Avista Corp. will ask Washington and Idaho regulators for permission to raise utility rates by early next year.
The Spokane-based company plans to file “rate cases” with both state’s public utilities commissions by the end of March, for increases that would take effect in late 2010 or early 2011, Avista’s Chief Financial Officer Mark Thies told analysts during a Thursday conference.
Rate cases lay out Avista’s rationale for higher rates and typically take 11 months to be decided in Washington, and seven months in Idaho. Company officials haven’t finalized how much of a rate hike they will request.
Meanwhile, Avista reported an 18 percent gain in net income last year. The company earned $87.1 million last year, compared to 2008’s earnings of $73.6 million. For the fourth quarter of 2009, Avista reported $22.1 million in earnings, compared to $17.5 million for the fourth quarter of 2008.
As a result of the stronger performance, Avista’s board of directors raised stock dividends from 21 to 25 cents per share.
Scott Morris, Avista’s chairman and CEO, credited several factors for the company’s improved financial results. Since mid-2009, Avista has been successful in getting utility rates raised for customers in Washington, Idaho and Oregon. Morris said the higher rates helped the company offset the $200 million that Avista spends each year to upgrade its transmission and distribution system.
Lower wholesale costs for electricity and natural gas also helped the company’s bottom line, Morris said. Customers shared in the benefits of lower wholesale rates through a break on their gas bills, he added. Customers saved 22 to 26 percent from the lower wholesale rates, though the part of their bill that reflects Avista’s costs for delivering natural gas went up slightly.
Avista also refinanced its long-term debt last year, which lowered the company’s interest payments. Morris said that savings is reflected in 2009 results.
In other news, Morris and Thies said:
•Even with the tough economy, Avista’s customer base continues to grow. The company added more than 2,000 natural gas customers last year and 1,800 electric customers.
•The El Niño trend that led to mild temperatures in January and February and reduced snowpack could reduce electrical output at the company’s dams this summer.