20231027Final_Order_No_35970.pdf

ORDER NO. 35970 1
Office of the Secretary
Service Date
October 27, 2023
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION
OF AVISTA UTILITIES FOR AN ORDER
APPROVING A CHANGE IN RATES FOR
PURCHASED GAS COSTS AND
AMORTIZATION OF GAS-RELATED
DEFERRAL BALANCES
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CASE NO. AVU-G-23-06

ORDER NO. 35970

On September 1, 2023, Avista Corporation d/b/a/ Avista Utilities (“Company”) filed its
annual Purchased Gas Cost Adjustment (“PGA”) application (“Application”) with the Idaho Public
Utilities Commission (“Commission”) requesting a change in rates for purchased gas costs and
amortization of gas-related deferral balances.
The PGA is a Commission-approved mechanism that adjusts rates up or down to reflect
changes in the Company’s costs to buy natural gas from suppliers including changes in
transportation, storage, and other related costs. The Company defers those costs into its PGA
account and then passes them on to customers through an increase or decrease in rates.
The Company proposed to: (1) pass any change in the estimated cost of natural gas for the
period of November 2023 through October 2024 (Tariff Schedule 150); and (2) revise the
amortization rate(s) to refund or collect the balance of deferred gas costs (Tariff Schedule 155).
Tariff Schedule 150 is a portion of the PGA which consists of commodity costs and demand
costs. The Company’s commodity costs are the variable costs that the Company incurs to buy
natural gas. The Weighted Average Cost of Gas (“WACOG”) is an estimate of those costs. The
Company’s demand costs are the costs for interstate transportation and underground storage, and
also includes some benefits from the Deferred Exchange Contract that are credited back to
customers.
Tariff Schedule 155 reflects the amortization of the Company’s deferral account. The
deferral consists of the difference in the price the Company paid for natural gas and the WACOG
established in the previous PGA.
The Company represented that if the filing is approved, residential customers using an
average of 64 therms per month would see rates increase by $3.54, or 4.7% per month, and the
Company’s annual natural gas revenue will increase by approximately $5.4 million, or about 5.0%.
Table No. 1 summarizes the impact of the proposed changes on customer classes.
ORDER NO. 35970 2

Table No. 1: Summary of Proposed PGA Rate Changes by Class
Service Schedule
No.
Commodity
Change per
Therm (a)
Demand
Change per
Therm (b)
Total
Sch. 150
Change
(c=a+b)
Amortization
Change per
Therm (d)
Total Rate
Change
per Therm
(e=c+d)
General 101 $(0.06236) $(0.00354) $(0.06590) $0.12118 $0.05528
Lg. General 111 $(0.06236) $(0.00354) $(0.06590) $0.12118 $0.05528
Lg. General 112 $(0.06236) $(0.00354) $(0.06590) - $(0.06590)
Interruptible 131 $(0.06236) - $(0.06236) - $(0.06236)
Transportation 146 - - - - -
The Company requested that the proposed rates take effect November 1, 2023.
COMMISSION STAFF COMMENTS
Staff reviewed the Company’s Application and accompanying workpapers. Staff examined
the Company’s gas purchases for the year, the Company’s fixed price hedges, pipeline
transportation and storage costs, and estimates of future commodity prices, to assess the
reasonableness of the proposed changes. Staff also reviewed the Company’s jurisdictional
allocation and the reasonableness of the Company’s Lost and Unaccounted for Gas volumes.
Staff represented that the Company’s filing will not change the Company’s earnings, and
Staff believed that the proposed changes to Tariff Schedules 150 and 155 accurately capture the
Company’s fixed (demand) and variable (commodity) costs given the coming year’s forecasted
gas purchases, and properly amortized the deferral balance from the prior year.
Staff also reviewed the current reporting associated with the PGA. Staff noted that the
Company currently submits two reports, one monthly and one quarterly. The monthly report
includes a summary of the deferred costs with a journal entry of the amounts booked, and the
quarterly report is a WACOG report.
Because review of the PGA filing happens within a short time frame, Staff recommended
that going forward the Company submit both reports quarterly and that the Company submit two
additional documents: (1) a gas accounting data download (“GADD”) in Excel format with a
reconciliation tab; and (2) a deferral calculation workbook (“DCW”) in Excel format, both
submitted with the PGA filing. Staff stated that the GADD report and DCW will improve audit
ORDER NO. 35970 3
efficiencies, increase turnaround time of data requests, and decrease the number of Staff’s
audit/production requests.
Staff reviewed the Company’s press release and customer notice, and Staff believed that
both met the requirements of Rule 125 of the Commission’s Rules of Procedure, IDAPA
31.01.01.125. However, Staff noted that some customers in the last billing cycles may not have
had adequate time to submit comments before the deadline, and Staff recommended that the
Commission consider late filed comments from customers.
STAFF RECOMMENDATIONS
After examining the Company’s Application, natural gas purchases, and deferral activity
for the year, Staff recommended that the Commission approve the Application and submitted
tariffs as filed. Staff also recommended that the Commission direct the Company to continue filing
quarterly WACOG reports and change the monthly deferred cost reports to quarterly and include
two additional reports; the GADD in Excel format, and DCW in Excel format filed with the PGA
filing. Finally, Staff recommended that the Commission consider any late-filed comments from
customers.
COMPANY REPLY COMMENTS
The Company did not submit any reply comments.
PUBLIC COMMENTS
The Commission did not receive any public comments.
COMMISSION FINDINGS AND DECISION
The Company is a gas corporation and public utility, and the Commission has jurisdiction
over it and the issues in this case under Title 61 of the Idaho Code, and more specifically, Idaho
Code §§ 61-117, 61-129, 61-307, 61-501, and 61-502. The Commission must establish just,
reasonable, and sufficient rates for utilities subject to its jurisdiction. Idaho Code § 61-502.
The PGA mechanism is used to adjust rates to reflect annual changes in the Company’s
costs for the purchase of natural gas from suppliers including transportation, storage, and other
related costs. The PGA mechanism passes through prudently incurred commodity costs in a timely
fashion, and the Company’s earnings are not to be increased from changes in prices and revenues
resulting from the PGA.
Having reviewed the record, the Commission finds it fair, just, and reasonable to approve
the Application and submitted tariffs as filed. Additionally, the Commission finds that quarterly
ORDER NO. 35970 4
WACOG and deferred cost reports provide useful information and assist Staff with determining
whether to audit earlier than planned, and whether an interim filing might be needed. The
Commission directs the Company to continue submitting quarterly WACOG reports and quarterly
deferred costs reports. Further, the Company is directed to file a GADD in Excel format with a
reconciliation tab, and a DCW in Excel format with its annual PGA filing. As always, the
Commission expects the Company to promptly apply to amend its WACOG if gas prices
materially deviate from the WACOG approved in this Order.
ORDER
IT IS HEREBY ORDERED that the Application and submitted tariffs are approved as
filed.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date upon 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 and 62-619.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 27th day of
October 2023.

ERIC ANDERSON, PRESIDENT

JOHN R. HAMMOND JR., COMMISSIONER

EDWARD LODGE, COMMISSIONER
ATTEST:

Jan Noriyuki
Commission Secretary

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