The Idaho PUC on Sept. 1 approved an all-party settlement in Avista's two-year electric [AVU-E-21-01] and natural gas [AVU-G-21-01] general rate cases.

As part of the settlement agreement, the company agreed to not file another general rate case before Sept. 1, 2023.

Under the settlement terms, annual base electric revenues will increase by $10.6 million or 4.3 percent effective Sept. 1, 2021, and by $8 million or 3.1 percent a year later.

For natural gas, the settlement decreases annual base revenues by $1.6 million or 3.7 percent effective Sept. 1, 2021, and increases them $900,000 or 2.2 percent a year later.

The parties have also agreed to offset revenue change increases over the two-year plan using customer tax credits included in Avista's original filing—$31.3 million for electric customers and $12.1 million for natural gas customers.

With the credits, overall electric billed revenue will remain unchanged in the first year and decrease by 0.8 percent in the second year.

Also with the credits, overall natural gas billed revenue will decrease by 4.5 percent in the first year and increase by 1.5 percent in the second year. The balance of the credit will be returned to customers over the subsequent eight years, with the amount and the amortization period subject to review and possible modification during the company's next general rate case.

The settlement's capital structure is a 9.4 percent return on equity with a common equity ratio of 50 percent and a rate of return on rate base of 7.05 percent.

Under the settlement, the monthly bills of residential electric customers using an average of 892 kWh will increase by 49 cents or 0.6 percent in the first year, and increase by 31 cents or 0.4 percent in the second year.

The monthly bills of residential natural gas customers using an average of 63 therms will decrease by $2.30 or 4.6 percent in the first year, and increase by 76 cents or 1.6 percent in the second year.

The primary difference between the settlement and Avista's original request is that costs from Avista's wind generation power purchase agreements will continue to be recovered through the power cost adjustment mechanism rather than through base rates. Together with the current reductions in overall net power supply costs, the PCA total will be $5 million.

In addition, Avista will pass through Idaho's share of benefits from its participation in the Western EIM via the PCA as of its go-live date, slated for March 1, 2022. Any incremental operations and maintenance expenses exceeding benefits from the participation will continue to be deferred for review in a future proceeding.

The utility's original rate request would have increased annual electric base revenues by $24.8 million or 10.1 percent in the first year and by $8.7 million or 3.2 percent in the second. For natural gas revenues, it would have increased annual base revenues by $100,000 or 0.1 percent the first year, and by $1 million or 2.2 percent in the second year.

Both requests were based on a rate of return of 7.3 percent with a common equity ratio of 50 percent and a 9.9 percent return on equity.

Joining Avista in the settlement were the Idaho Conservation League, Walmart, the Community Action Partnership Association of Idaho, the Idaho Forest Group and Clearwater Paper.

The utility serves more than 138,000 electric and 89,000 natural gas customers in Idaho.

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News Editor - Clearing Up

Rick Adair has been with NewsData since 2003, and is news editor for Clearing Up and editor for Water Power West. Previously, he covered environmental and energy issues in the Lake Tahoe area. He has a doctorate in earth sciences.