Avista rates to rise for fourth straight year

Avista recently announced that the local utility company is seeking to raise gas and electricity rates for the fourth year in a row.

Avista hopes to use the extra revenue to make necessary upgrades and repairs to infrastructure, such as aging power poles and transformers.

Avista itself is not allowed to set its own prices for electricity and natural gas. In Washington, the Utilities Commission sets the rates and prices.

Debbie Simock, Communications Manager at Avista, explained the reasons for the rate change request.

"Avista is an investor—owned utility regulated by the Washington Utilities Commission.," she said. "As a regulated utility our prices have to be approved by the commission. Prices can change throughout the day, but because we are regulated, we can't change that to match daily. The commission is tasked with setting rates that are fair for customers, while allowing the opportunity to earn a fair rate of return for the company."

The process of adjusting rates can take the commission up to 11 months, according to Simock.

"There are also opportunities for customers to voice their opinions on the request. The commission will then issue their ruling that is fair and in the interest of customers and shareholders," she said.

Avista Utilities is the primary operating division of Avista Corporation. The utility provides service to more than 244,000 electric customers and 147,000 natural gas customers in Washington. Avista customers total more than 485,000 in Washington, Northern Idaho and portions of Oregon.

Many community members, as well as students, are upset at the idea of energy prices going up.

Simock stressed the importance of earning a fair rate of return, as it is essential to attracting investors.

"We use them to run our business," Simock said. "When earnings are announced, a portion is returned to the company and go into running the business. It is key that we remain an attractive company to investors, which will keep our rates low. For example, if you buy a car and need financing, the entity you seek a loan from checks your credit, it's the same for us when we go to borrow money to make upgrades, the more solid we are as a company, the better loan rate we will get as well."

In Washington, Avista is asking for a 13.4 percent electric increase and a 6 percent increase in natural gas. For a customer who uses an average of 1,000 kilowatts per month, that customer would see a $10.62 increase per month for electricity and a $4 increase per month on natural gas.

Avista hopes to use the money generated from the rate increase for repairing and upgrading aging infrastructure.

"Because [our infrastructure] is so old, a lot of our equipment is reaching the end of its natural life. Transformers that are 50 or 60 years old need to be replaced to ensure reliability to our customers. By upgrading, it increases reliability; poles are better and stronger and can withstand more during storms."

Customers today are using more energy, according to Simock. To meet growing customer demand, Avista is investing $200 million every year in upgrading their infrastructure.

The request for rate increase will not go to executive bonuses, Simock said. "Rate filings are not about compensation," she said. "Power supply and upgrades are driving the costs. Only half a penny goes to executive compensation." 

"We understand that no one likes an increase in prices for things they need on a regular basis, it is particularly challenging in this economy," Simock said. "Our rates will remain low in comparison and we offer a number of programs to help customers manage their energy.We also offer energy assistance programs for those in need. We actually encourage customers to use less of our products."

Simock encourages students interested in energy efficiency to visit www.everylittlebit.com and to find out more about the rates case at www.avistautilities.com.