20150601Customer Notice and Press Release.pdf

EXHIBIT B
Customer Notice
&
Press Release
contact: DRAFT
Media: Debbie Simock [phone], [e-mail]
lnvestors: Jason Lang [phone], [e-mail]
Avista 2417 MediaAccess [phone]
Avista requests multi-year electric and natural gas rate increase in
ldaho
Company seeks recovery of cosfs for capital investments in infrastructure and
technology
SPOKANE, Wash., June X, 2015, {:05 p.m. PDT: lncreased capital investments in
infrastructure and technology are the major drivers in Avista's (NYSE: AVA) two-year electric
and natural gas rate plan request filed today with the ldaho Public Utilities Commission (IPUC).
Avista's request, if approved, is designed to increase annual electric revenues effective Jan.1,
2016, by an overall 5.2 percent or $13.2 million, and annual naturalgas revenues by an overall
5.8 percent or $3.2 million.
ln addition, Avista's request, if approved, is designed to increase annualelectric revenues
effective Jan. 1 , 20'17 , by an overall 5.1 percent, or $13.7 million, and annual natural gas
revenues by an overall 2.5 percent, or $1.7 million. The electric and natura! gas requests for
2016 and 2017 are based on a proposed rate of return (ROR) on rate base of 7.62 percent with
a common equity ratio of 50 percent and a 9.9 percent return on equity (ROE).
"Our general rate requests continue to be driven by the ongoing need to maintain, replace and
invest in the facilities and equipment we use every day to serve our customers," Avista
Chairman, President and Chief Executive Officer Scott L. Morris said. 'We are making
investments to modernize our systems so we can meet our customers' needs and continue to
provide the safe, reliable energy our customers expect, now and well into the future. This
includes ensuring our hydroelectric projects can continue to provide the low-cost energy they
have for more than 100 years, systematically replacing aging infrastructure and investing in
technology that will enhance reliability."
'We understand that rate increases can be challenging for our customers. While the costs of
doing business continue to rise, we maintain a firm focus on managing our costs so that our
customers can continue to have energy prices that are among the lowest in the country," Morris
said.
Avista serves more than 127,000 electric and nearly 78,100 naturalgas customers in ldaho.
The last general rate request filing in ldaho was Oct. 10,2012. The IPUC has up to nine months
to review Avista's request.
Residential Gustomer Electric Bill
!f Avista's 2016 electric request is approved, a residential customer using an average of 929
kilowatt hours per month could expect to see a bill increase of $5.92 per month, or 6.9 percent,
for a revised monthly bill of $91.16. The bill change includes a proposed increase of $3.25 per
month in the basic charge, from $5.25 to $8.50 per month.
For 2017, the proposed increase is $6.10 per month, or a 6.7 percent increase, resulting in an
overall monthly bill of $97.26.
As a part of its application, Avista has also proposed to use $5.6 million related to its 2014 ldaho
electric earnings sharing to extend a $2.8 million rebate customers are currently receiving in
2015. lf approved, that rebate would be extended for a two-year period, through 2017.
The requested electric increase by service schedule for the two-year rate plan is:
Rate Schedule Descrintion
2016 Billing
Incrcase
2017 Billing
Increase
Residential Service Schedule I 6.9% 6.7%
General Service Scheduhs ll &12 35% 3.5%
Larse General Service Schedules 2l &22 4.5% 4.5%
Exfa Larse General Service Schedule 25 45% 4.s%
E>tua Larse General Service 25P Schedule 25P 2.6% 2.7Yo
Ptmline Servbe Schedules 3l &32 5.2% 5.lo/o
Street & Area Lishts Schedules 4l - 49 6.1% 5.9%
fotal 5.2Yo 5.lo/o
Residential Customer Natural Gas Bill
A residential natural gas customer using an average of 61 therms per month could expect to
see a $3.90, or 6.6 percent, bill increase for a revised monthly bill of $63.12. The bill change
includes a proposed increase of $3.75 per month in the basic charge, from $4.25 to $8.00 per
month.
For 2017, the proposed increase is $1.79 per month, or a 2.8 percent increase, resulting in an
overall monthly bill of $64.91.
As a part of its application, Avista has proposed to use $0.2 million related to its 2014 natural
gas earnings sharing to replace a portion of a $1.2 million rebate customers are currently
receiving in 2015. lf approved, customers would receive that rebate in 2016.
The requested natural gas increase by service schedule for the two-year rate plan is:
Rate Schedule Description
2016 Billing
Increase
2017 Billing
Incrcase
General Service Schedule 101 6.s% 2.9%
Laree General Service Schedules lll &ll2 3.5% l.3yo
lntemrctible Service Scheduhs l3l &132 5.5% 2.0%
Transportation Service Schedule 146*4.5% 5.4%
Total 5.80h 2.50h
* excludes natural gas costs
Gapital lnvestments
Capital investments included in Avista's request include upgrades and maintenance of the
company's generation facilities, transmission and distribution equipment, natural gas pipe, and
information technology. Costs to replace facilities and parts of our system are many times more
expensive today than when originally installed. This is the primary reason for the need to
increase rates.
Among the major capital investments in todav's filinq are:. the ongoing and multi-year redevelopment of the 1O5-year-old Little Falls Powerhouse
on the Spokane River to increase generation reliability and the continuing rehabilitation
of the 107-year-old Nine Mile Powerhouse on the Spokane River, including the
replacement of original generators, turbines and other equipment which will increase the
generation of clean, renewable power;. information technology upgrades, including the replacement of Avista's 2O-year-old
Iegacy customer information system which supports traditional utility business functions,
such as meter reading, customer billing, payment processing, credit, customer service
orders and material management; and. the ongoing project to systematically replace portions of natural gas distribution pipe,
including hundreds of miles of natural gas distribution lines in Avista's service area that
were installed priorto 1987.
Fixed Gost Adjustment
The request also includes a proposed electric and natural gas Fixed Cost Adjustment (FCA)
mechanism. The FCA is a mechanism designed to break the link between a utility's revenues
and a consumer's energy usage. The company's actual revenue, based on kilowatt-hour and
therm sales, will vary, up or down, from the level set by the IPUC. This could be due to changes
in conseruation, weather or the economy.
Under the proposed FCA mechanism, the company's electric and natural gas revenues would
be adjusted each month to reflect revenues based on the number of customers, rather than
kilowatt-hour and therm sales. The difference between revenues based on sales and revenues
based on the number of customers will result in either surcharges or rebates to customers in the
following year.
Customer Assistance
To assist customers in managing their energy bills, Avista offers services such as comfort level
billing, payment arrangements and Customer Assistance Referral and Evaluation Services
(CARES). CARES provides assistance to special-needs customers through referrals to area
agencies and churches for help with housing, utilities, medical assistance and other needs. To
learn more, visit www.avistautilities.com. There, customers can also find information on energy
efficiency rebates and incentives, as well as online tools for managing energy use.
More lnformation
Avista's application is a proposal, subject to public review and a decision by the commission. A
copy of the application is available for public review at the offices of both the commission and
Avista, and on the commission's homepage (www.puc.idaho.qov). Customers may also
subscribe to the commission's RSS feed (httBlAaaaailpuc.idaho.qov/rssfeeds/rss.htm) to receive
periodic updates via e-mail about the case.
Additional information about Avista's rate request, including a video, is available at
www. avistautilities. com/id rates.
About Avista Corp.
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 369,000 customers and natural gas to 329,000 customers. lts
service territory covers 30,000 square miles in eastern Washington, northern ldaho and parts of
southern and eastern Oregon, with a population of 1.6 million. Alaska Energy and Resources
Company is an Avista subsidiary that provides retail electric service in the city and borough of
Juneau, Alaska, through its subsidiary Alaska Electric Liqht and Power Companv. Avista 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 , 2014 and the Quarterly Report on Form 10-Q for the
quarter ended March 31,2015.
SOURCE: Avista Corporation
-{sXX-
To unsubscribe from Avista's news release distribution, send a reply message to
sh irley.wolf@avistacorp. com
AEws
Important Notice for ldaho Electric Customers
On June 1,20'15, Avista filed an application with the ldaho Public Utilities Commission (Commission) to increase ldaho
electric rates. The Company proposed a two-year rate-plan which would increase electric rates by $13.2 million or
5.2% effective January 1, 2016, and by $13.7 million or 5.1o/o effective January 1,2017 . The proposed rate-plan reflects
primarily the capital investments to upgrade aging infrastructure to continue to provide our customers with safe and
reliable electric service. More information on the requested rate increase is available at wwwavistautilities.com/rates.
The proposed increase above current billing rates by service schedule is as follows:
2016 Billing !ncrease 20{7 Billing lncrease
Residential Service Schedule 1 6.9o/o 6.7o/o
GeneralService Schedules 11 & 12 3.5o/o 3.5o/o
Large GeneralService Schedules 21 &22 4.5o/o 4.5o/o
Extra Larqe General Service Schedule 25 4.5%4.5o/o
Extra Large General Service Schedule 25P 2.6%2.7o/o
Pumping Service Schedules 31 &32 5.20/o 5.1o/o
Street &Area Liqhts Schedules 41 - 49 6-1o/o 5.9o/o
As a part of the Company's application, Avista has proposed to use funds related to its 2014 electric earnings sharing
to extend a $2.8 million rebate customers are currently receiving in 2015. lf approved, that rebate would be extended
through 2017.
For 2016, the proposed increase for residential customers using an average of 929 kilowatt-hours per month would see
their monthly bills increase from $85.24 to $91.16, an increase of $5.92 per month or 6.9%. Avista is proposing that the
basic monthly charge for residential customers currently set at $5.25 increase to $8.50 per month. For 2017 the proposed
increase for residential customers using an average of 929 kilowatt-hours per month would see their monthly bills increase
from $91.16 to $97.26, an increase of $6.10 per month or 6.70/o.
The request also includes a proposed Fixed CostAdjustment (FCA) mechanism. The FCA is a mechanism designed to
break the link between a utility's revenues and a consumer's energy usage. The company's actual revenue, based on
kilowaft-hour and therm sales, willvary, up or down, from the level set by the Commission. This could be due to changes
in conservation, weather or the economy. Under the proposed FCA mechanism, the company's electric and natural gas
revenues would be adjusted each month to reflect revenues based on the number of customers, rather than kilowatt-hour
and therm sales. The difference between revenues based on sales and revenues based on the number of customers will
result in either surcharges or rebates to customers in the following year.
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 utility, and on the Commission's homepage
(www.puc.idaho.gov). Customers may also subscribe to the Commission's RSS feed (http:/Arvww.puc.idaho.gov/rssfeeds/
rss.htm) to receive periodic updates via e-mail about the case.
The Commission has up to seven months to review the Company's rate increase requests. The Commission will begin a
comprehensive review of Avista's application and will seek public input.
If you would like to submit comments on the proposed increase, you can do so by going to the Commission website or
mailing comments to:
ldaho Public Utilities Commission
P. O. Box 83720
Boise, lD 83720-0074
Avista offers a number of programs and services to help customers manage their energy use and costs. Msit 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.
AVA152i
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lmportant Notice for ldaho Natural Gas Customers
On June 1,2015,Avista filed an application with the ldaho Public Utilities Commission (Commission) to increase ldaho
natural gas rates. The Company proposed a two-year rate-plan which would increase natural gas rates by $3.2 million or
5.8% effective January 1,2016, and by $1.7 million or2.5o/o effective January 1,2017. The proposed rate-plan reflects
primarily the capital investments, operations and maintenance costs, and continuing emphasis on providing customers
with safe and reliable natural gas service. More information on the requested rate increase is available at www.
avistautilities.com/rates. The proposed increase above current billing rates by service schedule is as follows:
As a part of the Gompany's application, Avista has proposed to use $0.2 million related to its 2014 natural gas earnings
sharing to replace a portion of a $1.2 million rebate customers are currently receiving in 2015. lf approved, customers
would receive that rebate in 2016.
For 2016, the proposed increase for residential customers using an average of 61 therms per month would see their
monthly bills increase from $59.22 to $63.12, an increase of $3.90 per month or 6.6%. Avista is proposing that the basic
monthly charge for residential customers currently set at $4.25 increase to $8.00 per month. For 2017 the proposed
increase for residential customers using an average of 61 therms per month would see their monthly bills increase from
$63.12 to $64.91, an increase of $1.79 per month or 2.8%.
The request also includes a proposed Fixed Cost Adjustment (FCA) mechanism. The FCA is a mechanism designed to
break the link between a utility's revenues and a consumer's energy usage. The company's actual revenue, based on
kilowatt-hour and therm sales, will vary up or down, from the level set by the Commission. This could be due to changes
in conservation, weather or the economy. Under the proposed FCA mechanism, the company's electric and natural gas
revenues would be adjusted each month to reflect revenues based on the number of customers, rather than kilowatt-hour
and therm sales. The difference between revenues based on sales and revenues based on the number of customers will
result in either surcharges or rebates to customers in the following year.
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 utility, and on the Commission's homepage
(www.puc.idaho.gov). Customers may also subscribe to the Commission's RSS feed (http://www.puc.idaho.gov/rssfeeds/
rss.htm) to receive periodic updates via e-mail about the case.
The Commission has up to seven months to review the Company's rate increase requests. The Commission will begin a
comprehensive review of Avista's application and will seek public input.
lf you would like to submit comments on the proposed increase, you can do so by going to the Commission website or
mailing comments to:
ldaho Public Utilities Commission
P. O. Box 83720
Boise, lD 83720-0074
Avista offers a number of programs and services to help customers manage their energy use and costs. Visit 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.
A,Fvts
2016 Billing lncrease 2017 Billing Increase
GeneralService Schedule 101 6.5o/o 2.9o/o
Large GeneralService Schedule 111 &112 3.5o/o 1.3o/o
Interruptible Service Schedules 131 &132 5.5%2.A%
Transportation Service Schedule 146*4.5%5.4o/o
*excludes natural qas costs
AVA152i