Canada tariff hits 83% of natural gas used by Avista. But the effect on your power bill may not be what you think

The trade war that kicked off this week by the Trump administration between Canada, Mexico and China is making it more expensive for Avista Utilities to purchase the vast majority of the natural gas it uses to heat homes and businesses and generate some of its electricity.

Scott Kinney, vice president of energy resources at Avista, said Canadian officials earlier this week instituted a 10% tariff on fuel imported into the U.S.

That levy came in response to President Donald Trump’s decision earlier this week to place 25% tariffs on goods from Canada and Mexico and an additional 10% tariff on products from China. Trump levied the lower 10% tariff on fuel imported from Canada.

Kinney said about 83% of all the natural gas that Avista purchases is from a supply hub in Canada. However, the 10% higher cost of Canadian natural gas will not necessarily lead to 10% higher costs for Avista customers from Spokane or North Idaho each month.

Natural gas has been selling for lower prices than expected, Kinney said. As a result, the rate that Avista charges customers may not change despite the 10% tariff placed by Canada, Kinney said.

“There’s a lot of moving parts,” Kinney said, referring to the regulatory process and factors that go into how the utility calculated each bill. “Our customers could actually see a reduction this year, depending on how all of those components play out.”

Avista provides natural gas to 376,700 customers in Washington, North Idaho and parts of Oregon and California. It also provides electricity to about 416,680 customers.

Most of Avista’s electricity, about 60%, is generated by renewable sources like hydropower and wind. It still generates about 8% from coal and about 32% from generation plants fueled by natural gas.

Those plants, like the one on Rathdrum Prairie, use the same natural gas that comes from Canada. But Kinney said it’s too early to definitively say whether the 10% tariff will prompt higher electricity prices.

He noted that the natural gas generation plants are only used during peak times, so it’s difficult to calculate what effect the higher gas prices would have on customers.

“Our thermal plants are kind of the last to run,” Kinney said. “So, it’s really hard to predict exactly when we would run them, and then that corresponding impact of the gas tariff. But if it does, it shouldn’t be very much.”

He noted that any rate increases first must be approved by the Washington Utilities and Transportation Commission.

“We go through this process to determine if the prices that we currently have set are adequate or if they’ve changed, either up or down,” Kinney said.

Avista sends a proposal for rates in July or August, and the commission generally makes a decision in time for the rate set for Nov. 1. So, Kinney said, even if the 10% tariff causes Avista to raise gas or electricity rates, it would not occur until later this year.

Asked whether Avista officials have a position on the tariffs continuing or being negotiated away, Kinney said: “I think for us, we want the best for our customers and we want to keep our rates affordable.”