Avista rate increases challeged by Utilities and Transportation Comission staff


September 27, 2012


Staff members of the Washington Utilities and Transportation Commission (UTC) recommended slashing millions of dollars from Avista's electric and natural gas rate increase request Wednesday, Sept. 19.

In testimony filed with the UTC, commission staff members urged rejection of the company's initial request to raise electric revenues by $41 million and instead recommended an overall revenue reduction of $1.3 million (-0.3 percent). Commission staff agreed Avista should raise natural gas revenues; but only by $4 million (2.8 percent) rather than the company's original request of $10.1 million (7 percent).

The three-member commission, which is not bound by the staff recommendation, will make a final decision on the utility's rate hike request this winter. New rates would likely go into effect in March.

The staff recommendation would rebalance rates among industrial, commercial and residential customers. This rebalancing would result in electric and natural gas rates going up for some customers while overall revenues for the company go down. The average residential electric customer using 1,000 kilowatt hours-a-month would pay 32 cents more under the recommendation, for an average monthly bill of $80.17.

The typical residential natural-gas customer using about 68 therms a month would pay about 66 cents less, for a revised average bill of $60.89.

Basic service charges for electric customers would increase from $6 to $7.34 a month. Natural gas customers would see their basic service charge go up from $6 to $10.98 a month.

Commission staff recommended that Avista be allowed the opportunity to earn a 7.22 percent overall rate of return, not the 8.25 percent the company requested. Staff in the UTC also recommended lower power-supply costs, income taxes and executive compensation than the company originally sought.

Avista customers will be able to comment at two public meetings scheduled at 6 p.m. Thursday, Sept. 27 in the Spokane City Council Chambers, 808 W. Spokane Falls Blvd., and noon Friday, Sept. 28 in the Spokane Valley Council Chambers, 11707 E. Sprague Ave.

The commission has received 92 public comments to date on the Avista rate increase proposal – eight undecided and 84 opposed.

In addition to the UTC staff, other parties expected to submit testimony today include: Northwest Industrial Gas Users, Industrial Customers of Northwest Utilities, The Energy Project, Northwest Energy Coalition and the Public Counsel Section of the Attorney General's Office.

In a separate proceeding, Avista has requested permission to lower natural gas rates by 4.4 percent this fall. This reflects the lower wholesale gas prices Avista pays to buy gas from its suppliers. The UTC will review that request Oct. 25.


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