Electric rate hike request looms

A request Avista Utilities filed Wednesday with Idaho regulators indicates the company is likely to request higher electric rates for its Washington customers soon.

The company asked the Idaho Public Utilities Commission for permission to charge Idaho customers for part of its recent $62.5 million purchase of an Oregon power plant. However, the company simultaneously asked for an equivalent reduction in a surcharge.

Though the net impact to customer bills would be zero, the request, if approved, would increase Idaho customers’ base rates by about 1.9 percent.

Avista Spokeswoman Catherine Markson said the cost of the plant would be divided equally between Washington and Idaho customers. However, she said, since the company just went through a months-long process to raise rates in Idaho, this additional item was easier to treat quickly there.

“Costs are equally born,” Markson said. “It’s just a matter of timing.”

Any increase in Washington customers’ electric rates related to the power plant purchase also would be 1.9 percent, said Don Falkner, Avista’s manager of revenue requirements. It is not clear whether Avista would request a corresponding reduction in the surcharge for Washington customers.

“What we’re trying to do is mitigate the impact on customers to the best of our ability,” Falkner said. “We don’t differentiate between Washington and Idaho customers.”

Any rate increase proposed for Washington customers’ electric rates would take up to 11 months to address and would include extensive documentation and public hearings, just like the Idaho case recently concluded. It could also include additional company expenses, beyond the power plant purchase. In the Idaho case, the average residential customer’s electric bill went up by about $4 per month. Natural gas rates just went up in both states.

Avista just purchased half of the Coyote Springs II generating station from bankrupt Mirant Corp. The company now owns the entire 280 megawatt plant in Boardman, Ore. It began operations in July 2003.

Company officials have said Avista bought the plant because it needs additional resources to meet long-term power demands. When Avista generates as much of its own power as possible, the company avoids buying power on the volatile wholesale market.

Idaho’s commission is likely to handle Avista’s request quickly, said Randy Lobb, utilities division administrator for the commission. The commission also would be unlikely to hold hearings for a single-issue case, but rather would set up a public comment period.

“The company has requested a turnaround of about 60 days,” Lobb said. “I think we’ve indicated we could do it in that time frame.”

Lobb said the company’s request — with no net increase to rates — shows it is sensitive to the fact that it just raised rates for Idaho customers.

“One of the important factors here is they didn’t want a rate impact,” Lobb said.

Avista serves 325,000 electric customers in the two states.