Avista reaches settlement with stakeholders in latest rate case

Avista reaches settlement with stakeholders in latest rate case

Idaho Caucus Report
Brad Purdy, Caucus Chair

Spokane-based Avista Corp., which provides electric and natural gas service to much of northern Idaho, has joined the staff of the Idaho Public Utilities Commission (PUC) in asking the Commission to approve a rate case settlement agreement that could mean higher rates – though not as high as the utility first sought.

Avista filed its application with the PUC last week. The PUC is not bound to accept the proposed settlement agreement, and utility customers will have an opportunity to comment on it once the PUC revises its schedule for this case. Besides the utility and the PUC staff, other participants in the settlement discussions included Clearwater Paper, Idaho Forest Products, the Community Action Partnerships of Idaho, the Snake River Alliance, the Idaho Conservation League, and North Idaho Energy Logs.

Avista originally filed for an increase in its electric rates of 14 percent and in gas rates of 3.6 percent. This year’s rate increase request followed one last year in which the company sought a 12.8 percent increase that was reduced to 5.7 percent. The company said the rate hike is needed because of rising power supply costs, replacement costs for equipment, transmission lines and other infrastructure, and added costs to ensure the utility meets federal requirements on energy reliability.

Under the settlement terms agreed to in this rate case, rather than a 14 percent electric rate increase, the increase will be tempered in large part by using about $17 million in “deferred state income tax” refunds that have been sitting on the utility’s books and applying them over the first two of three years covered by the agreement. That brings the rate increase down to about 3.6 percent for the year beginning this Oct. 1 and 3.9 percent the year after. However, Avista concurrently filed its annual Power Cost Adjustment to reflect the true cost of generating and purchasing power over the past year. Once that is added to the mix, the total rate increase would be 6.6 percent, or about a $5.40 monthly increase for an average customer using 1,000 kilowatt-hours a month.

The settlement agreement also contained a number of other provisions, including a commitment by Avista to boost funding, outreach and education for low-income customers and a commitment to explore possible new rate structures in a workshop between now and the next rate case.