20120731Press Release-Customer Notice.pdf

AVISTA UTILITIES
Case No. AVU-G-12-0 ,~'
EXHIBIT "E"
Copy of Press Release and Customer Notice
July 30, 2012
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Contact:
Media: Anna Scarlett [phone], anna.scarlettcavistacorp.com
Investors: Jason Lang [phone], iasonianqavistacorD.com
Avista 24/7 Media Access [phone]
Avista Makes Price Reduction Requests in Idaho
Pass-through tariffs could decrease natural gas rates by 8 percent and electric rates by 2
percent
SPOKANE, Wash. - July 31, 2012, 1:05 p.m. PDT: Avista (NYSE: AVA) customers would see a
decrease in their electric and natural gas prices on Oct. 1 if the Idaho Public Utilities Commission
(IPUC or Commission) approves several annual rate adjustment requests filed today by the company.
There is no impact on company earnings from any of these adjustments. The requests include two
electric rate adjustments and two natural gas rate adjustments:
• Avista's annual Power Cost Adjustment (PCA)
• Avista's annual Purchased Gas Cost Adjustment (PGA)
• Electric and Natural Gas Energy Efficiency tariff rider adjustments (Tariff Rider)
"Each year, we propose to adjust rates our customers pay so that customers' bills reflect our actual
costs of purchasing natural gas and generating and purchasing electric power," said Dennis
Vermillion, president of Avista Utilities. "Today's requested rate reductions are due to, among other
things, lower natural gas prices and lower power supply costs, which is good news for our customers."
If the requests are approved by the Commission, residential electric customers in Idaho using an
average of 939 kilowatt-hours per month would see their monthly bills decrease from $80.55 to
$79.46, a decrease of $1.09 per month, or 1.4 percent. Residential natural gas customers using an
average of 60 therms a month would see a $4.42, or 7.9 percent, decrease in their monthly rate for a
revised monthly bill of $51.36.
Electric Adjustments
The major portion of an Avista electric customer's bill, about 60 percent, is the cost of generating or
purchasing electricity to meet customer needs. These costs may fluctuate up or down. Power supply
costs were lower in 2011, due to factors such as declining natural gas prices and favorable
hydroelectric conditions. The remaining 40 percent of a customer's bill covers the cost of delivering
the electricity - the equipment and people needed to provide safe, reliable service.
The PCA is an annual rate adjustment to reflect certain differences between Avista's actual cost of
generating and purchasing electric power to serve customers and the cost currently included in
customer rates. The proposed PCA rebate is designed to pass through reduced power supply costs
during the twelve-month period that ended June 30, 2012. The proposed revenue decrease that will
result from the company's request is approximately $5.6 million, or an overall decrease of
approximately 2.2 percent.
The second electric rate request filed with the IPUC is to reduce the electric Energy Efficiency Tariff
Rider Adjustment (Tariff Rider). The Tariff Rider is the rate paid by customers that funds the
company's energy efficiency programs. Avista projects that it can meet the demand for electric energy
efficiency with a lower level of funding. The proposed revenue decrease that will result from the
company's request is approximately $3.4 million, or an overall decrease of approximately 1.3 percent.
The two proposed rate decreases will be offset partially by the expiration of an existing refund rate
being passed through to customers. For the period of Oct. 1, 2011 through Sept. 30, 2012, Avista is
returning to customers approximately $3.8 million of deferred Idaho state income taxes. This current
rebate will expire on Oct. 1, 2012.
Taking into account the two proposed electric rate decreases, as well as the expiration of the current
refund rate, customers would see an overall net decrease of approximately 2 percent, or $5.2 million,
effective Oct. 1, 2012, if the requests are approved by the Commission. As a result, residential electric
customers in Idaho using an average of 939 kilowatt-hours per month would see their monthly bills
decrease from $80.55 to $79.46, a decrease of $1.09 per month, or 1.4 percent.
Natural Gas Adjustments
The combined costs of purchasing natural gas on the wholesale market and transporting it to Avista's
system makes up about 55 percent of an Avista natural gas customer's bill, and these costs fluctuate
up and down based on market prices. Avista does not mark these costs up. The remaining 45 percent
covers the cost of delivering the natural gas - the equipment and people needed to provide safe and
reliable service.
The annual Purchased Gas Cost Adjustment (PGA) is a true-up that balances the cost of wholesale
natural gas purchased by Avista to serve customers with the amount already included in customer
rates. The proposed revenue decrease that would result from the company's proposal is
approximately $3.6 million or an overall 5.4 percent. As the company noted when it reduced natural
gas rates for Idaho customers in March by 6 percent, wholesale natural gas costs have declined over
the past twelve months. Abundant supplies of natural gas and continued soft demand for the
commodity have continued to keep wholesale natural gas prices at lower levels over the past year.
The second natural gas rate request filed with the IPUC is to reduce the natural gas Energy Efficiency
Tariff Rider Adjustment (Tariff Rider). Similar to the electric Tariff Rider for energy efficiency, the
natural gas Tariff Rider is the rate paid by customers that funds the Company's natural gas energy
efficiency programs. The proposed revenue decrease that will result from the company's proposal is
approximately $1.7 million, or an overall decrease of approximately 2.6 percent.
If the requests are approved by the IPUC, residential customers using an average of 60 therms a month
would see a $4.42, or 7.9 percent, decrease in their monthly rate for a revised monthly bill of $51.36.
Commercial customers could expect decreases of 8.5 percent for general service schedule 111, and 16.8
percent for interruptible sales service schedule 131. If approved by the Commission, new rates would
become effective Oct. 1, with annual natural gas revenues decreasing by approximately $5.3 million. Avista
serves over 74,000 natural gas customers in Idaho.
Avista's rate applications are proposals, subject to public review and a decision by the Idaho Public Utilities
Commission. Copies of the applications are available for public review at the offices of both the IPUC and
Avista, as well as the IPUC's homepage at www.uc.idahoqy. The IPUC will begin a review of Avista's
applications and will seek public input on the company's request.
Avista expects to file its annual Purchase Gas Cost Adjustment in August with the Oregon Utilities
Commission and in September with the Washington Utilities and Transportation Commission.
To help customers proactively manage their energy use, Avista offers a number of energy efficiency
programs, including rebates and incentives. Visit www.evervlittlebit.com for information on the
programs that helped Avista's Idaho and Washington customers save enough energy in the past two
years to power over 15,000 homes and to serve almost 4,000 homes with natural gas.
Information on energy assistance programs and payment options offered by Avista to help qualifying
customers is available at www.avistautilities.com .
Avista Corp. is an energy company involved in the production, transmission and distribution of energy
as well as other energy-related businesses. Avista Utilities is our operating division that provides
electric service to 360,000 customers and natural gas to 321,000 customers. Our service territory
covers 30,000 square miles in eastern Washington, northern Idaho and parts of southern and eastern
Oregon, with a population of 1.5 million. Avista's primary, non-regulated subsidiary is Ecova, an
energy and sustainability management company with more than 500 multi-site commercial and utility
customers, representing more than 450,000 sites. Our stock is traded under the ticker symbol "AVA."
For more information about Avista, please visit www.avistacorp.com .
This news release contains forward-looking statements regarding the company's current expectations.
Forward-looking statements are all statements other than historical facts. Such statements speak only
as of the date of the news release and are subject to a variety of risks and uncertainties, many of
which are beyond the company's control, which could cause actual results to differ materially from the
expectations. These risks and uncertainties include, in addition to those discussed herein, all of the
factors discussed in the company's Annual Report on Form 10-K for the year ended Dec. 31, 2011.
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Important Notice for Idaho Natural Gas Customers
August 2012
Important Notice for Idaho Natural Gas Customers
August 2012
Important Notice for Idaho Natural Gas Customers
August 2012
On July 31, 2012, Avista filed two rate requests with
the Idaho Public Utilities Commission (Commission),
with a requested effective date of October 1, 2012. The
first rate request is for the approval of Avista's annual
Purchased Gas Cost Adjustment (PGA). The proposed
revenue decrease that will result from the Company's
PGA proposal is approximately $3.6 million, or an
overall decrease of approximately 5.4%. Abundant
supplies of natural gas and continued soft demand for
the commodity have continued to keep wholesale
natural gas prices at lower levels over the past year.
In the Company's PGA filing, Avista is proposing to
decrease the natural gas rates our customers pay to
better reflect current market prices for natural gas as
well as refund to customers over-collected costs.
Because of the unpredictable nature of wholesale
prices, Avista pre-purchases about two-thirds of the
natural gas needed to meet customer demand for the
coming winter. To help provide greater price stability for
customers and to allow for flexibility based on market
conditions, Avista follows a diversified natural gas
purchasing plan which also includes underground
storage and daily purchases.
The second rate request filed with the Commission is to
reduce the natural gas Energy Efficiency Tariff Rider
Adjustment (Tariff Rider). TheTariff Rider is the rate paid
by customers which funds the Company's natural gas
energy efficiency programs. Avista projects that it can
meet its regulatory obligations with a lower level of
funding. The proposed revenue decrease that will result
from the Company's proposal is approximately $1.7
million, or an overall decrease of approximately 2.6%.
(see over)
On July 31, 2012, Avista filed two rate requests with
the Idaho Public Utilities Commission (Commission),
with a requested effective date of October 1, 2012. The
first rate request is for the approval of Avista's annual
Purchased Gas Cost Adjustment (PGA). The proposed
revenue decrease that will result from the Company's
PGA proposal is approximately $3.6 million, or an
overall decrease of approximately 5.4%. Abundant
supplies of natural gas and continued soft demand for
the commodity have continued to keep wholesale
natural gas prices at lower levels over the past year.
In the Company's PGA filing, Avista is proposing to
decrease the natural gas rates our customers pay to
better reflect current market prices for natural gas as
well as refund to customers over-collected costs.
Because of the unpredictable nature of wholesale
prices, Avista pre-purchases about two-thirds of the
natural gas needed to meet customer demand for the
coming winter. To help provide greater price stability for
customers and to allow for flexibility based on market
conditions, Avista follows a diversified natural gas
purchasing plan which also includes underground
storage and daily purchases.
The second rate request filed with the Commission is to
reduce the natural gas Energy EfficiencyTariff Rider
Adjustment (Tariff Rider). TheTariff Rider is the rate paid
by customers which funds the Company's natural gas
energy efficiency programs. Avista projects that it can
meet its regulatory obligations with a lower level of
funding. The proposed revenue decrease that will result
from the Company's proposal is approximately $1.7
million, or an overall decrease of approximately 2.6%.
(see over)
On July 31, 2012, Avista filed two rate requests with
the Idaho Public Utilities Commission (Commission),
with a requested effective date of October 1, 2012. The
first rate request is for the approval of Avista's annual
Purchased Gas Cost Adjustment (PGA). The proposed
revenue decrease that will result from the Company's
PGA proposal is approximately $3.6 million, or an
overall decrease of approximately 5.4%. Abundant
supplies of natural gas and continued soft demand for
the commodity have continued to keep wholesale
natural gas prices at lower levels over the past year.
In the Company's PGA filing, Avista is proposing to
decrease the natural gas rates our customers pay to
better reflect current market prices for natural gas as
well as refund to customers over-collected costs.
Because of the unpredictable nature of wholesale
prices, Avista pre-purchases about two-thirds of the
natural gas needed to meet customer demand for the
coming winter. To help provide greater price stability for
customers and to allow for flexibility based on market
conditions, Avista follows a diversified natural gas
purchasing plan which also includes underground
storage and daily purchases.
The second rate request filed with the Commission is to
reduce the natural gas Energy EfficiencyTariff Rider
Adjustment (Tariff Rider). TheTariff Rider is the rate paid
by customers which funds the Company's natural gas
energy efficiency programs. Avista projects that it can
meet its regulatory obligations with a lower level of
funding. The proposed revenue decrease that will result
from the Company's proposal is approximately $1.7
million, or an overall decrease of approximately 2.6%.
(see over)
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If approved by the Commission, the resulting revenue If approved by the Commission, the resulting revenue If approved by the Commission, the resulting revenue
decrease effective October 1, 2012 from the two rate decrease effective October 1, 2012 from the two rate decrease effective October 1, 2012 from the two rate
changes is a overall decrease of $5.3 million, or 8.0%. changes is a overall decrease of $5.3 million, or 8.0%. changes is a overall decrease of $5.3 million, or 8.0%.
The table below summarizes the two rate changes: The table below summarizes the two rate changes: The table below summarizes the two rate changes:
PGA ($3.6 million) (5.4%)
Tariff Rider ($1.7 million) (2.6%)
Total ($5.3 million) (8.0%)
The percentage decreases resulting from the two rate
changes will vary by rate schedule as shown below:
General Service -Schedule 101 (79%)
Large General Service -Schedule 111 (8.5%)
Interruptible Service - Schedule 131 (16.8%)
Residential customers using an average of 60 therms
per month would see their monthly bills decrease from
$55.78 to $51.36, a decrease of $4.42 per month, or 7.9%
as a result of the two rate adjustments.
The Company's application is a proposal, subject to
public review and a Commission decision. A copy of
the application is available for public review at the
offices of both the Commission and the Company as
well as their respective websites. If you would like to
submit comments on this proposed decrease, or review
the application, you can do so by going to the
Commission website at www.puc.idaho.gov .
Avista offers a number of programs and services to
help customers manage their energy use and costs.
Visit us at www.avistautilities.com for information on
these programs which include Comfort Level Billing, bill
payment options, automated payment service,
assistance programs, conservation tips and energy
efficiency rebates and incentives.
PGA ($3.6 million) (5.4%)
Tariff Rider ($1.7 million) (2.6%)
Total ($5.3 million) (8.0%)
The percentage decreases resulting from the two rate
changes will vary by rate schedule as shown below:
General Service -Schedule 101 (79%)
Large General Service -Schedule 111 (8.5%)
Interruptible Service - Schedule 131 (16.8%)
Residential customers using an average of 60 therms
per month would see their monthly bills decrease from
$55.78 to $51.36, a decrease of $4.42 per month, or 7.9%
as a result of the two rate adjustments.
The Company's application is a proposal, subject to
public review and a Commission decision. A copy of
the application is available for public review at the
offices of both the Commission and the Company as
well as their respective websites. If you would like to
submit comments on this proposed decrease, or review
the application, you can do so by going to the
Commission website at www.puc.idaho.gov.
Avista offers a number of programs and services to
help customers manage their energy use and costs.
Visit us at www.avistautilities.com for information on
these programs which include Comfort Level Billing, bill
payment options, automated payment service,
assistance programs, conservation tips and energy
efficiency rebates and incentives.
PGA ($3.6 million) (5.4%)
Tariff Rider ($1.7 million) (2.6%)
Total ($5.3 million) (8.0%)
The percentage decreases resulting from the two rate
changes will vary by rate schedule as shown below:
General Service -Schedule 101 (7.9%)
Large General Service -Schedule 111 (8.5%)
Interruptible Service - Schedule 131 (16.8%)
Residential customers using an average of 60 therms
per month would see their monthly bills decrease from
$55.78 to $51.36, a decrease of $4.42 per month, or 7.9%
as a result of the two rate adjustments.
The Company's application is a proposal, subject to
public review and a Commission decision. A copy of
the application is available for public review at the
offices of both the Commission and the Company as
well as their respective websites. If you would like to
submit comments on this proposed decrease, or review
the application, you can do so by going to the
Commission website at www.puc.idaho.gov .
Avista offers a number of programs and services to
help customers manage their energy use and costs.
Visit us at www.avistautilities.com for information on
these programs which include Comfort Level Billing, bill
payment options, automated payment service,
assistance programs, conservation tips and energy
efficiency rebates and incentives.