Spokane, WA-based Avista Utilities Thursday filed with the state of Washington's regulatory commission, asking to increase electric and natural gas rates by a total of $55.6 million -- $51.1 for electricity and $4.5 million for natural gas service. The utility is asking that the change be effective by April 1, 2008. About 70% of Avista's annual electric and gas revenues come from its operations in Washington serving 228,000 power and 141,000 gas customers.

The filing made with the Washington Utilities and Transportation Commission requests increases of 15.85% for electric customers and 2.27% for natural gas users in Washington. Avista said the increases are driven primarily by what it called "increased costs associated with investment in facilities needed to improve reliability, as well as by increased fuel and purchased power costs to meet growing customer demand."

The utility's current rates were set in January 2006, and since then Avista said it has invested $20 million in upgrades to its Cabinet Gorge and Noxon Rapids hydroelectric projects and to its Colstrip coal-fired generation facilities to increase efficiency and output. During the same period, the utility has invested another $67 million in transmission system upgrades aimed at increasing reliability and capacity to meet the growing demand.

A five-year transmission upgrade plan will be completed at the end of this year, which includes the investment of more than $130 million to add more than 100 circuit miles of 230 kV transmission line to Avista's grid system in eastern Washington state and northern Idaho.

"In addition to the plant investments, the proposed electric rate change reflects increased power supply costs to serve electric retail loads that are approximately 10% higher than the loads used to set the current rates," an Avista spokesperson said. There are also increased administrative and general expenses, along with distribution operation/maintenance costs reflected in the proposed increase, and these costs are not covered in current rates, the spokesperson said.

"We continue to make significant investments in our generation, transmission and distribution infrastructure to provide for long-term, efficient and reliable energy supplies and high quality service for our customers," said Avista Corp. Scott Morris. "We have been quite purposeful in pursuing our objective of acquiring resources that will allow us to serve our customers under a range of operating conditions, which reduces our reliance on volatile energy markets."

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