Washington Water Power is asking state regulators to approve anew natural gas purchasing plan which will turn the purchasefunction for its residential customers over to Avista Energy, itsunregulated affiliate.

Avista currently is engaged in wholesale marketing for largecustomers. “This would consolidate our procurement function,” saidKelly Norwood, a WWP regulatory policy analyst. It will eliminateduplicate administrative costs and allow the utility to better useexcess pipeline released capacity, he added.

Customers will be protected because their cost of gas will bebased on published spot indices. The price formula proposed is aweighted average of published prices in Alberta, at Sumas and inthe Rockies, plus a $0.06/MMBtu premium. If Avista is able toprovide the gas at a lower cost to itself, it will make a profit.If its costs are above the spot index, it could lose money. Norwoodpointed out the company’s wholesale marketing arm is better able tomanage risks.

WWP is submitting the plan to the regulatory commissions inWashington and Idaho. It claims Idaho consumers would have saved$440,000 and Washington consumers $1.3 million over the last threeyears if the plan had been in effect. The company has asked for aFeb. 1 start-up with the six cent premium fixed for three years.

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