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Avista Reaches Settlement on Washington State General Rate Cases

Spokane, WA-based Avista Corp. said its utilities have reached a settlement with the three major parties in pending state of Washington general rate cases for electric and natural gas operations in the state. Avista Utilities filed the settlement with the Washington Utilities and Transportation Commission (WUTC) Aug. 12, and if it is approved by the state regulatory commission, the agreement will resolve all outstanding issues in the case that was filed last March 30.

The settlement parties -- Avista, WUTC staff, Northwest Industrial Gas Users and the Energy Project -- proposed that the settlement be effective Dec. 1. And the parties have suggested that the state regulators hold settlement hearings in October (17-20), at which time evidence supporting and opposing the deal can be heard.

As part of the settlement, electric utility revenues would increase by $22.1 million annually, representing a $13.7 million reduction from the company's original request, and natural gas retail utility revenues would rise slightly less than $1 million ($968,000), a reduction of $1.9 million in the original Avista request, with an agreement not to raise gas rates before July 1, 2007. Increases for electric and gas rates would be 7.7% and 0.6%, respectively, compared with original requests of 12.5% and 1.8% for electricity and gas, respectively.

In addition, the agreement changes some of the mechanics of the utility's Energy Recovery Mechanism, some of which is designed to allow Avista to more rapidly recover existing power cost deferral balances, such as the current one that the company said is about $101 million.

Avista Utilities President Scott Morris said he was pleased with the agreement because it "would provide a measure of certainty around future cost recovery, which is important in our ongoing efforts to restore our financial health." The settlement provides "a reasonable balance" between the company and consumer interests, Morris said.

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