Case No. AVU-E-07-07
August 13, 2007
Contact: Gene Fadness (208) 334-0339, 890-2712
Customers of Avista Utilities have until Sept. 7 to
comment on the company’s request to increase its surcharge to cover
extraordinary power supply expenses. Under the company’s proposal, the
surcharge would result in about a 1.5 percent increase for residential
customers, or about $1.04 per month for the average residential customer who
uses 1,000 kWh per month.
The surcharge varies year to year to account for changing
fuel prices, hydroelectric conditions and wholesale market prices. Most of the
company’s expenses to acquire power supply are included in base rates. However,
during years when water conditions are low and the utility’s hydroelectric
generation is short or during years when fuel expenses for natural gas plants
are higher than anticipated, the company incurs more power supply expense than
anticipated. Under those circumstances, the commission recently approved a
mechanism, called the Power Cost Adjustment or PCA, that allows Avista to
recover prudently incurred expenses through a one-year surcharge that is added
to base rates. During years when streamflow conditions are above average and
market and fuel prices are stable, customers are allowed a PCA credit that is
subtracted from base rates.
Avista claims its annual power supply costs have increased
to be about $4.6 million more than the $5 million raised in the existing PCA
surcharge. The PCA is currently 2.45 percent, or about 0.163 cents per kWh.
Under Avista’s proposal, the surcharge would result in an addition of 0.267
cents per kWh. Residential customers now pay a base rate of 5.84 cents per kWh
on their first 600 kWh of use, plus the 0.163-cent power cost surcharge, for a
total overall energy rate of 6.005 cents per kWh. If the surcharge were
approved, the total energy rate for the first 600 kWh would increase to 6.109
cents per kWh. For use of 600 kWh per month and more the monthly overall rate
would increase from 6.775 cents per kWh to 6.879 cents.
If approved, the PCA becomes effective Oct. 1 and expires
on Sept. 30, 2008. The PCA surcharge or credit does NOT affect company
earnings. It is basically a “pass-through,” collected from ratepayers by the
company, kept in a deferred account, and then passed directly to wholesale
power and fuel suppliers. Each year when Avista files its PCA, the commission
will review the application to ensure that power supply and fuel expenses
incurred by Avista were necessary to serve customers and were the most
reasonably priced available to the company at the time.
Those wishing to submit comments must do so by no later
than Sept. 7. Comments are accepted via e-mail by accessing the commission’s
homepage at www.puc.idaho.gov and
clicking on "Comments & Questions." Fill in the case number
(AVU-E-07-07) and enter your comments. Comments can also be mailed to P.O. Box
83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.
Avista, headquartered in Spokane, serves about 115,000
customers in its northern Idaho territory.