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Partial settlement reached in Avista request for rate increases

The Washington state Utilities and Transportation Commission earlier this year ordered Avista to refund $8.4 million to customers. (Tyler Tjomsland / The Spokesman-Review)
By Nicholas Deshais nickd@spokesman.com(509) 459-5440

Avista Corp. has reached a partial settlement in its request to increase electric and natural gas rates, an agreement that would help fund costs associated with the eventual closure of the Colstrip power plant in Montana.

If approved by the Washington Utilities and Transportation Commission, new rates would take effect April 1. The settlement would increase Avista’s annual billed electric revenues by $28.5 million, or 5.4%, and billed natural gas revenues by $8 million, or 5.2%, according to the Spokane-based utility.

The average residential electric customer using 918 kilowatts a month would see an increase of $5.41, or 6.6%, for an average monthly bill of $87.63, according to the UTC. The average residential natural gas customer using 66 therms a month would see an increase of $2.84, for an average monthly bill of $49.24.

The parties in the settlement are Avista, the UTC, the Public Counsel Unit of the Washington Office of Attorney General, the Alliance of Western Energy Consumers, the NW Energy Coalition, The Energy Project and the Sierra Club.

According to a statement from Avista, all parties agreed to the proposed electric increase, and all but the Public Counsel Unit of the Washington Office of Attorney General agreed to the proposed natural gas increase.

The partial settlement’s revenue increases are based on a 9.4% return on equity, which regulators have decided Avista can recoup.

The settlement would also have Avista commit at least $3 million to assist the community of Colstrip, Montana, transition from its coal-fired power plant. Avista is a part owner in units 3 and 4 of the plant. The utility company would also stop supporting investments to extend the life of the Colstrip plant past the end of 2025.

According to a statement from the Sierra Club, the settlement would put $33 million toward Colstrip decommissioning and reclamation, which could include cleanup of coal ash ponds. The total cost of cleanup is estimated to be as much as $700 million, according to the Montana Department of Environmental Quality.

The three-member utilities commission will make a final decision on the settlement in the spring.