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May 31, 2002
State Settles Avista Rate Case

Seattle - May 31, 2002 - Avista Utilities will not increase its rates further and will have to absorb a greater share of its expensive power purchasing agreements, according to a settlement reached today between the utility, state regulators and the Washington State Attorney General.

If approved by the Washington Utilities and Transportation Commission (WUTC), the settlement would essentially freeze Avista’s rates at current levels.

Avista, which provides power to a large portion of Eastern Washington, originally asked for a 37 percent rate increase, and the WUTC last fall approved a 25 percent rate surcharge that allows the utility to recover at least some of the extraordinary power costs it paid between 1999 and 2001.

The commission in March also approved an interim rate hike of 6.2 percent — for a total rate increase of 31.2 percent above last fall's rates, but 5.8 percent less than the utility’s original request.

Included in the settlement announced today is an "'Energy Recovery Mechanism" that requires the company to bear more than half of the excessive costs incurred through long-term power contracts. The company originally requested that its customers pay 90 percent of the company’s extra costs.

The "ERM" is an annual mechanism that requires the company to absorb the first $9 million in excess costs and 10 percent of all additional costs. The remaining extra costs will be covered through current rates.

The settlement also provides additional low-income assistance, including $150,000 per year for Project Share, which provides bill assistance to low income customers.


Robert Cromwell, Assistant Attorney General, (206) 464-6595 
Chris Jarvis, AGO Public Affairs, (206) 464-6432

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