Title

Utility staff says Avista’s electric and natural gas revenue requests too high

Published

9/19/2012

Details

Media Contact: (360) 664-1116 or media@utc.wa.gov
Docket Number: UE-120436 & UG-120437
 
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.
 
Utility staff says Avista’s electric and natural gas revenue requests too high
Customers invited to comment at public hearings next week in Spokane
 
OLYMPIA, Wash. – Staff members of the Utilities and Transportation Commission (UTC) today recommended slashing millions of dollars from Avista’s electric and natural gas rate-increase request.
 
The three-member UTC, 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.
 
In written 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 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. Basic service charges are paid by all customers regardless of the amount of electricity or gas used. The charge includes customer costs such as meters, maintenance and billing.
 
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. UTC staff also recommended lower power-supply costs, income taxes and executive compensation than the company originally sought.
 
Avista customers will be able to comment to state regulators at two public meetings scheduled at 6 p.m. Thursday, Sept. 27 in the Spokane City Council Chambers, 808 W. Spokane Falls Blvd., Spokane and noon Friday, Sept. 28 in the Spokane Valley Council Chambers, 11707 E. Sprague Ave., Spokane Valley. 
 
The commission has received 92 public comments to date on the Avista rate increase proposal – 8 undecided and 84 opposed. Customers who are unable to attend the public meetings but wish to comment on the proposed rate hike can mail their correspondence to: P.O. Box 47250 Olympia, Wash. 98504, email comment@utc.wa.gov or call toll-free 1-888-333-9882.
 
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.

Spokane-based Avista serves more than 237,000 electric and nearly 149,000 natural gas customers in Washington.
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 on Oct. 25.
 
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.
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Editor’s note: A copy of the UTC staff recommendation is available at the commission’s website:www.utc.wa.gov/120436
 

News Category

Consumer; Energy

Attachments

Content Type: Announcement
Created at 9/19/2012 4:48 PM by Meehan, Marilyn (UTC)
Last modified at 9/19/2012 4:48 PM by Meehan, Marilyn (UTC)