Avista Files for Purchased Gas Cost Adjustment
Posted on: Tuesday, 19 August 2008, 09:01 CDT
Power plant operator Avista has filed for a purchased gas cost adjustment with the Idaho Public Utilities Commission requesting an overall increase in natural gas rates of 14.2% or $11.6 million in annual revenues. The annual filing passes through changes in the cost of natural gas the company acquires to serve customers, and it does not increase company profits.
If the filing is approved by the Idaho Public Utilities Commission (IPUC), a residential customer using an average of 65 therms per month could expect to see a $10.44 increase for a revised total monthly bill of $85.58 effective October 1, 2008. The actual increase will vary based on customer usage.
About 75% of an average residential customer's monthly bill is the cost of natural gas and pipeline transportation, with the remaining 25% made up of Avista's fixed costs to provide natural gas service over its distribution system.
Avista said that it follows a structured natural gas purchasing plan that allows for flexibility based on market prices and conditions. Currently, about 67% of estimated customer demand for 2009 is either pre-purchased or placed in storage. In 2008, Avista has increased its underground Jackson Prairie storage capacity from 11% to 21% of expected annual demand requirements. Avista serves approximately 72,000 gas customers in Idaho.
Kevin Christie, director of natural gas supply for Avista, said: "Many factors have contributed to the volatility of natural gas prices, making this an especially challenging year for Avista as we purchase the commodity to serve our customers during the 2008-2009 heating season. This spring and summer natural gas prices soared to levels not seen since hurricanes Rita and Katrina. Although natural gas prices decreased about 30% in August 2008, prices remain above levels at this time a year ago."
Source: Datamonitor
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