April 5, 2008 in Idaho

Avista seeking Idaho rate increases

By The Spokesman-Review
 

North Idaho households could pay Avista Corp. an extra $10.70 per month for electricity next year, if state regulators approve a proposed rate increase.

The utility sent the requested 15.9 percent increase to the Idaho Public Utilities Commission on Friday. If approved, the rate hike would bring what Avista describes as a typical homeowner’s electric bill to $78.08 per month

Avista is also seeking a 6.5 percent increase in natural gas rates. If that’s approved by state regulators, natural gas bills would increase $4.91 per month to $80.05 for a typical household.

The Idaho Public Utilities Commission generally has up to seven months to act on a general rate increase, said Debbie Simock, Avista spokeswoman. So if the higher rates are approved, they would take affect in early 2009.

Avista filed similar rate increase requests with Washington regulators last month.

The higher rates in Idaho would generate an additional $37 million annually for Avista. Company officials said the money would go toward a number of expensive projects, including the relicensing of five dams on the Spokane River. The money would also pay for improvements at Clark Fork River dams and a coal-burning plant in Montana.

The higher rates would also help Avista upgrade substations and power lines.

Avista is focusing on projects that will help the utility get more power output from its existing facilities, so it doesn’t have to go looking for new, costly energy sources, Scott Morris, the company’s chairman and chief executive officer, said in prepared remarks.

Higher prices for steel, copper, aluminum and cement have also put pressure on Avista and the utility industry as a whole, he said. The materials are key parts of utility equipment, and the rising prices increase construction and maintenance costs, he said.

On the natural gas side, the higher rates will pay for an expansion of the Jackson Prairie Natural Gas Storage Facility near Chehalis, Wash.

Avista buys natural gas in the spring and summer months when costs are lower and stores it until the high-demand winter months. The utility is a one-third owner of the storage facility.

The rate request comes as many North Idaho residents already are struggling to pay their power bills. About 2,500 households in Kootenai County sought help with their heating bills this winter through the Community Action Partnership, said Mark Haberman, a program manger.

A larger number than usual appeared to be first-time applicants, said Haberman, who attributed the increase to downturns in the local construction industry. Formerly middle-class people are seeking help, he said.

Avista’s Simock said the rate request also includes more money for energy-assistance programs.

Avista hasn’t filed a request for a general rate increase in Idaho since 2004, although rates have gone up from surcharges, Simock said. For instance, Avista’s residential customers in North Idaho saw their electricity rates increase by 11 percent last year.

Most of last year’s surcharge was related to a temporary suspension of the Bonneville Power Administration’s residential exchange program, Simock said. The program, which ensures that all Northwest residents benefit from the federal Columbia hydropower system, has been reinstated. The credit, about 10 percent of a residential electric bill, should kick in by mid-April, Simock said.


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