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Spokane, Washington  Est. May 19, 1883
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Avista proposes 11% rise in electricity rates

UPDATED: Tue., Jan. 25, 2022

Avista has proposed raising electric and natural gas rates over the next two years starting in December. The headquarters for Avista Utilities is shown here.  (By Tyler Tjomsland/The-Spokesman-Reivew)
Avista has proposed raising electric and natural gas rates over the next two years starting in December. The headquarters for Avista Utilities is shown here. (By Tyler Tjomsland/The-Spokesman-Reivew)

Avista Corp. is proposing to increase residential electric rates by 11% and natural gas rates by 4.3% over the next two years starting this December.

Spokane-based Avista filed the company’s rate adjustment plan Friday with the Washington Utilities and Transportation Commission, seeking its approval. The rate increases are needed to recover costs for expenses and ongoing infrastructure investments, according to the company.

The UTC will process Avista’s request through a formal rate case process that includes public hearings. The three-member commission will eventually choose to approve, modify or deny the application.

State law provides the commission up to 11 months to issue a final order, according to the UTC. The process also allows Avista a chance to appeal.

Avista’s plan calls for two separate rate increases, with the first proposed to take effect in December. The actual percentage increases would vary depending on the customer and levels of energy use.

Residential electric customers in Washington who use an average of 932 kilowatt hours per month would see a $6.52 increase, raising their monthly bill 7.9% from $82.56 to $89.08, according to the company.

Meanwhile, natural gas customers who average 67 therms per month would see a $1.54 increase, increasing their bill from $66.40 to $67.15, or a 2.4% increase.

The second rate increase would take effect in December 2023.

As proposed, residential electric customers who average 932 kilowatt hours per month would then see their rates increase to $91.88, up by 3.1%, while natural gas users averaging 67 therms per month would see a 1.1% hike to $67.15 per month.

Part of the proposed rates are offset by what Avista calls a Residual Tax Customer Credit.

“In the last Washington General Rate Case, the majority of tax customer credits were administered to customers to mitigate rate increases for the previous two-year period, but not all funds were used,” Avista spokesperson Celena Mock said.

Company representatives said the credit would return $38 million in benefits incrementally over two years to electric and natural gas customers.

If the plan is approved, Avista would apply the Residual Tax Customer Credit to all electric and natural gas customers over a two-year period.

Avista proposed the residential rate adjustments alongside a series of increases for other service categories.

The company’s goal is to increase annual base revenues by $70 million over two years for electric and $13.1 million for natural gas, with most of that slated for 2022.

With the plan filed Friday, Avista cited a number of infrastructure projects in explaining the company’s need for a rate increase.

Among those were continued investment into Avista’s Wildfire Resiliency Plan and ongoing efforts to replace aging natural gas distribution pipeline within the company’s three-state service area.

“As we see the effects of inflation impact the entire country, the cost of doing business is going up for all companies and industries,” Avista President and CEO Dennis Vermillion said in a news release. “Avista is not unique in this regard, and our costs to deliver energy continue to outpace our revenue.”

Avista requested revenue increases last year from the UTC.

The commission ultimately approved part of what Avista requested: $13.6 million for electric and $8.1 million for natural gas, down from $44.2 million and $12.8 million.

The final amounts – approved after the UTC recommended even lower revenues that would have provided for a rate decrease – kept customer rates flat effective Oct. 1, according to the UTC.

That quickly changed for natural gas customers when the UTC approved rate increases for all four natural gas utilities in the state, including an approximately 10% increase for Avista users who average 66 therms per month.

The new rate took effect Nov. 1.Greg Mason can be reached at (509) 459-5047 or gregm@spokesman.com.

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