SPOKANE, WA -- (Marketwire) -- 02/06/13 -- Avista (NYSE: AVA) and other parties involved in the company's electric and natural gas general rate filings have reached a settlement agreement that, if approved by the Idaho Public Utilities Commission (IPUC or Commission), would conclude the proceedings related to the general rate requests filed on Oct. 11, 2012. New rates would be implemented in two phases: April 1, 2013 and Oct. 1, 2013.
The settlement proposes that, effective April 1, 2013, Avista would increase base rates designed to increase its annual revenues from Idaho natural gas customers by 4.9 percent or $3.1 million. There would be no change in base rates to increase annual electric revenues on April 1. However, the settlement would provide for recovery of the costs of the Palouse Wind Project through the Power Cost Adjustment mechanism beginning April 1.
The settlement also proposes that, effective October 1, 2013, Avista would receive an additional increase in base rates designed to increase its annual revenues from Idaho natural gas customers by an overall 2.0 percent or $1.3 million. A credit resulting from deferred natural gas costs of $1.6 million would be returned to natural gas customers from Oct. 1, 2013 through Dec. 31, 2014, so the net annual average natural gas rate increase to customers effective Oct. 1, 2013 would be 0.3 percent.
If the settlement is approved, effective Oct. 1, 2013, Avista would also increase base rates designed to increase its annual revenues from Idaho electric customers by an overall 3.1 percent or $7.8 million. A $3.9 million credit resulting from a payment to be made to Avista by the Bonneville Power Administration relating to its prior use of Avista's transmission system would be returned to Idaho electric customers from Oct. 1, 2013 through Dec. 31, 2014, so the net annual average electric rate increase to customers effective Oct. 1, 2013 would be 1.9 percent.
The $1.6 million credit to natural gas customers resulting from deferred natural gas costs and the $3.9 million credit to electric customers from Bonneville Power Administration relating to the prior use of Avista's transmission system will not impact company earnings.
"The revenue increases reflected in the settlement agreement, together with our continued management of the growth in utility costs, provides a framework for positive outcomes from our Idaho operations for both our customers and our shareholders in 2013 and 2014," said Dennis Vermillion, Avista Corp. senior vice president and president of Avista Utilities. "It gives our Idaho customers more certainty in their energy rates for the next two years and keeps their energy prices at some of the lowest prices in the Northwest and the nation."
The settlement agreement states that Avista may file a general rate case in Idaho in 2014. However, any increase in base retail rates would not take effect prior to Jan. 1, 2015. This does not preclude the company from filing annual rate adjustments such as the Power Cost Adjustment (PCA) and Purchased Gas Adjustment (PGA).
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