Idaho
Public Utilities Commission
September
27, 2012
Case
No. AVU-G-12-05, Order No. 32651
Case
No. AVU-G-12-03 and -06, Order No. 32650
Case
No. AVU-E-12-07, Order No. 32652
Contact:
Gene Fadness (208) 334-0339, 890-2712
Website:
www.puc.idaho.gov
Gas,
electric decreases effective for Avista customers on Oct. 1
Northern
Idaho customers of Avista Utilities are getting reductions to both their
electric and natural gas bills effective Oct. 1.
The
Idaho Public Utilities Commission approved three Avista applications that
reduce rates largely due to declining natural gas prices. Combined, rates for
natural gas customers decrease by about 5.6 percent and electric rates about 1.3
percent. A fourth application, a proposed
2.1 percent reduction to Avista’s annual Power Cost Adjustment (PCA) surcharge,
is expected to be ruled on soon.
The
largest decrease (about 3 percent) comes from Avista’s annual Purchased Gas
Cost Adjustment (PGA). Costs associated
with providing gas supply for customers vary from year to year as the wholesale
price of natural gas and transportation-related expenses change. Natural gas
utilities in Idaho file a PGA at least yearly to account for those changing
prices. Overall, prices today are lower
than they were in 2011. Consequently, the company will reduce by $2.14 million
the amount it collects in its PGA account.
Another $1.55 million of an un-refunded credit balance will be used to
offset a potential rate increase next April.
Avista has filed a notice with
the commission to file a combined electric and natural gas base rate case on or
after Oct. 10 for proposed new rates that, if adopted, would be effective in
April.
A
second gas rate decrease (2.6 percent) is attributable to the temporary
suspension of programs to fund natural gas efficiency programs.
Lower
natural gas prices due to changing gas supply now make it cost ineffective for
Avista customers to invest in natural gas energy efficiency programs. Consequently, the commission has approved Avista’s
application to temporarily suspend its gas efficiency programs while still
meeting its contractual obligations for agreements executed before Sept. 1,
2012. Customers who qualify for rebates associated with the programs will have
until Nov. 1 to send all required rebate forms to the company.
As
a result of the company’s proposal to temporarily suspend gas efficiency
programs, the company will zero-out the rider that funds those programs. Residential and small-commercial customers now
pay about 2.7 cents per therm for gas efficiency programs. There will still be
about $390,000 in the account to fund the efficiency programs and the rider
will continue to be collected through Oct. 1.
Avista will work with commission staff to determine the most appropriate
method to refund customers the remaining $390,000.
Electric
rates will decline about 1.3 percent as a result of the commission’s decision
to adopt an Avista application to reduce the rider used to fund electricity
conservation programs. Revenue from the
electric rider now collected from customers at the current level will exceed
the amount needed to fund the programs during the next year. Avista is reducing
the amount collected in the rider by $3.46 million.
In
its Washington and Idaho territories, Avista realized about 59,000
megawatt-hours of savings from energy efficiency programs, 115 percent of the
company’s goal. In its Idaho territory alone, the savings were 19,908 MWh
during 2011. However, the end of the
federal stimulus act that provided tax incentives for energy efficient measures
and a sluggish economy that discourages customers from investing in energy
efficient appliances has resulted in Avista needing only about 55 percent of
projected revenue collected from customers in the rider.
The
Snake River Alliance and the Idaho Conservation League opposed reducing the
rider, stating the utility did not present enough evidence that it will
over-collect the amount needed in rider funds and that the utility’s
projections should be made for two years, not just one year. Reducing the rider amount now may result in
the company’s failure to aggressively pursue energy efficiency programs in the
future, they argued.
The
commission said that allowing rider funds to accumulate “could undermine
customers’ confidence that their rates are prudently used to fund
cost-effective programs. We find it would not be prudent for the company to
retain rider funds for which it has no existing or projected use.”
The
commission said it still expects Avista to pursue all cost-effective efficiency
programs and notify the commission if the new rider proves insufficient to fund
the programs. The commission directed
Avista to file a report within 60 days advising it about the opportunities the
company believes exist for increasing customer awareness about energy
efficiency issues and the company’s current programs.
Avista,
headquartered in Spokane, serves about 125,000 electric customers and about
75,000 natural gas customers in northern Idaho.
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