Avista allowed recovery of extraordinary expenses
The portion of Avista Utilities’ customer bills that goes
to pay for extraordinary power supply costs will increase by about 1.5 percent
for residential customers – and 2.2 percent overall – beginning Oct. 1. For an
average residential customer who uses 1,000 kWh per month, the increase is
about $1.04 per month.
The power cost surcharge varies year to year to account
for changing fuel prices, hydroelectric conditions and wholesale market prices.
Higher natural gas fuel costs and reduced generation from Avista’s
hydroelectric projects resulted in the utility incurring $10.6 million more in
supply costs than is covered in base rates. 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, customers receive a surcharge in addition to the base rates.
During years when streamflow conditions are above average and market and fuel
prices are stable, customers can receive a credit that is subtracted from base
rates.
The surcharge is currently 2.45 percent, or about 0.163
cents per kWh, and will increase to about 0.267 cents per kWh on Oct. 1. The
surcharge has been as high as 19.4 percent when the Western energy crisis of
2000-01 caused unprecedented increases in wholesale power prices. It has been
dropping steadily until this year.
The surcharge does NOT affect company earnings and does
not go to pay salaries or finance any company operations. The surcharge is
essentially a “pass-through,” collected from ratepayers, kept in a deferred
account, and then passed directly to wholesale power and fuel suppliers. The
commission’s job is to review the surcharge request to make sure the 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. State
statutes require that regulated utilities recover all prudently incurred
expenses and earn a reasonable rate of return.
Avista, headquartered in Spokane, serves about 115,000
customers in its northern Idaho territory.
A full
text of the commission’s order, along with other documents related to this
case, are available on the commission’s Web site at www.puc.idaho.gov. Click on “File Room”
and then on “Electric Cases” and scroll down to Case No. AVU-E-07-07.
Interested parties may petition the commission for
reconsideration by no later than Oct. 5. Petitions for reconsideration must set
forth specifically why the petitioner contends that the order is unreasonable,
unlawful or erroneous. Petitions should include a statement of the nature and
quantity of evidence the petitioner will offer if reconsideration is granted.
Petitions
can be delivered to the commission at 472 W. Washington St. in Boise, mailed to
P.O. Box 83720, Boise, ID, 83720-0074, or faxed to 208-334-3762.