Avista seeks electricity and gas rate increases

Avista Utilities is seeking two new rounds of rate increases, for both electricity and natural gas, that would make it much more expensive for Spokane area residents to heat and light their homes.

The utility announced this week that it is seeking rate adjustments in both 2024 and 2025 that would raise the bill of the average user, based on the kilowatts used, to $110.20 in December 2024 and $117.07 in 2025.

For reference, the average electric customer in Washington was paying $85.52 in the first three weeks of December 2022. If both rate increases are approved, that same customer will be paying $31.55 more a month for electricity over a period of three years.

The proposed rate hikes for gas customers are steeper.

Before an increase on Dec. 21, 2022, the average natural gas customer paid $64.86 per month. If both rate requests are approved, that same customer will be paying $103.26 in December 2025, which equates to a $38.40 increase per month over three years.

“I get it. I’m a customer, too,” Avista spokeswoman Lena Funston said. “I feel the pinch. But we are just trying to keep the power safe and reliable. We are no different than a lot of businesses. We are feeling the crunch of higher maintenance costs and inflation.

“All those factors are impacting what we do to conduct normal day-to-day business.”

The rate increase requests will be reviewed by the Washington Utilities and Transportation Commission, which will eventually hear from Avista customers regarding the proposal. The regulators also will consider information from Avista detailing why the utility deems the higher rates necessary.

Funston said the commission normally takes about 11 months to make a decision.

In its news release, Avista CEO Dennis Vermillion echoed Funston’s sentiments about inflation and why the utility chose to pursue the rate increases.

“Utilities across the nation work to replace infrastructure and meet increasing compliance obligations while the costs of operating and maintaining our systems have steadily increased,” Vermillion said in the release. “Avista is not unique in this regard, and our costs to deliver energy continues to outpace our revenue.

“The ongoing effort to align the rates customers pay with Avista’s costs to serve is one of the main reasons we file general rate requests,” Vermillion said.

The electricity rate increases would generate an additional $77.1 million in 2024 and $53.7 million in 2025. The natural gas rate increases would generate $17.3 million in 2024 and $4.6 million in 2025, according to the release.

“We take our responsibility to provide our customers with energy at an affordable price very seriously,” Vermillion said in the release. “The fact that our region is fortunate enough to benefit from hydrogeneration means that the total average monthly cost of Avista’s residential electric service is almost 40% lower than the national average for investor-owned utilities.”

Funston said the utility spends hundreds of millions a year maintaining its system. Part of the costs factored into the rate increase are those generated by a 10-year wildfire resiliency plan.

“Part of what we are doing is grid hardening,” Funston said. “When poles need to be replaced, we try to replace wooden poles with a steel pole. If poles have life left, we are adding fire protection at the base of the poles.”

She noted the costs of maintaining the grid are much less than wholesale replacement of those systems.

“Our facilities have been around a long time,” she said. “We need to keep it running and maintained so we don’t have to create new infrastructure.”

Part of the costs is in eliminating power from the embattled Colstrip coal-fired generation plant in eastern Montana.

Avista agreed last year to turn over its partial ownership stake in Colstrip to another utility. That transfer will take effect on Dec. 31, 2025, which is the last day the utility has to comply with a 2019 Washington law that banned the use of coal-generated electricity.

“That is a factor” in the rate request, Funston said. “It removes a fuel source from our energy mix. It will have to be replaced in some way that may or may not be cheaper.”