Customers protest Avista rate hike

When Frank and Claudia Frago moved to Pinehurst from Northern California six years ago, the rates the couple paid to Avista Utilities for natural gas seemed reasonable. That quickly changed, the Fragos told the Idaho Public Utilities Commission on Monday.

“I find this ludicrous,” Frank Frago said. “How high is it gonna go?”

The Fragos were among about 40 Silver Valley residents who attended one of three public hearings scheduled this week by the commission as it considers Avista’s request to raise rates. The state regulatory agency held a similar meeting in Sandpoint on Monday night and will hold a hearing in Lewiston tonight.

Avista wants to raise both natural gas and electricity rates for Idaho customers. Residential rates for natural gas customers would increase by about 8.6 percent. For residential electric customers, the proposed rate hike is 11 percent. The proposal is due to higher operations costs, not to the higher cost of the commodities. The company’s last request to raise its base rates was five years ago for electric users and 14 years ago for gas.

However, the company has regularly passed through the higher costs it pays for gas and electricity. Avista has a simultaneous request before the commission to raise natural gas rates by 14 percent to cover the rising cost of wholesale gas.

The utilities commission staff that reviewed Avista’s request recommended only a 5.1 percent increase for residential electric customers and a 7 percent increase for residential gas customers. If Avista’s proposal is approved, the typical residential user’s monthly bill would go up from $60.15 to $65.09 per month. If the gas increase is approved, the typical residential user’s bill would rise from $57.68 per month to $62.47. If the request to pass through the higher natural gas prices the company is paying is approved, that monthly bill would jump to $70.68.

But the residents attending Monday’s hearing said no one they know pays amounts that low. Eileen Wilhelm, of Kellogg, said her bill is about $135 per month. Wilhelm said if Avista is trying to make up for money it lost during the energy crisis of 2000 and 2001, when prices skyrocketed, the company shouldn’t be allowed to collect that money from people on fixed incomes.

Some 1,500 Silver Valley residents have signed a petition protesting the proposed rate increases.

“This company is making a very healthy profit, and the profit shouldn’t come off the backs of the ratepayers,” said Iris Byrne, of Kellogg, one of the principal signature-gatherers, at Monday’s hearing.

However, Kelly Norwood, Avista Utilities vice president, said the company will be weaker if it isn’t allowed to make a profit. Earning a profit attracts investors, and the company can’t survive without outside investment, he said. The company currently is struggling to improve its credit rating so that it can borrow money at lower interest rates, he said.

Some in the audience also took issue with the high salaries company executives earn. Norwood said in order for the company to be successful, it needs to hire and retain quality employees. Doing that means paying them comparable salaries to other companies in the industry.

Two Idaho state representatives, Bonnie Douglas and Mary Lou Shepherd, attended the hearing to support their constituents. They spoke of the numbers of people living below the poverty level, the high unemployment rate in the Silver Valley and the increased challenges facing the working poor.

“Thank you for listening,” Shepherd told the utilities commission President Paul Kjellander. “I know you will do justice for us.”