September 17, 2005 in Business

Hearing set on Avista rate increase request

By The Spokesman-Review
 

what’s next

Rate hearing

The Washington Utilities and Transportation Commission will hold a public hearing on Avista Utilities’ proposed rate increase from 5 to 7 p.m. on Oct. 11. The hearing will be held at the Ramada Inn Spokane Airport, 8909 Airport Road.

Avista Utilities’ Washington customers will have the opportunity to comment on the energy company’s proposed rate increase next month when the state’s Utilities and Transportation Commission holds a public hearing here.

All three commissioners — who ultimately will decide upon the proposed increase — are expected to attend the Oct. 11 hearing. Avista’s proposal would boost electric rates by about $5.22 for the average residential customer and natural gas rates by about 57 cents.

Tim Sweeney, a spokesman for the commission, said customers should not confuse the rate case with the company’s recently announced “purchase gas adjustment” (PGA), an annual pass-through of the higher costs the company is paying for natural gas. The company is not allowed by state law to profit from the pass-through of higher costs. That request would raise natural gas rates by about 23 percent, or $16 per month, for customers in both Washington and Idaho. The utilities commission is scheduled to rule on the PGA on Oct. 26, but will not hold a public hearing.

“The PGA is what’s in the pipe, and the rate case is the pipe,” Sweeney said. A rate case is a request to raise customers’ base rates, which cover the cost of doing business. Avista has attributed the need to raise rates to money it has spent beefing up generation and transmission systems, the purchase of a power plant in Oregon, and improvements made to its Cabinet Gorge Dam. Also rising are costs for gas, insurance, wages and benefits, Avista officials have said.

But Simon ffitch, chief of the public counsel’s division of the state attorney general’s office, takes issue with the rate of return Avista would like to deliver to investors. He says the proposed rates are too high, largely due to the 10.4 percent rate of return Avista is seeking. Avista’s proposal is supported by three parties to the case, including commission staff, an industrial gas users’ organization and a group that represents low-income consumers.

The public counsel’s office instead is recommending a 9.25 percent rate of return, which ffitch said would reduce Avista’s proposal by several million dollars. Avista officials have said their proposed rate of return falls within the average range for regulated utilities nationwide.

So far, the utilities commission has received 135 comments regarding Avista’s proposal, all of them opposed. Comments on the rate case or PGA can be submitted to the utilities commission via email at: comments@wutc.wa.gov or by mail at: P.O. Box 47250 Olympia, WA 98504.


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