April 3, 2012 in City

Avista seeking increase in rates

Official says hikes for equipment, operations
By The Spokesman-Review
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Avista Corp. is seeking to charge its Washington customers more next year to offset the higher cost of delivering power and natural gas in Eastern Washington.

It’s a trend that has upset many ratepayers in recent years, but the Spokane utility said it will continue to seek higher rates in the future.

Avista filed its latest request on Monday, asking for a 6.3 percent rate increase for electricity. If approved by state regulators the request would tack an extra $4.94 onto the average homeowner’s monthly electric bill, driving the amount due to $83.91.

The utility seeks a similar bump in the price it charges for natural gas: a 6.9 percent increase, which would drive the monthly cost of natural gas at the average home up $4.23 for a total bill of about $65.78.

Avista wasted little time in its quest for higher rates. As part of a settlement with state regulators last year to raise rates, the utility agreed to hold off on another request until April.

If this most recent request is approved, the company will collect an extra $41 million to replace aging electric equipment and $10 million for gas system upgrades.

Those electrical system expenditures include $9.5 million to replace some of the company’s remaining 240,000 wooden power poles; $8.3 million to replace a turbine in its Noxon Rapids dam in western Montana; $4.5 million for equipment at its new windmill project on the Palouse; and $4.6 million to replace century-old intake gates at its Post Falls dam, along with scores of other, smaller projects.

The company also wants to replace aging natural gas pipes and recover the cost of service expansions.

Kelly Norwood, Avista’s vice president of state and federal regulations, said the rate increase requests do not reflect the price of power and gas, but rather the cost of equipment, operations and maintenance.

He noted that while Avista is seeking more from natural gas customers for pipe and other costs, the company just last month passed along rate cuts of 6.4 percent in Washington, and 6 percent in Idaho, as the price of natural gas has plummeted.

Norwood said Avista does not mark up the price it pays to procure natural gas.

The company’s request will be reviewed by the Washington Utilities and Transportation Commission. Customers will be able to submit comments on the proposal. A decision by the WUTC is due within 11 months.

Scott Morris, Avista’s chairman and chief executive officer, said the cost of updating equipment and maintenance is ongoing and gets more expensive each year.

“This was the primary reason for the proposed increase in our last request and it is expected to continue to cause a need for increased rates in the future,” Morris said in a news release.

“We realize in these difficult times it can be a struggle for people to meet their basic needs, and we continually strive to reduce costs and improve efficiency and productivity.”

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