Idaho regulators suspended pending electric and natural gas rate increases from Spokane, WA-based Avista Utilities Thursday and announced a settlement had been reached on a second (electric) rate case involving Salt Lake City-based Rocky Mountain Power, a PacifiCorp utility. The Idaho Public Utilities Commission (PUC) set Feb. 25 as the deadline for parties to intervene in the Avista case, and it scheduled hearings March 11 and 17 on the rate settlement for the PacifiCorp unit.

If the settlement is ultimately approved by the PUC, Rocky Mountain’s new rates would be effective April 18.

In late January, Avista asked the PUC for a net electric rate increase of $31.2 million, or 7.8%, and a natural gas hike of $2.7 million, or 3%. This request overall for electric retail rates was a 12.8% rate hike that was offset by a 5% reduction in the current power cost adjustment. Avista serves 121,000 electric and 93,000 gas customers in Idaho.

Avista asked for a Feb. 23 effective date for the electric and gas rate increases, but the PUC has suspended that date for up to seven months to allow the PUC staff to fully examine the utility’s books.

PacifiCorp’s Rocky Mountain Power Co. sought last year to increase its retail rates $5.9 million, or 4% overall. Rocky Mountain Power serves 70,000 customers in eastern Idaho and other customer groupings in Utah and Wyoming. It originally asked the Idaho PUC for the rate increase last September, with a proposed Oct. 19 effective date. As they have in cases with other utilities, the Idaho regulators balked at the short turnaround.

Avista is seeking an average rate of return on rate base of 8.8% and an 11% return on equity, telling the PUC that the increases are needed to meet customer growth, deal with aging generation plants, power lines, poles and substations. Collectively, these infrastructure needs add up to $200 million annually in upgrades, the PUC said the utility is claiming.

“Avista’s requested base rate increase for electric charges was lowered by its reduction in annual Power Cost Adjustment (PCA) charge by $12.3 million, or 5%, ” the PUC spokesperson said, adding that the PCA, however, only covers this year and could be raised again next year.

In the settlement, Rocky Mountain and its stakeholders have agreed to an increase of $4.38 million for the PacifiCorp utility. Parties include the PUC staff, Idaho Irrigation Pumpers Association, Community Action Partnership Association of Idaho and the utility. Rocky Mountain’s largest customer, Monsanto, participated in the settlement negotiation and said while it would not sign the agreement, it also will not oppose it.

The PUC said there were four key components to the settlement: no party has accepted all of the methodology used to arrive at the increase total; all parties agreed Rocky Mountain’s purchase of the Chehalis natural gas plant in Washington state was a prudent decision; it was agreed by all that the utility’s demand-side management programs are all cost-effective; and Rocky Mountain agreed to include a design for tiered residential rates in its next rate case.

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