Idaho Utilities Commission Approves Rate Hikes for Intermountain Gas

By Hagadone, Zach

Hundreds-of-thousands of Idahoans will see their gas and electricity bills increase this fall after the Idaho Public Utilities Commission approved a slate of rate hikes for Intermountain Gas Co. and Avista Utilities Oct. 1.

Intermountain Gas, which serves about 300,000 customers in southern Idaho, received a Purchased Gas Cost Adjustment (PGA) increase of between 15 and 18 percent. The one-year increase will raise bills by $7.90 per month for the average residential customer using gas just for space heating (a total of about $61); $12.30 for residential gas space and water heating (about $80.36 per month); and $55.30 for commercial customers (about $335.82 per month).

Spokane, Wash.-based Avista Utilities, which serves nearly 121,000 electrical customers and a little over 72,000 gas customers in northern Idaho, received a PGA increase of 9.3 percent to gas rates, a Power Cost Adjustment (PCA) increase of 18.1 percent to electric rates and a permanent increase to base rates that raises electric bills by 11 percent and gas bills by 4.7 percent.

Taken together, that means Avista’s average residential gas customer will pay about $82.12 per month, while its electrical customers will pay about $73.21 per month. Rates vary widely based on usage, but Avista spokeswoman Debbie Simock said an average commercial gas customer pays $1,960 per month for natural gas and commercial electric customers pay an average of $2,795 per month.

Simock added that Avista offers a wide range of rebates and incentives to keep costs down, but “the best way to protect against rising energy costs is to use less energy.”

The increase to Avista’s base rates is the first since 2004, and Intermountain Gas customers have received credits on their bills for the past two PGAs, which are adjusted either upward or downward each Oct. 1 to reflect fluctuating wholesale natural gas prices.

Intermountain’s PGA will increase company revenues by $54.3 million, while Avista’s rate adjustments will increase revenues by $27.1 million. None of the revenues collected by the PGA or PCA can go toward either company’s bottom line; instead they are deposited in a deferred account, audited by the Idaho Public Utilities Commission and used to meet costs related to gas supply.

Both companies have pointed to higher-than-usual gas prices as reasons for the rate boosts, and the utilities commission noted that they would have a negative impact on consumers going into the winter amid a generally sour economy.

“This commission is not oblivious to the consequences of its rate orders,” the commission said. “The volatility in the energy markets, however, shows no sign of abating.”

To lessen the hardship, the commission adopted a proposal to increase funding for low-income weatherization from $350,000 to $465,000 and authorized $25,000 in funding for low-income outreach and conservation education.

It also ordered Avista and other utilities to participate in upcoming energy affordability workshops. As part of the process Avista has agreed to create a low-income rate assistance program for its Idaho customers.

“In this time it’s just important to make wise energy decisions,” Simock said. “And here’s a program that we have available to low- income customers to help them do that.”

Avista will use $3 million of the $3.9 million it raises from the PGA to purchase the Jackson Prairie Natural Gas Storage Facility and the installation of automated meters. The additional storage is designed to allow Avista to purchase gas supply when costs are down and store it for use during heavy demand months when costs are higher. This should result in lower PGAs in future years, the commission said.

Credit: Zach Hagadone

(Copyright 2008 Dolan Media Newswires)

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