HomeMy WebLinkAbout20170103press release.pdf
Case No. AVU-E-16-03, Order No. 33682
Contact: Gene Fadness (208) 334-0339, 890-2712
www.puc.idaho.gov
Avista electric rates increased an average 2.6% on Jan. 1
North Idaho utility originally requested 6.3%
BOISE (January 3, 2017) – Electric rates for the northern Idaho customers of Avista Utilities
went up by an average 2.6 percent effective January 1. The utility originally requested a 6.3
percent increase, but a settlement proposed by Idaho Public Utilities Commission staff, Avista
and other parties resulted in a smaller increase.
Avista originally requested a $15.4 million increase to its annual revenue requirement. The
settlement, adopted by the commission, reduced that annual increase to $6.25 million.
“The settlement represents a reasonable compromise of the positions held by the parties and
reflects a significant reduction in the requested revenue increase,” the commission stated. “The
commission appreciates the parties’ work on the settlement and their ability to resolve all the
issues in this case.”
Parties signing the settlement included commission staff, Clearwater Paper Corporation, Idaho
Forest Products, the Snake River Alliance and the Community Action Partnership Association of
Idaho, which represents low- and fixed-income customers.
After Avista filed the application last May, commission staff initiated an active discovery
process, including an on-site investigation and thorough audit. Commission staff said its
position in the settlement process was to reach a conclusion that “was as good or better (for
customers) than what could be achieved,” had the case not settled and went to full litigation.
The settlement reduced Avista’s requested annual revenue increase by $9.2 million. The most
significant adjustment was a $4.5 million reduction by moving the net expenses for the Palouse
Wind project from base rates to the annual Power Cost Adjustment (PCA) process.
“Circumstances and evidence suggest that the company acquired Palouse Wind to meet
Resource Portfolio Standards for the State of Washington, not to meet Idaho load needs,” the
commission said. Further, the commission stated, Avista pays substantially more for Palouse
Wind energy than the actual market value of the energy. However, Idaho customers are served
by some of the energy from the wind project. The compromise in past years, the commission
said, has been to remove the above-market value of Palouse energy from base rates and flow
90 percent of the remainder through the PCA process, with Avista paying the remaining 10
percent. By continuing that treatment for Palouse Wind, the savings to customers is about
$450,000 annually.
The settlement also reduced Avista’s requested Return on Equity from 9.9 percent to 9.5
percent, resulting in a $2.47 million reduction in revenue requirement. Other reductions
included $1.33 million from capital plant additions, $1.06 million from 2015 storm costs;
$333,000 from administrative and general expense, board of director expense and other items;
$310,000 from non-union labor expense; and $171,000 by removing all company officer
incentives.
Finally, the settlement reduced the size of the increase in the Residential Basic Charge from the
company’s requested $6.25 per month to $5.75 per month. The former charge was $5.25 per
month. The parties also agreed to meet before the next rate case to assess Avista’s Low-
Income Weatherization and Low-Income Energy Conservation education programs for possible
improvements.
Avista, headquartered in Spokane, has about 125,000 customers in its north-central and
northern Idaho territory. A copy of the commission’s final order as well as other documents in
this rate case are available on the commission’s website at www.puc.idaho.gov. Click on “Open
Cases” under the “Electric” heading and scroll down to Case No. AVU-E-16-03.
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