Panel begins review of Avista rate hike request

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Parties seeking to intervene in Avista Utilities' electric and natural gas base rate case for the purpose of presenting evidence and cross-examining witnesses must file a petition with the Idaho Public Utilities Commission no later than Monday.

Deadlines for public comment and dates for any public workshops and hearings will be announced later.

The commission's staff of auditors, engineers, rate analysts and attorneys have begun a six-month process of examining Avista's request for a two-year rate plan that would increase electric rates by 5.2 percent in 2016 and 5.1 percent in 2017 and natural gas rates by 4.5 percent in 2016 and 2.2 percent in 2017.

The proposed increases in the gas rate are anticipated to be offset by estimated 10 percent reduction in natural gas rates through the annual Purchased Gas Cost Adjustment effective Nov. 1.

"We have already received requests from customers asking the commission to deny Avista's application, but state statute requires that the commissioners first consider the evidence before they decide how much, if any, increase the company should be allowed," said commission spokesman Gene Fadness. "We are in the process of gathering that evidence now."

Regulated utilities are entitled by state law to recover prudently incurred expenses in exchange for their commitment to reliably serve all customers within their assigned territories.

"The burden will be on Avista to demonstrate that the expenses it seeks to recover from customers were necessary to serve customers and that they were prudently incurred," Fadness said.

Avista claims it has or will invest $1.08 billion in capital improvements projects since the company's last general rate case three years ago. That case, filed in 2012, was a two-year plan that increased rates in 2013 and 2014 and a settlement that extended it through 2015 with no increase.

If the commission were to grant Avista's request in its entirety, the bill for a residential customer using the system average of 929 kilowatt-hours per month would increase about $5.92 per month in 2016 and $6.10 per month in 2017. Part of that $5.92 increase is a proposed increase in the monthly customer service charge from $5.25 per month to $8.50.

The bill for a natural gas customer using the company average of 61 therms per month would increase by $3.90 per month in 2016 and $1.79 per month in 2017. The proposed increase in the natural gas customer service charge is to $8 per month, up from the current $4.25.

Avista's proposal would increase annual electric billed revenue by $13.2 million in 2016 and another $13.7 million in 2017. Natural gas revenues would increase by $3.2 million in 2016 and $1.2 million in 2017.

To mitigate the size of the proposed electric increase, Avista wants to extend another two years a $2.8 million refund customers are now receiving, reducing overall rates by 1.1 percent. That refund, originally money made available to Avista from the Bonneville Power Administration as part of a settlement regarding BPA's prior use of Avista's transmission system, is due to expire at the end of this year.

Avista proposes to replace that with another rebate, resulting from a settlement of the 2012 rate case under which Avista agreed to share with customers one-half of earnings the company made in excess of a 9.8 percent Return on Equity.

Avista further proposes to apply $200,000 of gas earnings sharing to help offset a $1.2 million rebate that expires on Jan. 1. However, that $200,000 sharing will expire in 2017.

Copies of Avista's application and its supporting testimony and exhibits are available at www.puc.idaho.gov. Select "Open Cases" under either the "Electric" or "Natural Gas" headings and select either Case No. AVU-E-15-05 or AVU-G-15-01.

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