August 18, 2009 in Business

Agencies object to Avista hikes

Filings with utilities commission propose much lower raises, cut

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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.

Two comments on this story so far. Add yours!

• 

  liarsinnews on August 18 at 6:27 a.m.

  Two birds with one stone. What a surprise? Obama, continues to tell the Americans he is seeing some improvement in the economy even though thousands of jobs are abolished daily and workers are wondering where the next meal will come from. Food stamps have hit an all time high and unemployment lines are longer as each day passes. And AVISTA, once again is trying to increase rates because the Spokane economy is booming. In case you don`t believe what the monopoly says, just ask County Assessor Ralph Baker, who is telling everybody the housing market in Spokane county has not decreased home values. I can attest to the fact, when he told me my home value had not decreased, when I complained to him about it and that my taxes should be lowered. I got the run around when he sent me to the board of equalization. I was told by the Manager there that Baker was giving me the run around. I would not be surprised if Baker told me, the sun is rising in the west not the east.

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  greyhound2 on August 18 at 7:44 a.m.

  It takes two government agencies filing complaints to get any attention about excessive profits and rate hikes from a for-profit preditatory private monopoly running a vital utility like Avista. Don’t count on any intervention on the ratepayer’s behalf from the appointed, rubber-stamp commissioners. Don’t count on any rate reductions from falling oil, natural gas and electricity, dams built by taxpayers and not Wall Street investors. Avista has two considerations, salaries to overpaid executives and return on investment to Avista’s greedy shareholders. Avista has staff on hand who work 24/7 on devising new schemes to increase rates at the expense of captive ratepayers. This is a crazy way to run a vital utility.