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Washington State Regulatory Staff Rejects Avista Utility Rate Hikes

Washington Utilities and Transportation Commission (UTC) staff on Wednesday deflated natural gas and electric utility general rate increases proposed by Spokane, WA-based Avista Utilities.

The UTC staff recommended increases in the combination utility's rates in its home state, but in reduced amounts from Avista's proposal for an 18-month plan to hike natural gas charges $4.4 million, or 2.8%, starting Jan. 1, next year, in return for the utility not raising rates again before July 1, 2018. It also asked to increase electric utility rates $38.6 million, or 7.6%, on the same time frame.

During the 18-month period, Avista was also proposing to have second increases on Jan. 1, 2018 of $900,000, or 1%, for gas customers, and another $10.3 million, or 3.9%, for power customers.

UTC staff disputed the Avista request, calculating that the utility was seeking a total gas increase of 6.8% and an electric hike of 11.7%. Instead, it is recommending to the three-member commission that gas rates only rise by $700,000, or 0.8%, and the power increase be $25.6 million, or 5.1%.

The UTC, which is not bound by the staff recommendation is expected to make a final decision on the utility's rate request this winter. New rates are slated to be effective at the start of 2017.

Under the UTC staff proposal, gas utility customers would pay pennies more (25 cents) monthly, and power utility customers would pay a little more than $4 in addition each month ($4.17).

Staff also recommended that Avista be authorized a rate of return of 7.3%, compared to the 7.64% requested by the combination utility that also operates in Oregon and Idaho. The bulk of its customers are in Washington state: 153,000 gas utility customers and 242,000 electric.

In Oregon, Avista has a pending 7.4% gas utility rate decrease, effective Nov. 1, before state regulators. The utility made a purchased gas cost adjustment rate filing to the Oregon Public Utility Commission at the end of July.

Oregon retail gas rates were expected to drop by more than $4 monthly, or 6.9%, according to Avista's filing, reflecting lower gas commodity costs.

Meanwhile in Idaho, Avista has filed for an electric revenue increase of $15.4 million, or 6.3%, effective at the start of next year to cover additional infrastructure and maintenance costs in that state.

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