20240112Final_Order_No_36059.pdf

ORDER NO. 36059 1
Office of the Secretary
Service Date
January 12, 2024

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF AVISTA’S
APPLICATION FOR AN ORDER
AUTHORIZING DEFERRED ACCOUNTING
FOR COSTS RELATED TO THE
NOVEMBER 2023 WILLIAMS NORTHWEST
PIPELINE OUTAGE
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CASE NO. AVU-G-23-08

ORDER NO. 36059

On November 9, 2023, Avista Corporation d/b/a Avista Utilities (“Company”) applied
to the Commission for authority to defer costs associated with a “dig in” event causing the
Williams Pipeline to shut down on the afternoon of November 8, 2023. The Company requested
its Application be processed by Modified Procedure.
On November 24, 2023, the Commission issued a Notice of Application and Notice of
Modified Procedure establishing comment deadlines for interested persons and the Company’s
reply. Staff filed comments to which the Company replied. No other comments were received.
Having reviewed the record in this case, we issue this Order approving the Company’s
Application to defer costs associated with the November 8, 2023, dig-in event with a carrying
charge.
NOTICE OF APPLICATION
The shutdown forced the Company to stop delivering natural gas to customers in the
Moscow and Lewiston areas. Between Idaho and Washington, the Company estimated 35,000-
40,000 customers were affected.1
The Company had not finalized its response plan at the time of filing but indicated it
would have to visit every affected premise to turn off natural gas meters, then purge the lines, and
finally refill the lines, turn on the meters, and relight appliances. The duration of the outage was
unknown at the time of filing.
The Company proposed to defer costs associated with the dig-in incident for future
recovery. Under the Company’s proposal, it would seek reimbursement of deferred costs plus
interest in a later proceeding. The Company did not rule out that it could seek damages through
future legal proceedings which could be applied towards the deferral.

1 In its December 19, 2023, reply comments, the Company indicated that approximately 38,000 customers lost service.

ORDER NO. 36059 2
The Company did not provide its response plan, restoration plan, communications, or
other shutdown response measures. The Company indicated it would supplement the filing when
additional information is available.
THE COMMENTS
1. Staff Comments
Staff mostly supported the Company’s request to defer costs associated with the dig-
in event. Staff recommended approval of the Company’s request for an accounting order
authorizing deferral of costs related to the November 2023 Willaims Northwest Pipeline outage in
a subaccount of FERC Account No. 182.3-Other Regulatory Assets. Staff noted that the Company
expects the final costs to be between $8-10 million, potentially offset by claims made against third
parties. Staff further recommended that recovery of the deferred costs related to the Williams
outage should be determined in the Company's next general rate case or other proceedings and that
the Company should not receive a carrying charge on the deferred costs related to the outage.
2. Company Reply
The Company acknowledged Staff’s support to allow the Company to defer the costs
associated with the outage and restoring gas service to affected customers. However, the Company
requested the Commission diverge from its usual practice of denying a carrying charge on the
deferral amount. The Company recognized that this is Staff’s and the Commission’s usual position,
but argued the situation was unusual and therefore merited the Commission considering allowing
the carrying charge in this instance. The Company noted that this event was wholly out of its
control and it expended significant resources to ensure that service was restored as quickly as
possible. Further, the Company explained that it has had to borrow money for this event and the
rate it pays on debt is currently 6.4%, versus the 5.37% authorized in its most recent general rate
case, Case No. AVU-G-23-01. The Company concluded, stating “[t]he Commission should
exercise its discretion to allow for a carrying cost under these specific circumstances involving a
significant event, entirely beyond the Company’s control, and including substantial payment of
expenses, the recovery of which will have to await the outcome of Avista’s next general rate case
in August 2025, at the earliest.” Reply Comments at 2.
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,

ORDER NO. 36059 3
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,
discriminatory, or in violation of any provision of law, and to fix the same by order. Idaho Code
§§ 61-502 and 61-503.
Having reviewed the record in this case we grant the Company’s request to defer costs
associated with the November 2023, outage event that forced the Company to expend tremendous
effort and resources to safely and timely restore gas service to impacted customers. With this
authority, we also grant the Company’s request for a carrying charge on the deferred expenses at
the embedded costs of debt established in Case No. AVU-G-23-01. We acknowledge that we
traditionally do not allow utilities a carrying charge on deferrals, but given the uniqueness of the
circumstances here, we find it would be unjust to disallow the carrying charge.
While we are allowing a carrying charge in this case due to the circumstances
necessitating the service restoration expenses, we iterate that this should not be construed by either
the Company or other Commission-regulated utilities as a precedent-setting decision. Our decision
is guided by the fact the Company did not have control over the outage that forced it to expend the
resources required to restore service. We expect the Company will seek recovery of damages from
the party responsible for the outage and any subsequent damages awarded will be applied to the
deferral. We are hopeful that this will not impact customers financially but agree the deferral will
allow the Company an opportunity to recover damages before making a determination on the
impact on customers’ rates, if any. We will determine the prudency of the deferral in a future rate
proceeding.
O R D E R
IT IS HEREBY ORDERED that the Company may defer its costs associated with
restoring service after the November 2023 outage.
IT IS FURTHER ORDERED that the Company is allowed a carrying charge on this
deferral at the embedded costs of debt established in Case No. AVU-G-23-01. Order No. 35909.
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

ORDER NO. 36059 4
decided in this Order. Within seven (7) days after any person has petitioned for reconsideration,
any other person may cross-petition for reconsideration. Idaho Code § 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 12th day
of January 2024.

ERIC ANDERSON, PRESIDENT

__________________________________________
JOHN R. HAMMOND JR., COMMISSIONER

EDWARD LODGE, COMMISSIONER

ATTEST:

_______________________________
Monica Barrios-Sanchez
Interim Commission Secretary

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