Website:
www.puc.idaho.gov
Overall
decrease in Avista gas rates effective Nov. 1
The
Idaho Public Utilities Commission has approved two changes to gas rates that
become effective Nov. 1 for customers of Avista Utilities. The net result of
the two rate adjustments is a decrease of about 2 percent in natural gas rates.
The first filing, AVU-G-06-03, reduces by 3.4 percent Avista’s annual Purchased Gas Cost Adjustment (PGA). The PGA reflects changes in the wholesale market price for natural gas. The PGA mechanism is used to adjust rates to reflect changes in the costs incurred by the company to purchase gas from its wholesale suppliers. Those costs include not only the purchase price, but transportation, storage and other related costs of acquiring natural gas. The company’s earnings are not increased or decreased from changes in prices and revenues relating to the annual PGA. In years that there is a surcharge, all the money collected from customers goes to pay Avista’s wholesale gas suppliers. In years of a credit, as this year, all the money goes to customers.
The
second filing, AVU-G-06-04, is a 1.4 percent increase in overall rates due to
an increase in the company’s Energy Efficiency Tariff.
On
Sept. 29, Avista revised its application, seeking a WACOG of 76.24 cents per
therm, a 3.4 percent reduction from the current WACOG. The revised WACOG is
based on declining wholesale prices for natural gas and the company’s hedging
practices.
“Although
lowering the WACOG carries with it the potential of creating a large deferral
balance subject to collection from customers in the future if prices turn out
to be higher than forecasted, the company has already been able to take
advantage of recent sharp drops in forward natural gas prices and has hedged
approximately an additional 20 percent of its forecasted load at lower prices,”
the commission said. The company hedges by buying ahead natural gas at a fixed
price. “We are confident that the company will continue to take advantage of
lower prices when the opportunity arises within their established risk
management policy.”
The
energy efficiency tariff is used to pay for conservation programs that help
customers respond to increasing natural gas prices. The rider, now at 0.5
percent of retail rates, has not increased since 2001 and will now increase to
1.75 percent of retail rates.
The
rider raised about $300,000 a year, but the company has budgeted $720,000 in
demand-side management (DSM) expenses for 2007. For residential customers, the
rider increases from just under a half-cent per therm to about 2 cents per
therm. For a customer who uses 70 therms per month, the DSM increase would be
from 30 cents per month to $1.40.
Avista
has identified 27 different measures the utility believes are cost-effective
and have significant potential net value in energy savings. These measures
total 1,062,000 first-year therm savings, more than four times more the
company’s prior DSM goal.
The
program includes significant incentives paid to customers in the form of cash
rebates for items such as weatherization, high-efficiency hot water heaters,
thermostats and high-efficiency furnaces.
“The commission wishes to commend the company
for meeting and exceeding the goals of its DSM program and encourages Avista’s
customers to take advantage of the opportunities presented by the company to
conserve natural gas resources,” the commission said.
A full text of the
commission’s orders, along with other documents related to these cases, are
available on the commission’s Web site at www.puc.idaho.gov.
Click on “File Room” and then on “Gas Cases” and scroll down to Case Numbers
AVU-G-06-03 and AVU-G-06-04.