Agencies object to Avista hikes

TUESDAY, AUG. 18, 2009

Filings with utilities commission propose much lower raises, cut

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

The staffs 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 electricity revenue increase. It also proposed that Avista’s natural gas customers see only a 0.13 percent hike in 2010.

Rather than any increase, the Public Counsel agency, which acts as a consumer advocate, recommended that Avista’s electricity customers in Washington receive a rate decrease of 3 percent next year.

The Public Counsel agency’s staff also said Avista’s natural gas customers should pay just a 0.2 percent increase – a net increase in revenue of just $400,000, compared with the $4.9 million requested.

The Public Counsel Section said Avista’s rate-increase 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 costs related to its $18 million contract with an Idaho power plant.

The counsel called Avista’s power purchase from a Lancaster, Idaho, plant “imprudent” and said its cost should be borne by shareholders.

Simon ffitch, the attorney general’s counsel section chief, highlighted one Avista expense cited by the utility to justify its proposal: a projected $30 million expense for natural gas during 2010.

Natural gas prices have dropped significantly since January, when Avista submitted the 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 said Monday all sides are taking part in the normal rate-setting 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.

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

The utilities commission said Monday it has received 696 public comments on Avista’s rate increase proposal – 689 opposing, five supporting and two undecided.

There are two comments on this story »