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Agencies object to Avista’s proposed rate hikes

Two Washington state agencies on Monday filed strong objections to a requested 18.5 percent electricity rate hike by Spokane’s Avista Utilities.

Both the staff of the Washington Utilities and Transportation Commission and the Attorney General’s Public Counsel Section filed written testimony opposing the increase. Both agencies also oppose Avista’s proposed 2.4 percent rate hike for natural gas customers.

The three-member utilities commission, which is not bound by its staff recommendation, will make a final decision on Avista’s rate requests by Dec. 23.

The utilities commission staff recommended that Avista get a 5.15 percent electric revenue increase. It also proposes that Avista’s natural gas customers see only a 0.13 percent hike in 2010.

Rather than any increase, the public counsel section, which acts as a state consumer advocate, recommended Avista’s electric customers in Washington earn a rate decrease of 3 percent next year.

The section staff also said Avista’s natural gas customers should pay just a 0.2 percent increase — a net increase in revenue of $400,000 instead of $4.9 million requested.

The public counsel section claimed Avista’s rate requests should be denied because the utility cannot justify several significant corporate expenses and because Avista should not be allowed to pass on to ratepayers an $18 million contract the power utility has with an Idaho power plant.

The counsel’s testimony called Avista’s power purchase from a Lancaster, Idaho, power plant “imprudent” and said its cost should be borne by shareholders, not ratepayers.

Simon ffitch, the Attorney General’s counsel section chief, drew specific attention to one Avista expense being cited by the utility to justify the electricity rate proposal — a projected $30 million expense for natural gas during 2010.

But natural gas prices have dropped significantly since January when Avista submitted that request, ffitch added.

“We went back and asked Avista to calculate the power cost (for natural gas) using today’s prices,” ffitch said. “The amount is $30.4 million less.”

Avista responded to the testimony filed Monday by saying both sides are taking part in the normal rate case process.

“We are in the process of reviewing the testimony which we received this afternoon. After all of the input in a rate case is considered, the utility commission will set rates that are fair and just, while allowing Avista the opportunity to earn a reasonable profit,” the company said in an e-mail response.

Avista has until Sept. 11 to file rebuttal testimony in support of its rate proposals.

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