Avista seeks approval to increase rates in Washington, Idaho

Avista in late May said that it has filed two requests with the Washington Utilities and Transportation Commission to recover costs related to power supply, as well as infrastructure, system maintenance, and technology

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Avista on June 9 said that it is requesting approval from the Idaho Public Utilities Commission to increase annual electric billed revenues by $18.6 million, or 7.9 percent, effective Jan. 1, 2018, and $9.9 million, or 4.2 percent, effective Jan. 1, 2019.

That plan would create a stay-out period where Avista would not file a new general rate case for a new rate plan to be effective prior to Jan. 1, 2020, the company said.

For natural gas, the rate request is designed to increase annual billed revenues by $3.5 million, or 5.7 percent, effective Jan. 1, 2018, and $2.1 million, or 3.3 percent, effective Jan. 1, 2019, Avista said.

The electric and natural gas requests for the January 2018-December 2019 rate periods are based on a proposed rate of return on rate base of 7.81 percent, with a common equity ratio of 50 percent, and a 9.9 percent return on equity, the company said.

Avista noted that it is not proposing to update base power supply costs for year two of the rate plan, but rather have any differences flow through the power cost adjustment mechanism.

The company noted that capital investments in infrastructure, system maintenance, as well as technology and increased power supply costs are the main drivers in its request.

Investments include the rehabilitation and maintenance of generating plants and such distribution and transmission infrastructure as wood pole replacements, feeder upgrades, as well as substation and transmission line rebuilds to maintain reliability for customers Avista said.

According to the company’s filing submitted to the IPUC, substation – station rebuilds represent about $17.5 million in 2017; about $7.9 million in 2018; and about $15.8 million in 2019. Examples of substation rebuilds to be completed in the next five years are Kamiah (wood substation), Ford (end of service life), 9th and Central, Priest River, and Colville, Avista said.

Transmission major rebuild – asset condition projects represent about $9.5 million in 2017; about $12 million in 2018; and about $11 million in 2019. Projects include ER 2550 – Burke-Thompson A&B 115-kV Transmission Line rebuild; ER 2604 – Lind-Warden 115-kV Transmission Line rebuild; ER 2577 – Benewah-Moscow 230-kV Transmission Line structure replacement; ER 2597 – Cabinet-Noxon 230-kV Transmission Line rebuild; and ER 2596 – Lolo-Oxbow 230-kV Transmission Line rebuild.

Mandatory and compliance investments include the Spokane Valley Transmission Reinforcement project, which represents $374,000 in 2017, and about $7.8 million in 2018. Portions of that project already completed include construction of the Opportunity substation and Irvin-Millwood 115-kV Transmission Line, Avista added, noting that currently planned projects include rebuilding the Beacon-Boulder #2 115-kV Transmission Line and construction of the Irvin 115-kV switching station.

Avista noted in its statement that its rates are cost-based, where the costs related to projects that are included in customer rates reflect the cost of the equipment when it was installed, decades ago. Avista said that as it replaces the turbines, generators, poles, and other equipment, the costs are many times more expensive today.

Discussing new and expiring rebates, the company noted that as a result of the 2015 general rate case, customers are currently receiving a rebate of about $2.7 million for 2017 that expires on Dec. 31. In the current filing, Avista has proposed to replace about one half of the current rebate in 2018 with $1.5 million related to the 2015 earnings sharing. The company added that the net effect of the new and expiring rebate for 2018 is a billed increase of about $1.2 million.

Effective Jan. 1, 2018, residential customers using an average of 910 kWh per month would see their monthly bills increase from $86.39 to $93.42, an increase of $7.03, or 8.1 percent per month, Avista said. As a part of the request, Avista said that it is proposing that the basic monthly charge for residential service currently set at $5.75 per month increase to $6 per month.

Effective Jan. 1, 2019, residential customers using an average of 910 kWh per month would see their monthly bills increase from $93.42 to $97.44, an increase of $4.02, or 4.3 percent per month, Avista said.

Of natural gas, the company noted that effective Jan. 1, 2018, residential customers using an average of 61 therms per month would see their monthly bills increase from $51.10 to $54.47, an increase of $3.37 per month, or 6.6 percent. As part of the request, Avista is proposing that the basic monthly charge for residential service currently set at $5.25 increase to $6 per month.

The company also said that effective Jan. 1, 2019, residential customers using an average of 61 therms per month would see their monthly bills increase from $54.47 to $56.54, an increase of $2.07 per month, or 3.8 percent.

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