No relief on rates

The New Year has brought new energy rates for many residents of the Inland Northwest.

Avista Utilities’ Washington customers saw their power rates go up by an average of almost 8 percent in January, and many of the region’s smaller utilities are keeping their eyes on a Bonneville Power Administration rate case, which likely will result in higher rates in October.

Inland Power and Light, which serves 35,000 customers in rural Eastern Washington and North Idaho, is planning preemptive action to minimize the impact of the expected BPA rate increase, said CEO Kris Mikkelsen. The utility plans to raise rates 12 percent in April and plans another rate increase next April, although the amount has not been determined. The first increase will result in customers paying about $9 more per month, she said.

“We don’t like to have to raise rates at the same point in time when people are already seeing their rates go up due to the heating season,” Mikkelsen said. “It just makes it easier for some of our members if they can phase them in.”

Mikkelsen said the BPA rate increase is expected to increase Inland’s power costs by between 40 percent and 50 percent. Other utilities that buy power from the BPA, such as Modern Electric Water, Vera Water and Power and Kootenai Electric Cooperative, will see varying changes to their rates, based on the outcome of the rate case and their own expenses. Avista buys a minimal amount of power from the BPA, not enough to affect rates, Avista officials have said.

BPA has said the actual rate it would charge for the coming three-year period would be about $30 per megawatt-hour, or 3 cents per kilowatt-hour. The average household uses about 1,000 kilowatt-hours per month. An opposition group has mobilized, calling for the BPA to hold rates to $27 per megawatt-hour.

Consumers won’t see any relief on the home heating bill side either, as evidenced by recent increases in natural gas prices. The record-setting hurricane season that hammered the Gulf Coast this year is largely to blame, said Jason Thackston, director of gas supply for Avista. Since last year, he said, wholesale natural gas prices have increased 68 percent, due mostly to the hurricanes.

In addition, natural gas prices track closely with the price of crude oil. Last year, oil prices were about $42 per barrel. Today, that price is hovering around $65 per barrel.

The price customers are paying today for natural gas is about 78 cents per therm, Thackston said. (The average household uses about 75 therms per month.) However, the price utilities have paid for natural gas on the market has been as high as $1.30 per therm, Thackston said. That doesn’t mean Avista customers’ bills will immediately go up again, because the utility buys much of its gas ahead of time.

It could mean, however, that customers are in for another increase in the fall, when the utility asks state regulators for permission to pass through to customers the higher price it is paying for the commodity.

Higher gas prices also impact the price of electricity, due to gas-fired power plants used to produce power. However, the price impact is not as severe in this region because the bulk of the power is hydropower, said Dan Kirschner, executive director of the Northwest Gas Association. Though the region is not in danger of running out of gas, there’s no surplus either, he said.

“We’re not seeing for this coming year a lot of immediate relief on the horizon,” Kirschner said, speaking of gas prices. “It’s going to be more expensive this coming year than it has been in years past.”