The state attorney general's office says that a Dec. 29 legal settlement between the power utility Avista, state regulators and others contains critical flaws that cost ratepayers millions of dollars more than should be allowed.

The AG's Public Counsel Section is appealing the deal, today filing a petition for review in superior court in Olympia. If the appeal is successful, a judge could order refunds or order the case back to state regulators for changes.

The deal allowed a 9.1 percent hike in the company's revenues from electrical rates and 2.4 more from natural gas, according to the Attorney General's office. Tat's an additional $37.3 million for electricity and $4.8 million more for gas.

The Public Counsel section had recommended that rates be allowed to increase no more than $24.8 million for electricity and $3.4 million for gas.

The state's argument:

-that regulators failed to subtract the cost of advertising, charitable donations and some other company expenses from the rate hike,
-that current ratepayers are wrongly being asked to pay $39 million that Avista paid to the Coeur d'Alene Tribe as compensation for the utility's longtime use of the lake water for power.
-that Avista was allowed to bypass a normal 10-month review process for new rates.

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