Avista files multiyear electric and natural gas rate plan in Idaho

The company is looking to recoup ongoing infrastructure investments and increased operational costs

SPOKANE, Wash., Feb. 01, 2023 (GLOBE NEWSWIRE) — Today, Avista (NYSE:AVA) filed a multi-year installment plan with the Idaho Public Utilities Commission that would allow the company to defray costs of fixed expenses and ongoing investments in infrastructure, technology and more. If approved, the new rates would come into effect in September 2023 and September 2024 respectively.

“As an energy company, we know that we play an important role in the daily lives of those we serve, and we take that responsibility seriously,” said Dennis Vermillion, President and CEO of Avista. “As the cost of goods and services has generally increased, we know how challenging rising energy prices can be for our customers. We work hard to make choices that help keep these costs affordable because we know it’s important to all of our customers.”

“Part of being responsible for delivering an essential service is making sure customers have power when they need it. This means that we must continue to make important and necessary investments in the infrastructure that serves our customers, such as substations and much more. We have made these investments on behalf of our clients because it is the right thing to do.

“There are also new pressures that are driving up costs for all businesses and industries. Supply chain constraints, inflation and rising interest rates all contribute to a challenging operating environment and make it difficult to control costs. In the last year alone, the cost of basic utilities such as transformers and utility poles have increased by 15-54%. Avista is not unique in this regard.

“We continue to aggressively manage costs to achieve an appropriate balance between providing safe, reliable service at competitive rates and a high level of customer satisfaction, while maintaining the financial health of the utility. We focus on long-term and sustainable savings to continually improve our service to our customers and control costs for the future.

“The ongoing effort to align the rates customers pay with Avista’s service costs is one of the main reasons we submit general rate requests. It’s important to the health of the business and an integral part of providing safe and reliable power,” said Vermillion.

Avista’s requests
The proposal is a two-year installment plan, with new installments taking effect in September 2023 and September 2024. This plan would create a stay-out period during which Avista would not file a new general rate case for new rates to take effect Sept. 2024. This would provide customers with some predictability of their expected future energy prices.

If approved, the Electricity Rate Application is expected to increase annual baseline revenues by $37.5 million (or 14.7% on a billing basis) effective September 1, 2023 and by $13.2 million (or 4.5% on a billing basis ) effective September 1, 2023, increasing September 1, 2024.

If approved, the General Natural Gas Rate Application is intended to increase annual revenue by US$2.8 million (or 2.7% on an accounting basis) effective September 1, 2023 and by US$0.1 million effective September 1, 2023 -dollars (or 0.1% on invoice basis) increase 1st 2024.

The power and natural gas inquiries are based on a proposed rate of return of 7.59%, with a common equity ratio of 50% and a return on equity of 10.25%.

infrastructure investments
Avista must continue to replace infrastructure that has reached the end of its useful life and respond to the need for the reliability and technology investments required to build the integrated energy services network that will take us into the future. Projects included in today’s submission include:

• Ongoing management, inspection and replacement of 240,000 wooden poles for power distribution through Avista’s wooden pole management program to ensure the poles and equipment on them support the company’s ability to provide safe and reliable power to customers.
• Continued investment in Avista’s Wildfire Resiliency Plan, which outlines key steps Avista has taken to protect against the growing threat of wildfires, including grid hardening, improved vegetation management and other industry-leading best practice measures.
• The ongoing project to systematically replace portions of the natural gas distribution line in Avista’s service area that were installed prior to 1987, as well as the replacement of other natural gas supply equipment, to enhance system integrity, safety and reliability.
• Technology upgrades that support necessary business processes and operational efficiencies that allow Avista to effectively manage the utility and serve customers.

Invoices from residential customers in Idaho
Since January 2016, overall average electricity prices have remained flat and natural gas prices have increased by 3.8% per year.

electric
Valid from Sept. 2023: Idaho residential electric customers who consume an average of 927 kilowatt-hours per month could expect their total bill to increase by 15.4%, or $13.18, for a revised monthly bill of $98.58 from $85.40. The proposed monthly increase includes a proposed base fee increase of $8 per month to a level of $15.00 per month.

Valid from Sept. 2024: Idaho residential electric customers, who consume an average of 927 kilowatt-hours per month, could expect their total bill to increase by 4.7%, or $4.66, with a revised monthly bill of $98.58 to $103.24. The proposed monthly increase includes a proposed $5 per month base rate increase to a $20.00 per month level, offset by a slight reduction in the volumetric price per kWh.

natural gas
Valid from Sept. 2023: Residential natural gas customers in Idaho, who consume an average of 64 spas per month, could expect an overall bill increase of 3.5% or $2.60 for a revised monthly bill of $76.02 from $73.42. The proposed monthly increase includes a proposed base fee increase of $8 per month to a level of $15.00 per month offset by a reduction in the volumetric rate per therm.

Valid from Sept. 2024: Residential natural gas customers in Idaho, who consume an average of 64 spas per month, could expect an overall bill increase of 0.2% or $0.14 for a revised monthly bill of $76.16 from $76.02. The proposed monthly increase includes a proposed $5 per month base fee increase to a $20.00 per month level offset by a decrease in the volumetric rate per therm.

Proposed changes by service plan
The requested electrical increase according to the maintenance plan is as follows:

The proposed increase in natural gas consumption according to the timetable is as follows:

The actual percentage increase for electricity and natural gas customers varies by customer tariff group and depends on how much energy a customer uses.

customer resources
To help customers manage their energy bills, Avista offers customer services such as convenience billing, payment arrangements and customer care referral and assessment services (CARES) that support customers with special needs through referrals to local agencies and churches with accommodation, utilities, medical help and other needs.

Avista offers energy efficiency and outreach programs that include discounts and incentives as well as tips and resources to help customers manage their energy use and energy bills. Customers can learn more at www.myavista.com.

Prize application process and additional information
Avista’s application is a proposal subject to public scrutiny and a decision by the Commission. Copies of the applications are available for public inspection at the offices of the Commission and Avista, and on the Commission’s website (www.puc.idaho.gov). Clients may submit written comments to the Commission regarding the Company’s submission. Clients can also subscribe to the Commission’s RSS feed (https://puc.idaho.gov/RssPage) to receive regular email updates about the case. Copies of the Tariff Notice are also available on our website www.myavista.com/rates.

The Commission will begin a full review of Avista’s application and will seek public input. If you would like to comment on the proposed increase (Case Nos AVU-E-23-01 and AVU-G-23-01) you can do so by going to the Commission’s website or by sending comments to:

Idaho Public Utilities Commission
PO Box 83720
Boise ID 83720-0074

About Avista Corp.
Avista Corp. is an energy company engaged in the production, transmission and distribution of energy and other energy-related businesses. Avista Utilities is the division that provides electricity to 403,000 customers and natural gas to 369,000 customers. Its service area covers 30,000 square miles in eastern Washington, northern Idaho and parts of southern and eastern Oregon with a population of 1.6 million. Alaska Energy and Resources Company is a subsidiary of Avista, which provides retail electrical services through its subsidiary Alaska Electric Light and Power Company in the city and county of Juneau, Alaska. Avista shares trade under the ticker symbol “AVA”. For more information about Avista, visit www.avistacorp.com.

This press release contains forward-looking statements based on the Company’s current expectations. Forward-looking statements are all statements that are not historical facts. Such statements speak only as of the date of the press 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 expectations. These risks and uncertainties include, in addition to those discussed herein, all factors discussed in the Company’s annual report on Form 10-K for the year ended December 31, 2021 and quarterly report on Form 10-Q for the quarter ended September 30, 2022.

SOURCE: Avista Corporation
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