Avista seeking rate increase

SANDPOINT — Avista is seeking to increase rates for electric and natural gas service in order to recover expenses incurred in 2016.

The Idaho Public Utilities Commission reports Avista said it under-collected the fixed costs of serving its Idaho customers by a combined $9.6 million in 2016. To recover those costs, Avista has asked the commission to approve a 3 percent increase to a billing mechanism known as the fixed cost adjustment.

The adjustment allows Avista to recover the fixed costs it loses when energy sales decline due to decreased consumption among customers, said a news release from the commission.

“Though energy consumption fluctuates, the fixed costs associated with providing service are more stable. The FCA is designed to provide the utility with a financial incentive to promote energy efficiency and conservation among its customers,” said the release. “It can be adjusted annually with commission approval — via a surcharge when expenses exceed revenue or a refund when FCA revenue surpasses costs. Any increase to the surcharge is capped at 3 percent.”

In seeking commission approval to raise the FCA for the coming year, Avista said its natural gas and electric customers used significantly less energy in 2016 than in 2014, the test year on which revenue projections are based.

For natural gas customers, the drop in usage led to a $3.1 million shortfall in FCA revenue. The company attributed the bulk of the decline to “abnormally warm” weather, though it said its energy efficiency programs played a role.

The shortfall was even more acute among electric customers — approximately $6.5 million — with energy efficiency programs and weather having the largest impact.

If approved in full, the company’s proposal to recover those costs would increase the monthly bill for residential electric customers using an average of 910 kilowatt-hours by $2.56.

Avista’s residential natural gas customers using an average of 61 therms per month would see an increase of $1.51 per month.

The utility asked for the change to take effect Oct. 1 for electric service, and Nov. 1 for natural gas customers.

The commission approved the FCA mechanism in early 2016 as part of a three-year pilot program included in Avista’s settlement of a 2015 rate case.

The commission is accepting comments on Avista’s proposal through Aug. 31 for the electric case, AVU-E-17-04, and Sept. 27 for the natural gas case, AVU-G-17-03.

To comment, visit www.puc.idaho.gov. Under the “Consumers” heading, click on “Case Comment Form,” and include the case number(s), AVU-E-17-04 and/or AVU-G-17-03.

Avista’s application can be viewed on the commission’s website at www.puc.idaho.gov. Click on “Open Cases” under the “Electric” heading and scroll down to AVU-E-17-04 or click on “Open Cases” under the “Natural Gas” heading and scroll down to AVU-G-17-03.

These two cases are separate from Avista’s general rate case that is before the commission. If approved, the pending general rate request would mean a $7.03 increase in the monthly bill for a residential electric customer using an average of 910 kilowatt hours from $86.39 to $93.42, starting Jan. 1, 2018. On Jan. 1, 2019, that customer’s monthly bill would climb $4.02 to $97.44.

Residential natural gas customers using an average of 61 therms per month would see an increase of $3.37 per month in 2018, taking their bill from $51.10 to $54.47, and a $2.07 increase in 2019 to $56.54.

Earlier this month, Avista announced it is being purchased by the Toronto-based Hydro One in a $5.3 billion deal agreed to by the boards of both companies but awaiting Avista shareholder, regulatory and government approvals.

When the sale was announced, Scott Morris, Avista’s chairman, president and CEO, said the deal will not change Avista’s request for a two-year rate hike for its electric and natural gas customers in North Idaho to pay for replacing or upgrading infrastructure.

“We’ll continue to run the business as we always have and invest in infrastructure,” Morris said.