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State utility staff reach settlement in Avista’s electric and natural gas rate request
 
Aug. 25, 2010
Docket Number: UE-100467 & UG-100468

Editor’s note: This news release reflects the position of energy staff of the Washington Utilities and Transportation Commission (UTC) and NOT the views of the three-member commission. It discusses a staff recommendation that the commissioners have not yet reviewed. Any positions taken or comments offered by the commission staff regarding this proceeding should be attributed clearly to staff members and NOT to the UTC.

OLYMPIA, Wash. – Avista reached an agreement with staff members of the Utilities and Transportation Commission (UTC) and others on a proposed settlement of its case requesting increased electric and natural gas rates in Washington.

The proposed all-party settlement now goes before the three-member UTC, which will make a final decision on the utility’s rate-hike request this fall. The commission is not bound by the staff recommendation.

Under the terms of the settlement agreement, Avista’s electric revenues would increase by $29.5 million a year, or an overall 7.4 percent, down from the $55.3 million, or 13.8 percent, the company asked for in its initial request March 23. Avista would also be able to collect an additional $4.6 million, or 2.9 percent, in natural gas revenues. This is lower than the company’s original request of $8.5 million, or 5.4 percent.

The average residential electric customer using 1000 kilowatt hours-a-month would see an increase of $5.62, for an average $77.41 monthly bill. The typical natural-gas customer using 70 therms a month would pay about $2.20 more, for a revised bill of $63.01.

In addition to the UTC staff and the company, four other parties signed the settlement agreement. They include: Northwest Industrial Gas Users, Industrial Customers of Northwest Utilities, The Energy Project and the Public Counsel Section of the Attorney General’s Office.

Included in the settlement is a provision rejecting Avista’s request to raise the basic service charge for electric and natural gas customers to $10 a month. If adopted by the UTC, the fee will remain at $6 a month.

The all-party settlement is recommending Avista be allowed the opportunity to earn a 10.2 percent rate of return on equity, not the 10.9 percent the company originally sought.

Avista customers will be able to comment to state regulators on the proposed settlement agreement at a public meeting scheduled at 5:30 p.m. Wednesday, Oct. 6 at the Spokane City Council Chambers, 808 W. Spokane Falls Blvd., Spokane.

The commission has received 30 public comments to date on the Avista rate increase proposal – one in favor and 29 opposed.

The agreement calls for a Dec. 1 effective date. The settlement agreement also includes increases of 7.4 and 2.9 percent in electric and natural gas rates, respectively, for contributions to the Low-Income Ratepayer Assistance Program (LIRAP). If approved, the average residential electric customer will pay $7.44 per year to the LIRAP fund. The average natural gas customer will pay $8.46 per year for the LIRAP fund.

The settlement also would allow Avista to collect $2 million a year for its low-income weatherization program, up from $1.5 million previously.

Legal issues unsettled in the last rate case involving Avista’s cost recovery with regard to the purchase of the Lancaster power plant in Rathdrum, Idaho would be resolved in the settlement agreement.

Spokane-based Avista serves more than 234,000 electric and nearly 147,000 natural gas customers in Washington.

The UTC is the state agency that regulates private, investor-owned electric and natural gas utilities in Washington. It is the commission’s responsibility to ensure regulated companies provide safe and reliable service to customers at reasonable rates, while allowing them the opportunity to earn a fair profit.