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Spokane, Washington  Est. May 19, 1883
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Regulators say ‘no’ to Avista’s request for higher electric rates in Washington

UPDATED: Tue., Aug. 15, 2017

 (Tyler Tjomsland / The Spokesman-Review)
(Tyler Tjomsland / The Spokesman-Review)

State regulators have turned down Avista Corp.’s request for $15 million in additional electric revenue from Washington customers.

The Spokane-based utility had asked for a 2.9 percent increase in electric rates, beginning Sept. 1, citing higher power costs.

The rate increase was “designed to be a starting point to get cost recovery back on track for Avista’s Washington electric operations,” utility officials said in a news release.

Avista’s electric sales in Washington account for about 50 percent of the company’s earnings.

The Utilities and Transportation Commission’s December decision not to grant Avista a rate increase for 2017 has led to an earnings “shortfall” of $20 million to $30 million for the year, Kelly Norwood, the company’s vice president of state and federal regulation, wrote in a letter to the commission.

As a regulated utility, Avista is allowed to earn a profit for its shareholders. In Washington, that’s expressed as the opportunity to earn a 9.5 percent return on equity. With the denial of higher rates for 2017, the utility is on track to earn a 7.1 to 7.5 percent return on equity in Washington this year, Norwood said.

But the three-member Utilities and Transportation Commission denied Avista’s recent request for the additional $15 million in revenue during a Thursday hearing. Amanda Maxwell, a UTC spokeswoman, said Avista’s power costs will be addressed in the utility’s ongoing request for higher base rates for electricity and natural gas, which will be decided in late April.

The Spokane-based utility filed a request to raise rates over three years with the state Utilities and Transportation Commission in late May.

If that three rate plan is approved, the cost of electricity for a typical household would increase to about $100 a month by May 2020. Natural gas bills would go up to about $65 a month in the same time frame.

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