Avista denied Washington rate hike for 2017

Avista Utilities customers won’t pay more for electricity or natural gas in 2017.

The Washington Utilities Commission rejected the utility’s request for higher rates on Thursday, saying the company failed to show that its current revenue was insufficient.

The vote was 2 to 1, with Chairman David Danner and Commissioner Ann Rendahl voting against the rate request. Commissioner Phil Jones filed a dissenting opinion, saying he thought an increase was warranted.

The rate request would have cost a typical residential customer about $9 per month in higher electric and gas rates.

Avista has filed requests for annual rate hikes for about a decade, saying the additional revenue was needed to upgrade aging dams, transmission lines and other facilities that produce and deliver electricity and natural gas.

Avista spent about $375 million this year on capital projects, and will spend about $400 million each year through 2020, said Casey Fielder, a utility spokeswoman, in an earlier interview.

The current request also included about $2 million related to the November 2015 windstorm.

For the commission to entirely reject a utility’s request for higher rates is unusual, though not unprecedented, said Amanda Maxwell, a commission spokeswoman. Often, the commission approves a lower rate hike than the utility requests.

Last year, the commission asked Avista to bring a stronger financial case for higher rates to the commission. In their decision, the two commissioners said Avista hadn’t met the burden of proof.

“Avista proposes to maintain a trajectory of rate increases that could continue on the same slope into the indefinite future, yet it has not presented adequate (evidence) to demonstrate that its current rates are insufficient or that the pace of its capital investments is outside of the company’s control,” the majority opinion said.

Avista filed the rate request last February, six weeks after an earlier rate hike was approved, the commissioners noted.

For the past four years, the utility has earned profit levels at or even above the allowed return, they said.

In his dissent, Jones said, “I believe that Avista has met its burden of proof and there is ample evidence in the proceeding to render a reasoned decision on revenue requirements.”

Fielder, the Avista spokeswoman, called the decision “very disappointing.”

“The company is evaluating the commission’s order and will consider next steps,” she said.

Avista has 20 days to ask the commission to reconsider its decision. If a request for reconsideration is turned down, the utility could appeal the order in Superior Court.

Avista’s yearly rate hikes have been unpopular with customers. The commission received 73 public comments on Avista’s rate increase proposal – 71 opposed, two undecided and none in favor.

The commission regulates investor-owned electric and natural gas utilities. It’s charged with ensuring that utilities provide safe and reliable service to customers at reasonable prices, while allowing them to earn a fair profit.

Avista serves more than 237,000 electric and nearly 149,000 natural gas customers in Washington.