With wholesale prices tripling over the past four years, and the prospect for $8 natural gas, Spokane, WA-based Avista Corp. announced Tuesday it has filed with the Oregon Public Utility Commission for a $18.9 million natural gas rate hike to cover increased wholesale fuel prices. Avista is seeking the rate hike effective Oct. 1, which would mean an average 18% jump for its 90,000 gas distribution utility customers in the state.
Industrial and commercial customers face even bigger increases, if the Oregon PUC agrees with the utility’s proposed rate spread, including average increases of $20.6% and 22% for commercial and industrial customers, respectively, and up to 25.5% for large interruptible customers. The larger percentages for the nonresidential customers are due to their lower rate bases, Avista said.
“Energy prices in the Pacific Northwest have risen dramatically in the last five years,” said a utility spokesperson. “As oil prices have reached new highs, average U.S. natural gas prices tripled between December 2000 and the end of 2004. And the price utilities pay for natural gas is running almost 33% higher than prices of just a year ago.”
Avista said their forecasts see winter wholesale natural gas prices hovering at $8/MMBtu, compared to $6/MMBtu just a year earlier. The company said it is continuing to employ “a number of strategies” to mitigate the high wholesale gas prices, but recent price fluctuations have continued unabated.
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