Avista’s Annual Price Adjustment Filings in Idaho Would Reduce Gas and Electric Rates

SPOKANE, Wash. – A sight (NYSE: AVA) has filed with the Idaho Public Utilities Commission (IPUC or Commission) annual filings of rate adjustments which, if approved, are designed to reduce overall electricity revenues by approximately $12.0 million or 4.7% effective October 1, 2022, and reduce overall natural gas revenues by approximately $0.1 million or 0.2% effective November 1, 2022. These annual filings have no impact on Avista’s profits.

Electric adjustment deposits

Four annual electrical adjustments have been filed, which, if approved, are designed to change overall electrical revenues effective October 1, 2022 as follows:

  1. Electricity Cost Adjustment (PCA): a decrease of approximately $3.1 million or 1.2%
  2. Fixed Cost Adjustment (CAF): a decrease of approximately $5.1 million or 2.0%
  3. Electrical energy efficiency: a decrease of approximately $3.7 million or 1.4%
  4. Bonneville Power Administration Residential Exchange Program (ResEx): a decrease of approximately $0.1 million or 0.1%

Natural Gas Adjustment Deposit

The natural gas regularization request is the annual natural gas FCA. If approved, Avista’s application is designed to reduce overall natural gas revenues by approximately $0.1 million or 0.2% beginning November 1, 2022.

Customer invoices resulting from these deposits

If the PCA, FCA, Energy Efficiency and ResEx electric filings are approved, residential electric customers in Idaho using an average of 892 kilowatt hours per month would see their monthly bills drop from $86.29 to $82.19, a decrease of $4.10 per month, or about 4.8%. The proposed electricity rate change would come into effect on October 1, 2022.

The net effect, on an annual revenue basis, of the electricity rate changes requested by rate schedule is as follows:

  • Residential Service – Hourly 1 -5.0%
  • General Service – Hours 11 and 12 -6.0%
  • Large general service – Hours 21 and 22 -4.3%
  • Extra Large General Services – Schedule 25 -3.2%
  • Extra Wide General Service – Hourly 25P -3.5%
  • Pumping Service – Hours 31 & 32 -4.9%
  • Street and area lighting – Schedules 41-49 -1.2%
  • Overall -4.7%

If the FCA natural gas filing is approved, residential natural gas customers in Idaho using an average of 63 therms per month would see their monthly bills decrease from $62.06 to $61.73, a decrease of 0, $33 per month, or about 0.5%. The proposed change to natural gas prices would come into effect on November 1, 2022.

The net effect, on a revenue basis, of the requested rate change for natural gas by rate schedule is as follows:

General Service – Schedule 101 -0.5%
Large general services – annexes 111 and 112 1.2%

Interruptible service – Schedules 131 and 132 0.0%
Transmission service – Schedule 146 0.0%

Overall -0.2%

Power Cost Adjustment (PCA)

The APC is an annual rate adjustment made to reflect the difference between the actual cost of generating and purchasing electricity to serve customers and the cost currently included in the rates charged to customers. Over the past year, electricity supply costs have been higher than those included in retail rates due to higher wholesale electricity and natural gas prices. However, higher feed costs were more than offset by the expiration of the previous year’s surcharge, which resulted in an overall drop in rates.

Fixed Cost Adjustment (FCA)

The electric and natural gas FCA is a mechanism designed to break the link between a utility’s revenues and customers’ energy consumption. Avista’s actual revenues, based on sales of kilowatt hours or thermal electricity, will vary, up or down, from the level included in a general rate case approved by the Board. This may be caused by climate change, energy conservation or other factors. Under the FCA, Avista’s revenue is adjusted monthly based on the number of customers. The annual difference between revenue based on sales and the number of customers is increased or returned to customers starting the following year.

The proposed FCA rate adjustments in 2022 are primarily driven by variations in customer usage in 2021 related to weather conditions and the COVID-19 pandemic, where a higher level of residential customer usage was partially offset by a lower level of use by non-residential customers. The FCA mechanisms do not apply to Avista’s General Lighting and Extra Large Street Lighting service programs, or its Interruptible Natural Gas and Transmission service programs.

Energy efficiency adjustment

The energy efficiency adjustment is tied to financing Avista’s electrical energy efficiency programs. This adjustment aligns the amount that is collected in customer rates with the actual costs of operating and delivering programs. Avista’s energy efficiency programs are designed to provide a financial incentive or rebate for cost-effective energy efficiency measures. The Board approves the amount of funding for these important programs through a portion of energy tariffs. The proposed rate reduction reflects the lower level of funding needed to operate the programs over the coming year.

Residential Exchange Adjustment

The Residential Exchange Program provides a share of the benefits of the Columbia River Federal Electric System to residential and small farm customers of investor-owned utilities in the Pacific Northwest, including Avista. Avista applies the benefits it receives, which generally fluctuate from year to year, to customers as a credit in their monthly electricity rates. Due to fluctuating usage, Avista reimbursed customers for a slightly lower level of benefits than the level of benefits received from BPA. Through this deposit, Avista seeks to slightly increase the level of benefits offered to eligible customers in order to repay the underpaid balance.

Rate request procedure

Avista’s applications are proposals subject to public review and decision by the Commission. Copies of the applications are available for public review at the offices of the Commission and Avista, as well as on the Commission’s website (www.puc.idaho.gov). Customers may file written comments with the Commission regarding Avista’s filings. Clients can also subscribe to the Commission’s RSS feed (http://www.puc.idaho.gov/rssfeeds/rss.htm) to receive periodic email updates on the case. Copies of the rate filings are also available on Avista’s website at www.myavista.com/rates.

If you wish to submit comments on the proposed tariff change, you may do so by visiting the Board’s website or by mailing your comments to:

Idaho Public Utilities Commission

Box 83720

Boise, ID 83720-0074

Eleanor C. William