Partial Avista rate hike approved

Effective Jan. 1, energy costs are going up for Avista Corp.’s Eastern Washington customers.

On Tuesday, the state Utilities and Transportation Commission gave the Spokane-based utility approval to charge more for electricity and natural gas. But the three-member commission decided that Avista can only collect a fraction of the amount it requested in a rate case filed last January.

Under the new rates, the cost of electricity will go up 2.8 percent, adding about $2 to a typical household’s monthly bill for a total of $79.47 per month. The new rates allow Avista to collect $12.1 million in additional annual revenue instead of the $69.8 million the utility initially requested.

Natural gas customers will pay an average of 25 cents more per month for a monthly total of $59.25. Avista will collect an additional $557,000 per year in gas revenues instead of $4.9 million.

Basic service charges will also go up 25 cents per month for a $6 monthly total. Ratepayers will also pay more for energy assistance programs. Each household will pay about $15 total per year.

Avista and other parties reached a partial settlement in the case in September. Falling wholesale prices for natural gas prompted Avista to scale back its revenue requests, though the level approved by regulators Tuesday went even lower than that.

Debbie Simock, an Avista spokeswoman, said utility officials were still reviewing the 148-page order and didn’t have an immediate comment.

State regulators allowed Avista’s stockholders the chance to earn a 10.2 percent rate of return on their shares, instead of the 11 percent return that Avista requested.

In addition, Avista wasn’t allowed to recover costs associated with power purchases from the Lancaster generating plant in Rathdrum. Commission members said the utility didn’t show that it followed legal requirements related to the purchase. That decision could be reconsidered in future rate cases if Avista can demonstrate that it complied with regulations.