Avista Files for Lower Gas Rates, Higher Electric Rates in Washington State

Spokane-based Avista Utilities filed (Dockets UG-151758 and UE-151760) on August 27 for an annual overall 15 percent decrease in natural gas rates and a 1.4 percent increase in electric rates, respectively, in Washington State, if approved by the Washington Utilities and Transportation Commission (UTC). A Nov. 1, 2015 effective date was requested for the two adjustments, which have no impact on company earnings.

 Natural Gas Adjustment
Avista serves approximately 150,000 natural gas customers in the Evergreen State. If the request is approved, Avista residential customers using an average 68 therms (about 2 MWh) per month can expect their bills to dwindle by $10.17, or 14.9 percent, for a revised monthly bill of $57.99 beginning November 1. The filing would result in an overall decrease of 15 percent or $26.1 million.

The primary drivers for the company’s requested decrease include a reduction in natural gas commodity costs, due to a warmer than normal winter; an abundance of natural gas held in storage, and continued high production levels of natural gas.

Purchased Gas Cost Adjustments (PGAs) are filed annually to balance the actual cost of wholesale natural gas purchased by Avista to serve customers with the amount included in rates. This comprises the natural gas commodity cost, as well as the cost to transport natural gas on interstate pipelines to Avista’s local distribution system.

About half of an Avista natural gas customer’s bill represents the combined cost of purchasing natural gas on the wholesale market and transporting it to Avista’s system. These costs fluctuate up and down, based on market prices. The costs are not marked up by Avista.

The remaining 50 percent of the bill covers the cost of delivering the natural gas — the equipment and people needed to provide safe and reliable service.

Electric Adjustment
The electric adjustment is related to the Bonneville Power Administration (BPA) Residential Exchange Program. The Residential Exchange Program provides a share of the benefits of the federal Columbia River power system to the residential and small farm customers of the investor-owned utilities in the Pacific Northwest, including Avista. Avista applies the benefits it receives, which typically fluctuate from year to year, to customers as a credit in their monthly electric rates.

Starting in October, the benefit Avista will receive from BPA will be $6.9 million lower than the current level of benefits currently being passed through to qualifying customers. If approved, residential and small farm customers using an average of 966 KWh per month could see their monthly bill increase from $80.70 to $83.39 – a step-up of $2.69 per month or 3.3 percent, effective November. 1.

Avista serves approximately 241,000 electric customers in Washington State.

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