20230818Notice_of_Application_Order_No_35895.pdf

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35895 1
Office of the Secretary
Service Date
August 18, 2023
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF AVISTA
CORPORATION’S FILING OF THE FIXED
COST ADJUSTMENT MECHANISM
ANNUAL RATE ADJUSTMENT
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CASE NO. AVU-G-23-05

NOTICE OF APPLICATION

NOTICE OF
MODIFIED PROCEDURE

ORDER NO. 35895

On July 31, 2023, Avista Corporation (“Company”) applied to the Idaho Public Utilities
Commission (“Commission”) for authorization to adjust the Fixed Cost Adjustment (“FCA”) rates
for natural gas service from November 1, 2023, through October 31, 2024. The Company noted
the current FCA rates as well as the proposed changes as illustrated in Table No. 1 below:
Table No. 1
Current Rate
(Per Therm)
Proposed Rate
(Per Therm)
Propose Rate Change
Residential Group
(Schedule 101)
Rebate of 1.020¢ Rebate of 1.219¢ -0.2% decrease
Non-Residential
Group
(Schedules 111 and
112)
Surcharge of 0.381¢ Rebate of 0.632¢ -1.2% decrease

The Company requested that the adjustment have a November 1, 2023, effective date and that the
Commission process the request under Modified Procedure.
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 costs1 of providing service, thus decoupling
the utility’s revenues from its customers’ energy usage. This decoupling removes a utility’s
incentive to increase sales to increase revenue and profits and encourages energy conservation.

1 “Fixed costs” are a utility’s costs to provide service, such as infrastructure and customer service, which do not vary
with energy use, output, or production, and remain relatively stable between rate cases.

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35895 2
The Commission originally approved a three-year pilot program of the Company’s FCA as part of
the approved settlement of the Company’s 2015 rate case. Order No. 33437 at 10. 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 the program was functioning as intended. On June 15, 2018, the Commission
approved an addendum to the settlement that extended the term of the Company’s FCA pilot for
an additional year. Order No. 34085. On December 13, 2019, the Commission authorized the
Company to extend its FCA mechanism for both gas and electric customers through March 31,
2025. Order No. 34502.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that the Company’s proposed rate adjustment for its
Residential and Non-Residential natural gas customer groups is based on the amount of deferred
revenue for the 12 months ending June 30, 2023. The Company mostly attributes the proposed
changes to higher monthly use-per customer than is embedded in rates because of colder than
average weather and participation in Demand Side Management programs.
YOU ARE FURTHER NOTIFIED that the Company recorded $820,233 of deferred
revenue in the rebate direction for its Residential natural gas customers for the 12-month period
ending on June 30, 2023. The Company stated that the proposed rate of 1.219¢ per therm is
designed to return $859,547 to the Company’s Schedule 101 customers. The Company represented
that the deferral balance for the 12 months ending June 30, 2023, plus interest through October 31,
2024, plus the prior year’s FCA residual balance, plus a revenue related expense adjustment would
be transferred into a regulatory liability balancing account, and the balance of that account would
be reduced monthly by the revenue collected under Schedule 101 customers under the tariff.
YOU ARE FURTHER NOTIFIED that the Company recorded $181,388 of deferred
revenue in the rebate direction for its Non-Residential natural gas customers for the 12-month
period ending on June 30, 2023. The Company stated that the proposed rate of 0.632¢ per therm
will result in a rebate of $174,563 for the Company’s Schedules 111 and 112 commercial and
industrial customers. Like the Residential customers, the Company represented that the deferral
balance for the 12 months ending June 30, 2023, plus interest through October 31, 2024, plus the
prior year’s FCA residual balance, plus a revenue related expense adjustment, would be transferred

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35895 3
into a regulatory liability balancing account, and the balance of that account would be reduced
monthly by the revenue collected under Schedule 111 and 112 customers under the tariff.
YOU ARE FURTHER NOTIFIED that the Company submitted its Residential and Non-
Residential rate calculations, support for its deferrals, and its proposed FCA tariff Schedule 175
with its Application and supplemental materials.
YOU ARE FURTHER NOTIFIED that the Company’s Application and all submitted
documentation is available for public inspection during regular business hours at the
Commission’s office. The Application and all submitted documentation is also available on the
Commission’s website 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.
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
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 4, 2023, to file written comments. Comments must
be filed through the Commission’s website or by e-mail unless computer access 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 Commission

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35895 4
Secretary and 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 (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 11, 2023.
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.
ORDER
IT IS HEREBY ORDERED that this case be processed by Modified Procedure, Rule 201-
204. Persons shall have until October 4, 2023, to file written comments, and the Company shall
have until October 11, 2023, to file a reply.
IT IS FURTHER ORDERED that parties comply with Order No. 35375, issued April 21,
2022. Generally, all pleadings should be filed with the Commission electronically and will be
deemed timely filed when received by the Commission Secretary. See Rule 14.02. Service between
parties should continue to be accomplished electronically when possible. However, voluminous
discovery-related documents may be filed and served on CD-ROM or a USB flash drive.

NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO. 35895 5
DONE by order of the Idaho Public Utilities Commission at Boise, Idaho this 18th day of
August 2023.

ERIC ANDERSON, PRESIDENT

JOHN R. HAMMOND JR., COMMISSIONER

EDWARD LODGE COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\GAS\AVU-G-23-05_FCA\orders\AVUG2305_Ntc_App_Mod_md.docx