Idaho regulators will seek comments from stakeholders and the general public over the first three weeks of September on Spokane, WA-based Avista Utilities’ Aug. 18 request 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.

After experiencing a 4.6% decrease in its gas costs a year ago, Avista has seen wholesale prices soar to what the Idaho Public Utilities Commission (PUC) called “levels not seen since Hurricanes Rita and Katrina in 2005.” As a result, Avista has an undercollection of revenues from its retail gas rates to pay for its last 12 months’ of wholesale purchases.

“Although natural gas prices decreased by about 30% in August, prices remain above levels at this time a year ago,” an Idaho PUC spokesperson said.

This is part of the utility’s annual purchased gas adjustment filing to reflect changes in wholesale gas prices. The utility attributed the hike to various factors contributing to more volatility in natural gas wholesale prices.

According to the PUC, Avista said the higher-than-normal wholesale gas prices were caused by a combination of an unusually long, cold spring that depleted storage reserves nationally; a decline in imports of gas from Canada; and a decline in liquefied natural gas (LNG) shipments to the United States.

For Avista’s Pacific Northwest operations, which cover Oregon, Washington and Idaho, the extended cold weather in the spring depleted storage reserves, putting upward pressures on gas prices, Avista told the PUC.

In its filing in August the utility said it responded to the marketplace by following a “structured natural gas purchasing plan” allowing for flexibility based on market prices and conditions (see Daily GPI, Aug. 20). “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.”

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