20130731Exhibit E Customer Notice.pdf

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Case No. AVU-G-13-0 I
EXHIBIT 66E"
Copy of Press Release and Customer Notice
July 30,2013
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DRAFT
Contact:
Media: Jessie Wuerst [phone], i
lnvestors: Jason Lang [phone], [e-mail]
Avista 24t7 Media Access [phone]
Avista Makes Annual Price Adjustment Requests in ldaho
Pass-Through Tariffs Could lncrease Electric and Natural Gas Prices
SPOKANE, Wash. - July 31, 2013, 1:30 p.m. PDT: Avista (NYSE: AVA) customers would see an
increase in their electric and natural gas rates on October 1 if the ldaho Public Utilities Commission
(IPUC or Commission) approves several annual rate adjustment requests filed today by the company.
The requests include three electric rate adjustments and one natural gas rate adjustment:
o Avista's annua! Power Cost Adjustment (PCA)o Electric Energy Efficiency Tariff Rider Adjustment (Tariff Rider)o Bonneville Power Administration's (BPA) Residential Exchange Programo Avista's annual Purchased Gas Cost Adjustment (PGA)
There is no impact on company earnings resulting from these adjustments.
Electric Adjustments
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. Power supply costs were lower in2012 due to factors such as lower naturalgas and
wholesale power prices and favorable hydroelectric conditions. Lower natural gas prices reduced the
cost to generate power with natural gas-fired resources. The proposed PCA rebate is designed to
pass through reduced power supply costs to customers that occuned during the twelve-month period
that ended June 30, 2013. The proposed revenue decrease that will result from the company's
request is approximately $1.9 million or an overal! decrease of approximately 0.8 percent.
The second electric rate request filed with the IPUC is to increase the surcharge that funds the
company's popular electric energy efficiency program in the state. The request was made to adjust
the amount of funding required for Avista to operate its electric energy efficiency program in ldaho,
including the rebates and incentives paid to participating customers for installing energy-saving
measures. The proposed revenue increase that will result from the company's request is
approximately $2.0 million or an overall increase of approximately 1.2 percent.
The final electric rate adjustment is related to the BPA Residential Exchange Program. The
Residential Exchange Program provides a share of the beneflts of the federal Columbia River power
system to the residential and small farm customers of the investor-owned utilities in the Pacific
Northwest. Avista applies the benefits it receives, which usually fluctuate annually, to customers as a
credit on their monthly electric bill. The benefit that the Company will be receiving from BPA starting
in October 2013 will be lower than the current level of benefits cunently being passed through
applicable customers. As a result of the reduced level of benefits, the proposed revenue increase that
will result from the company's request is approximately $1.1 million, or an overall increase of
approximately 0.5 percent.
Taking into account the three proposed electric rate changes, as well as the impact of the
implementation of the October 1 rate change resulting from the company's last general rate case
approved by the IPUC in March 2013, the resulting revenue increase would be approximately 2.9
percent, or $6.5 million, effective October 1,2013, if the requests are approved by the Commission.
Residential electric customers in ldaho using an average of 930 kilowatt-hours per month would see
their monthly bills increase from $78.69 to $81.94, an increase of $3.25 per month, or 4.2 percent.
The electric increases by rate schedule, including the effects of the general rate case, are:
Residential Service - Schedule 1
General Service - Schedules 11 & 12
Large General Service - Schedules2l &22
Extra Large General Service - Schedule 25
Clearwater Paper - Schedule 25P
Pumping Service - Schedules 31 & 32
Street & Area Lights - Schedules 41-48
4.1o/o
2.5o/o
2.40/o
0.90/o
O.1o/o
3.4o/o
3.5%
Natural Gas Adjustments
The combined costs of purchasing natural gas on the wholesale market and transporting it to Avista's
system make up about 55 percent of an Avista natural gas customer's bill. These costs fluctuate up
and down based on market prices, and 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 increase that would result from the company's proposal is approximately
$4.9 million or an overall 7.5 percent increase.
ln2012, the natural gas market, driven by lower demand, higher production rates and record high
storage levels, drove prices to lows not seen in the last decade. However, for most of 2013, prices
have moved on an upward trend from these lows. The late, colder than normal winter increased
national demand, absorbing excess supply and drawing storage balances down below their five-year
average. This return to a more balanced market added to the uplift on wholesale natural gas prices
in 2013.
Taking into account the proposed PGA, as well as the impact of the implementation of the October 1 ,
2013, rate change resulting from the company's last general rate case approved by the IPUC in
March 2013, the resulting revenue increase would be approximately 7.8 percent, or $5.1 million,
effective October 1,2013, if the PGA request is approved by the Commission. Residential natural gas
customers using an average of 60 therms a month would see a $4.1 1 , or 7 .4 percent, increase in their
monthly rate for a revised monthly bill of $59.48. The requested natural gas increase by customer
segment is as follows:
General Service - Firm - Schedule 101 - Residential & Small Commercial 7.4o/o
Large General Service - Firm - Schedules - Commercial 111 & 112 9.2o/o
High Annual Load Factor Large - lnterruptible Service Schedules 131 & 132 6.90/o
Rate Application Procedure
Avista's rate applications are proposals, subject to public review and a decision by the ldaho Public
Utilities Commission. Copies of the applications are available for public review at the offices of both
the IPUC and Avista, as well as on the IPUC's homepage at www.puc.idaho.qov. The IPUC will begin
a review of Avista's applications and will seek public input on the company's request.
ln addition, Avista expects to file its annual Purchase Gas Cost Adjustment this month with the Public
Utility Commission of Oregon and in September with the Washington Utilities and Transportation
Commission.
Energy Efficiency and Energy Assistance Programs
To help customers proactively manage their energy use, Avista offers a number of energy efficiency
programs. lnformation on available energy efficiency rebates and incentives from Avista for
residential, commercial and low-income customers is available at www.avistautilities.com, along with
other energy-saving information.
lnformation on energy assistance programs and payment options offered by Avista to help qualifying
customers is available at www.avistautilities.com.
About Avista
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 362,000 customers and natural gas to 323,000 customers. Our service tenitory
covers 30,000 square miles in eastern Washington, northern ldaho and parts of southern and eastern
Oregon, with a population of 1.5 million. Avista's primary, non-utility subsidiary is Ecova, an energy
and sustainability management company with over 700 expense management customers,
representing more than 600,000 sites. Our stock is traded under the ticker symbol 'AVA." For more
information about Avista, please visit avistacorp.com.
This news release contains fonrard-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 , 2012
and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2013.
SOURCE: Avista Corporation
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Important Notice for
Idaho Natural Gas Customers
August - September 2013
On July 31,2013, Avista filed a Purchased Gas Cost Adjustment (PGA) with the Idaho Public
Utilities Commission (Commission) to be effective October 1,2013. The request is for an overall
increase of $4.9 million or 7.5o/o. The annual PGA filing passes through changes in the cost of
natural gas the Company acquires to serve customers, and it does not increase Company
earnings.
The proposed increase is caused both by an increase in the wholesale cost of natural gas as well
as a reduction in the present refund rate used to pass through natural gas cost savings from prior
years. The wholesale price for natural gas fluctuates as a result of many factors, similar to the
price for crude oil. Because of the unpredictable nature of wholesale prices, Avista pre-purchases
about two-thirds of the 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.
Taking into account the proposed PGA, as well as the impact of the implementation of the
October 1,2013 rate change resulting from the company's last general rate case approved by the
Commission in March 2013, the resulting revenue increase is approximately 7.8 percent, or $5.1
million, if the PGA request is approved by the Commission. Residential natural gas customers
using an average of 60 therms a month would see a $4.11, or 7.4 percent, increase in their
monthly rate for a revised monthly bill of $59.48.
The requested natural gas increase by customer segment is as follows:
General Service - Firm - Schedule 101 - Residential & small commercial 7.4%
Large General Service - Firm - Schedules lll & ll2 9.2%
High Annual Load Factor Large - Intemrptible Service Schedules l3l & 132 69%
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 increase, 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.
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