Avista Corp. and Three Parties Reach Settlement on Avista's Washington Rate Case
August 15 2005 - 9:30AM
PR Newswire (US)
If Approved, Settlement Would Resolve All Issues in Avista's
Electric and Natural Gas General Rate Cases SPOKANE, Wash., Aug. 15
/PRNewswire-FirstCall/ -- Avista Corp. (NYSE:AVA) and three other
parties participating in Avista's Washington electric and natural
gas general rate cases -- pending before the Washington Utilities
and Transportation Commission (WUTC) -- have reached a settlement
agreement that, if approved, would resolve all issues in these
cases. Avista filed its electric and natural gas rate increase
requests with the WUTC on March 30, 2005. (Logo:
http://www.newscom.com/cgi-bin/prnh/20040128/SFW031LOGO ) In the
settlement agreement filed Aug. 12, 2005, the parties -- including
Avista, the WUTC staff, the Northwest Industrial Gas Users and the
Energy Project -- have requested that the WUTC approve the
settlement to become effective by no later than Dec. 1, 2005. The
parties have proposed that settlement hearings be held by the WUTC
on Oct. 17-20, 2005, at which time evidence will be heard both in
support of and in opposition to the settlement. The Public Counsel
Section of the Washington Attorney General's Office and the
Industrial Customers of Northwest Utilities did not join in the
settlement agreement. "We are pleased to reach this settlement
agreement because, if approved, it would provide a measure of
certainty around future cost recovery, which is important in our
ongoing efforts to restore our financial health. The settlement
also strikes a reasonable balance between the interests of our
company and our customers, including our limited income customers,"
said Scott Morris, president of Avista Utilities. Electric and
Natural Gas Revenues As part of the settlement agreement, Avista's
annual electric revenues would increase by $22.1 million,
representing a $13.7 million reduction from the company's original
request. Avista has also agreed to an annual natural gas revenue
increase of $968,000, a $1.9 million reduction from its original
request. Avista also agreed to not raise natural gas base rates
again prior to July 1, 2007, absent extraordinary circumstances
related to the company's natural gas operations. The overall
increase in base electric rates would be 7.7 percent under the
settlement proposal, down from Avista's original request to
increase base electric rates by 12.5 percent. Natural gas rates
would increase by 0.6 percent with the settlement, down from
Avista's original request to increase base natural gas rates by 1.8
percent. The settlement calls for an overall rate of return of 9.11
percent with a common equity ratio of 40 percent and a 10.4 percent
return on equity. Under an equity building mechanism in the
settlement, Avista agrees that it will increase the utility equity
component to 35 percent by year-end 2007 and to 38 percent by
year-end 2008. Failure by the company to meet those targets could
result in a reduction in base rates. Energy Recovery Mechanism
Adjustment The settlement proposal also calls for modifications to
the existing Energy Recovery Mechanism. The $9 million power cost
"deadband," which has been in place since 2002, will be reduced to
$3 million, effective Dec. 1, 2005. There would be no change in the
90 percent-10 percent power cost sharing mechanism between Avista
customers and shareholders. In addition, the current electric
surcharge of 9.8 percent would be increased to 10.8 percent,
designed to provide an additional $2.7 million annually to allow
Avista to more rapidly recover the existing power cost deferral
balance, which is currently $101 million. Customer Programs Avista
recognizes the impact of price increases on its customers,
especially its limited income customers. As part of the settlement
agreement, Avista would increase funding levels for two existing
programs aimed at assisting limited income customers. Avista would
increase limited income demand side management -- or energy
conservation -- funding by $200,000 to $1.1 million annually.
Avista would also provide an additional $600,000 annually for two
years to the Low Income Rate Assistance Program (LIRAP) in
Washington, raising the company's annual funding level to $3.6
million. The increased LIRAP funding would be evaluated at the end
of the two-year period. Changes would also be adopted to increase
limited-income agencies' administrative flexibility in operating
LIRAP and demand side management programs. Approximately 70 percent
of the company's annual retail electric and natural gas revenues
are derived from Washington where the company serves approximately
220,000 electric customers and 134,000 natural gas customers.
Avista Corp. is an energy company involved in the production,
transmission and distribution of energy as well as other
energy-related businesses. Avista Utilities is a company operating
division that provides service to 330,000 electric and 285,000
natural gas customers in three western states. Avista's
non-regulated subsidiaries include Avista Advantage and Avista
Energy. Avista Corp.'s stock is traded under the ticker symbol
"AVA." For more information about Avista, please visit
http://www.avistacorp.com/ . Avista Corp. and the Avista Corp. logo
are trademarks of Avista Corporation. This news release contains
forward-looking statements, including statements regarding expected
annual electric and natural gas revenues, as well as the potential
outcome of proceedings. Such statements are subject to a variety of
risks, uncertainties and other factors, most of which are beyond
the company's control, and many of which could have a significant
impact on the company's operations, results of operations and
financial condition, and could cause actual results to differ
materially from those anticipated. For a further discussion of
these factors and other important factors, please refer to the
company's Annual Report on Form 10-K for the year ended Dec. 31,
2004 and Quarterly Report on Form 10-Q for the quarter ended June
30, 2005. The forward-looking statements contained in this news
release speak only as of the date hereof. The company undertakes no
obligation to update any forward-looking statement or statements to
reflect events or circumstances that occur after the date on which
such statement is made or to reflect the occurrence of
unanticipated events. New factors emerge from time to time, and it
is not possible for management to predict all of such factors, nor
can it assess the impact of each such factor on the company's
business or the extent to which any such factor, or combination of
factors, may cause actual results to differ materially from those
contained in any forward-looking statement.
http://www.newscom.com/cgi-bin/prnh/20040128/SFW031LOGO
http://photoarchive.ap.org/ DATASOURCE: Avista Corp. CONTACT:
Media: Patrick Lynch, +1-509-495-4246, , Investors: Jason Lang,
+1-509-495-2930, , both of Avista Corp., Avista 24/7 Media Access,
+1-509-495-4174 Web site: http://www.avistacorp.com/
Copyright
Avista (NYSE:AVA)
Historical Stock Chart
From Sep 2024 to Oct 2024
Avista (NYSE:AVA)
Historical Stock Chart
From Oct 2023 to Oct 2024