase for the schedules is 7
proposed to be recovered through a uniform percentage increase of approximately 12.4% 8
applied to the two energy block rates. The proposed increase for the first 250,000 kWhs 9
used per month under the schedules is 0.815 cents per kWh, and an increase of 0.687 cents 10
per kWh for usage over 250,000 kWhs per month. 11
Q. Would you please describe how the Company is proposing to apply 12
Schedule 21/22’s 2024 increase of $2,243,000 to the rates within the schedule? 13
A. Yes. The Company is proposing to increase the present minimum demand 14
charge (for the first 50 kW or less) by $25 per month, from $500 to $525, and increase the 15
demand charge from $6.50/kW to $7.00/kW. The remaining revenue increase for the 16
schedules is proposed to be recovered through a uniform percentage increase of 17
approximately 3.5% applied to the two energy block rates. The proposed increase for the 18
first 250,000 kWhs used per month under the schedules is 0.259 cents per kWh, and an 19
increase of 0.220 cents per kWh for usage over 250,000 kWhs per month. 20
Q. Turning to Extra Large General Service Schedule 25, would you please 21
describe the present rate structure under that schedule, and how the Company is 22
proposing to apply Schedule 25’s 2023 increase of $2,814,000 to the rates within the 23
schedule? 24
Miller, Di 14
Avista Corporation
A. Yes. Schedule 25 is applicable for customers with demands in excess of 1
3,000 kVa per month, such as large industrial customers and universities. Extra Large 2
General Service Schedule 25 consists of a minimum monthly charge of $14,000 for the first 3
3,000 kVa or less, a demand charge of $5.00 per kVa for monthly demand in excess of 4
3,000 kVa, and two energy block rates: 5.693 cents per kWh for the first 500,000 kWhs 5
per month and 4.769 cents per kWh for all usage in excess of 500,000 kWhs. 6
The Company is proposing that the present minimum demand charge of $14,000 7
per month increase to $16,000 per month and the volumetric demand charge of $5.00/kVA 8
per month increase to $5.75/kVA per month. The remaining revenue increase for the 9
schedule is proposed to be recovered through a uniform percentage increase of 10
approximately 13.2% applied to the two energy block rates. The proposed energy rate 11
increase for the first 500,000 kWhs used per month is 0.754 cents per kWh and the increase 12
for usage over 500,000 per month is 0.632 cents per kWh. 13
Q. Would you please describe how the Company is proposing to apply 14
Schedule 25’s 2024 increase of $987,000 to the rates within the schedule? 15
A. Yes. The Company is proposing that the minimum demand charge of 16
$16,000 be increased by $1,000 to $17,000 per month. Further, the Company is proposing 17
to increase the volumetric demand charge from $5.75/kVA to $6.25/kVA. The remaining 18
revenue increase for the schedule is proposed to be recovered through a uniform percentage 19
increase of approximately 3.5% applied to the two energy block rates. The proposed energy 20
rate increase for the first 500,000 kWhs used per month is 0.224 cents per kWh and the 21
increase for usage over 500,000 per month is 0.187 cents per kWh. 22
Q. Please describe the service the Company provides to Clearwater 23
Paper’s Lewiston Plant under Schedule 25P. 24
Miller, Di 15
Avista Corporation
A. In Commission Order No. 34252, dated June 28, 2013, the Commission 1
approved a five-year Electric Service Agreement (Agreement) between Avista and 2
Clearwater, applicable to its Lewiston Plant.2 The Agreement became effective July 1, 3
2013 and was replaced with a new Agreement effective March 1, 2019. The 2013 4
Agreement provided for Clearwater to use its on-site generation to serve its own load, and 5
for Clearwater to purchase from Avista all of the electric power requirements that exceed 6
the electric power generated by Clearwater. This contract was not in effect with Avista 7
during the twelve months ended 2022 test year. 8
On February 27, 2019 the Commission approved a new Power and Purchase and 9
Sale Agreement (Order No. 34252) between Avista and Clearwater that allows Avista to 10
sell to Clearwater an amount of energy equivalent to its generation at a second block rate 11
of $24.56 per MWh. In turn, Clearwater sells the electricity it generates and the 12
corresponding REC’s to Avista at a contract rate of $24.50 per MWh (adjusted for 13
Commission fees). Because Avista buys and sells an equivalent amount of energy at near 14
equivalent prices, the new Agreement provides the same benefit to Clearwater as allowing 15
Clearwater to generate into its own load under the prior Agreement. 16
Avista serves Clearwater’s load requirements under Schedule 25P. As described in 17
Schedule 25P, for purposes of all proposals related to General Rate Case Filings, “Base 18
Revenue” will be defined as Clearwater’s “net” generation requirements as measured 19
through the Block 1 Retail Meter. Because the effects of the Block 2 Generation load are 20
removed from the Company’s filing, the new Agreement has no impact on the level of base 21
revenue proposed to be recovered in the Company’s filing. 22

2 On July 30, 2015 the Commission approved (Order No. 33350) a Joint Petition between Avista and
Clearwater which, among other things, gave approval of a contract amendment which would extend the length
of the original contract from June 30, 2018 to June 30, 2021 (Case No. AVU-E-15-06).
Miller, Di 16
Avista Corporation
Q. Please describe the application of the proposed Schedule 25P 2023 1
increase of $2,602,000 to the rates within the schedule. 2
A. Similar to Schedule 25, the Company is proposing that the present minimum 3
demand charge of $14,000 per month increase to $16,000 per month. The per month 4
volumetric demand charges of $5.00/kVA for all kVA between 3,000 and 55,000 increase 5
to $5.75/kVA, and the $2.50/kVA for all kVA over 55,000 increase to $3.00/kVA. The 6
remaining revenue increase for the schedule is proposed to be recovered through an increase 7
of 0.557 cents per kWh to the energy charge. 8
Q. Please describe the application of the proposed Schedule 25P 2024 9
increase of $914,000 to the rates within the schedule. 10
A. Similar to Schedule 25, the Company is proposing that the present minimum 11
demand charge of $16,000 be increased by $1,000, to $17,000 per month. Further, the 12
Company is proposing to increase the volumetric demand charge for the 3,000 – 55,000 13
kVA block from $5.75/kVA to $6.25/kVA. The remaining revenue change for the schedule 14
is proposed to be recovered through a percentage increase of approximately 3.4% applied 15
to the single energy block rate, an increase of 0.162 cents per kWh. 16
Q. Turning to Pumping Schedules 31/32, would you please describe how 17
the Company is proposing to apply the 2023 increase of $844,000 to the rates within 18
the schedules? 19
A. The Company is proposing an increase the present $13.00 per month 20
customer charge to $16.00 per month in 2023. The remaining revenue increase is proposed 21
to be spread on a uniform percentage basis of approximately 13.2% to the two energy rate 22
blocks under the schedules. The proposed increase in the first block rate is 1.374 cents per 23
kWh and the increase in the second block rate is 1.160 cents per kWh. 24
Miller, Di 17
Avista Corporation
Q. Please describe how the Company is proposing to apply Schedule 1
31/32’s 2024 increase of $296,000 to the rates within the schedules. 2
A. The Company is proposing that the customer charge of $16.00 per month be 3
increased by $2.00, to $18.00 per month, and that the remaining revenue increase be spread 4
on a uniform percentage basis of approximately 3.8% to the two energy rate blocks under 5
the schedules. The proposed increase in the first block rate is 0.452 cents per kWh and the 6
increase in the second block rate is 0.382 cents per kWh. 7
Q. How is the Company proposing to spread the proposed 2023 revenue 8
increase of $550,000 applicable to Street and Area Light (Schedules 41-49)? 9
A. The Company proposes to increase present street and area light (base) rates 10
on a uniform percentage basis. The proposed increase for all lighting rates is 13.6%. The 11
(base tariff) rates for those schedules are provided in Exhibit No. 18, Schedule 2. 12
Q. How is the Company proposing to spread the proposed 2024 revenue 13
increase of $192,000 applicable to Street and Area Light (Schedules 41-49)? 14
A. The Company proposes to increase present street and area light (base) rates 15
on a uniform percentage basis. The proposed increase for all lighting rates is 4.2%. The 16
(base tariff) rates for those schedules are provided in Exhibit No. 18, Schedule 2. 17
Q. Is the Company proposing any other changes to its Street and Area 18
Light schedules? 19
A. Yes. The Company has made some minor housekeeping type changes to 20
clean up the Street and Area Light tariffs which mostly remove lighting options that are no 21
longer being used by our customers. 22
Q. Turning now to the Company’s Electric Fixed Cost Adjustment 23
Mechanism, how will new baseline information be incorporated into the mechanism? 24
Miller, Di 18
Avista Corporation
A. As in prior general rate cases, the Company would, as a part of its 1
Compliance Filing at the conclusion of this case, submit the final baseline values for its 2
Fixed Cost Adjustment Mechanism (for both 2023 and 2024) prior to new rates going into 3
effect as a result of this general rate case. 4
5
III. PROPOSED NATURAL GAS REVENUE INCREASE 6
Q. Would you please explain what is contained in Schedules 4 and 5 of 7
Exhibit No. 18? 8
A. Yes. Schedule 4 of Exhibit No. 18 is a copy of the Company’s present and 9
proposed natural gas tariffs for 2023 and 2024, showing the changes (strikeout and 10
underline) proposed in this filing. Schedule 5 of Exhibit No. 18 contains the proposed 11
(clean) natural gas tariff sheets for 2023 and 2024 incorporating the proposed changes 12
included in this filing. 13
Q. Would you please explain what is contained in Schedule 6 of Exhibit No. 14
18? 15
A. Schedule 6 of Exhibit No. 18 contains information regarding the proposed 16
spread of the natural gas revenue increase among the service schedules and the proposed 17
changes to the rates within the schedules. Page 1 shows the proposed general revenue and 18
percentage increase by rate schedule. Page 2 shows the rates of return and the relative rates 19
of return for each of the schedules before and after the proposed 2023 increase. Pages 3 and 20
4 show the present rates under each of the rate schedules, the proposed changes to the rates 21
within the schedules, and the proposed rates after application of the 2023 and 2024 rate 22
changes. These pages will be referred to later in my testimony. 23
Miller, Di 19
Avista Corporation
Summary of Natural Gas Rate Schedules and Tariffs 1
Q. Would you please review the Company's present rate schedules and the 2
types of natural gas service offered under each? 3
A. Yes. The Company's present Schedules 101 and 111 offer firm sales service. 4
Schedule 101 generally applies to residential and small commercial customers who use less 5
than 200 therms/month. Schedule 111 is generally for customers who consistently use over 6
200 therms/month and Schedule 131 provides interruptible sales service to customers 7
whose annual requirements exceed 250,000 therms. Schedule 146 provides 8
transportation/distribution service for customer-owned natural gas for customers whose 9
annual requirements exceed 250,000 therms. 10
Q. The Company also has rate Schedules 112 and 132 on file with the 11
Commission. Would you please explain which customers are eligible for service under 12
these schedules? 13
A. Yes. Schedules 112 and 132 are in place to provide service to customers 14
who at one time were provided service under Transportation Service Schedule 146. The 15
rates under these schedules are the same as those under Schedules 111 and 131 respectively, 16
except for the application of Temporary Gas Rate Adjustment Schedule 155. Schedule 155 17
is a temporary rate adjustment used to amortize the deferred natural gas costs approved by 18
the Commission in the prior Purchased Gas Cost Adjustment (“PGA”) filing. Because of 19
their size, transportation service customers are analyzed individually to determine their 20
appropriate share of deferred natural gas costs. If those customers switch back to sales 21
service, the Company continues to analyze those customers individually; otherwise, those 22
customers would receive natural gas cost deferrals which are not due them; thus the need 23
for Schedules 112 and 132. There are only two customers served under these schedules as 24
Miller, Di 20
Avista Corporation
Rate Schedule No. of Customers
General Service Schedule 101 91,039
Large General Service Schedules 111/112 1,572
Interruptible Sales Service Schedules 131/132 0
Transportation Service Schedule 146 6
of June 30, 2022. 1
Q. How many customers does the Company serve under each of its natural 2
gas rate schedules in Idaho? 3
A. As of June 30, 2022, the Company provided service to the following number 4
of customers under each of its schedules in Idaho: 5
Table No. 7 – Customers by Service Schedule 6
7
8
9
10
Q. Is the Company proposing any changes to the present rate structures 11
within its natural gas service schedules? 12
A. No. The Company is not proposing any changes to the present rate 13
structures within its natural gas schedules. 14
Proposed Rate Spread 15
Q. For 2023, what is the proposed natural gas revenue increase, and how 16
is the Company proposing to spread the increase by rate schedule? 17
A. For 2023, the proposed base revenue increase is $2,771,000, or 6.0% in base 18
margin3 revenue. The proposed general increase over present billing rates, after including 19
all other rate adjustments (such as DSM and PGA), is an increase of 2.7%. The proposed 20
percentage change by rate schedule is as follows: 21

3 Base margin revenue refers to the base revenue associated with the Company’s ownership and operation of
its natural gas distribution operations. It is the revenue related to delivering natural gas to customers, and
does not include the cost of natural gas, upstream third-party owned transportation, or the effect of other
tariffs.
Miller, Di 21
Avista Corporation
Present Proposed
Relative Relative
Rate Schedule ROR ROR
General Service Schedule 101 0.91 0.96
Large General Service Schedules 111/112 1.41 1.20
Transportation Service Schedule 146 1.79 1.52
Overall 1.00 1.00
Increase in Increase in
Rate Schedule Margin Rates Billing Rates
General Service Schedule 101 0.3%0.1%
Large General Service Schedules 111/112 0.0%0.0%
Interrupt. Sales Service Schedules 131/132 0.0%0.0%
Transportation Service Schedule 146 0.0%0.0%
Overall 0.2%0.1%
Table No. 8 – Proposed % Natural Gas Change by Schedule - 2023 1
2
3
4
5
6
Q. What information did the Company use to develop the proposed spread 7
of the overall 2023 change to the various rate schedules? 8
A. The Company used the results of the cost of service study (sponsored by 9
Company witness Mr. Anderson) as a guide to spread the natural gas general increase. 10
Given the modest size of the request, the Company has applied the entire rate increase to 11
General Service Schedule 101, as this is the only schedule providing less than their relative 12
rate of return. The spread of the proposed increase results in the rates of return for the 13
various service schedules moving towards overall rate of return (unity). The relative rates 14
of return before and after application of the proposed 2023 increase by schedule are as 15
follows: 16
Table No. 9 – Present & Proposed Relative Rates of Return 17
18
19
20
21
Page 2 of Exhibit No. 18, Schedule 6 shows this information in more detail. 22
Q. For 2024, what is the proposed natural gas revenue increase, and how 23
is the Company proposing to spread the increase by rate schedule? 24
Miller, Di 22
Avista Corporation
Increase in Increase in
Rate Schedule Margin Rates Billing Rates
General Service Schedule 101 0.3%0.1%
Large General Service Schedules 111/112 0.0%0.0%
Interrupt. Sales Service Schedules 131/132 0.0%0.0%
Transportation Service Schedule 146* 0.0%0.0%
Overall 0.2%0.1%
A. For 2024, the proposed base revenue increase is $120,000, or 0.2% in base 1
margin revenue. The proposed general increase over billing rates, after including all other 2
rate adjustments (such as DSM and PGA), is an increase of 0.1%. Consistent with the 2023 3
rate spread, the Company applied the increase to General Service Schedule 101. Below is 4
a table showing the effect of the Company’s 2024 proposed natural gas increase by rate 5
schedule: 6
Table No. 10 – Proposed % Natural Gas Change by Schedule - 2024 7
8
9
10
11
12
This information is also shown on page 1 of Exhibit No. 18, Schedule 6. 13
Proposed Rate Design 14
Q. Would you please explain the present rate design within each of the 15
Company’s present natural gas service schedules? 16
A. Yes. General Service Schedule 101 generally applies to residential and small 17
commercial customers who use less than 200 therms/month. The schedule contains a single 18
rate per therm for natural gas usage and a monthly customer/basic charge. 19
Large General Service Schedule 111 has a four-tier declining-block rate structure 20
and is generally for customers who consistently use over 200 therms/month, such as 21
schools, restaurants, and office buildings. The schedule consists of a monthly minimum 22
charge plus a usage charge for the first 200 therms or less, and block rates for 201-1,000 23
therms/month, 1001-10,000 therms/month and usage over 10,000 therms/month. 24
Miller, Di 23
Avista Corporation
Interruptible Sales Service Schedule 131 contains a single rate per therm for natural 1
gas usage. The schedule also has an annual minimum (deficiency) charge based on a usage 2
requirement of 250,000 therms per year. There are presently no customers taking service 3
under this rate schedule. 4
Transportation Service Schedule 146 contains a $300 per month customer charge 5
and contains a single rate per therm for natural gas usage. The schedule also has an annual 6
minimum (deficiency) charge based on a usage requirement of 250,000 therms per year. 7
Q. Where in your Exhibit No. 18 do you show the present and proposed 8
rates for the Company’s natural gas service schedules? 9
A. Pages 3 and 4 of Schedule 6 shows the present and proposed rates under 10
each of the rate schedules, including all present rate adjustments (adders) for the 2023 and 11
2024 rate changes. Columns (g, h, & i) on those pages show the proposed changes to the 12
rates contained in each of the schedules. 13
Q. How does the Company propose to spread Schedule 101’s proposed 14
2023 general revenue increase of $2,771,000 to the rates within that schedule? 15
A. Similar to electric, the Company proposes to increase the monthly customer 16
charge from $7.00 per month to $15.00 per month. The remaining revenue change for the 17
schedule would be recovered through a 19.2% decrease, or 8.444 cents per therm reduction 18
in the volumetric energy rate. This is shown in columns (g), page 3, Schedule 6 of Exhibit 19
No. 18. 20
Q. How does the Company propose to spread Schedule 101’s proposed 21
2024 general revenue increase of $120,000 to the rates within that schedule? 22
A. The Company proposes to increase the monthly customer charge from 23
$15.00 per month to $20.00 per month. The remaining revenue change for the schedule 24
Miller, Di 24
Avista Corporation
would be recovered through a 21.4% decrease, or 7.598 cents per therm reduction in the 1
volumetric energy rate. This is shown in column (g), page 4, Schedule 6 of Exhibit No. 18. 2
Q. For 2023, what is the proposed monthly change for a residential natural 3
gas customer with average usage? 4
A. Inclusive of the customer charge increase, the bill impact for a residential 5
customer using an average of 64 therms of natural gas per month would be $2.60 per month, 6
or 3.5%. A bill for 64 therms per month would be increased from the present level of 7
$73.42 to a proposed level of $76.02. As noted earlier, this includes an $8 per month 8
increase in the monthly basic charge, offset by a reduction in the volumetric rate. 9
Q. For 2024, what is the proposed monthly increase for a residential 10
natural gas customer with average usage? 11
A. Inclusive of the customer charge increase, the increase for a residential 12
customer using an average of 64 therms of natural gas per month would be $0.14 per month, 13
or 0.2%, resulting in an overall bill of $76.16, including all rate adjustments. As noted 14
earlier, this includes a $5 per month increase in the monthly basic charge, offset by a 15
reduction in the volumetric rate. 16
Q. Would you please explain the proposed changes in the rates for Large 17
General Service Schedules 111? 18
A. Yes. The present rates for Schedules 101 and 111 provide guidance for 19
customer placement: customers who generally use less than 200 therms/month should be 20
placed on Schedule 101, customers who consistently use over 200 therms per month should 21
be placed on Schedule 111. Not only do the rates provide guidance for customer schedule 22
placement, they provide a reasonable classification of customers for analyzing the costs of 23
providing service. The Company is not proposing to change the total revenue collected for 24
Miller, Di 25
Avista Corporation
Schedule 111 in either 2023 or 2024. 1
The proposed 2023 decrease to the minimum charge for Schedule 111 (for 200 2
therms or less) of $16.16 per month is a function of the volumetric charge change under 3
Schedule 101. This methodology maintains the present relationship between the schedules 4
and will minimize customer shifting. In order for the Schedule to remain revenue neutral, 5
the remaining revenue requirement for the schedules is proposed to be recovered through a 6
uniform percentage change of approximately 5.5% to blocks 2, 3 and 4. 7
The proposed 2024 change to the Schedule 111 minimum charge for Schedule 111 8
(for 200 therms or less) is a reduction of $10.19 per month. In order for the Schedule to 9
remain revenue neutral, the remaining revenue requirement for the schedule is proposed to 10
be recovered through a uniform percentage increase of approximately 3.3% to blocks 2, 3 11
and 4. 12
Q. Did the Company propose a revenue increase for Schedules 131/132? 13
A. No customers are presently served on these schedules. The Company is not 14
proposing any changes to the rates under Schedules 131/132 over either year of the rate plan. 15
Q. Is the Company proposing a change to the rates under Transportation 16
Schedule 146? 17
A. No. The Company is not proposing to change the rates for Schedule 146 over 18
either year of the rate plan. 19
Q. Is the Company proposing any other changes to its natural gas service 20
schedules? 21
A. No, it is not. 22
Q. Turning now to the Company’s Natural Gas Fixed Cost Adjustment 23
Mechanism, how will new baseline information be incorporated into the mechanism? 24
Miller, Di 26
Avista Corporation
A. As in the prior general rate case, the Company would, as a part of its 1
Compliance Filing at the conclusion of this case, submit the final baseline values for its 2
Fixed Cost Adjustment Mechanism (for both 2023 and 2024) prior to new rates going into 3
effect as a result of this general rate case. 4
5
IV. RESIDENTIAL BASIC CHARGE 6
Q. As part of Settlement approved in the Company’s last general rate case, 7
did the Parties agree to “meet and confer” on the appropriate level of basic charges? 8
A. Yes. Provision 24 of the Settlement Stipulation in Case No. AVU-E-21-01 9
stated the following: 10
Electric Cost of Service and Basic Charge Workshop – The Parties 11
agree, prior to the Company’s next general rate case filing, to meet and 12
confer regarding the Company’s electric cost of service study and the 13
appropriate level of basic charges. The purpose of the workshop will be 14
to discuss the merits of differing cost of service methodologies and basic 15
charge levels. The Company will provide available information, studies 16
and data requested by any of the Parties so as to enable meaningful 17
workshop participation and discussion of issues. No Party shall be 18
bound by workshop discussions and may contest cost of service and rate 19
spread or rate design issues in subsequent proceedings. 20
21
In compliance with that agreement, the Parties held a virtual meeting on May 4, 2022, to 22
discuss the merits of differing basic charge levels. Based on discussion from that meeting 23
and the Company’s own analysis, the Company is proposing higher basic charge levels in 24
this proceeding. 25
Q. Please summarize your proposal for the basic charge proposals in this 26
proceeding. 27
A. The Company is proposing to make substantive changes to both the electric 28
and natural gas basic charges in order to design rates that better align with the actual fixed 29
Miller, Di 27
Avista Corporation
Schedule 001 Electric Schedule 101 Natural Gas
Present $7.00 $7.00
2023 - Rate Year 1 $15.00 $15.00
2024 - Rate Year 2 $20.00 $20.00
2025 - Future GRC $25.00 $22.00
2026 - Future GRC $30.00 $24.00
2027 - Future GRC $35.00 $26.00
costs to serve customers. The Company envisions a five-year plan that increases the basic 1
charges each year until they more closely align with the actual fixed costs to serve 2
customers as discussed below. The first two increases are discussed below and included in 3
the rate design components in this proceeding. The remaining changes are illustrative and 4
will be proposed in subsequent general rate case filings by the Company. Table No. 11 5
below details the basic charge changes over the next five years. 6
Table No. 11 – Proposed Basic Charge Changes 7
8
9
10
11
Q. Why is the Company proposing a multiyear transition for the basic 12
charge changes? 13
A. The Company is proposing a multiyear transition in order to temper the bill 14
impacts for lower use customers and avoid rate shock. The Company is attempting to 15
balance moving towards the alignment of fixed costs in customer rates, recognizing that 16
these changes will have an impact on its customers. 17
Q. What proportion of revenues from residential customers is recovered 18
through the fixed basic charge? 19
A. At present levels, approximately only 6.3% of base revenue is recovered 20
through the basic charge for electric customers and approximately 18.5% for natural gas 21
customers. 22
Q. Why is the Company proposing to increase the Schedule 001 monthly 23
basic charge for electric customers? 24
Miller, Di 28
Avista Corporation
A. A significant portion of the Company’s costs are fixed and do not vary with 1
customer usage. These costs include distribution plant and operating costs to provide 2
reliable service to customers. Upon evaluation of the total customer allocated costs, as 3
shown in Mr. Garbarino’s Exhibit No. 16, Schedule 3, Page 4, line 26, those costs are 4
$19.24 per customer per month. Factoring in distribution demand cost per customer per 5
month of $23.84, as shown in Mr. Garbarino’s Exhibit No. 16, Schedule 3, Page 4, line 29, 6
the total customer and distribution demand monthly cost is $43.08. These are essentially 7
fixed costs that are allocated based on the number of customers served. Given the large 8
disparity between the level of customer and demand costs and the present level of the basic 9
charge, the Company believes that it is appropriate to recover more of these fixed customer 10
costs through the basic charge. The result of a basic charge that does not adequately recover 11
the fixed costs of customers is those costs are then recovered through a higher volumetric 12
charge. The effect of a low basic charge is that customers with low monthly usage are being 13
subsidized by customers with higher monthly usage. 14
Q. Has the Company prepared an analysis to determine how the proposed 15
change in the basic charge levels would impact customers bills at different usage 16
levels? 17
A. Yes. Table No. 12 below shows the Rate Year 1 residential bill impact at 18
differing usage levels inclusive of the increased revenue proposed in this proceeding. 19
Miller, Di 29
Avista Corporation
Schedule 001 Present Schedule 001 Proposed
Usage Level Basic Charge Block 1 Block 2 Total Bill Basic Charge Block 1 Block 2 Total Bill Bill Impact % Change
$7.00 0.08088$ 0.09135$ $15.00 0.08624$ 0.09736$
100 $7.00 8.09$ $15.09 $15.00 8.62$ $23.62 $8.53 56.5%
200 $7.00 16.18$ $23.18 $15.00 17.25$ $32.25 $9.07 39.1%
300 $7.00 24.26$ $31.26 $15.00 25.87$ $40.87 $9.61 30.7%
400 $7.00 32.35$ $39.35 $15.00 34.50$ $49.50 $10.15 25.8%
500 $7.00 40.44$ $47.44 $15.00 43.12$ $58.12 $10.68 22.5%
600 $7.00 48.53$ $55.53 $15.00 51.74$ $66.74 $11.21 20.2%
700 $7.00 48.53$ 9.14$ $64.67 $15.00 51.74$ 9.74$ $76.48 $11.81 18.3%
800 $7.00 48.53$ 18.27$ $73.80 $15.00 51.74$ 19.47$ $86.21 $12.41 16.8%
900 $7.00 48.53$ 27.41$ $82.94 $15.00 51.74$ 29.21$ $95.95 $13.01 15.7%
927 $7.00 48.53$ 29.87$ $85.40 $15.00 51.74$ 31.84$ $98.58 $13.18 15.4%
1000 $7.00 48.53$ 36.54$ $92.07 $15.00 51.74$ 38.94$ $105.68 $13.61 14.8%
1100 $7.00 48.53$ 45.68$ $101.21 $15.00 51.74$ 48.68$ $115.42 $14.21 14.0%
1200 $7.00 48.53$ 54.81$ $110.34 $15.00 51.74$ 58.42$ $125.16 $14.82 13.4%
1300 $7.00 48.53$ 63.95$ $119.48 $15.00 51.74$ 68.15$ $134.89 $15.41 12.9%
1400 $7.00 48.53$ 73.08$ $128.61 $15.00 51.74$ 77.89$ $144.63 $16.02 12.5%
1500 $7.00 48.53$ 82.22$ $137.75 $15.00 51.74$ 87.62$ $154.36 $16.61 12.1%
Table No. 12 – Electric Bill Impact 1
2
3
4
5
6
7
8
As is shown in the table, a customer with average usage of 927 kWh’s per month would 9
receive the approximate average increase being requested in this case. Those customers 10
who use less than the average would see larger bill impacts and those customers with higher 11
usage would see lower than average bill impacts. 12
Q. Why is the Company proposing to increase the Schedule 101 monthly 13
basic charge for natural gas customers? 14
A. Similar to electric, a significant portion of the Company’s costs are fixed 15
and do not vary with customer usage. Upon evaluation of the total customer allocated costs, 16
as shown in Mr. Anderson’s Exhibit No. 17, Schedule 6, Page 4, line 24, those costs are 17
$21.96 per customer per month at current rates. Factoring in distribution demand cost per 18
customer per month of $7.56, as shown in Mr. Anderson’s Exhibit No. 17, Schedule 2, Page 19
8, the total customer and distribution demand monthly cost is $29.51. Like electric, there 20
is a large disparity between the level of customer and demand costs and the present level 21
of the basic charge, the Company believes that it is appropriate to recover more of these 22
fixed customer costs through the basic charge. The effect of a low basic charge is that 23
customers with low monthly usage are subsidized by customers with higher monthly usage. 24
Miller, Di 30
Avista Corporation
Schedule 101 Present Schedule 101 Proposed
Usage Level Basic Charge Block 1 Total Bill Basic Charge Block 1 Total Bill Bill Impact % Change
$7.00 1.03788$ $15.00 0.95344$
10 7.00$ 10.38$ 17.38$ 15.00$ 9.53$ 24.53$ 7.16$ 41.2%
20 7.00$ 20.76$ 27.76$ 15.00$ 19.07$ 34.07$ 6.31$ 22.7%
30 7.00$ 31.14$ 38.14$ 15.00$ 28.60$ 43.60$ 5.47$ 14.3%
40 7.00$ 41.52$ 48.52$ 15.00$ 38.14$ 53.14$ 4.62$ 9.5%
50 7.00$ 51.89$ 58.89$ 15.00$ 47.67$ 62.67$ 3.78$ 6.4%
60 7.00$ 62.27$ 69.27$ 15.00$ 57.21$ 72.21$ 2.93$ 4.2%
64 7.00$ 66.42$ 73.42$ 15.00$ 61.02$ 76.02$ 2.60$ 3.5%
70 7.00$ 72.65$ 79.65$ 15.00$ 66.74$ 81.74$ 2.09$ 2.6%
80 7.00$ 83.03$ 90.03$ 15.00$ 76.28$ 91.28$ 1.24$ 1.4%
90 7.00$ 93.41$ 100.41$ 15.00$ 85.81$ 100.81$ 0.40$ 0.4%
100 7.00$ 103.79$ 110.79$ 15.00$ 95.34$ 110.34$ (0.44)$ -0.4%
110 7.00$ 114.17$ 121.17$ 15.00$ 104.88$ 119.88$ (1.29)$ -1.1%
120 7.00$ 124.55$ 131.55$ 15.00$ 114.41$ 129.41$ (2.13)$ -1.6%
130 7.00$ 134.92$ 141.92$ 15.00$ 123.95$ 138.95$ (2.98)$ -2.1%
140 7.00$ 145.30$ 152.30$ 15.00$ 133.48$ 148.48$ (3.82)$ -2.5%
150 7.00$ 155.68$ 162.68$ 15.00$ 143.02$ 158.02$ (4.67)$ -2.9%
Q. Has the Company prepared an analysis to determine how the proposed 1
change in the basic charge levels would impact natural gas customers bills at different 2
usage levels? 3
A. Yes. Table No. 13 below shows the natural gas Rate Year 1 residential bill 4
impact at differing usage levels inclusive of the increased revenue proposed in this 5
proceeding. 6
Table No. 13 – Natural Gas Bill Impact 7
8
9
10
11
12
13
14
15
As is shown in the table, a customer with average usage of 64 therms per month would 16
receive the approximate average increase being requested in this case. Those customers 17
who use less than the average would see larger bill impacts and those customers with higher 18
usage would see lower than average bill impacts or rate reductions. 19
While the Company acknowledges that these rate design changes will impact 20
customers bills, the changes to both the electric and natural gas basic charges will better 21
align customers rates with the actual fixed costs to serve customers and reduce the intra-22
class subsidization that presently exists within customers rates. 23
Q. Does this conclude your pre-filed, direct testimony? 24
Miller, Di 31
Avista Corporation
A. Yes, it does. 1