Capital investments in infrastructure, system maintenance, and
technology and increased power supply costs are the main drivers in
Avista’s (NYSE:AVA) request filed today with the Idaho Public
Utilities Commission (IPUC or Commission).
“Our customers expect their energy to be there when they need
it, and so do we. To meet these expectations, we’re continually
investing in our systems in an effort to maintain reliability and
deliver value, at a reasonable cost for customers,” Avista
Chairman, President and Chief Executive Officer Scott L. Morris
said.
These investments include the rehabilitation and maintenance of
generating plants and distribution and transmission infrastructure
that is necessary to serve customers. The work to upgrade and
modernize this equipment will enable it to run efficiently and
serve our communities for decades to come, said Morris. Avista’s
rates are cost-based, where the costs related to projects that are
included in customer rates reflects the cost of the equipment when
it was installed, decades ago. As the company replaces the
turbines, generators, poles and other equipment, the costs are many
times more expensive today. This is a primary reason for the
request to increase rates, he added.
“We understand that increasing prices can be a challenge. This
is a key consideration as we make decisions about how and where to
invest,” Morris said.
Two-Year Rate PlanThe proposal is a two-year
rate plan for calendar years 2018 and 2019, with new rates taking
effect Jan. 1, 2018 and Jan. 1, 2019. This plan would create a
stay-out period where Avista would not file a new general rate case
for a new rate plan to be effective prior to Jan. 1, 2020. This
would provide customers with some predictability in their expected
future energy prices.
Avista’s RequestsAvista’s request, if approved,
is designed to increase annual electric billed revenues by $18.6
million or 7.9 percent, effective Jan. 1, 2018 and $9.9 million or
4.2 percent effective Jan. 1, 2019.
For natural gas, the rate request is designed to increase annual
billed revenues by $3.5 million or 5.7 percent, effective Jan. 1,
2018 and $2.1 million or 3.3 percent effective Jan. 1, 2019.
The electric and natural gas requests for the January
2018-December 2019 rate periods are based on a proposed rate of
return (ROR) on rate base of 7.81 percent with a common equity
ratio of 50 percent and a 9.9 percent return on equity (ROE).
The company is not proposing to update base power supply costs
for year two of the rate plan, but rather have any differences flow
through the Power Cost Adjustment (PCA) mechanism.
Avista serves more than 128,200 electric customers in Idaho. The
IPUC has up to nine months to review Avista's request.
Capital InvestmentsAvista’s capital investment
plans address the need to replace infrastructure that has reached
the end of its useful life, as well as respond to the need for
reliability and technology investments required to build the
integrated energy services grid for today and into the future.
Among the capital investments in today’s filing are:
- Generator rehabilitation at the Kettle Falls biomass plant that
will ensure efficient generation and operations.
- The ongoing project to systematically replace portions of
natural gas distribution pipe in Avista’s service area that were
installed prior to 1987 as well as replacement of other natural gas
service equipment.
- Transmission and distribution system investment, such as wood
pole replacements, feeder upgrades, and substation and transmission
line rebuilds to maintain reliability for our customers.
- Technology upgrades that support necessary business processes
and operational efficiencies that allow Avista to effectively
manage the utility and serve customers.
- A refresh of the customer-facing website, providing relevant
information, greater accessibility on mobile devices, easier
navigation, and a streamlined payment experience.
New and Expiring RebatesAs a result of the 2015
general rate case, customers are currently receiving a rebate of
approximately $2.7 million for 2017 that expires on Dec. 31, 2017.
In this filing, Avista has proposed to replace approximately one
half of the current rebate in 2018 with $1.5 million related to the
2015 earnings sharing. The net effect of the new and expiring
rebate for 2018 is a billed increase of approximately $1.2
million.
Residential Customer Bills
ElectricEffective Jan. 1, 2018: Residential
customers using an average of 910 kilowatt hours per month would
see their monthly bills increase from $86.39 to $93.42, an increase
of $7.03 or 8.1 percent per month. As a part of the request, Avista
is proposing that the basic monthly charge for residential service
currently set at $5.75 per month increase to $6.00 per month.
Effective Jan. 1, 2019: Residential customers using an average
of 910 kilowatt hours per month would see their monthly bills
increase from $93.42 to $97.44, an increase of $4.02 or 4.3 percent
per month.
Natural GasEffective Jan. 1, 2018: Residential
customers using an average of 61 therms per month would see would
see their monthly bills increase from $51.10 to $54.47, an increase
of $3.37 per month or 6.6 percent. As part of the request, Avista
is proposing that the basic monthly charge for residential service
currently set at $5.25 increase to $6.00 per month.
Effective Jan. 1, 2019: Residential customers using an average
of 61 therms per month would see their monthly bills increase from
$54.47 to $56.54, an increase of $2.07 per month or 3.8
percent.
Changes by Service Schedule
The requested electric increase by service schedule is as
follows:
Rate Schedule |
|
Proposed 2018 Billing Increase |
|
Proposed 2019 Billing Increase |
Residential Service - Schedule 1 |
|
8.1 percent |
|
4.3 percent |
General Service - Schedules 11 & 12 |
|
7.5 percent |
|
4.0 percent |
Large General Service - Schedules 21 & 22 |
|
8.2 percent |
|
4.4 percent |
Extra Large General Service - Schedule 25 |
|
7.7 percent |
|
4.3 percent |
Extra Large General Service 25P - Schedule 25P |
|
7.2 percent |
|
4.1 percent |
Pumping Service - Schedules 31 & 32 |
|
8.8 percent |
|
4.6 percent |
Street & Area Lights - Schedules 41 – 49 |
|
7.5 percent |
|
3.8 percent |
Total |
|
7.9 percent |
|
4.2 percent |
The requested natural gas increase by service schedule is as
follows:
Rate Schedule |
|
Proposed 2018 Billing Increase |
|
Proposed 2019 Billing Increase |
General Service - Schedule 101 |
|
6.6 percent |
|
3.8 percent |
Large General Service - Schedules 111 & 112 |
|
2.2 percent |
|
1.3 percent |
Transportation Service - Schedule 146(excludes commodity and
interstate pipeline transportation costs) |
|
9.2 percent |
|
5.0 percent |
Total |
|
5.7 percent |
|
3.3 percent |
Additional information about Avista’s rate request and energy
prices is available at www.myavista.com/rates.
Customer ResourcesTo assist customers in
managing their energy bills, Avista offers services for customers
such as comfort level billing, payment arrangements and Customer
Assistance Referral and Evaluation Services (CARES), which provide
assistance to special-needs customers through referrals to area
agencies and churches for help with housing, utilities, medical
assistance and other needs. Avista also partners with community
action agencies in administering the Project Share bill payment
assistance program.
Avista provides energy efficiency and outreach programs that
include rebates and incentives as well as tips and resources to
help customers manage their energy use and energy bills. Customers
can learn more at www.myavista.com.
Rate Application Procedure and Additional
InformationThe Company’s application is a proposal,
subject to public review and a Commission decision. A copy of the
application is available for public review at the offices of both
the Commission and Avista, and on the Commission’s website
(www.puc.idaho.gov). Customers may file with the Commission written
comments related to the Company’s filing. Customers may also
subscribe to the Commission’s RSS feed
(http://www.puc.idaho.gov/rssfeeds/rss.htm) to receive periodic
updates via e-mail about the case. Copies of the rate filing is
also available on our website, www.myavista.com/rates.
The Commission will begin a comprehensive review of Avista’s
application and will seek public input. If you would like to submit
comments on the proposed increase, you can do so by going to the
Commission website or mailing comments to:
Idaho Public Utilities CommissionP. O. Box 83720Boise, ID
83720-0074
About Avista Corp.Avista Corp. is an energy
company involved in the production, transmission and distribution
of energy as well as other energy-related businesses. Avista
Utilities is the operating division that provides electric service
to 379,000 customers and natural gas to 342,000 customers. Its
service territory covers 30,000 square miles in eastern Washington,
northern Idaho and parts of southern and eastern Oregon, with a
population of 1.6 million. Alaska Energy and Resources Company is
an Avista subsidiary that provides retail electric service in the
city and borough of Juneau, Alaska, through its subsidiary Alaska
Electric Light and Power Company. Avista stock is traded under the
ticker symbol "AVA." For more information about Avista,
please visit www.avistacorp.com.
This news release contains forward-looking statements regarding
the company’s current expectations. Forward-looking statements are
all statements other than historical facts. Such statements speak
only as of the date of the news release and are subject to a
variety of risks and uncertainties, many of which are beyond the
company’s control, which could cause actual results to differ
materially from the expectations. These risks and uncertainties
include, in addition to those discussed herein, all of the factors
discussed in the company’s Annual Report on Form 10-K for the year
ended Dec. 31, 2016 and the Quarterly Report on Form 10-Q for the
quarter ended March 31, 2017.
Contact:
Media: Casey Fielder (509) 495-4916, casey.fielder@avistacorp.com
Investors: Jason Lang (509) 495-2930, jason.lang@avistacorp.com
Avista 24/7 Media Access (509) 495-4174
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