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Avista Lauds ‘Fair’ Settlement in Idaho Rate Case

October 25, 2016 By Cheryl Kaften

Avista ‘s 128,000 electric customers in Idaho can expect to pay higher retail prices as of next January 1 – but not as astronomically high as originally requested by the investor-owned utility.

All of the other parties in the company’s electric rate case (Case No.AVU-E-16-03), filed on May 26, have reached a settlement agreement that, if approved by the Idaho Public Utilities Commission (IPUC), would increase annual electric revenues by $6.3 million, or 2.5 percent.

Avista originally had proposed an increase in electric billed revenues of $15.4 million or 6.3 percent, effective January 1, 2017.

The settlement revenue increase is based on a 9.5 percent return on equity (ROE) with a common equity ratio of 50 percent.

If the settlement is approved, a residential customer using an average of 918 kilowatt hours per month could expect to see a bill increase of $2.64 per month, or 3.1 percent, for a revised monthly bill of $87.15. The total revised average monthly bill amount includes the effects of an increase in the basic charge of $0.50, from $5.25 to $5.75 per month.

In addition to the agreed-upon increase in electric revenues to recover costs primarily driven by Avista’s increased capital investments in infrastructure to serve customers, the settlement includes the continued recovery of approximately $4.1 million in costs related to the 105-megawatt (MW) Palouse Wind Project through the Power Cost Adjustment (PCA) mechanism rather than through base rates. 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

 Among the major capital investments cited in the filing are:

  • The ongoing and multi-year redevelopment of the 106-year-old Little Falls Powerhouse on the Spokane River to increase generation reliability;
  • The continuing rehabilitation of the 108-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; and
  • The refurbishment of Post Falls South Channel Dam, built in 1906, with six new spill gates, frames and hoists along with a new spillway control system, electrical distribution and concrete facing that enable the structure to continue its role in generating clean, low-cost renewable energy.

“This settlement agreement will provide new electric rates in Idaho that are fair and reasonable for our customers, the company and our shareholders,” said Avista Utilities President Dennis Vermillion, adding, “This outcome provides us the opportunity to continue to earn a fair return in Idaho and supports Avista’s efforts to make key capital investments so we can continue to provide the reliable energy our customers expect.”

The new rates will be effective on January 1, 2017.

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