With particular ire toward an $11.3 million disallowance of natural gas costs, Spokane, WA-based Avista Corp. last Friday lashed out at the Idaho Public Utilities Commission for an interim order in Avista utilities’ electric and gas general rate case. The disallowance relates to gas purchased for its electric generation plants.

In a prepared statement issued in the wake of the state regulatory commission’s action, Avista said that as of May 31 this year it had $26 million in unrecovered gas fuel costs, and the interim PUC order allowed for recovering only about $15 million of those costs.

Nevertheless, the net increases amounted to $24.7 million for electric rates and $3.3 million for gas, along with an authorized rate of return overall of 9.25% and 10.4% return on common equity, representing what the utility conceded is 80% of its revised request. The new rates became effective last Thursday.

The Idaho commission announced new permanent rate bases for gas and electric customers and temporary surcharges for both. Overall, a 1.9% increase in electric revenues went into effect, along with 20.6% increase in gas rates, the PUC said.

The gas rate changes include the first base rate change in 14 years and a 14.2% hike in the utility’s purchased gas cost adjustment mechanism, reflecting the higher wholesale gas costs in the past year.

Avista originally asked for a $35.2 million increase in its revenues for electric service, and subsequently reduced that to $31.1 million. Avista had asked for 10.9%. return on equity.

The net electric rate increase was a combination of a permanent base rate increase and a reduction in the utility power cost adjustment, the latter being a major sore point with the utility.

“We understand the challenge the commission faced in balancing the financial needs of our company with the impact of price increases on our customers,” said Scott Morris, president of Avista Utilities. “We requested recovery of the costs necessary to serve our customers, and we believe approval of our request was warranted.”

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