Avista Reaches Settlement in Idaho Electric and Natural Gas General Rate Requests
August 26 2011 - 6:39PM
Marketwired
Avista (NYSE: AVA) and all other parties involved in the company's
electric and natural gas general rate filings have reached a
settlement agreement that, if approved by the Idaho Public
Utilities Commission (IPUC), would resolve all issues in the cases.
The general rate case settlement is designed to recover $2.8
million in additional annual electric revenue, which is a 1.1
percent increase in electric base rates, and to provide $1.1
million in additional annual natural gas revenue, or a 1.6%
increase. The settlement agreement is supported by all parties.
When combined with Avista's other proposed rate adjustments now
pending before the IPUC, the results would be a net overall
decrease in electric rates of 2.4 percent and a net overall
decrease in natural gas rates of 0.8 percent. New rates would
become effective October 1, 2011. The Commission must still approve
the terms of the settlement.
"We believe the general rate case settlement, when taken as a
whole, represents a fair resolution of the issues and provides a
reasonable outcome for our customers and our shareholders," said
Dennis Vermillion, Avista Corp. senior vice president and president
of Avista Utilities.
Elements of the electric and natural gas
settlement The electric and natural gas general rate case
settlement includes a "stay-out" provision such that Avista will
not propose an additional general rate increase that would be
effective prior to April 1, 2013. This does not preclude the
company from filing annual rate adjustments such as the Power Cost
Adjustment (PCA) and Purchased Gas Adjustment (PGA).
In addition, the settlement agreement includes deferred
accounting treatment related to the operations and maintenance
(O&M) costs associated with Avista's Coyote Springs 2 project
and its share of the Colstrip 3 & 4 coal-fired projects that
will address the year-to-year variability in these costs. Each year
the difference between the actual O&M and the amount built into
base retail rates would be deferred and amortized over the next
three-year period. The amortization amounts would be recovered
through future rate cases, as they occur.
The settlement provides for recovery of 100 percent of the costs
associated with the Palouse Wind project through the PCA mechanism,
subject to a prudence review of the costs, until those costs are
reflected in future base retail rates.
Also included in the settlement is an increase of $10,000 in
annual funding for the Community Action Partnership Association of
Idaho (CAPAI) to $50,000 for outreach and education activities for
low income customers. This funding is in addition to the current
$700,000 for low-income weatherization programs.
"We are pleased that this settlement agreement recognizes the
need to recover costs to serve our customers. Combining our rate
change requests for an October 1 effective date makes it possible
to minimize the impact of multiple rate adjustments for our Idaho
customers, while preserving a reduction in the overall rates our
customers pay for their energy," Vermillion said.
If the Commission approves the settlement and the other proposed
electric rate adjustments to become effective Oct. 1, 2011, a
residential customer using an average 956 kilowatt-hours per month
would see a $1.79 per month decrease, or 2.1 percent, for a revised
monthly bill of $82.02. A residential customer using an average of
62 therms would see a $0.27 per month decrease, or 0.4 percent, for
a revised monthly bill of $60.49.
The proposed rate adjustments now pending
before the IPUC
----------------------------------------------------------------------------
Electric Rate Request Filing Proposed Rate Adjustment
----------------------------------------------------------------------------
General Rate Request Rate Increase $2.8 million or 1.1%
----------------------------------------------------------------------------
Power Cost Adjustment (PCA) Rate Decrease ($15.5 million) or (6.0%)
----------------------------------------------------------------------------
BPA Residential Exchange Rate Decrease ($2.2 million) or (0.9%)
----------------------------------------------------------------------------
Deferred state income tax
credit* Rate Increase $8.7 million or 3.4%
----------------------------------------------------------------------------
Net overall rate/revenue
change Net Rate Decrease ($6.2 million) or (2.4%)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Natural Gas Rate Request Proposed Rate Adjustment
Filing
----------------------------------------------------------------------------
General Rate Request Rate Increase $1.1 million or 1.6%
----------------------------------------------------------------------------
Purchased Gas Adjustment (PGA) Rate Increase $0.8 million or 1.1%
----------------------------------------------------------------------------
Demand-Side Management (DSM) Rate Decrease ($2.9 million) or (4.2%)
----------------------------------------------------------------------------
Deferred state income tax
credit* Rate Increase $0.5 million or 0.7%
----------------------------------------------------------------------------
Net overall rate/revenue
change Net Rate Decrease ($0.5 million) or (0.8%)
----------------------------------------------------------------------------
* The deferred state income tax credit is a previously-approved
temporary rebate to customers, returning $17.5 million of deferred
Idaho state income tax from prior years. The credit offsets base
rate changes in 2011 and 2012 under a settlement agreement approved
by the Commission in September 2010.
The BPA Residential Exchange credit, PCA, PGA and DSM
adjustments are rate adjustments that pass through actual changes
in expenses (or benefits from the BPA Residential Exchange credit)
and have no impact on company earnings.
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 our operating
division that provides electric service to 357,000 customers and
natural gas to 317,000 customers. Our service territory covers
30,000 square miles in eastern Washington, northern Idaho and parts
of southern and eastern Oregon, with a population of 1.5 million.
Avista's primary, non-regulated subsidiary is Advantage IQ. Our
stock is traded under the ticker symbol "AVA." For more information
about Avista, please visit www.avistacorp.com.
This news release contains forward-looking statements regarding
the company's current expectations. Forward-looking statements are
all statements other than historical facts. Such statements speak
only as of the date of the news release and are subject to a
variety of risks and uncertainties, many of which are beyond the
company's control, which could cause actual results to differ
materially from the expectations. These risks and uncertainties
include, in addition to those discussed herein, all of the factors
discussed in the company's Annual Report on Form 10-K for the year
ended Dec. 31, 2010 and the Quarterly Report on Form 10-Q for the
quarter ended June 30, 2011.
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Contact: Media: Jessie Wuerst (509) 495-8578 Email
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