New energy charges may be added to customers' bills

As if proposed rate increases weren’t enough, even more additional charges might soon be piling up on local energy bills.

Avista Utilities requested on Monday to increase its electric power cost adjustment (PCA) surcharge by about 5.9 percent, or $12.2 million.

If the Idaho Public Utilities Commission grants the request, customers using an average 1,000 kilowatt-hours per month would see a $3.43 hike per month, or a 5.4 percent increase over current residential rates.

The change, separate from Avista’s pending proposal for a gas and electric rate increase, would take effect on Oct. 1, 2008.

The PCA is calculated annually to cover unanticipated costs that weren’t included in customers’ base rate.

“This is money that has already been spent,” said Jessie Wuerst, Avista spokesperson.

Every year, utility companies project how much they will spend on natural gas to fuel their power plants, as well as how much will be spent on electricity from other market sources.

If the year’s costs end up below the projections, then customers receive money back, or credit. If the costs are above what was expected, customers are billed a surcharge.

With fuel prices significantly higher than what they were at the beginning of this year, the surcharge was all but inevitable, said IPUC spokesperson Gene Fadness.

“The very important thing for customers to remember and that most don’t understand is that Avista gets none of the money,” Fadness said. “(Avista) owes its fuel suppliers and electric suppliers $12.2 million. They collect (the surcharge) from customers, turn around and pay it to their fuel suppliers. It’s not profit, it’s not revenue, it doesn’t go toward salaries or employees. It pays the power bills not covered in base rates.”

Avista was required to absorb the first 10 percent of unexpected costs.

The IPUC will review the company’s market purchases to ensure Avista bought the most reasonably priced fuel available, and it will set the surcharge based on what is necessary to recover “prudent purchases” only, Fadness said. The IPUC will make a decision by the end of September.

The commission will need more time to assess Avista’s proposal to increase gas and electricity rates in North Idaho, however. The company filed a request in early April to raise electric rates by an average 15.8 percent, and gas rates by 5.8 percent. Public hearings on the request are scheduled for late September, and the IPUC expects to make a decision by November.

People hoping to lower their energy bills are encouraged to better manage energy use, Wuerst said.

She suggested customers close the shades during the day and use programmable thermostats to heat and cool homes according to their lifestyles.

Avista also offers various rebate and incentive programs for customers who install energy efficient appliances, Wuerst added. Others can try to temper costs with the Comfort Level billing option, where the company averages energy bills over 12 months.

“There’s a whole lot customers can do on their side while we’re doing our best to be prudent and efficient on our side,” Wuerst said. “We’re in this together.”