Increased capital investments is the major driver in Avista’s request filed with the Washington Utilities and Transportation Commission (UTC) to increase electric and natural gas base rates. Avista has requested an effective date of January 1, 2015. The last general rate request filing in Washington was April 2, 2012.
Avista’s request, if approved, would increase annual electric base revenues by 3.8 percent or $18.2 million and annual natural gas base revenues by 8.1 percent or $12.1 million. Both requests are based on a proposed rate of return on rate base of 7.71 percent with a common equity ratio of 49.0 percent and a 10.1 percent return on equity.
In addition, Avista’s electric customers are receiving benefits from two rebates that are currently reducing customers’ monthly energy bills by 2.8 percent during 2014. These rebates will expire at the end of 2014. Avista is proposing a new rebate beginning January 1, 2015, related to its sale of renewable energy credits that would reduce customers’ monthly bills by 1.1 percent.
The net effect of the expiring rebates and the new rebate will result in an increase of about 1.7 percent beginning January 1, 2015. These rebates are passed through to customers on a dollar-for-dollar basis and do not increase or decrease the company’s earnings.
If Avista’s requests are approved, a residential customer using an average 965 kilowatt hours per month would see a total billed increase of $4.89 a month, or 6.1 percent, for a revised monthly bill of $84.98, beginning January 1, 2015. The revised monthly bill includes a proposed increase in the monthly basic charge from $8.00 to $15.00.
Avista serves more than 241,000 electric and nearly 152,000 natural gas customers in Washington.