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Hot Potato? Avista Files for Another Electric Rate Increase in Idaho

June 1, 2016 By Cheryl Kaften

Avista’s 128,200 electric customers in Idaho can expect to pay higher bills next year, if the Idaho Public Utilities Commission (IPUC) approves a rate request filed by the utility (Case No. AVU-E-16-03) on May 26.

In this filing, Avista is proposing an increase in electric billed revenues of $15.4 million or 6.3 percent, effective January 1, 2017. With this increase, a residential customer using an average of 918 kilowatt-hours (kWh) per month can expect to pay $6.54 more, or 7.7 percent, for a revised monthly bill of $91.26. The bill change includes a proposed increase of $1.00 per month in the basic charge, from $5.25 to $6.25 per month.

Commercial and industrial customers can expect to see hikes in their rates of between 4.5 percent and 5.6 percent.

This follows a proposal approved last December (Case Nos. AVU-E-15-05 and AVU-G-15-01) for a rate hike of 0.9 percent, which added an extra 75 cents to a typical Idaho residential electric bill of $85.74.

The request is based on a proposed rate of return (ROR) on rate base of 7.78 percent with a common equity ratio of 50 percent and a 9.9 percent return on equity (ROE).

“Serving our customers with safe, reliable energy at a reasonable cost is our priority,” commented Avista CEO Scott L. Morris, adding, “We must continually invest in the facilities and systems we use to serve customers, including maintenance, replacements and upgrades, to meet their energy needs and expectations now and into the future. The costs of doing business and making these infrastructure investments continue to rise, and this is what is driving our general rate requests,”

Capital investments included in Avista’s request include upgrades and maintenance of the company’s generation facilities, transmission and distribution equipment, and 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,” the utility stated.

 Among the major capital investments cited in the latest 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.

The IPUC has up to nine months to review Avista’s request. Gas customers will not be affected.

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