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FOR IMMEDIATE RELEASE
October 23, 2012
Public Counsel questions back-to-back winter rate increases in proposed Avista settlement

SEATTLE - Avista, UTC Staff, and other parties filed a non-unanimous multiparty settlement late Friday with the Washington Utilities and Transportation Commission (UTC) in Avista's general rate case.  The Public Counsel Section of the Washington State Attorney General's Office did not sign the settlement.

"The proposed settlement provides for guaranteed, back-to-back annual rate increases for customers that would go into effect in January of 2013 and January of 2014.  The rates would go into effect in the heart of winter heating season.  Absent this settlement, any new rates ordered by the UTC would not have taken effect until March 2013," said Simon ffitch, Division Chief of the Public Counsel Section.  "This is a surprising change of positions in light of the testimony and evidence filed by staff and other parties in September that demonstrate a rate reduction - not an increase - is in order.  Given the strong cases for a rate reduction and the message from customers that they can no longer absorb these annual rate increases, Public Counsel can not support the proposed settlement."

Simon ffitch added that the settlement calls for a significantly higher shareholder profit margin than recommended by both staff and the Industrial Customers of NW Utilities in testimony.  The settlement, ffitch says, also does not address some key issues, including attrition, executive compensation and board of director costs, charitable contributions, image advertising, and non-utility related use of the corporate aircraft.  "The commission should hold a full hearing to consider the evidence of excessive revenue," said ffitch.

The Spokane-based utility's original request sought rates that would generate an additional $40.9 million in revenue from its electric customers and an additional $10.1 million in revenue from its natural gas customers.  The proposed settlement allows for a three percent rate increase for electric service of $13.7 million in 2013 and an additional three percent increase of $14 million in 2014.  The settlement calls for credits from the ERM account to offset the rate increases. However, the credits would expire at the end of 2014, resulting in a two percent increase in 2015, in addition to any increase requested by Avista in a 2014 general rate case.

For natural gas, the proposed settlement provides for increases of $5.3 million (3.7 percent) and $1.4 million (0.9 percent) in 2013 and 2014, respectively.

Expert testimony filed by UTC Staff on Sept. 19 argued that Avista should see a revenue reduction of over $1 million annually, while the Industrial Customers of NW Utilities recommended a reduction of over $7 million. 

The proposed settlement is a recommendation that does not take effect unless approved by the UTC.  The Commission may approve, reject, or modify the settlement agreement.  Public Counsel will have an opportunity to file testimony in opposition of the proposed settlement on Nov. 9 and proponents of the settlement may file rebuttal testimony on Nov. 19.  Hearings on the proposed settlement will take place at the Commission's headquarters on Nov. 29 and 30.  If the Commission rejects the settlement, it would then hold a full hearing on recommendations to reduce rates.

Avista serves approximately 236,000 electric customers and 149,000 natural gas customers in Eastern Washington.

PUBLIC COMMENT:
Members of the public may comment on the rate case and the proposed settlement agreement in a number of ways. Written comments may be sent to UTC, P.O. Box 47250, Olympia, WA, 98504, or e-mail comments@utc.wa.gov. Include your name and mailing address, the name of the company (Avista), and docket no. UE 120436 / 120437 (electric and gas).

Comments by telephone can be made by calling the Commission at (888) 333-WUTC (9882).

For more information, customers may contact either the UTC or Public Counsel:

  • UTC - (800) 562-6150, e-mail at comments@wutc.wa.gov. Information is available online at www.wutc.wa.gov. Enter docket no. UE 120436 (electric) or UG 120437 (natural gas).
  • Attorney General's Office Public Counsel Section -- Public Counsel, Attorney General's Office, 800 Fifth Avenue, Suite 2000, Seattle, WA 98104-3188, or e-mail utility@atg.wa.gov

The Public Counsel Section advocates for the interests of consumers on major rate cases, mergers, rulemakings, and other proceedings before the UTC. More information about Public Counsel's work is available online at http://www.atg.wa.gov/Utilities/AboutPublicCounsel.aspx.

Contacts:       Janelle Guthrie, Director of Communications, (360) 586-0725
                            Lisa W. Gafken, Assistant Attorney General, (206) 464-6595                                                   

Editor's Note: The spelling of Simon ffitch is correct - the surname begins with two lowercase f's.

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