20180501Decision Memo 2.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER RAPER
COMMISSIONER ANDERSON
COMMISSION SECRETARY
COMMISSION STAFF
FROM:KARL T. KLEIN
DEPUTY ATTORNEY GENERAL
DATE: MAY l,2018
SUBJECT:PROPOSED SETTLEMENT REGARDING AVISTA CORPORATION IN
THE COMMISSION'S INVESTIGATION INTO THE IMPACT OF
FEDERAL TAX CODE REVISIONS ON UTILITY COSTS AND
RATEMAKING - CASE NO. GNR.U.18-01.
On May 1,2018, Avista Corporation and Commission Staff filed a Stipulation and
Settlement and a Motion for Approval of Stipulation and Modified Procedure. The Stipulation and
Motion are signed by the Company, Commission Staff, and intervenors Clearwater Paper
Corporation, Idaho Forest Group, LLC, and Idaho Conservation League (the only persons or
entities who expressed interest in participating in this matter as to Avista). If approved, the
Stipulation would return to customers 100% of tax benefits the Company has realized under the
new federal tax law. In summary, customers would receive:
(l) An overall reduction (rate credit) of $13.7 million (or 5.3o/o overall rate reduction for
electric, and $2.6 million (or 6.lYo overall rate reduction) for natural gas associated with permanent
or long-term tax benefits. These rate credits will take effect on June l, 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 $l 1.980 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);
(3) A Natural Gas Temporary Tax Benefit Reduction of $544,000 as an adjustment in the
Purchased Gas Adjustment effective November l, 2018.
DECISION MEMORANDUM I
Additionally, any changes in Federal Energy Regulatory Commission Transmission
rates and/or refund to transmission customers as a result of the federal tax law changes will be
tracked through the Power Cost Adjustment until reflected in base rates in the next general rate
case
Since some of the stipulated benefits would take effect on June 1,2018, the parties ask
the Commission to process the Stipulation by Modified Procedure with Comments due in time for
an approving order to issue by that date. To meet this deadline, the parties recommend the
Commission set a May 11,2018 comment deadline.
COMMISSION DECISION
Does the Commission wish to issue a Notice of Proposed Settlement and Notice of
Modified Procedure setting a May 11,2018 comment deadline relating to the Avista Stipulation?
kl /L
Karl T. Klein
Deputy Attorney General
I:\Legal\MULTI-UTILITL,,GNR-U-18-01't!'lemos\GNRul80l kk6 docx
2DECISION MEMORANDUM