Idaho Public Utilities Commission

Case No. AVU-G-09-05, Order No. 30937

November 3, 2009

Contact: Gene Fadness (208) 334-0339, 890-2712

Avista gas rates drop by 22 percent

Residential and small-business customers of Avista Utilities started paying about 22 percent less in natural gas rates Nov. 1. Avista serves about 70,000 natural gas customers in northern Idaho.

“A reduction in demand for natural gas coupled with an abundance of natural gas supplies have driven down natural gas prices,” the Idaho Public Utilities Commission said in an order approving Avista’s third request this year to decrease its Purchased Gas Cost Adjustment (PGA) surcharge. “In addition, Avista follows a flexible, diversified natural gas purchasing plan and effectively manages its underground natural gas storage facility,” the commission said. “These actions allow Avista to provide stable and low prices to its customers.”

The reduction is larger than that requested by Avista. Avista wanted to refund customers the balance in its PGA deferral account over two years to mitigate a possible future increase in the adjustment next year. But the commission said customers should get all the benefit this year.

Residential customers who use the average 66 therms per month will get a monthly reduction of about $16.44 or 21.93 percent. The company requested a reduction of about $12.74 per month or 17.8 percent. Large commercial customers will get about a 25.9 percent decrease.

An adjustment to the PGA, to reflect the always changing prices of natural gas, is made at least once yearly. However, the commission directed Avista “to promptly file an application to amend” the PGA should gas prices continue to deviate significantly either up or down from current prices.

The PGA results in either a surcharge or a credit depending on the always fluctuating prices of wholesale gas and related transportation costs. While the decrease reduces Avista’s annual revenue by $18.8 million, it does not impact company earnings; nor does an increase in the surcharge.

A full text of the commission’s order, along with other documents related to this case, is 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 Number AVU-G-09-05.