UTC says no to latest Avista rate hike requests

The Utilities and Transportation Commission last week rejected Avista Utilities’ request to increase electric and natural gas rates.

In a two to one vote, the three-member commission rejected all aspects of the company’s proposal, which was filed in February. Avista was asking for an increase in electrical rates of 7.6 percent and natural gas rates of 2.8 percent.

The rate request would have cost a typical residential customer about $9 per month in higher electric and gas rates.

Not convinced

The UTC decided that wasn’t appropriate—or necessary.

The UTC, in an order signed by Chairman David Danner and Commissioner Ann Rendahl, found that the company failed to show that its current rates are not sufficient to meet its operating needs. Commissioner Phil Jones filed a dissenting opinion.

“Avista proposes to maintain a trajectory of rate increases that could continue on the same slope into the indefinite future,” the majority opinion stated. “Yet it has not presented adequate evidentiary support to demonstrate that its current rates are insufficient or that the pace of its capital investments is outside of the company’s control.”

In Avista’s 2015 rate proceeding, the commission had determined that the company did not demonstrate an immediate need to recover certain projected expenses, instead requesting that Avista provide more evidence to support those requests in a future proceeding. The commission found that Avista failed to do that in the latest filing.

Avista has filed requests for annual rate hikes for about a decade, saying the additional revenue was needed to upgrade aging dams, transmission lines and other facilities that produce and deliver electricity and natural gas.

Collaboration

Avista spent about $375 million this year on capital projects and will spend about $400 million each year through 2020, according to company officials.

The current request also included about $2 million related to the November 2015 windstorm.

The commission also ordered the UTC staff to initiate a collaborative effort with the interested stakeholders, including regulated utilities, to clearly define the scope and expected outcome in cost of service proceedings.

In his dissent, Commissioner Jones said, “I believe that Avista has met its burden of proof and there is ample evidence in the proceedings to render a reasoned decision on revenue requirements.”

Avista’s annual rate hikes haven’t been popular with customers.

The commission said it received 73 public comments on Avista’s rate increase proposal—71 opposed, two undecided, and none in favor of the rate increases.

For the commission to entirely reject a utility’s request isn’t unprecedented, but it is unusual. Often, the commission okay’s a lower rate hike than the utility requests.

Avista filed the latest rate request in February, six weeks after an earlier rate hike was approved, commissioners noted.

For the last four years, the utility has earned profit levels at or even above the allowed return, they said.

Avista has 20 days to ask the commission to reconsider its decision. If a request for reconsideration is turned down, the utility has the option of appealing the order in Superior Court.

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