Avista Utilities has begun the process of asking Washington regulators to approve higher electric and natural gas rates, with an effective date of January 2016.
In a filing Monday, the Spokane-based utility said the higher rates are needed to pay for ongoing projects in Eastern Washington, which will cost about $375 million this year. The state Utilities and Transportation Commission has 11 months to consider Avista’s request and make a decision. Customers will have an opportunity to make public comment.
Avista wants the average residential electric customer to pay $6.45 more each month, bringing the average bill to $87.67. That’s based on usage of 966 kilowatts hours per month.
The company is asking that the average residential natural gas customers pay an extra $5.41 per month, bringing that portion of the bill to $73.57 for usage of 68 therms per month.
The proposal also includes a steep hike in monthly basic charges, which customers pay in addition to their energy use. Instead of an $8.50 monthly basic charge, electricity customers would pay $14. For natural gas customers, the monthly basic charge would increase from $9 to $12.
Avista has requested hikes in the basic monthly charges for several years. Utility officials said the proposed hikes reflect Avista’s effort to recover fixed costs, which include items such as equipment and customer billing, that remain the same whether or not customers are using electricity.
Last year, Avista agreed on a 50-cent increase for the basic monthly electric charge and a $1 increase in the basic monthly gas charge through a rate settlement. But utility officials continue to think base fees should be higher, said Pat Ehbar, the company’s manager of rates and tariffs.
If the rate package is approved by state regulators as proposed by Avista, annual electricity revenues would increase by 6.7 percent, or $33.2 million, and annual natural gas revenues by 6.9 percent, or $12 million. The company’s most recent rate increase took effect Jan. 1.
Avista has entered a period of flat customer growth and aging infrastructure, which makes annual rate increases necessary, Ehbar said. In the past, a growing customer base helped absorb the cost of the capital upgrades with less impact on rates, he said.
Major capital projects this year include ongoing work at the Little Falls and Nine Mile dams on the Spokane River, which have both passed the century mark, and replacing the customer information system to support functions such as meter reading and customer billing. Avista is also working to replace hundreds of miles of natural gas distribution lines, and is investing in advanced metering systems.
By 2016, Avista will start installing the new metering systems, which is a six-year project, said Laurine Jue, a company spokeswoman. The two-way systems automatically notify Avista of power outages and they can send customers alerts about their level of energy use, to help them reduce their bills, she said.
Avista has more than 241,000 electric and nearly 152,000 natural gas customers in Washington.