20180504notice_of_settlement_order_no_34054_avu.pdf

Ofñee of the Secretary
Service Date
May 4,2018
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE INVESTIGATION )CASE NO.GNR-U-18-01
INTO THE IMPACT OF FEDERAL TAX )CODE REVISIONS ON UTILITY COSTS AND )NOTICE OF SETTLEMENT
RATEMAKING )STIPULATION (AVISTA
)CORPORATION)
)NOTICE OF MODIFIED
)PROCEDURE
)ORDER NO.34054
On May 1,2018,Avista Corporation dba Avista Utilities ("Avista"or the "Company")
and Commission Staff filed a Stipulation and Settlement (the "Settlement Stipulation")and a
Motion for Approval of Stipulation and Modified Procedure.The Settlement Stipulation and
Motion are signed by the Company,Commission Staff,and intervenors Clearwater Paper
Corporation,Idaho Forest Group,LLC,and Idaho Conservation League.If approved,the
Settlement Stipulation would return to customers 100%of tax benefits the Company has realized
under a new tax law that decreased the Company's corporate tax rate and expenses.
With this Order,the Commission provides notice of the Settlement Stipulation and
notice that the matter will be processed by Modified Procedure,with deadlines to submit comments
about the Stipulation as set below.
BACKGROUND
The federal Tax Cuts and Jobs Act of 2017 decreased the federal corporate tax rate
from 35%to 21%,effective January 1,2018.In response,the Commission opened this multi-
utilitycase to investigate whether to adjust the rates of certain utilities that benefit from the reduced
tax rate can flow through to customers.See Order No.33965.The Commission directed all
affected utilities-including Avista-to immediately account for the tax benefits as a regulatory
liability,and to report on how the tax changes affected them,and how resulting benefits could be
passed on to customers.See id.at 1-2.Avista filed its report on March 29,2018.
ORDER NO.34054 1
NOTICE OF SETTLEMENT STIPULATION
YOU ARE HEREBY NOTIFIED that the Settlement Stipulation,including
attachments,is 33 pages long.It is available for public review as described below.Major
components are summarized in the followingparagraphs.
YOU ARE FURTHER NOTIFIED that the Settlement Stipulation,if approved,would
return to customers 100%of tax benefits the Company has realized under the new federal tax law.
In summary,customers would receive:
(1)An overall reduction (rate credit)of $13.7 million (or 5.3%overall rate reduction
for electric,and $2.6 million (or 6.1%overall rate reduction)for natural gas associated with
permanent or long-term tax benefits.These rate credits will take effect on June 1,2018 through
new "Permanent Federal Income Tax Rate Credit"Tariff Schedules 72 (electric)and 172 (natural
gas)and be passed back to customers until they are incorporated into base rates in a future general
rate case proceeding;
(2)An Electric Temporary Tax Benefit of $11.980 million,which will be used to offset
costs associated with accelerated depreciation of Colstrip Units 3 and 4,or other purposes as the
Commission may approve in the depreciation case (Case No.AVU-E-18-03);and
(3)A Natural Gas Temporary Tax Benefit Reduction of $544,000 as an adjustment in
the Purchased Gas Adjustment effective November 1,2018.
YOU ARE FURTHER NOTIFIED that,under the Settlement Stipulation,any changes
in Federal Energy Regulatory Commission Transmission rates and/or refund to transmission
customers as a result of the federal tax law changes would be tracked through the Power Cost
Adjustment until reflected in base rates in the next general rate case.
YOU ARE FURTHER NOTIFIED that,because some of the stipulated benefits are
proposed to take effect on June 1,2018,the parties have requested that the Commission process
the Settlement Stipulation by Modified Procedure in time for an approving Order to issue by that
date,with comments on the Settlement Stipulation to be due by May 11,2018.
YOU ARE FURTHER NOTIFIED that this docket,the Settlement Stipulation,and
any supporting workpapers,testimony,and exhibits are available for public inspection during
regular business hours at the Commission offices.They also may be viewed on the Commission's
website at www.puc.idaho.gov by clicking on "File Room"and then "Multi-Utility Cases"and
going to the case number referenced in the above caption.
ORDER NO.34054 2
YOU ARE FURTHER NOTIFIED that the Commission is not bound by the parties'
agreement as reflected in the Settlement Stipulation.The Commission will independently review
the Settlement Stipulation consistent with Commission Rules 271-280,IDAPA 31.01.01.271-280,
to decide whether to approveor reject it,or state conditions under which to accept it.The proposed
settlement's proponents ultimately bear the burden to prove that it is just,fair,and reasonable,in
the public interest,or otherwise in accordance with law or regulatory policy.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determinedthat the public
interest may not require a formal hearingin this matter,and will proceed under Modified Procedure
pursuant to 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 the parties,and any person desiring to state a
position on this Settlement Stipulation,may file a written comment about the Settlement
Stipulation with the Commission no later than May 11,2018.The comment must contain a
statement of reasons supporting the comment.Persons desiring a hearing must specifically request
a hearing in their written comments.Written comments concerning this Settlement Stipulation
may be mailed to the Commission and the Company at the followingaddresses reflected below:
Commission Secretary David J.Meyer,Esq.
Idaho Public Utilities Commission Vice President and Chief Counsel of
PO Box 83720 Regulatory and Governmental Affairs
Boise,ID 83720-0074 Avista Corporation
1411 E.Mission Ave
Street Address for Express Mail:P.O.Box 3727
Spokane,WA 99220
472 W.Washington Street e-mail:[e-mail]
Boise,ID 83702-5918
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Commission's home page at www.puc.idaho.gov.Click the "Case Comment or Question Form"
under the "Consumers"tab,and complete the form using the case number on the front of this
document.These comments must also be sent to the Company at the e-mail addresses listed above.
YOU ARE FURTHER NOTIFIED that the parties may file reply comments no later
than May 18,2018.
ORDER NO.34054 3
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.
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be conducted
pursuant to the Commission's jurisdiction under Title 61 of the Idaho Code,and the Commission
may enter any final Order consistent with its authorityunder Title 61.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
pursuant to the Commission's Rules of Procedure,IDAPA 31.01.01.000,et seq.
ORDER
IT IS HEREBY ORDERED that the Settlement Stipulation be processed under
Modified Procedure,Rules 201-204 (IDAPA 31.01.01.201-.204).The parties and any interested
persons shall have until May 11,2018 to file written comments.The parties shall have until May
18,2018 to file reply comments,if any.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this 7
day of May 2018.
PAUI JELLAND'ËR PRESIDENT
KRISÎINÈ RAPER CO MISSIONER
ERIC AMERSON,COMMISSIONER
Diane M.Hanian
Commission Secretary
GNRUl801 AVU NtcSettlementMod kk
ORDER NO.34054 4