Avista Customers in Idaho Face Two Potential Autumn Rate Increases

By Anonymous

Idaho Public Utilities commissioners are considering a request from Avista Utilities to raise its one-year gas cost surcharge about 14 percent, the second upward adjustment to rates it has requested this summer.

The commission is accepting written comments until Sept. 23, and if approved, the increase would be effective Oct. 1. The annual Purchased Gas Cost Adjustment (PGA) – which covers gas supply costs not included in base rates – would increase the average residential Avista gas customer’s monthly bill from $75.14 to $85.58.

Small commercial gas customers spend an average of $1,700 per month, though rates vary based on usage. The Spokane, Wash.-based utility serves about 75,000 customers in northern Idaho. Avista’s PGA is adjusted every Oct. 1, and not always up: When the utility collects more than it needs for anticipated supply expenses, customers get a credit, as in 2006 and 2007 when rates were adjusted downward 2 percent and 4.6 percent, respectively.

This year, however, the wholesale gas market soared to levels not seen since hurricanes Rita and Katrina, the commission said, resulting in the utility collecting about $11.6 million less from customers than it owed suppliers. Intermountain Gas, which serves about 300,000 customers in southern Idaho is also asking for a PGA surcharge increase of about 18 percent.

According to Avista, three factors have aligned over the past year to jack up prices: An unusually long, cold spring depleted nationwide storage reserves; gas imports from Canada to the U.S. are in decline; and demand from international markets has drawn liquefied natural gas away from the U.S., reducing supply and putting pressure on prices.

In July Avista officials said the price the utility pays for gas rose about 73 percent, from $7.39 per dekatherm (10 therms, or about 290 kilowatt hours) to $12.81. The utility also said it invested heavily in upgrades to the Noxon Rapids and Cabinet Gorge hydroelectric projects, improvements to the Colstrip thermal project, $130 million in transmission upgrades and upgrades to the Jackson Prairie Natural Gas Storage Facility.

Those factors led Avista to ask the commission for a separate, permanent, increase to base rates that could total 11.98 percent for electricity and 4.7 percent for natural gas. That increase, which is still being considered by the commission, could also take effect Oct. 1. The commission is taking comment on the request until Sept. 5.

“For Avista customers, this is one of those years when there is a double whammy of both a permanent rate increase request on top of the annual Purchased Gas Cost Adjustment request,” said commission President Mack Redford. “Idaho, unfortunately, is not immune from the rapid increases we witnessed nationwide over the last year in the wholesale gas markets.”

None of the money collected from the surcharge can go to company profits, only toward paying off gas supply expenses.

The Idaho Public Utilities Commission has decided to handle the public input portion of the PGA request through written comments only, rather than public hearings, though comments may request a hearing. Increasing expenses for all utilities are expected to continue, and the commission says it continues to encourage customers to practice energy efficiency at home and through programs and plans made available by community agencies, utilities and the commission.

Credit: IBR Staff

(Copyright 2008 Dolan Media Newswires)

(c) 2008 Idaho Business Review, The. Provided by ProQuest LLC. All rights Reserved.