Noting that Spokane, WA-based Avista Utilities has filed for electricity and natural gas rate hikes due to rising wholesale costs, the staff of the Idaho Public Utilities Commission (PUC) will present workshops in Moscow and Coeur d'Alene, ID, on July 23 and 24, respectively, to explain the request and receive comments from northern Idaho customers.
In early April Avista asked the commission for an average 15.8% rate increase for its electric customers and 5.8% for gas customers. Later that month Idaho regulators said they were suspending the effective date for the proposed rate increases in order to review the request and hear from intervenors (see NGI, April 28). Avista serves 120,000 electric customers and 71,700 natural gas customers in northern Idaho. Both public and technical hearings are scheduled for late September.
At the workshops commission staff will present the company's case and Avista customers will have an opportunity to ask questions about the issues the commission must consider when deciding rate cases. An accountant from the commission will explain how the commission determines a utility's revenue requirement and an engineer will explain how that revenue requirement is allocated among customer classes. Representatives of Avista may also be present to answer questions.
The PUC said Avista claims the rate hikes are necessary to meet significant increases in fuel costs as well as increased costs it incurs to purchase power it needs to meet growing customer demand. In addition, the utility says it also invested to upgrade its aging infrastructure to increase capacity and reliability. Those investments include upgrades to the Noxon Rapids and Cabinet Gorge hydroelectric projects and the Colstrip thermal project. The company claims it spent more than $130 million to upgrade its electric transmission system. Also included in this rate increase request are $21 million in costs incurred in the seven-year process to relicense Avista's hydroelectric projects on the Spokane River.
In the natural gas case, Avista says its chief investment is the upgrading of the Jackson Prairie Natural Gas Storage Facility.
For an average electric customer who uses 977 kWh a month, the monthly bill would increase from $67.58 to $78.08 if Avista's increase were granted. An average gas customer who uses 65 therms per month would see an increase of $4.91 per month to $80.05 if the gas increase were granted.
The PUC staff said the commission's job is to determine if the company acted in the best interest of customers when it made its additional investment. "Were the expenses incurred necessary and were they prudently incurred?" the staff noted.
Staff added that Avista last had a general rate case in 2004, where the utility sought an overall increase of 11% in electric rates and was granted 1.9%, but for residential customers, the increase was 7.1%. The gas rate increase was 6.38%, but the company had sought a 9.16% bump.
More information on the public workshops is available at www.puc.state.id.us.
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