Avista Utilities says it spent more on electricity for Idaho customers last year than it recovered through rates. So, the utility is asking Idaho regulators for permission to raise electric rates by 4.2 percent for residential customers starting Oct. 1.
The request, known as a “power cost adjustment,” is filed each year in late summer.
Casey Fielder, an Avista spokeswoman, said the Spokane-based utility compares the cost of generating and purchasing electricity for customer use over the 12-month period versus the cost the company recovered through current customer rates.
During years when power costs are less than rates, Avista customers receive rebates through the process. In other years, the utility requests rate hikes from state regulators to make up for higher power costs, she said.
An extended outage at the Colstrip plant led to higher power costs for Avista over the past year, Fielder said. A generator failed at the Montana coal plant, which Avista partly owns. The utility had to purchase electricity from other sources while the generator was repaired.
Fielder said the proposed 4.2 percent hike is the net result of several actions, including the expiration of a customer rebate.
If Avista’s proposed 4.2 percent increase is approved by the Idaho Public Utilities Commission, a typical household’s monthly electric bill would rise from $81.88 to $85.83.
In related news, Avista recently agreed to a settlement for base electric and natural gas rates for Idaho customers, which would keep base rates the same through at least Jan. 1, 2016.
Setting base rates is a different process than power cost adjustments, Fielder said. Base rates reflect the utility’s cost of delivering power as well as power costs.