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UTC staff recommend decrease for Avista electric and natural gas rates

Docket Number: UE-200900, UG-200901, and UE-200894

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 staff testimony 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.

Customers invited to comment at hearing in June 

LACEY, Wash. - Staff members of the Utilities and Transportation Commission have proposed a small rate decrease for Avista electric and natural gas customers.

In testimony filed last week, the commission’s energy staff proposed an increase to Avista’s electric revenues of $7.2 million and an increase to natural gas revenues of $5.6 million - significantly lower than the company’s proposed increase of $44.2 million in electric and $12.8 million in natural gas revenue.

However, in staff’s proposal, the increase is offset by the return of approximately $89 million in tax benefits to customers.

Therefore, under staff’s proposal, an average residential electric customer using 914 kilowatt-hours a month would pay $1.14 less, for an average monthly bill of $81.19, a 1.4% decrease.

A typical residential natural gas customer using 67 therms a month would pay $0.11 less, for an average monthly bill of $56.42, a 0.2% decrease.

The three-member commission, which is not bound by the company’s request or staff’s recommendation, will make a final decision on the utility’s rates this fall. New rates would go into effect Oct. 1.

Staff recommended excluding the company’s requested increases for certain expenses from rates. Citing a pattern of unreliable projections, staff removed proposed increases to operating expenses including insurance and information technology.

In its recommendation, staff supported $1.7 million in costs that Avista incurred in 2020 to fund its wildfire resilience plan but opposed Avista’s request to include wildfire costs that it scheduled for January to September 2021. Costs incurred in 2021 or beyond will be considered in future rate proceedings. These expenses are part of Avista’s efforts to harden its grid to ensure power supply is more resistant to utility-caused wildfires.

Staff’s proposal also excluded $9 million in costs related to Colstrip Units 3 and 4, a Montana-based coal-fired power plant.

Staff recommended that Avista be allowed the opportunity to earn a 7.07% overall rate of return, not the 7.43% the company requested.

The UTC will hold a virtual public comment hearing for customers who want to comment on the rate proposal on June 16 at 6 p.m.

The public can participate via Microsoft Teams (recommended). Or, they can call 253-372-2181, and use conference ID 328 665 042#.

Customers can also submit comments:
• online at www.utc.wa.gov/comments;
• via email to comment@utc.wa.gov;
• by mail to P.O. Box 47250, Olympia, WA., 98504; or
• toll-free at 1-888-333-9882.

The commission has received three public comments to date on Avista’s rate increase proposal – all opposed.

Spokane-based Avista serves more than 242,000 electric and more than 153,000 natural gas customers in eastern 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.

Topic(s)
Consumer
Energy