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Spokane, Washington  Est. May 19, 1883
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Workshop explores utility rate increase

The woman from Post Falls made an interesting point.

Why, she asked, does declining use of natural gas contribute to a rate increase?

The question was one of several asked at a sparsely attended workshop the Idaho Public Utilities Commission held Tuesday night on a gas and electric electricity rate increase requested by Avista Utilities. The utility, which serves more than 105,000 customers in North Idaho, wants to increase power rates by an average of 11 percent and natural gas rates by 9.2 percent.

Contributing to the rate increase request are millions of dollars worth of new investments in power generation, transmission and distribution systems, along with new natural gas systems, Avista officials said. Also contributing are record low-water conditions and high wholesale market prices that hurt the company’s credit rating and make borrowing money more expensive.

But, confirmed Avista Utilities Vice President Kelly Norwood, declining customer use of natural gas also is a factor. Because customers are using less, Avista collects less money to offset other rising costs. Norwood said conserving gas is still “the right thing to do,” because it places less demand on the commodity, but it does require Avista to try to make up those lost revenues. Also, he said, the amount of the rate increase attributed to declining use of natural gas is small.

Other than passing on higher wholesale costs for the commodities, Avista hasn’t asked its Idaho customers to pay higher base rates for electricity in five years. It’s been 14 years for natural gas. This “general rate case” addresses revenues the company is trying to make up, based on its increased costs of doing business, company officials say.

In the past five years, Avista has invested $81 million in electric generation and transmission systems, $54 million in electric distribution and $73 million in its natural gas system, Avista has said. The request before the Idaho Public Utilities Commission, which regulates Avista’s Idaho operations, would reap additional annual revenues for the company of $18.9 million from electricity and $4.8 million from natural gas. About 30 percent of Avista’s retail electric and natural gas revenues come from Idaho.

The increase for residential customers would be about 13.5 percent for electricity and 10 percent for natural gas. Avista also would like to boost the monthly customer service charge from $4 to $5 per month for electricity and from $3.28 to $5 per month for natural gas.

Avista has requested that the rate increases take effect in September. Commission staff, including attorneys, auditors and engineers, will investigate the filing and make a recommendation to the three-member commission, following public hearings. Approval is not automatic. In Avista’s last Idaho general rate case, the company filed for an 11.6 percent electricity increase, but only received a 7.58 percent increase.

A petition circulated in the Silver Valley collected almost 1,300 signatures in three days from people opposed to the rate increases. Interveners in the case include Potlatch Corp., Coeur Silver Valley Inc. and the nonprofit Community Action Partnership of Idaho which represents the interests of many low-income residents.

Tuesday’s workshop was one of two being held this week in North Idaho. A Moscow meeting will be held tonight at 7 at the Best Western University Inn, 1516 Pullman Road. Formal public hearings before the full commission are scheduled for July 26 in Kellogg and Sandpoint, and for July 27 in Lewiston.

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