Spokane7
50°
November 20, 2010 in Idaho
Avista rate hikes approved with warning
Annual audits imposed to prevent more incorrect charges
Washington regulators granted part of Avista’s request for higher rates Friday, but also said the electric and natural gas utility must conduct annual expense audits to make sure that ratepayers aren’t illegally saddled with costs that should be borne by shareholders.
The new rates, effective Dec. 1, could be adjusted downward if irregularities are found, according to an order signed by the Washington Utilities and Transportation Commission.
The action came after an audit by the state attorney general’s office, which found that Avista had billed utility customers for $38,000 in expenses that the company’s shareholders should have paid. Those items included:
• Professional portraits and first-class travel for the board of directors;
• Employee gifts, a retirement party and employee entertainment at a sporting event;
• Dues and fees to civic organizations, such as Rotary and chambers of commerce;
• Charitable contributions, advertising to improve Avista’s corporate image and moving costs for a company executive.
Those expenses were part of Avista’s rate proposal, submitted to regulators in March. But since they were flagged by the AG’s Office of Public Counsel’s audit, they were not included in the new rates.
“We are concerned that a broader investigation will reveal many more such instances,” the WUTC’s three-member commission said in Friday’s order, which directed Avista to perform the annual expense audits and train employees to reduce errors.
Commissioners reserved the right to adjust the new rates if the audit reveals additional errors.
“We are confident that the company can and will do better,” the commissioners said in the order. “Given the attention to these matters, we expect that future filings will be free of blatant errors and accounting adjustments that are unquestionably improper.”
Avista spokeswoman Debbie Simock said the company’s internal audit is already under way.
The Spokane-based utility processes more than 3 million transactions per year, including 500,000 expense transactions, she said.
“We understand that a small number of errors could occur,” Simock said. “We’re certainly going to take the steps to make sure that these types of errors do not occur in the future.”
The commission is charged with ensuring that investor-owned utilities, such as Avista, provide safe and reliable service to customers at reasonable rates, while allowing them the opportunity to earn a fair profit.
Avista and other investor-owned utilities can only recover certain types of costs from their ratepayers. Other costs must be borne by the company’s shareholders.
Miners to return to Lucky Friday 
monkeyman on November 20 at 1:14 a.m.
“…must conduct annual expense audits to make sure that ratepayers aren’t illegally saddled with costs…”
I assume this means they weren’t already doing this? Is this normal for this “business”?
$38,000 would get an entry level accountant I suppose. Let’s gift one from the ratepayers’ side…
“• …advertising to improve Avista’s corporate image…”
…perhaps they tried to sneak in a part of Dan’s (“the Avista Maan”) salary? :)
mikeln on November 20 at 4:59 a.m.
So, another corporate fox allowed to watch the hen house. A broader investigation may find more irregularity in the way the public is billed, they say. This company needs to be turned over to public control and its stockholders need to go get real jobs. Some things should never be allowed to be for profit and this is one of them.
oneanddone on November 20 at 5:01 a.m.
Makes one wonder how many other costs under “misc” are added to the ratepayer’s burden unlawfully. When a company tries to do this sort of thing there needs to be a MASSIVE fine. Mistakes happen but this is fraud and someone’s head should roll. You shouldn’t have to count on investigations to make these companies adhere to the law.
greyhound2 on November 20 at 5:27 a.m.
Why don’t they include campaign contributions which are paid by ratepayers to bribe public officials to appoint appropriate commissioners to rubber stamp their proposals. Why limit it to future excesses when they already have a bucket full of improper expenses on the list they want to ram down the throats of ratepayers. “Could do better in the future”, give me a break.
schleufer on November 20 at 8:18 a.m.
avistas ceo pay
http://www.aflcio.org/corporatewatch/paywatch/ceou/database.cfm?tkr=AVA&pg=1
Dan_at_Avista on November 20 at 8:58 a.m.
If you want to know where the money goes (and you have every right to) - we created this webpage to go over it. http://avistainfo.com/Home/Rates/WhereDoesTheMoneyGo.aspx
We’ve also been talking about rates all year on the Avista Blog and answering customer questions. Check out Energy on the Street: http://www.avistautilities.com/street
-Dan
schleufer on November 20 at 9:07 a.m.
thanks for the link dan. however i have a 32 inch monitor and still cant read the fine print around those pie charts. what i can read i dont see upper management pay and bonuses. i also dont see a graph of say the last several years where you can compare the ceo pay to rate hikes.
johnclarke on November 20 at 9:12 a.m.
Come on folks - are you really surprised ?
liarsinnews on November 20 at 9:14 a.m.
Washington regulators have looked the other way for years. What did they do when Washington Water Power, aka AVISTA, paid a fine of over $2. million just a few years ago. ENRON, was involved. And we know about the sleaze bags that ran that company. Or AVISTA blaming a employee who committed suicide and the low life officials who tried to blame him for their gambling mistake on Wall Street. There was only one problem. The scum bags forgot to look at the calendar. Had they done it, they would have discovered the poor soul was dead the day he was accused of managements gambling mistake. The Spokesman Review was one of the “last newspapers in the country to print the story”. The editors is another pathetic group as it appeared they covered up the horrible lie re the suicide victim being blamed and the story much later than the story should have been published. It didn`t even make the front page as the other newspapers I followed after being told about the tragedy.
schleufer on November 20 at 9:17 a.m.
what does he do to earn $24.00 a minute?
S. L. Morris
Chairman of the Board President & Chief Executive Officer
AVISTA CORP (AVA)
Headquarters: SPOKANE, WA
Electric Gas And Sanitary Services
2009 Compensation
2009
Salary $630,001
Bonus $0
Value of Stock Awards $1,112,983
Value of Option Awards $0
Non-Equity Incentive Plan Compensation $582,026
Change in Pension Value and Deferred Compensation Earnings $691,983
All Other Compensation $11,025
Total $3,028,018
CEO-to-Worker Comparisons
Annual Weekly Daily Hourly Per Minute
S. L. Morris $3,028,018 $58,231 $11,646 $1,455 $24
Minimum Wage Worker $15,080 $290 $58 $7.25 $0.12
Average Worker $32,048 $616 $123 $15 $0.25
U.S. President $400,000 $7,692 $1,538 $192 $3.20
How Many Years to Equal S. L. Morris’s 2009 Compensation?
Minimum Wage Worker 200 years Completion Date 2210 A.D.
Average Worker 94 years Completion Date 2104 A.D.
U.S. President 7 years Completion Date 2017 A.D.
How Many Workers Equal S. L. Morris’s 2009 Compensation?
Minimum Wage Worker 200 workers
Average Worker 94 workers
U.S. President 7 workers
How many workers could be supported by S. L. Morris’s pay package?S. L. Morris made $3,028,018, which is equal to:
1 Nobel prize winners
7 average university presidents
7 U.S. presidents
11 AFL-CIO presidents
16 Chairmen of the Joint Chiefs of Staff
94 average workers
200 minimum-wage earners
How long would it take to equal S. L. Morris’s total compensation for 2009?A Nobel prize winner would have to work until 2011 A.D.
An average university president would have to work until 2017 A.D.
The President of the United States would have to work until 2017 A.D.
AFL-CIO President John Sweeney would have to work until 2021 A.D.
The Chairman of the Joint Chiefs of Staff would have to work until 2026 A.D.
An average worker would have to work until 2104 A.D.
A minimum-wage earner would have to work until 2210 A.D.
Dan_at_Avista on November 20 at 9:34 a.m.
Schleufer, sorry about the fine print on those graphs. Lots of stuff to plug in there. You can also track everything we’ve written about rates on the blog by clicking this link: https://www.avistautilities.com/community/blog/archive/tags/Rates/default.aspx
We also discussed executive compensation on the blog here when we filed our annual report: https://www.avistautilities.com/community/blog/archive/2010/03/31/033110.aspx I’m offering this link, not to argue the merits of anyone’s compensation because I don’t aim to change anyone’s mind anyhow, only to provide you accurate information about the issue.
mikeln on November 20 at 9:51 a.m.
It’s time to take back what belongs to everybody. The people need to go to work and take our energy away from these theives. It’s a good old boys club, with the top brass passing the torch every few years so another one of them can rob their customers. There are ways to make this into a PUD and get rid of these bums. I, fortunately, am not one of their customers. I wish their victims well and hope they can get it together and send them packing.
lewis8457 on November 20 at 10:02 a.m.
I remember going to a meeting at the Masonic temple a few years back. Where the AG was coming to have a meeting with those of us who contacted him about the rate hikes and Avista. In that meeting it was decided I thought Avista wasn’t going to get the full rate they were asking for. Not more then a week later it was reported in the SR that Avista being granted the rate they previously requested. Making the AG meeting a total waste of time.
It was reported recently in the SR SNAP has had to stop taking names to help with energy cost this winter because the State has not told SNAP how much money they get this year. I cannot help but think if the state did its job and regulated Avista like they are supposed to maybe they wouldn’t have to be giving SNAP so much money.
This last July SNAP (Thank you) came and weatherized my home; I am looking forward to being warm this year even though I probably will be paying the same amount. Several years ago I installed a new furnace and was hoping to see a savings but I never did with rates going up every 3 months.
I think it is really funny how avista always gives out weatherization tips as they raise the rates. When in reality they could just keep the rates at a reasonable rate and people wouldn’t have to spend thousands of dollars to keep there energy costs constant.
The city must get a special rate we never hear anything from our fine mayor when the rates go up….not a peep.
schleufer on November 20 at 10:02 a.m.
so what i gather from that link is they compare each other for compensation and if they all are doing the same thing that makes it ok. maybe that works for those raking in millions per year but go out on the floor and ask someone in coveralls how they feel about that system.
undercover boss is a great show especially when you see those CEOs with no blue collar skills and even in the office they have problems running thier own software or even answering the phone. the thing that has been painfully clear to the workers and now in this show is that management is so far out of touch with reality.
now with lean mfg they cut the workforce to the bone and maintenance goes in the tank so that the profits in the end reflect on the CEO bonus plan.
this lean mfg might make sense at times but look at the end results for the country. bigger CEO pay = fewer jobs - less healthy companies and those are the ones who havnt closed shop and move over seas. now with workers all over the state facing pay or even job cuts avista does thier part by jacking up rates. like i said if everybody is doing it that makes it ok right?
zelda on November 20 at 10:28 a.m.
Considering all the expense items listed in those bullet points, I find it hard to believe it was only $38K. Those activities are pricey so I surmise it was a brief period when some expenses got charged to the wrong internal location code by someone or there was an error in accounting. If not, the amount of money just doesn’t match up with what’s in the audit list. In a company that size, $38K is petty cash.
spokanecommunistparty on November 20 at 10:37 a.m.
Avista sucks
monkeyman on November 20 at 10:59 a.m.
@Dan_at_Avista on November 20 at 8:58 a.m.
“…We’ve also been talking about rates all year on the Avista Blog and answering customer questions. …”
I hope the Avista management reviews your appearance here (assumed paid) and soon sees how it is backfiring. It might make a small difference if you or Avista can show that you are doing this for free as a service to the community. Otherwise they should put you to a better use.
I doubt you are going to report in this yourself, but if your upper management is somehow listening in on a Saturday morning, then I would suggest that they should considering restricting “customer education” to “official” outlets. However helpful the actual content of your postings here may be they are always going to be taken with a bagful for salt. I don’t think you will find any customer comments here thanking Avista for its great product and its CEO for his service and hard work. (Unless Avista goes to the next step of “recruiting” “well educated” commenters :)
I would think that there are a lot more people who don’t like the idea paying for an online propagandist who I assume is getting paid to monitor this site on a Saturday. (Propagandist is the appropriate word here even in its best connotation). Is this your full time job, since you may be covering other outlets as well?
Any critical comments from others? In the real spirit of actually getting some education, do you think Dan’s appearance here has any chance of working on you personally? And for Avista’s management?
Dan_at_Avista on November 20 at 11:18 a.m.
Monkeyman, thanks for your comments - critical as they may be. I can take it, as long as the word gets out that Avista is making every effort to engage with customers. It’s pretty obvious this isn’t a meeting of the Avista fan club, but does that mean we should shy away from critical comments? I don’t think so. The SR even did a feature on my writing in these forums here: http://www.spokesman.com/stories/2010/mar/29/dan_at_avista/ Part of my job is reading and writing online and I’m happy to do it along with my other responsibilities. Working on the weekends? Free of charge.
misjustice on November 20 at 11:31 a.m.
“Any critical comments from others? In the real spirit of actually getting some education, do you think Dan’s appearance here has any chance of working on you personally? And for Avista’s management? ”
Nope. Corporate mouthpieces, spinning the corporate line, will not sway my opinion. Actions, as they say, speak louder than corporate mouthpieces.
I do, however, want to read the results of the audit.
monkeyman on November 20 at 11:38 a.m.
@ Dan_at_Avista
Well if someone could get paid to be a full-time “official Avista-basher” then we could see real discussion. You probably know that any story/numbers can usually be spun at least two different and directly opposite ways…
BTW, if I were you I wouldn’t have provided the link to your profile on SR earlier. It didn’t help confirm that you are being paid, ultimately by the customers like me, for this :)
zelda on November 20 at 12:17 p.m.
Dan_at_Avista is no doubt an exempt salaried worker so doing this on weekends is just part of the job.
When I read his comments, I imagine them coming from a HAL 3000 voice simulator. “I am putting myself to the fullest possible use, which is all I think that any conscious entity can ever hope to do.”
spokanecommunistparty on November 20 at 12:21 p.m.
I’m unemployed and your rates already cost too much. After I get another job, I will buy my first solar panel. I hope this will power my aquarium and maybe our well pump. Solar power can be achieved one piece at a time. Just educate your self on how to do it cheep. Most places think you’ll just take out some kind of loan and pay some jocks to install it but that is too expensive. Do it your self spread out over time, thats my plan. One day the whole farm will be solar powered. I even have an old 3 cyl Subaru Justy that I plan on converting into a plug in electric car. The parts for that cost about $5,000 right now, still looking for a cheaper way. Don’t get mad my fellow comrades, get smarter.
Dazzeetrader11 on November 20 at 12:27 p.m.
AN amazing model when a public utility functions as a private profit center by using publicly won commodity like the water, gas…which the utility doesn’t own.
This is among the biggest distortions of what’s public I’ve ever seen. WWP pulled this off for years with the help of the “barons” in town because they were usually on the board ro owned huge amounts of stock. This newsaper offered cover” for this outfit for years. And the public never suspected this union made quietly..not on paper…just a wink and a nod.
Inland NW has been raped by this outfit…and I’m not afraid to say it. Just the logic of it scalds my skin. Sure. AV owns the dams, piplines, etc but the public owns the source and the product…and lolol..gets charged for using their own product. And nobody notices…
Ship of fools who read the paper for their news and information never suspecting it’s manipulated to suit the purposes of the owners. Just outrageous on its face. Glad I own stock..:) ….oh Im showing my liberal tendency..pigs. Somedays…I rage against the machine. I just can’t help it.
Dan_at_Avista on November 20 at 12:32 p.m.
I appreciate all the familiar names commenting here. If anyone wants to participate in an actual discussion, e-mail me at conversation@avistautilities.com or visit http://www.avistautilities.com/blog.
zelda on November 20 at 1:24 p.m.
Daisy — the same could be said of any extraction industry, i.e., mining, forest products, oil, natural gas.
I don’t doubt that the low snowpack last year put a dent in revenues and the high snowfalls the previous two years couldn’t be stored and instead had to go over the spillways.
What irks me is the amount of regulatory capture that has occurred over the past 20 years. Regulators have been effectively neutered by stocking commissions with former executives of the industries that are regulated.
Industries with lack of incentive or will to enforce regulations (toothless as they are) create public distrust. And it doesn’t help when the rate structures are so arcane and Byzantine that the average citizen would have to undertake a course of study in energy systems management to comprehend his power bill. Power companies (and most large corporations) want things deliberately complicated because it benefits them. After all, their own lobbyists helped write the legislation.
I am pro-regulation and pro-enforcement because as we’ve seen over the past three years, unfettered markets will not self-regulate and do not self-correct.
Dazzeetrader11 on November 20 at 1:45 p.m.
Darling impassioned Zelda…all I can say is that I agree wholeheartedly with you. There was a time we could depend on leaders…well some of them anyway…to do the right thing by the people. I think those days…at least for a while…have gone the way of the DO DO bird.
D Statler on November 20 at 5:02 p.m.
AVISTA is just doing what the Attourneys General office and the UTC allow them to. When I asked at the last meeting about the secret emails.Nothing was done by Rob McKenna’s office. Instead McKenna sent two attourneys to Spokane.One to represent the people.One to represent and protect the interests of the UTC. This just stunk of conflict of interest and corruption. We all need to write our Governor and Senators about the ATG’s actions,or lack of, on this matter. I have filed complaints twice now on AVISTA and the UTC and have not had any satisfaction from Rob McKenna’s office.
I was told by AVISTA’s top bean counter that they do provide any information the UTC requests. Unfortunately the UTC doesn’t ask for the pertinant information. This story just goes to show that fact. AVISTA isn’t pulling the wool over the UTC’s eyes. The UTC has it’s head buried in the sand.AVISTA is pulling the wool over the UTC’s backsides to cover the deeply rooted corruption.Rob McKenna’s office makes sure there are enough layers of wool over the UTC’s backsides to get anything AVISTA missed.Not caring about who is getting hurt by AVISTA’s actions seems to be a trademark of the UTC and the ATG. Maybe someone will run against McKenna and straighten this mess out.Maybe our Governor will read this blog :^( . Maybe it will rain $2 bills tomorrow!
greenlibertarian on November 20 at 9:25 p.m.
“spokanecommunistparty on November 20 at 12:21 p.m.
I’m unemployed and your rates already cost too much. After I get another job, I will buy my first solar panel. I hope this will power my aquarium and maybe our well pump. Solar power can be achieved one piece at a time. Just educate your self on how to do it cheep.”
I can highly recommend:
http://www.backwoodssolar.com/
monkeyman on November 20 at 11:31 p.m.
@ Dan_at_Avista on November 20 at 12:32 p.m.
“I appreciate all the familiar names commenting here. If anyone wants to participate in an actual discussion…”
Please don’t tell me I had something to do with your bad Saturday as well.
Are you dissing your audience and shirking away from your duty? Did you really tell Scott Morris about your resignation already??? Or are you going to be at it on Sunday as well? For free?!!
I can almost hear the Avista’s management bonus going “ka-ching”, it being so cold tonight and for the couple of days to come…
monkeyman on November 20 at 11:35 p.m.
One last thing, continuing from my very first comment on this thread:
“• …advertising to improve Avista’s corporate image…” …perhaps they tried to sneak in a part of Dan’s (“the Avista Maan”) salary? :)”
…Dan’s salary should be fall in the above category, and thus should be paid by the shareholders, not us the “bagholders”.
tea42 on November 21 at 8:59 a.m.
Thanks Dan for your comments, however after reading “Where does the money go”, I have a few questions. “Replacement power for new long-term resources is now costing between 7 and 11 cents”, thats a quote from Avista web site, but no explanation of where those number come from. Natural gas continues to trade at decade lows ($3.79/MMBtu) as per Henry hub recent spot prices via “Bloomberg” and are not predicted to go any higher as we have a massive current over supply. Electricity has been trading at very low prices Palo Verde, firm on-peak, spot $33.02 and Mid-Columbia, firm on-peak, spot $34.88 as of Nov 18, again check Bloomberg for real numbers not some imaginary “7 to 11 cents”. Also while your at it, how about a break down of how much all avista employees make including health insurance and pension and other benefits, and then compare that number to the local private sector. Thanks Dan and I look forward to your reply.
509ifyourlucky on November 21 at 2:12 p.m.
Avista is ripping everyone off
greenlibertarian on November 21 at 7:18 p.m.
I do not believe that Avista is a bad guy all around.
However, as a publicly regulated monopoly utility, they need to be held to very strict standards of accountability.
Their dam generation costs on the rivers are quite low. Natural gas fired generation plants should also be operating a very low costs, due to the historically low prices for gas and which are predicted to stay low for the foreseeable future, say 2-3 years.
And I’m sure that the costs for upgrading or replacing worn out equipment is higher than it was in the past, but, as I said before:
“Why are you (Avista) buying and producing misleading advertising, such as in the Oct. 7th issue of the Inlander?
Part of the ad copy:
“A substation transformer that cost $35,000 when it was installed in the 1960s, for example, can now cost UP TO (EMPHASIS ADDED) $500,000 to replace.”
First of all, $35,000 in 1965 is $242,569 in today’s dollars. And you using the term “up to” $500,000 could mean far less, in fact, in logic, it could mean $1.
OK, so the cost has doubled, in constant dollars, maybe, since the 60’s. Maybe it’s the cost of getting rid of all the toxic wastes in an old substation. Maybe a new substation is far more efficient than a 60’s era substation, thus providing lower operations costs but at a higher up front cost.
That’s fine.
But to imply the (real) cost of a substation has risen more than 10-fold since the 60’s is pure bullhockey.
Do you think the ratepayers aka captive customers are idiots and will not challenge your bogus claim?”
I’m sure that institutional investors in the energy sector are looking at Avista and saying, hey, why aren’t they charging something closer to the average price for electricity in the country? They’re leaving money on the table!
tea42 on November 25 at 8:16 a.m.
Where oh where has Dan gone??
monkeyman on November 25 at 10:20 a.m.
@ tea42 on November 25 at 8:16 a.m.
“Where oh where has Dan gone??”
I was wondering the same. Would like to get response on points raised by you and greenlibertarian. Actually, I would rather see him gone, since I don’t want us ratepayers to pay for his job.
Also, I was curious about your numbers. Here is the Bloomberg link for others to see: http://www.bloomberg.com/energy/
For electric: MWh = 1000 kWh = 1000 units
= $70 for end user (according to what I remember from my bill a few months ago). So if my calculations are correct we are paying a 100% markup.