20181106Gehl Direct.pdf

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Z5 DIRECT TESTIMONY OF WIL GEHL
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IBrad M. Purdy
Attomey at Law
Bar No. 3472
2019 N. 17tr St.
Boise,lD. 83702
[phone] (Land)
(208) 484-9e80 (Cell)
[e-mail]
Attomey for Petitioner
Community Action Partnership
Association of ldatro
IN THE MATTER OT TITE JOINT
APPLICATION OF I{YDRO OI\TE LIN{ITED
AND AVISTA CORPORATION FOR
APPROVAL OF MERGER AGREEMENT
BEFORE THE IDAHO PT]BLIC UTILITIES COMMISSION
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cAsE NOS. AVt -E-17-09
Avt'i-G-I7-05
COMMUNITY ACTION PARTNERSHIP ASSOCIATION Otr' IDAHO'S
DIRECT TESTIMOI{Y OT'WIL GEHL
IN SUPPORT OF SETTLEMENT STIPULATION
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DlRECT TESTIMONY OF WlL GEHL
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I.INTRODUCTION
Please state your name and business address.
My name is Wil Gehl. I am the Executive Director of the Community Action
Association of Idaho (CAPAI), located at 3350 W. Americana Terrace, Suite 360, Boise,
rD 83706.
On whose behalf are you testifuing in this proceeding?
The CAPAI Board of Directors asked me to present the views of an expert on, and
advocate for, the low income customers of Avista in the context of the proposed merger
between Avista Corporation and Hydro One Limited.
II. CAPAI'S BACKGROUND
Please describe CAPAI's organizational structure and the firnctions it performs, relevant
to its involvement in this case.
CAPAI is an association of the following private, nonprofit organizations that fight
poverty in Idaho: l) The Community Action Partnership (CAP-N & CAP-NC); 2) El
Ada, Inc. (El Ada); 3) The Western Idaho Community Action Partnership (WICAP); a)
The South Central Community Action Partnership (SCCAP); 5) The Southeastern Idaho
Community Action Agency, Inc. (SEICAA); 6 The Eastern Idaho Community Action
Partnership, Inc. (EICAP); 7) The Community Council of ldaho, Inc. (CCf, and; 8)
Metro Community Services (MCS), formerly named the Canyon County Organization on
Aging, Weatherization and Human Services, Inc. The last two agencies, CCI and MCS,
are designated in CAPAI's Bylaws as "special purpose agencies." These agencies are
focused on providing services to migrant and senior populations, respectively.
Collectively, the six Community Action Agencies (sometimes referred to as o'CAPs")
along with CCI and MCS are referred to as o'member agencies." For the purposes of the
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Q:
Merger Stipulation at issue in this proceeding, there is no relevant distinction between a
Community Action Agency and a special purpose agency.
Do the collective agencies provide low-income services statewide?
lYes. Each member agency has a designated service area. Combining all agencies, every j
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county in Idaho is served. The agencies design their various programs to meet the uniWel
needs of communities located within their respective service areas. Not every agency
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provides all of the following services, but all work with people to promote and support
increased self-sufficiency. Programs provided by CAPS include: employment
preparation and retention, education assistance, child care, emergency food, senior
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independence and support, clothing, home weatherization, energy assistance, affordable
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housing, health care access, and much more.
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What is the relationship between CAPAI and the member agencies?
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CAPAI is effectively the umbrella organization that provides a myriad of services to the
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members to assist them in carrying out their individual missions throughout Idaho. Su"f,
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services include training and technical assistance, coordination ofresources, program
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lplanning and assistance with implementation, programmatic administrative oversight, *dl
advocacy for the low-income in Idaho, among other things. I
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Are the individual member agencies represented on CAPAI's Board of Directors and, if
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so, how? I
IYes they are. Each agency has an Executive Director and its own Board of Directors that]
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establishes policy for that agency. The Executive Director manages the day to day
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functions of the agency. In addition, each Executive Director of each member agency sitl
on the CAPAI Board of Directors. Thus, there are currently 8 CAPAI Board members. I
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Q:Which of the eight member agencies provide low-income assistance to Avista's service
territory?
The Community Action Partnership ("CAP") serves North Idaho including all of Avista's
Idaho service territory.
Have you testified before this Commission in other proceedings?
No, this will be my first appearance before this Commission and I welcome the
opportunity.
Would you please describe CAPAI's involvement in this case?
CAPAI has participated fully throughout the entirety of this case, filed comments in
support of the proposed merger on June 20,2018, and participated in settlement
negotiations.
III. SUMMARY
Please summarize your testimony in this case?
The purpose of my testimony is to support the sefflement stipulation previously entered
into between numerous parties prior to the late intervention of certain others and the
rescheduling of these proceedings. The Settlement Stipulation was fiIed, pursuant to
Rule 274 of the Commission's Rules of Procedure, IDAPA 31.01.01.246, with the
Commission on April 13,2018 and initially signed by both applicants, the Commission
Staff, Clearwater Paper Corporation, Idaho Forest Group, the Idaho Conservation
League, the Washington and Northern Idaho District Council of Laborers, and CAPAI.
The Avista Customer Group and the Idaho Departrnent of Water Resources subsequently
filed, and were granted, Petitions for lntervention.
The Settlement Stipulation was accompanied by a Motion for Approval, also filed
on April 13, 2018 pursuant to Rule 274 of the Commission's Rules of Procedure,Id. As
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425DIRECT TESTIMONY OE WIL GEHL
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detailed below, CAPAI unconditionally supports the Settlement Stipulation at issue
before this Commission. I also provide the rationale for CAPAI's support of the
settlement. Finally, I will explain why I believe that the settlement is in the interests not
only of Avista's low-income customers, but also the general body of ratepayers.
Are there any exhibits to your testimony?
No.
IV. ESSENTIAL ELEMENTS OF SETTLEMENT
Please explain your analysis of the Settlement Stipulation and why CAPAI supports it.
CAPAI assessed the sefilement based primarily upon the impact that it will have on
Avista's low income customers, both prior to and after the merger. This should not be
construed to mean that the other provisions contained in the Stipulation were not of
importance to CAPAI. The Settlement Stipulation was viewed on the whole. Following
numerous negotiations, analyses and due consideration, it is CAPAI's that the merger, as
proposed and as set forth in the Stipulation, will inure to the benefit of Avista's low
income customers in ways that haven't been experienced in recent memory. The
Stipulation also contains provisions that will benefit all other customer classes.
Will there be a rate impact as a result of the merger?
Yes. My understanding is that the applicants have commiued to a $15.8 million overall
rate credit to customers spread over five years.
LOW INCOME PROVISIONS
Paragraph 58, Exhibit A:
Please outline the specific provisions that you believe will provide meaningful assistance
to Avista's low income customers?
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A:The majority of provisions contained within the Stipulation that have the likelihood of
providing assistance to the poor are found in Paragraphs 58-65 of Exhibit "A" to the
Stipulation. Specifically, Paragraph 58 of the Stipulation states that Hydro One will
zurange funding of $500,308,847 over a ten-year period to help fund energy effrciency,
weatherization, conservation, and low income assistance programs. The aforementioned
funding will be disbursed by a diverse group of customer groups including the Energy
Effrciency, Weatherization, Conservation and low income assistance committee
("EWCL'), a new committee of stakeholders tasked with determining which existing or
new programs should receive this funding to address energy effrciency, weatherization,
conservation, and low-income needs in Avista's Idaho service territory. The committee
will consist of representatives from: Avista,Idaho PUC Commission Staff, the Lewiston
CAP agency, Idaho Conservation League (ICL), the Idaho Forest Group, and Clearwater
Paper Corporation. The committee will have the ability to add members at its discretion
and will consider the needs of all parties while remaining flexible on the timing of any
disbursements.
When will the EWCL convene to begin fulfilling its role?
The EWCL will convene within 90 days after the close of the CAPAl-purposed CAP
transaction, will present a 10-year funding plan to Avista by June 1,2019 and will revise
this plan periodically, as needed.
What is your assessment of the viability and effectiveness of the EWCL?
I believe that the foregoing EWCL collaborative group of stakeholders will provide a
balanced perspective of necessary low-income conservation funding and will help to
insure that all interests and perspectives are taken into consideration. Consequently, it
provides a thorough safeguard to ensure the best possible selection of opportunities.
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COMMT]NITY CONTRIBUTIONS
Paragraph 61, Exhibit A:
What low income benefits will be derived from this particular benefit identified in
paragraph?
Hydro One has agreed to cause Avista to make a one-time $7,000,000 contribution to
Avista's charitable foundation at or promptly following closing of the merger, assuming
it is approved by the Commission.
What are the low-income benefits that this program is intended to provide?
The purpose of this pot of money is, for the time-being, yet to be fully defined. The
overall intent is to identift ways in which the money could provide assistance to low
income customers.
BILL ASSISTAI\ICE
Paragraph 62, Exhibit A:
What are the presumed benefits of this particular provision to the Stipulation?
Avista agrees that it will continue to work with low-income agencies to address other
issues of low income customer concern. Specifically, Avista has indicated a desire to
utilize merger-related funds to develop a program funding bill payment assistance using
money that does not come from Avista's ratepayers. Neighboring states such as
Washington and Oregon already have bill payment programs in effect. Such programs
would go much farther in helping the most impoverished customers than most any other
low-income progftun already in existence. This would provide truly substantial help to
Avista's low-income customers. In furn, and as discussed below, there are numerous
tangible and intangible benefits that inure to all ratepayers derived from keeping low-
income customers as active customers, reducing collection and billing costs and bad-debt
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1 write-off, among other things. CAPAI believes that such a progftrm could have a
profoundly positive impact and possibly help set the stage for a future program of this
nature.
FEE FREE PAYMENT PROGRAM
Paragraph 63, Exhibit A:
Q: What are the benefits of this list item?
A: Avista currently charges no fee for customers who wish to make payments over the
telephone. The Company had planned to seek authority to terminate this program and begin
charging a fee, as many utilities due. The impact of the merger will be to continue the free
pro$am into the indefinite future.
IMPROYE PEI\TETRATION OF' LOW.INCOME PROGRAMS
Paragraph 64, Exhibit A:
Q: What is the intended impact on low-income customers of this proposal?
A: Hydro One and Avista will work closely with the Lewiston CAP to undertake a targeted
eflort with the goal of improving the penetration rate of low income programs in general with a
focus on underserved, vulnerable, and high energy burden households. This commitrnent may
include marketing, outreach and data analysis where appropriate. This provision is clearly
directed specifically to the companies' low income customers and though not yet constructed or
fully defined should prove to be of considerable value to said customers.
Q: How will work with local tribes benefit low income customers?
A: It is generally accepted that many of Idaho's most impoverished citizens, including
customers of Avista, are disproportionately impoverished. Consequently, any progftrm
that targets these individuals for assistance will likely be of assistance to a Avista's tribal
communities.
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General Provision:
Q: What is the value of this particular Stipulation provision?
A: Many global settlements involving multiple jurisdictions, such as the one at hand, contain
most favored nation status to ensure that, during the course of a protracted, multi-
jurisdiction process, no participant is any worse off than any other merely by virtue of
their negotiating prowess. Consequently, should any state receive any concession,
whether for low-income customers, or non-low income, it assures equitable treafinent
across the utility's numerous service territories and markets.
V. CONCLUSION
Q: Do you have any sunmary remarks regarding the proposed merger?
A: Yes. The proposed merger represents a unique opportunity to obtain numerous desirable
conditions for all of the Company's customers. The Company has been creative in
fashioning a result that, if approved, should go far in addressing the needs of its low
income customers.
Q: Does this conclude your testimony?
A: Yes, it does.
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AVISTA CUSTOMERGROT]P
Parsons Behle & Latimer
800 W. Main St.
Boise,lD 82702
IDAHO DEPT. OF WATER RESO{'RCES
Garrick L. Baxter
Idaho Dept. of Water Resources
3228. Front St.
Boise,ID 83720-0098
Brad M. Purdy C-
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