Methodology for setting 2016 Avista rates was flawed, court finds

Avista Corp.’s 2016 rates for electricity and natural gas may need to be recalculated, following a successful court challenge.

The Washington Court of Appeals sided last week with the state Attorney General’s Office, which disputed some of the methodology used in the rate-making.

Avista’s rates must be approved by the state Utilities and Transportation Commission, which is currently reviewing the court ruling, UTC spokeswoman Kate Griffith said. The three-member commission could petition the Washington Supreme Court to review the lower court’s decision.

The Spokane-based utility initially requested a $33.2 million, or 6.6 percent, increase in electric rates. However, UTC eventually required Avista to lower its electric revenues by about $8.1 million, or 1.41 percent.

Avista was allowed to raise natural gas rates by about 6.3 percent, collecting an additional $10.8 million in revenue. The new rates took effect in January 2016.

The court challenge revolved around how Avista recovered costs related to large infrastructure investments.

Avista issued a statement, saying the company will work with state regulators on the issue.