Avista customers will see energy rates increase starting next week

Spokane-area residents will begin paying more for electricity and natural gas next week after state regulators approved Avista Utilities’ request for higher rates.

The higher rates include 7.7% more for electricity and 1.1% more for natural gas over the next two years. The first rate bump begins Dec. 21 and a second kicks in on the same day in 2023.

Avista spokeswoman Casey Fielder acknowledged that the rate increases coincide with the holidays, but she noted that the utility first sought the rate hikes in January 2022 and that the approval didn’t come for 11 months.

“We understand that any increases in energy prices can be a challenge for our customers,” Fielder said. “We definitely want them to reach out to us if they have any questions or concerns about their energy prices.”

The Washington Utilities and Transportation Commission approved Avista’s request despite expert testimony from Attorney General Bob Ferguson’s Public Counsel Unit this summer that the request was “not fair” for customers.

“Washington families are struggling right now,” Ferguson said in a statement at the time. “They do not need utility bills any higher than is absolutely necessary.”

The settlement agreement will boost Avista’s annual electric revenues by $50.5 million and natural gas revenues by $9 million over two years.

Costs for residential electricity users, those using an average of 932 kilowatt hours per month, would increase 5.2% from $85.52 to $89.52 per month starting on Dec. 21. For the same user, the bill would increase next year by 2.5% from $89.99 to $92.23.

The bills of residential natural gas users, those using an average of 67 therms of natural gas, will rise 0.3%, which will increase the monthly bill from $64.86 to $65.06 starting this month.

Those same users would see another increase this time next year of 0.8% that will raise the bill of a customer using an average of 67 therms of natural gas from $65.06 to $65.58.

The rate increases follow a multiparty settlement after Avista filed a plan last January that proposed even higher rate increases, some 11% for electricity and 4.3% for natural gas.

Fielder said Avista will use the added revenue for capital projects, or infrastructure used to transmit the energy. Those projects include a customer technology program, the continuation of the program where crews inspect and maintain electric poles and “wildfire resiliency investments” that help protect the system from fires, she said.

But the attorney general’s office testified to state regulators this summer that Avista overestimated some of its costs to provide power to customers, and its projected 9.4% profit margin is excessive at a time when electricity and natural gas rates contribute significantly to inflation.

The Public Counsel Unit stated that Avista is seeking $47 million more than it should for electric rates over a two-year period.

“If the commission accepts the revenue requirement increases in the settlement, the resulting bill increases will contribute unfairly to Avista customers’ energy expenses and compound the effects of inflation that its customers face,” Corey J. Dahl, a regulatory analyst for the Public Counsel Unit, said in testimony.

To ease the effects on customers, Avista and parties involved in the settlement agreed to offset part of this year’s rate request with what’s called a “residual tax customer credit.” The credit is expected to incrementally return $27.6 million to electric customers and $12.5 million to natural gas customers through December 2024.

Avista President and CEO Dennis Vermillion said in a news release that company officials are pleased with the commission’s decision.

“This is a positive outcome that benefits both our customers and shareholders,” Vermillion said in the news release. “We take our responsibility to provide safe, reliable energy at an affordable price very seriously, and we will continue to work hard to manage our costs and identify ways to best serve our customers that contribute to keeping energy prices affordable.”