Avista's natural gas rates for the average homeowner are proposed to increase a total of $3.13 per month in two stages this year and electric rates are proposed to increase $2.04 per month on Oct. 1 under a settlement announced on Wednesday.
The settlement between Avista, Idaho Public Utilities Commission staff, Clearwater Paper Corporation, Idaho Forest Group and The Idaho Conservation League stems from the utility firm's rate requests filed last October.
The IPUC board is expected to make a decision on the proposal before April 1.
If the settlement is OK'd, natural gas rates for the average homeowner (using 60 therms a month) will increase $2.82 per month starting April 1 for a revised monthly bill of $55.37. They'd increase an additional 31 cents starting Oct. 1.
Kelly Norwood of Avista said the rate increases are driven by upgrades in facilities, including at the Post Falls Dam and in Noxon, Mont. Wooden headgates at Post Falls were recently replaced with steel ones.
"We need to replace a lot of worn out equipment," Norwood said.
Some of the upgrades were directed by the Federal Energy Regulatory Commission during the dam relicensing process.
Norwood said he can't remember when an Avista two-stage rate increase was last proposed in Idaho, but one in Washington is underway and others have been approved at other Idaho utilities.
"We expect them to become more common," Norwood said.
Norwood said part of the reason for the tiered increase with natural gas was to ease the burden on ratepayers. Avista also needs to start recouping its upgrade costs earlier on the gas side than with electric users.
The settlement states that Avista can't have any more base rate hikes before Jan. 1, 2015.
"This doesn’t mean we wouldn’t adjust rates based on power supply or wholesale natural gas costs before then," wrote Avista's Anna Scarlett. "But what it does mean is that you’ll have more certainty in your energy rates for the next two years, so you can better plan to manage your energy costs. And your energy prices will still be among the lowest in the nation."
The IPUC will establish a schedule to gather comments on the settlement from parties to the rate case and Avista customers prior to making a decision. Information: www.puc.state.id.us