Attorney General’s office opposes Avista rate increases

Avista Corp.’s proposed rate increases are being challenged by the Washington Attorney General’s Office, citing excessive executive compensation and other factors. “We believe Avista may be charging its customers for expenses that should be borne by its shareholders,” Senior Assistant Attorney General Simon ffitch said in prepared remarks today. “Moreover, Avista’s customers have expressed a high degree of weariness for the rapid, back-to-back rate increases. Many of the customer comments demonstrate that they are at their limits in terms of absorbing the increases.” Avista, based in Spokane, has requested Washington state rate increases that would generate an additional $40.9 million in revenue from its electric customers and an additional $10.1 million in revenue from its natural gas customers, according to the Attorney General’s Office. The state Utilities and Transportation Commission has final say. Public hearings are scheduled for Spokane and Spokane Valley next week to take comment on the proposed rate increases. ffitch oversees the office’s Public Counsel unit, which reviews regulated utility rates. Here are highlights of the recommendations being sent to utility regulators from the Attorney General’s Office: • Eliminate or greatly reduce Avista’s request for a $20 million “attrition” adjustment, which the company argues is designed to address regulatory lag in recovering the cost of new plant additions. The Industrial Customers of NW Utilities (ICNU) and Northwest Industrial Gas Users (NWIGU) joined Public Counsel in sponsoring this recommendation. • Reject the Company’s request to increase the customer charge by 67 percent, raising the basic monthly charge customers pay from $6 to $10 per month. Public Counsel recommends a smaller increase. • Reduce amounts in rates related to executive compensation and Board of Director costs by $1.8 million. The Commission had specifically requested additional information related to Avista’s executive pay practices and required Avista to file a report on its executive compensation practices in conjunction with this case. • Correct a $2.9 million error in Avista’s case regarding claimed federal income tax expense. • Reject the Northwest Energy Coalition’s request to allow Avista to recapture a portion of electric revenues which it loses due to the company’s energy efficiency programs. Avista will have an opportunity to file rebuttal testimony addressing Public Counsel and other parties’ recommendations. Hearings will be held in the fall, and a Commission decision is expected by March 2013. Avista serves approximately 236,000 electric customers and 149,000 natural gas customers in Eastern Washington.