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Idaho Public Utilities Commission

Case No. AVU-E-09-01 and AVU-G-09-01, Order No. 30856

July 17, 2009

Contact: Gene Fadness [phone], 890-2712

Website:
http://www.puc.idaho.govwww.puc.idaho.gov

Idaho commission adopts Avista rate case settlement

Avista Utilities residential electric and gas customers will pay just slightly more than 1 percent more per month – about $1 – on each of their electric and gas bills as the result of four rate adjustments effective Aug. 1.

The Idaho Public Utilities Commission announced two adjustments today – a base rate increase and an electric and gas supply decrease – and will announce an increase in the company’s energy efficiency rider later this month. The fourth component, the resumption of the Residential Exchange Credit from the Bonneville Power Administration will result in a rate decrease.

Today’s order adopts a settlement among various parties to a major electric and gas rate case filed by Avista last January. The result of the rate case is an average 1.5 percent increase for electric customers (1.2 percent for residential customers) and no increase for gas customers. However, when including the increase in the energy efficiency rider to be announced later this month, the net result for residential gas customers is about a 1.2 percent increase.

The settlement adopted today increases Avista Utilities’ annual electric revenue by $12.5 million and gas revenue by $1.93 million. Avista originally sought a $31.2 million increase in annual electric revenue and a $2.7 million gas revenue increase.

 Noting that the disputes among the parties to the rate case were “numerous and significant,” the commission congratulated the parties for “their diligent work on the settlement and their ability to resolve all the issues in this case.” The commission said the settlement represents “a significant reduction in the requested revenue increase, about 60 percent less than originally requested.”

The permanent base electric rate increases by 5.7 percent, but because of a 4.2 percent reduction in the company’s annual Power Cost Adjustment (PCA), the net increase to all electric customer classes is 1.5 percent (1.22 percent for the residential class). Avista originally sought a 12.8 percent base electric increase that would have netted 7.8 percent with the PCA reduction. On the gas side, the permanent rate increase is 2.1 percent, but because of a decrease in the annual Purchased Gas Cost Adjustment (PGA) there was no net increase in gas rates for most customers.

For a residential electric customer who uses about 1,000 kilowatt-hours per month, the net impact of all four adjustments is an increase of 98 cents, from $79.92 to $80.90, according to the company’s calculations.

For a residential gas customer who uses 65 therms per month, the net impact of all four adjustments is about 91 cents a month. An average monthly bill increases from $72.97 to $73.88, according to Avista’s calculations.

The commission conducted hearings and workshops in northern Idaho in the rate case and received about 200 written comments. Many of those comments addressed the issue of company salaries. The settlement adopts the commission staff proposal “to reduce wages for executive and non-executive employees to reflect actual wage in 2009 and to eliminate any pro forma increase in 2010,” the order states. “For ratemaking purposes, the stipulation (settlement) also removed pay increases for the company’s executives in 2009 and 2010.”

The parties in the case included Avista, commission staff, the Idaho Forest Group, Clearwater Paper Corporation, the Idaho Conservation League, the Idaho Community Action Network and the Community Action Partnership of Idaho.

The commission’s entire order and other documents related to the case are available on the commission’s Web site at
http://www.puc.idaho.govwww.puc.idaho.gov. Click on the electric icon, then on “Open Electric Cases,” and scroll down to Case No. AVU-E-09-01.

Interested parties may petition the commission for reconsideration by no later than Aug. 7. Petitions for reconsideration must set forth specifically why the petitioner contends that the order is unreasonable, unlawful or erroneous. Petitions should include a statement of the nature and quantity of evidence the petitioner will offer if reconsideration is granted.

Petitions can be delivered to the commission at 472 W. Washington St. in Boise, mailed to P.O. Box 83720, Boise, ID, 83720-0074, or faxed to 208-334-3762.