20231218Comments of the Commission Staff.pdf

DAYN HARDIE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE,IDAHO 83720-0074
[phone]
IDAHO BAR NO.9917
Street Address for Express Mail:
11331 W CHINDEN BLVD,BLDG 8,SUITE 201-A
BOISE,ID 83714
Attorneyfor the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA'S )APPLICATION FOR AN ORDER )CASE NO.AVU-G-23-08
AUTHORIZING DEFERRED ACCOUNTING )FOR COSTS RELATED TO THE NOVEMBER )
2023 WILLIAMS NORTHWEST PIPELINE )COMMENTS OF THE
OUTAGE )COMMISSION STAFF
COMMISSION STAFF ("STAFF")OF the Idaho Public Utilities Commission,by and
through its Attorneyof record,Dayn Hardie,Deputy AttorneyGeneral,submits the following
comments.
BACKGROUND
On November 9,2023,Avista Corporation d/b/a Avista Utilities ("Company")
applied to the Commission for authorityto 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.
The shutdown forced the Company to stop delivering natural gas to customers in the
Moscow and Lewiston areas.Between Idaho and Washington,the Company estimates 35,000-
40,000 customers were affected.
STAFF COMMENTS 1 DECEMBER 18,2023
The Company had not finalized its response plan at the time of filing but indicated it
will 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 proposes to defer costs associated with this 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.
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.
STAFF ANALYSIS
Staff reviewed the Company's Application and is generally supportive of the Company's
request.As noted in its Application,the Company is requesting authorityto defer the costs
associated with this incident in account 182.3-Other Regulatory Assets.The costs of this
incident are not fully knownscurrently,but the Company estimates the final costs to be between
$8-10 million.Company response to Production Request ("PR")Nos.1 and 8.The Company
would request a cut-off date of March 31,2024,for receiving any invoices of costs associated
with mutual aid resources that are outside of the Company's control.Id.The Application did
not mention how the costs will be allocatedbetween the Washington and Idahojurisdictions.
The Company is evaluating the potential claims that could be made against third parties for
recovery that could reduce the estimated cost of $8-10 million.
The Company requested a carrying charge on the Idaho share of the deferral at the
Company's authorized cost of debt established in its last general rate case,Case No.AVU-G-23-
01.Avista's response to Staff's PR No.5 stated that the costs were completely outside the
control of the Company and are considered as short-term expenses;therefore,the Company
proposes to finance the incident response through short-term borrowing.The Company's present
cost of debt rate is 5.37%.As standard in recent accounting orders,Staff does not support a
carrying charge.Granting the Company deferral of expenses that would likely otherwise be
unrecoverableis sufficient relief to the Company.No law requires the Commission to allow a
STAFF COMMENTS 2 DECEMBER 18,2023
carrying charge on deferral accounts.The Commission has discretionary authority,affirmed by
the Supreme Court,in determining whether to approve a carrying charge on a deferral account.
STAFF RECOMMENDATION
Staff recommends approval of the Company's request for an accounting order
authorizing deferral of costs related to the November 2023 Willaims Northwest Pipeline outage.
Staff recommends the Commission authorize the Company to defer Idaho's share of costs for
this outage be recorded in a subaccount of FERC Account No.182.3-Other Regulatory Assets.
Recovery of the deferred costs related to the November 2023 Williams Northwest Pipeline
outage should be determined in the Company's next general rate case or other proceeding.
Additionally,Staff recommends that the Company not receive a carrying charge on the deferred
costs related to this November 2023 outage.
Respectfullysubmitted this 18th day of December 2023.
Dayn Hardie
Deputy AttorneyGeneral
Technical Staff:Leena Gilman
Kevin Keyt
i:umisc/comments/AVU-G-23-08 Comments
STAFF COMMENTS 3 DECEMBER 18,2023
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 18th DAY OF DECEMBER 2023,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF TO
AVISTA CORPORATION,IN CASE NO.AVU-G-23-08,BY E-MAILING A COPY
THEREOF TO THE FOLLOWING:
PATRICK EHRBAR DAVID J MEYER
DIR OF REGULATORY AFFAIRS VP &CHIEF COUNSEL
AVISTA CORPORATION AVISTA CORPORATION
PO BOX 3727 PO BOX 3727
SPOKANE WA 99220-3727 SPOKANE WA 99220-3727
E-mail:[e-mail] E-mail:[e-mail]
[e-mail]
Ida Elmasian
CERTIFICATE OF SERVICE