Washington AG challenges Avista’s proposed 25% electrical rate hike over four years

The Washington State Attorney General’s Office is challenging Avista’s proposal to increase customer electric rates by 25% and gas rates by 10% over the next four years.

Attorney General Nick Brown pointed to Avista’s status as a monopoly as the main issue.

“Avista, like other utility companies, have a true monopoly over utility services in Washington state. In the Spokane Valley, you don’t have an option but to use Avista, so when you have a monopoly like that, it’s reasonable for the state to demand a more modest level of increase rather than what Avista has proposed,”Brown said in an interview with The Spokesman-Review.

Avista did not address Brown’s specific objections but defended the overall request.

In a written statement, the utility said, “We filed a general rate case on Jan 16, 2026, to recover costs related to power generation and supply, infrastructure upgrades, wildfire safety and prevention, technology improvements, regional growth and reliability, and clean energy compliance. Our proposal allows us to provide safe, reliable electric and natural gas service for customers, every day.”

The Washington Utilities and Transportation Commission has the final say on the proposal.

In a statement, the agency said that in any rate case proceedings, commissioners review and consider all evidence in a docket before making decisions, which includes “comments and recommendations from customers, as well as testimony and evidence provided in litigated proceedings from the public, advocacy groups, the Attorney General’s Public Counsel Unit, UTC staff, Avista staff, and their counsel.”

The UTC says that rates are set by an accounting formula recognized across the nation by utility companies: Revenue Requirement = Operating Expenses + (Rate Base x Return). Essentially, Avista and the AG are fighting over two terms in that equation: which expenses customers should cover and Avista’s returns.

The AG’s office doesn’t see eye to eye with Avista on what customers should be paying.

“Overall, they proposed over $700 million worth of increases over the four years. What we determined was that roughly $626 million of that didn’t really reflect the true expenses and costs,” Brown said. “They’ve also proposed a number of pretty expensive, exorbitant, out-of-state infrastructure projects, including funding infrastructure projects for a pretty wealthy golf community in Idaho. These are expenses that they’re suggesting that Washingtonians cover.”

To further save Avista customers money, the AG has suggested to the UTC that instead of a 10% dividend increase to shareholders, 7% would be more reasonable. Avista has seen increased dividend payouts for the past 24 years.

“We’ve suggested that the increase in dividend payment should be 3 percentage points lower,” Brown said. “If the UTC agrees with this, we think that’s a win, but this is obviously a really important question for not only the UTC but the legislature moving forward about how these monopolies operate within our state.”

Avista has to reconcile its obligations of returning sufficient value to shareholders with providing affordable service to customers.

“It’s a careful balancing act,” said Brown, noting how Avista needs to manage shareholder interests with customer budgets.

“When we’re talking about Avista, they’re essentially asking Washingtonians to cover things like their CEO pay increases, their marketing expenses and their lobbying expenses. Those are the types of things that we don’t think are necessary to really allow Avista to fairly operate in this market,” Brown said. “We have to recognize that this is not a normal free market system. When we have a power company, we’re dealing with a monopoly that has exclusive rights to provide this service within a jurisdiction, so the normal factors that we might think of in a free market system really aren’t in play here,” Brown said.

The fight seems to be over how specific line items, such as executive pay and lobbying, should be split between customers and shareholders.

In the statement from the UTC, the agency said , “Revenues authorized by the commission include operational expenses plus a return on infrastructure investments that generate and deliver energy to homes and businesses. Certain operational expenses cannot be recovered from customers (for example, lobbying costs, charitable contributions, certain executive benefits, duplicative or unreasonable/unsupported costs).”

When asked what he would tell a homeowner worried about the increase, Brown said that “Their worry is legitimate. In this time, where people are really concerned, rightly, about affordability, this is a great way to start to approach some of those issues.”

The UTC will hold a virtual public hearing on the proposal Aug. 27 at 6:30 p.m. The agency said ratepayers will be sent the link to join and other information at least 30 days before that.