Avista Corp. seeks to raise natural gas prices by 10%

Avista Corp. has filed two rate adjustment requests that, if approved by state regulators, would decrease electric rates and increase by 10% the amount Washington customers pay for natural gas.

If the two rate adjustments are approved by the Washington Utilities and Transportation Commission, residential natural gas customers in the state using an average of 66 therms per month would see their monthly bills increase 10% from $58.23 to $64.04.

Residential electric customers using an average of 914 kilowatt hours per month would see their bills decrease 28 cents from $81.22 to $80.94.

Avista filed its annual rate adjustments Tuesday with the UTC. The proposed changes would increase the Spokane-based utility’s natural gas revenues by $17.5 million, or 10.6%, effective Nov. 1, according to a company release.

The electric rate adjustment is related to the Bonneville Power Administration’s Residential Exchange Program, which provides a share of benefits from the federal Columbia River power system to customers in the state via a monthly bill credit.

The second rate adjustment is Avista’s purchased-gas-cost adjustment filing that is submitted annually to state regulators to balance the cost of wholesale natural gas purchased by the utility with the amount included in customers’ rates. Avista attributed natural-gas rate increase to rising wholesale prices during the second quarter of 2021 that has resulted from higher demand and lower supply.

Avista is seeking to recoup that higher cost of natural gas for transactions it had entered into through October 2022.

The utility has been procuring natural gas on a periodic basis over the past 36 months to serve customers this year. The purchases represent nearly 28% of estimated-annual-load requirements for the upcoming year, Avista spokeswoman Celena Mock said in an email.

The lack of supply and increased demand for natural gas has led to smaller-than-average storage, putting upward pressure on prices through the beginning of 2022 – both nationally and regionally, Mock added.

Other factors in the West contributing to the upward pressure on prices include a below-average water year and reduction of available hydropower capacity in California, leading to a rise in demand for natural-gas-fired generation in the area.

Additionally, maintenance on an interstate pipeline has slowed capacity for bringing natural gas from Canada to the Pacific Northwest, she said.

Avista’s recent rate adjustment filing is not the first time it has sought a double-digit increase in natural gas prices. In a rate adjustment filing in 2019, the utility proposed a 14.8% increase in natural gas rates, citing higher wholesale prices caused, in part, by a Canadian pipeline disruption that limited natural gas flows into the Pacific Northwest.

Last month, the three-member UTC approved several filings from Avista resulting in a 3.83% decrease in electric rates and a 2.6% increase in natural gas rates, which went into effect Aug. 1.

In Washington, natural gas companies must file plans to adjust rates at least every 15 months based on fluctuations in wholesale gas prices.

Utilities earn profits on the cost of supplying natural gas to customers’ homes and businesses.Amy Edelen can be reached at (509) 459-5581 or at amye@spokesman.com.