Avista profits jump 72 percent
Gains driven by increase in rates, long winter, spring
Avista Corp.’s profits rose 72 percent during the first half of the year, driven in part by higher rates charged to customers and more energy usage to heat and light homes during the long and cold winter/spring of 2008.
Company executives said the gap in year-over-year profits – to $48.8 million in 2008, from $28.3 million in 2007 – also can be attributed to a $12 million loss posted by its former energy marketing unit that suppressed the first-half numbers in 2007.
While the profits should give stockholders reason to cheer, the utility is mindful of the broad economic woes squeezing many of its ratepayers. Gasoline, food and other basics are at record prices. And now, the utility plans to seek double-digit rate increases for natural gas.
“We are becoming increasingly concerned about the price of natural gas and impact on our customers’ energy bills,” company CEO Scott Morris told analysts during a conference call Wednesday.
Wall Street brushed aside such worries Wednesday. Avista shares rose 75 cents to close at $22.09 as the company expects to meet its financial targets for 2008.
The big hit for ratepayers will come this fall as Avista plans to seek a 20 percent to 25 percent increase in the price it charges for natural gas. The company took the unusual step of issuing what amounted to a warning earlier this summer, announcing that it had to pay record prices for natural gas and would seek to recoup the cost using what’s called a pass-through charge.
That’s atop Avista’s standing request of Washington state regulators to bump electricity rates by 9.2 percent and natural gas rates by 3.3 percent.
In Idaho, Avista seeks a 15.9 percent rate increase for electricity users and wants to bump natural gas rates by 6.5 percent.
Company spokeswoman Jessie Wuerst said the higher rates would offset the millions of dollars spent upgrading and maintaining dams and transmission projects.