Avista takes heat at hearing

Avista’s proposal to raise electricity and natural gas rates by $144 a year for the average Eastern Washington household may leave the elderly and poor with a stark choice: go hungry or be cold, said opponents of the company’s plans.

“They’re already facing tough decisions,” Marie Raschko, a volunteer with Aging & Long Term Care of Eastern Washington, said Tuesday evening during a public hearing.

Members of the Washington Utilities and Transportation Commission heard from 15 people – all opposed to Avista’s request.

Turnout was light as about three dozen came to City Hall to listen and comment. Some people blamed the 5 p.m. starting time as inconvenient.

“The cost of gas and cost of food has risen,” she said, “and Social Security rises around 3 percent annually. This is the sole source of money for many.”

She asked the commission, which will rule on the rate request, to reject the proposal and instead consider tying rate increases to inflation.

Greg Partch, a Whitman County commissioner and member of the aging group’s board, warned that financial assistance programs that offset heating and power bills for the poor aren’t keeping pace. A new round of rate hikes, he said, “can’t be absorbed.”

Avista says it needs the money to pay for equipment upgrades at its dams built more than 50 years ago. The backbone of the company’s electricity holdings must be maintained, said company Vice President Kelly Norwood, spearheading the company’s rate case.

At the same time, Avista is busy beefing up its transmission system to handle more customers in growing Spokane and other regions.

Those fixes, Norwood said, must be funded by ratepayers.

The company also wants to boost its profit margin, asking the commission for the right to earn an 11.4 percent rate of return. This would, Norwood said, help the company impress Wall Street and regain its status as an investment-grade company.

Three ratings companies – Standard & Poor’s, Moody’s and Fitch – have declined to give Avista the coveted marks it seeks, though Fitch did reward the firm’s brighter outlook for next year with a series of upgrades.

Avista anticipates a return to investment in 2008, Norwood said. Such a move would signal that the company has recovered from the West Coast energy crisis of 2000-01 that nearly bankrupted it. And it would help the company solicit a broader base of investors and find more attractive interest rates when it borrows money for such financial activities as refinancing debt or undertaking major projects.

Medical Lake resident James Button called Avista’s plans unreasonable and urged commissioners to ignore the company’s Wall Street hopes.

Others encouraged Avista to behave like other companies with a tight budget: Freeze employee pay and slash executive compensation.

“My last raise was 2.3 percent,” said Peggie Boothe, of Spokane, looking at several Avista executives and wondering how much their salaries have risen. “I think the Regular Joe needs a break here.”

State employee Annita Davison reflected on Avista salaries and opined “I wished I worked for Avista.”

Kris Odel said Spokane people are being used.

“I say enough is enough,” he said. “Our income is not increasing with the rates they are requesting.

Simon ffitch, chief of the state attorney general’s Public Counsel Division, has called Avista’s rate request excessive.

Though his office has yet to submit formal comments, he released some critical preliminary findings including a position that Avista’s rate of return should be forced down rather than allowed to grow.

Avista has taken steps to lower its risks and thus should not be allowed to turn the risk-and-reward scenario upside down.

Furthermore, ffitch said executive salaries should be studied to ensure reasonableness. He also questioned the cost-effectiveness of deploying automated meters and was troubled by a company proposal to seek “mini-rate cases” that would exclude much of the public vetting.

The commission will accept public comments until Dec. 7. A decision on rates will be made sometime in March, said commission chairman Mark Sidran.