Calling it “barely noticeable” to natural gas utility consumers, the Oregon Public Utility Commission (PUC) raised natural gas rates 0.7% for Spokane, WA-based Avista Utilities’ 92,355 Oregon customers, effective Tuesday. This is the first of two small gas rate hikes the PUC has authorized for Avista this year.

A second 1.1% hike will be effective Nov. 1, the PUC said. The combined 2008 increase is $2.2 million, or 1.8%, in annual revenues. Higher labor, pension and insurance costs were cited, along with capital project cost increases.

Avista originally asked the PUC for a $2.9 million, or 2.3%, increase. For the average customer, the increases amounts to an added 45 cents monthly now and another 89 cents monthly in November.

The PUC approved a stipulation reached among Avista, the PUC staff, the Citizens Utility Board and Northwest Industrial Gas Users. Avista gas customers are scattered in parts of southern, central and northeastern Oregon.

The rate increase this year is being phased in, the PUC said, because a portion of the Avista request includes two unfinished capital projects — East Medford Reinforcement and Jackson Prairie Storage. “By law, money for such projects cannot be collected from customers until they are operational, and both projects are expected to be completed by Nov. 1,” a PUC spokesperson said.

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