Avista electricity bills may dip

Beginning in April, Avista Corp.’s residential customers could see a bit of relief on their monthly electric bills.

The Bonneville Power Administration proposes a $336 million payout to Northwest utilities through the “residential exchange program.” The program was created to ensure that all Northwest residents receive a financial benefit from federal hydroelectric generation on the Columbia and Snake rivers.

Avista’s share of the proposed payout is $9.6 million. According to the Spokane-based utility, that would translate into a 4 percent credit on customers’ monthly bills in Washington. Idaho customers would receive a 9 percent monthly credit. The credit also would apply to small-farm customers.

The reductions would have to be approved by public utilities commissions in Washington and Idaho and would run through October.

The residential exchange program was created by Congress in 1980 through the Northwest Power Act. In essence, it allows public and private utilities to swap higher-cost power they generate for lower cost hydropower generated by 31 federal dams in the Columbia River Basin.

BPA is the government agency that markets that power.

How the residential exchange program operates, however, has been a source of ongoing dispute between publicly owned utilities and private, investor-owned utilities, such as Avista.

Following litigation from public utilities, BPA suspended the program’s monthly payments last May. In a May 3 ruling, the 9th U.S. Circuit Court of Appeals said that BPA overstepped its authority on how it set an annual subsidy to reduce electric rates for private utility customers.

“It wasn’t the principle of providing credits to these customers that was the issue,” said BPA spokesman Scott Simms, “but rather the methodology that was used.”

As a result of the suspended payments, Avista’s electric rates went up $4.21 per month for a Washington customer using 1,000 kilowatt hours of electricity per month.

Idaho customers saw their electric bills increase by an average of $6.03 per month.

BPA is working on a long-term resolution as part of its 2009 rate case for electricity. Meanwhile, has proposed the $336 million as an interim payment to utilities.

“We’re trying to have an outcome that will be equitable to customers in the region, and legally defensive,” Simms said.

Late last year, public and private utilities agreed on a framework for future payments from the residential exchange program.

“That’s a piece of good news” that should help speed up a resolution, said Larry La Bolle, Avista’s director of federal and regional affairs.

This spring, Avista will file electric rate cases with Washington and Idaho regulators. The utility wants permission to raise its electric rates to recover costs related to $200 million in improvements to Avista’s electrical systems.

That’s a separate action, not related to the residential exchange program, said Debbie Simock, Avista’s communications manager.

“Every change in rates has to be approved by the public utilities commissions,” she said.