Idaho Public Utilities Commission

Case No. AVU-G-10-02

June 3, 2010

Contact: Gene Fadness (208) 334-0339, 473-8791

Comments due June 30 in Avista gas efficiency rider case

The Idaho Public Utilities Commission is continuing to take customer comment on Avista Utilities’ application to increase its natural gas Energy Efficiency Rider by 2.6 percent. Written comments are accepted through June 30. (This is not the same case as Avista’s natural gas base rate increase request. In that case, Avista is seeking a 3.6 percent increase to its natural gas base rate, which is separate from the Energy Efficiency Rider.)

Customer response to more than 30 conservation programs to reduce natural gas consumption prompted Avista last February to request an increase to the customer rider that pays for the programs.

If approved, the increase would be about $1.52 a month for an average residential gas customer. Approval of the rider would not increase or decrease company earnings. All the money collected in the rider must go to fund gas conservation programs.

When utilities propose increases in efficiency riders, the commission investigates the conservation programs funded by the rider for their cost-effectiveness and approves them only if it has evidence demonstrating that lack of such programs would result in even higher rates for customers. For example, the reduction of more than 2 million therms by customers during 2009 prevented Avista from having to buy or store those 2 million therms.

In its application, Avista contends that energy efficiency remains the lowest cost resource and all customers, even those who may not directly participate in the programs, benefit from them. The company’s most recent cost-benefit analysis (2008) indicates the net benefit to customers from the programs was more than $8.9 million

Customer participation in the program continues to exceed funding, according to Avista. During 2009, the company set a target of 1.6 million therms in savings and more than exceeded that target with consumption reduced by 2 million therms.

Avista’s programs consist primarily of providing financial incentive or rebates for cost-effective efficiency measures installed by customers with a simple payback of greater than one year. This includes more than 300 measures packaged into 30-plus programs. Some of the measures include programs for appliances, compressed air and HVAC systems and motors. There are also industrial applications, maintenance strategies and sustainable building measures.

Portions of rider revenue go toward low-income weatherization, direct aid ($465,000) to Idaho electric and natural gas low-income customers and $25,000 to Idaho Community Action Partnership agencies for low-income outreach and conservation education.

On the electric side, Avista is not proposing an increase to its energy efficiency rider, even though it anticipates a shortfall of about $600,000 at the close of 2010. Avista’s 2009 energy efficiency savings in electricity in Idaho and Washington was more than 82 million kilowatt hours, or about 9.4 average megawatts. That was 143 percent of the company’s target of 57.2 million kWh. The company claims the net benefit to customers from the electric programs during 2008 was more than $39 million.

Avista serves about 72,300 natural gas customers in northern Idaho.

The commission plans to handle this request in a modified procedure that uses written comments rather than conducting a hearing, unless customer comments can demonstrate a need for a public hearing. Comments are accepted through June 30 via e-mail by accessing the commission’s homepage at www.puc.idaho.gov and clicking on "Comments & Questions." Fill in the case number (AVU-G-10-02) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.

A full text of the commission’s order, along with other documents related to this case, is available on the commission’s Web site. Click on “File Room” and then on “Gas Cases” and scroll down to the above case number.