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Washington state attorney general opposes Avista’s request to increase utility rates

Aug. 2, 2022 Updated Tue., Aug. 2, 2022 at 9:45 p.m.

The headquarters building forAvista Utilities is shown on April 6, 2021, in Spokane.  (By Tyler Tjomsland/The Spokesman-Review)
The headquarters building forAvista Utilities is shown on April 6, 2021, in Spokane. (By Tyler Tjomsland/The Spokesman-Review)

The Washington Attorney General’s Office is challenging an electric and natural gas rate hike proposal by Avista Utilities, stating the company is seeking unjustified profit margins.

The Spokane-based utility reached a multiparty settlement agreement in June that, if approved by state regulators, would raise electricity rates by 7.7% during the next two years and natural gas rates by 1.1%. The first increase would take effect in December.

Attorney General Bob Ferguson’s Public Counsel Unit recently filed expert testimony with the Washington Utilities and Transportation Commission, claiming Avista’s multiparty settlement is “not fair, just and reasonable” for customers, according to a news release.

“Washington families are struggling right now,” Ferguson said in a statement. “They do not need utility bills any higher than is absolutely necessary.”

The settlement agreement, if approved, would boost Avista’s annual electric revenues by $50.5 million and natural gas revenues by $9 million over two years.

Avista customers would see their average monthly electric bills increase by approximately $7 per month, and gas bills by $1 per month, according to the attorney general’s office.

The attorney general’s office testified to state regulators that Avista overestimated some of its costs to provide power to customers and its projected 9.4% profit margin is excessive at a time when electricity and natural gas rates contribute significantly to inflation.

“If the commission accepts the revenue requirement increases in the settlement, the resulting bill increases will contribute unfairly to Avista customers’ energy expenses and compound the effects of inflation that its customers face,” Corey J. Dahl, a regulatory analyst for the Public Counsel Unit, said in testimony to state regulators.

The Public Counsel Unit stated that Avista is seeking $47 million more than what it should for electric rates over a two-year period.

It also claimed the utility is seeking $7 million more than would it should for natural gas rates over two years.

Avista’s multiparty settlement is related to its rate adjustment plan filed in January that initially proposed raising electric rates by 11% and natural gas rates by 4.3% over two years.

Avista filed the rate request to recover costs for fixed expenses as well as ongoing infrastructure and technology investments to serve its customers, according to a company release.

To arrive at an agreement for the settlement, Avista consulted with UTC staff, the Public Counsel Unit, the Alliance of Western Energy Consumers, the NW Energy Coalition, The Energy Project, Walmart, Sierra Club, and Small Business Utility Advocates.

All parties, aside from the Public Counsel Unit, agreed on settlement terms in Avista’s rate case.

The Public Counsel Unit’s testimony is part of the regular procedural process for Avista’s general rate case, Avista spokeswoman Casey Fielder said in an email.

“We are in the process of reviewing the testimony and will have the opportunity to formally respond with testimony on August 19,” Fielder said.

August 19 is the deadline for Avista to file a rebuttal to testimony from the Public Counsel Unit.

In addition, the attorney general’s office opposed a proposal by Puget Sound Energy, which is requesting to raise electricity rates by $405 million and gas rates by $215 million over the next three years starting in January, according to the news release.

State regulators will ultimately make the final decision on whether to approve rate requests filed by Avista and Puget Sound Energy.

The UTC is hosting a virtual public hearing for Avista’s rate case on Sept. 7 at 6 p.m.

A Zoom link and phone participation information can be found at: http://utc.wa.gov/220053.

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