191129PUC Approves Settlement.pdf

ldaho Public Utillties Gommlssion Brad Cot!,no,
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Case No. AW-E-19-04
Final Order No. 3,1499
Contact: Adam Rush
Office: [phone]
adam.rush(n)p uc.idaho.!,ov
ldaho Public Utilities Commission approves settlement with Avista Utilities that
will result in rate decrease
BOISE - The ldaho Public Utilities Commissaon has approved a proposed settlement with Avista Utilities
that decreases annual base electric revenues by 57.18 million, or 2.84 percent.
The settlement takes effect Dec. 1, 2019. A residential electric customer who uses an average of 900
kilowatt-hours per month will see a decrease in their bill of 50.86, or a 1 percent decrease for a revised
monthly bill of $84.45.
Avista's original proposal called for an increase in electric base revenues of 55.25 million, or 2.1 percent,
The Spokane-based company said its original request was prompted by an increase in net plant
investment (including return on investment, depreciation and taxes, and offset by the tax benefit of
interest) from that currently authorized. ln addition, net power supply expense is reduced from the
currently authorized level, offsetting the company's overall increase as originally requested.
ldaho state law allows regulated utilities to recover prudently incurred expenses and earn a reasonable
rate of return. The rate of return is established by the ldaho Public Utilities Commission. A utility has the
burden of proof to demonstrate that additional capital investment was necessary to serve customers
and, if so, that the expenses were prudently incurred.
Based on the settlement, there will be several reductions to the company's original proposal. For
Avista's electric operations, those chanBes include a S2.2 million decrease to the company's proposed
2019 revenue requirement tied to a reduction in return on common equity, a reduction of nearly
5774,000 through the elimination of officer incentive pay and salary increases and a reduction in non-
officer incentives and salary increases. There also is a reduction of approximately 56.4 million due to
reduced power supply costs.
The revenue decreases are based on a g.s-percent return on equity, down from a g.g-percent return on
equity in Avista's original proposal.
The settlement agreement was reached between parties to the case after a settlement conference in
September. Those parties included commission staff, Clearwater Paper Corporation, ldaho Conservation
League, lnc., ldaho Forest Group, LLC, the Community Action Partnership Association of ldaho, lnc. and
Walmart, lnc.
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Avista serves approximately 133,000 electric customers in northern ldaho.
To access documents filed in this case, please visit the commission's website at www. puc. ida ho.gov, and
click on "Open Cases" under the "Electric" heading. Scroll down to case number AVU-E-19{4.