Friday, February 26, 2021

Avista proposes two-year rate plan with IPUC

| February 2, 2021 1:00 AM

Capital investments and increased power supply costs are the main drivers in Avista’s request filed Friday with the Idaho Public Utilities Commission.

If the company’s two-year rate plan is approved, a tax consumer credit would allow the company to recover capital costs with little to no impact to customer bills, according to an Avista press release.

“While we and all of our communities have responded to the situation created by the COVID-19 crisis, Avista has maintained focus on our essential service and providing our customers with safe, reliable and affordable energy,” Avista President and CEO Dennis Vermillion said. "This means that we’ve continued to make important and necessary investments in our infrastructure, including replacement of wooden distribution poles, enhancements in electric grid resiliency, investment in customer facing technology and much more.”

The ongoing effort to align the rates customers pay with Avista’s costs to serve is one of the main reasons the company files general rate requests, the release said.

"Avista understands that rate cases can be challenging. Through the use of a tax customer credit, this rate proposal would help to mitigate the company’s rate request, resulting in little to no initial change in customers’ bills," the release said.

The proposal is a two-year rate plan, with new rates taking effect Sept. 1, 2021 and Sept. 1, 2022. This plan would create a stay-out period where Avista would not file a new general rate case for new rates to be effective prior to Sept. 1, 2023. This would provide customers with a level of predictability in their expected future energy prices.

Avista’s request, if approved, is designed to increase annual electric base revenues by $24.8 million or 10.1% effective Sept. 1, 2021 and $8.7 million or 3.2% effective Sept. 1, 2022. The company, however, is proposing to apply a Tax Customer Credit that would fully offset the increase for Sep 1, 2021, resulting in no initial bill change for customers.

For natural gas, the rate request is designed to increase annual base revenues by $0.1 million or 0.1% effective Sept. 1, 2021 and $1.0 million, or 2.2% effective Sept. 1, 2022. The Tax Customer Credit for natural gas would more than fully offset the Sept. 1, 2021 increase, resulting in an initial rate reduction for all customers and would continue for a ten-year period.

The company is proposing to offset the majority of the increase for the Sept. 1, 2022 rate change with other deferred customer credits.

The combined effect of the proposed rate plan and the offsetting customer credits is an increase to electric revenues of $8.7 million, or 3.5%, and a decrease to natural gas revenues of $1.1 million, or 1.7%.

Avista serves more than 138,000 electric and 89,000 natural gas customers in Idaho. The last electric general rate case filed by Avista in Idaho was on June 7, 2019, and for natural gas was June 8, 2017.

The commission has up to nine months to review Avista's requests.