20200409Avista Application.pdf

Avista Corp.
1411 East Mission P.O. Box 3727
Spokane. Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170

April 9, 2020

Diane Hanian, Commission Secretary
Idaho Public Utilities Commission
P O Box 83720
Boise, ID 83720-0074

RE: Application of Avista Corporation for an Accounting Order Authorizing Deferred
Accounting of Incremental Costs Associated with the COVID-19 Public Health Emergency.

Dear Ms. Hanian:

Attached for electronic filing in the above matter is Avista’s Application for an Accounting Order
Authorizing Deferred Accounting Treatment of Incremental Costs Related to the COVID-19 Public
Health Emergency.

Please direct any questions on this matter to Elizabeth Andrews at [phone] or myself at
[phone].

Sincerely,

Patrick Ehrbar
Director of Regulatory Affairs
Avista Utilities
[e-mail]
509-495-8620

Enclosures
RECEIVED
2020 April 9,PM1:13
IDAHO PUBLIC
UTILITIES COMMISSION
NEW CASE
AVU-E-20-03//AVU-G-20-03

DAVID J. MEYER
VICE PRESIDENT AND CHIEF COUNSEL FOR
REGULATORY AND GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
P.O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: [phone]
[e-mail]

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF
AVISTA CORPORATION, D/B/A AVISTA
UTILITIES, FOR AN ACCOUNTING ORDER
AUTHORIZING DEFERRED ACCOUNTING
OF INCREMENTAL COSTS ASSOCIATED
WITH THE COVID-19 PUBLIC HEALTH
EMERGENCY

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CASE NO. AVU-E-20-___
CASE NO. AVU-G-20-___

APPLICATION OF AVISTA CORPORATION

RECEIVED
2020 April 9,PM1:13
IDAHO PUBLIC
UTILITIES COMMISSION

Application of Avista Corporation Page 1
Case No. AVU-E-20-___ & AVU-G-20-___
I. INTRODUCTION
Avista Corporation, doing business as Avista Utilities (hereinafter “Avista” or
“Company”), at 1411 East Mission Avenue, Spokane, Washington, pursuant to Section 61-
524 Idaho Code and Rule 52 of the Idaho Public Utilities Commission (“Commission Rules
of Procedure”), hereby applies to the Commission for an order authorizing it to defer to a
regulatory asset the incremental costs from the COVID-19 public health emergency and the
normal business costs not recovered due to the reduction in electricity and natural gas use
by its customers. No change in customer rates is proposed at this time. Avista would seek
a prudence determination and recovery method of the deferred costs on a future
Commission proceeding.1
Avista is a utility that provides service to approximately 387,000 electric customers
and 251,000 natural gas customers in a 26,000 square-mile area in eastern Washington and
northern Idaho. Avista Utilities also serves approximately 103,000 natural gas customers
in Oregon. The largest community served by Avista is Spokane, Washington, which is the
location of its main office.
Pursuant to Commission Rule of Procedure 201, the Company requests that this
filing be processed under the Commission’s rules for Modified Procedure.

1 Certain other jurisdictions across the United States have approved similar accounting treatment, with
ultimate recovery of such revenues and costs, subject to a prudence review in a future proceeding, i.e., Public
Utilities Commission of Nevada, Docket No. 20-03021 dated March 27, 2020; Public Service Commission
of Wisconsin, Docket No. 5-AF-105, Order 386353 dated March 24, 2020; Public Utility Commission of
Texas, Project No. 50664 dated March 26, 2020; and State of Connecticut Public Utilities Regulatory
Authority, Docket No. 20-03-15, Motion No. 2 dated March 18, 2020.

Application of Avista Corporation Page 2
Case No. AVU-E-20-___ & AVU-G-20-___
Communications in reference to this Application should be addressed to:
David J. Meyer, Esq. Patrick Ehrbar
Vice President and Chief Counsel for Director of Regulatory Affairs
Regulatory & Governmental Affairs Avista Corporation
P. O. Box 3727 P. O. Box 3727
1411 E. Mission Avenue, MSC 13 1411 E. Mission Avenue, MSC 27
Spokane, Washington 99220-3727 Spokane, Washington 99220-
3727
Telephone: [phone] Telephone: [phone]
Facsimile: [phone] Facsimile: [phone]
E-mail: [e-mail] E-mail:
[e-mail]

Avista Dockets (Electronic Only) - [e-mail]

II. BACKGROUND
In February 2020, the World Health Organization designated the novel coronavirus
disease outbreak that began in 2019 as COVID-19 (‘CO’ stands for ‘corona,’ ‘VI’ for
‘virus,’ and ‘D’ for disease). The infectious disease causes respiratory illness such as fever,
cough, and shortness of breath 2-14 days after exposure from another infected person.
On March 25, 2020, Idaho Governor Brad Little issued an “extreme emergency
declaration” over the COVID-19 outbreak. As permitted by Idaho Code § 56-1003(7), on
March 25, 2020, Governor Little and the Director of Idaho Department of Health and
Welfare issued an Order to Self-Isolate for the State of Idaho (“Stay-Home Order”) “to
protect the public from the spread of infectious or communicable diseases” through April
15, 2020, or until it is extended, rescinded, superseded, or amended in writing by the
Director.2

2 Idaho Department of Health & Welfare Director Dave Jeppesen to All Citizens of the State of Idaho,
Elected and Appointed Officials, Order to Self-Isolate for the State of Idaho (March 25, 2020).

Application of Avista Corporation Page 3
Case No. AVU-E-20-___ & AVU-G-20-___
As a result of the impacts of COVID-19 and Idaho’s state and local stay-home
orders on Idaho businesses, Avista expects that there will be a new subset of its customers
that will have an inability, or will be challenged financially, to pay their Avista bills until
they can return to work. In anticipation of this likely scenario, the Company temporarily
suspended service disconnections for non-payment applicable to all of Avista’s residential
and small/medium business customers and began a temporary suspension of all late fees
for applicable customer billings. The Company hopes that these measures will help
contribute to the health and safety of its customers during this unprecedented crisis.
III. AVISTA’S COVID-19 RESPONSE
Functioning electric and natural gas critical infrastructure is imperative during the
COVID-19 emergency for both public health and safety, as well as community well-
being. Avista expects that it may incur significant incremental costs in its response to
the public health emergency, including bad debt expense resulting from higher than
average levels of write-offs of uncollectible accounts associated with the suspension of
disconnects and late payment fees to assist customers facing unprecedented economic
pressures. Avista also expects to incur additional costs that cannot currently be predicted
given the unprecedented nature of this public health emergency. At the same time the
Company expects to incur these additional costs, revenues that are designed to recover
Avista’s normal business costs could be reduced significantly due to the statewide Stay-
Home Order, which has caused shut downs or slowdowns of many commercial and
industrial businesses throughout Avista’s service area. Accordingly, Avista requests
authorization to establish a new regulatory asset to record the deferral of incremental and
unrecovered costs associated with its COVID-19 response.

Application of Avista Corporation Page 4
Case No. AVU-E-20-___ & AVU-G-20-___
Avista is also seeking authorization for the deferral of the costs because of the
potential magnitude and unprecedented nature of the COVID-19 public health
emergency. The associated risks of the COVID-19 public health emergency are well
outside reasonable business risk for the Company that might otherwise be considered
normal “regulatory lag.” During this COVID-19 emergency, Avista welcomes, and is
fully capable of executing, its obligation to provide safe, reliable electric and natural gas
service to its customers. At the same time, it is important to the ongoing financial health
of the Company to have a reasonable opportunity to recover its prudently incurred costs.
IV. PROPOSED ACCOUNTING TREATMENT

Avista seeks authorization from the Commission to defer, for future amortization,
incremental costs incurred to respond to the COVID-19 outbreak within its Idaho service
area and normal business costs not recovered due to reduction in electricity and natural gas
use by its customers, due to the statewide Stay-Home Order. Avista proposes to record
amounts that would be subject to the deferral in accordance with the Code of Federal
Regulations to the Federal Energy Regulatory Commission (“FERC”) Account 182.3
(Other Regulatory Assets) and credit FERC Account 407.4 (Regulatory Credits). The costs
as incurred will be debited to various expense accounts.
Given the unprecedented nature of this public health emergency, Avista cannot
estimate the incremental costs associated with its COVID-19 response, or the length of
time in which the costs may be incurred. Avista does not propose to accrue interest on the
unamortized balance. The Company is not seeking to establish the method by which these
costs would be identified and tracked in this case. Rather, the Company expects to present
as part of a future regulatory proceeding the nature and prudence of the associated costs

Application of Avista Corporation Page 5
Case No. AVU-E-20-___ & AVU-G-20-___
and why such costs were incremental and necessary to directly respond to the COVID-19
emergency. The requested deferred accounting treatment will minimize the frequency of
rate changes or the fluctuation of rate levels that would otherwise be necessary to match
appropriately the costs borne by and benefits received by customers.
V. MODIFIED PROCEDURE
Avista believes that a hearing is not necessary to consider the issues presented
herein, and respectfully requests that this Application be processed under Modified
Procedure; i.e., by written submissions rather than by hearing. RP 201, et seq.
VI. REQUEST FOR RELIEF
WHEREFORE, Avista respectfully requests that the Commission issue an Order
approving the requested deferred accounting and ratemaking treatment, as described above,
and processed under Modified Procedure. Avista is prepared and able to provide safe,
reliable electric and natural gas service to its customers during this COVID-19 emergency.
To maintain the ongoing financial health of the Company during this extraordinary time,
Avista requests authorization to defer for later ratemaking treatment its prudently incurred
incremental costs from the COVID-19 public health emergency and normal business costs
not recovered due to reduction in electricity and natural gas use by its customers to a
regulatory asset until it can request amortization of the deferred costs in a future
Commission proceeding.

Application of Avista Corporation Page 6
Case No. AVU-E-20-___ & AVU-G-20-___
DATED at Spokane, Washington, this 9th day of April 2020.

AVISTA CORPORATION

By
Patrick Ehrbar
Director of Regulatory Affairs
Avista Corp