August 26, 2010 in City

Avista seeks rate increase for Washington customers

Proposed hike is about half of utility’s initial request
By The Spokesman-Review
 

Avista customers in Washington could see their electric rates go up 7.2 percent and their natural gas rates rise 3.2 percent starting Dec. 1, according to an agreement pending state approval.

Under terms of a rate case settlement agreement announced Wednesday, the rate hikes would boost Avista’s annual electric revenues by $29.5 million and natural gas revenues by $4.6 million.

If approved by the Washington Utilities and Transportation Commission, the new rates would mean a residential customer using an average of 1,000 kilowatt-hours of electricity per month would pay an additional $5.62 per month, for a revised bill of $77.41.

A residential customer using an average of 69 therms of natural gas per month would see a $2.17 monthly increase, for a revised bill of $62.20.

As part of the proposed settlement agreement, Avista would not ask for another rate increase before April 1, 2011.

Avista’s request to raise the basic service charge for electric and natural gas customers to $10 per month was rejected in the proposed settlement. If adopted by the commission, the fee would remain at $6 per month.

Company officials called the proposed settlement a “fair and reasonable outcome” for the utility’s customers and shareholders. All parties in the settlement made concessions, said Dennis Vermillion, president of Avista Utilities.

Avista’s original request in March was for an electric rate increase of 13.4 percent, or $55.3 million in increased annual electric revenues. The lower increase reflects in part an $11.7 million decrease in power supply costs, primarily due to the decline in natural gas fuel prices.

The Spokane-based utility in March also had requested to raise natural gas rates by an average of 6 percent, or $8.5 million in additional annual revenue. The lower amount in the settlement is due in part to additional natural gas storage to be used starting in May.

Avista executives said the utility needs the extra revenue to pay for improvements to the company’s dams, transmission systems and network of neighborhood distribution lines, as well as lock in new long-term contracts with outside electricity providers to meet the needs of a growing population.

Other parties to the settlement are the staff of the state Utilities and Transportation Commission, the Public Counsel Section of the Washington Office of the Attorney General, Northwest Industrial Gas Users, Industrial Customers of Northwest Utilities and the Energy Project.

The commission is not bound by the settlement.

Staff writer Becky Kramer contributed to this report.


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