Spokane, WA-based Avista Utilities said Monday it has filed with the Idaho Public Utilities Commission (PUC) for an $11.6 million, or 14.2%, natural gas rate increase for its 72,000 Idaho customers to recover high wholesale costs of gas. It asked for the rate hike to be effective Oct. 1.

This is part of the utility’s annual purchased gas adjustment (PGA) filing to reflect changes in wholesale gas prices. Avista said even with a large drop in wholesale prices for August, its gas costs are still higher than they were a year ago. The utility attributed the hike to various factors contributing to more volatility in natural gas wholesale prices.

It was “an especially challenging year for Avista as we purchased the commodity to serve our customers during the 2008-2009 heating season,” said Kevin Christie, natural gas supply director. “This spring and summer natural gas prices soared to levels not seen since Hurricanes Rita and Katrina [fall 2005]. Although natural gas prices decreased about 30% in August, prices remain above levels at this time a year ago.”

For Avista’s Pacific Northwest operations, which cover Oregon, Washington and Idaho, a “long, cold spring” depleted storage reserves across the country, Canadian natural gas imports continued to decline and global supply-demand constraints sent liquefied natural gas supplies away from the United States, all adding up to upward pressures on gas prices.

In response, the utility said it followed a “structured natural gas purchasing plan” allowing for flexibility based on market prices and conditions. “Currently about 67% of estimated customer demand for the upcoming year is either pre-purchased or placed in storage,” Avista said. “This year [we] have increased underground Jackson Prairie [WA] storage capacity from 11% to 21% of expected annual demand requirements.”

Avista also said Monday former Black Hills Corp. CFO Mark Thies will join the company as senior vice president and CFO in September, and current CFO Executive Vice President Malyn Malquist will remain through the transition, and longer term he will continue as a senior executive focused on subsidiary oversight before retiring.

Avista CEO Scott Morris said that bringing in Thies at this time gives the company “the opportunity for an orderly and smooth transition in the CFO position.”

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