AVA - Avista files multi-year rate plan in Washington | Benzinga
SPOKANE, Wash., Jan. 18, 2024 (GLOBE NEWSWIRE) -- Today Avista (NYSE:AVA) filed a multi-year rate plan with the Washington Utilities and Transportation Commission (WUTC or Commission) that, if approved, would allow the Company to recover increased operating and maintenance costs and ongoing investments to infrastructure, technology and more. If approved, new rates would be effective in Dec. 2024 and Dec. 2025.
"The effects of inflation impacted the entire country, and the cost of doing business has gone up for all companies and all industries. Utilities across the nation work to replace infrastructure and meet increasing compliance obligations while the costs of operating and maintaining our systems have steadily increased. Avista is not unique in this regard, and our costs to deliver energy continues to outpace our revenue. The ongoing effort to align the rates customers pay with Avista's costs to serve is one of the main reasons we file general rate requests," Avista CEO Dennis Vermillion said.
"Our customers remain our primary focus as we make decisions about how and where to invest across the company. We've continued to make important and necessary investments in our infrastructure. This includes upgrading substations and generation facilities, investments in customer-facing technology, replacement of deteriorating natural gas pipe, investments to increase wildfire resiliency, replacement of other aging infrastructure, and steps to meet our clean electricity goals."
"We take our responsibility to provide our customers with energy at an affordable price very seriously. The fact that our region is fortunate enough to benefit from hydrogeneration means that the total average monthly cost of Avista's residential electric service is almost 40% lower than the national average for investor-owned utilities," Vermillion said.
Two-Year Rate Plan
If approved, the electric general rate request is designed to increase annual revenue by $77.1 million (or 12.6% on a billed basis) effective in December 2024, and $53.7 million (or 7.8% on billed revenue basis) effective in December 2025.
If approved, the natural gas general rate request is designed to increase annual base revenue by $17.3 million (or 6.3% on a billed basis) effective in December 2024, and $4.6 million (or 1.6% on a billed basis) effective in December 2025.
The electric and natural gas requests are based on a proposed rate of return of 7.61%, with a common equity ratio of 48.5%, and a 10.4% return on equity.
Infrastructure Investments
Avista must continue to replace infrastructure that has reached the end of its useful life, as well as respond to the need for reliability and technology investments required to build the integrated energy services grid that will take us into the future. Among the projects included in today's filing are:
- Investments in our clean energy hydroelectric projects, such as Nine Mile, Cabinet Gorge, Post Falls, and Noxon Rapids, as well as installation of new substations to meet customer capacity requirements.
- Continued investment in Avista's Wildfire Resiliency Plan, which outlines substantial steps that Avista has taken to guard against the growing threat of wildfires including grid hardening, enhanced vegetation management, and other industry-leading best practice measures.
- Ongoing systematic replacement of portions of natural gas distribution pipe in Avista's service area installed prior to 1987, as well as replacement of other natural gas service equipment to strengthen the integrity, safety, and reliability of the system.
- Technology upgrades that support necessary business processes and operational efficiencies that allow Avista to effectively manage the utility and serve customers.
Beyond infrastructure investment, another important driver of the Company's electric requests over this multi-year rate plan reflects the impact of updated power supply costs.
Colstrip
In year two of the proposed multi-year rate plan, the Company, in compliance with Washington's Clean Energy Transformation Act (or CETA), has removed from customer rates the costs associated with generation from the Colstrip Generating Plant. Avista is a 15 percent owner of Units 3 and 4 at the plant. As a part of CETA, by the end of 2025 all electric utilities must eliminate coal-fired generation from serving Washington customers.
WA Residential Customer Bills
Electric
Effective Dec. 2024: Residential electric customers in Washington using an average of 945 kWhs per month could expect to see a total billed increase of 13.3%, or $12.94 for a revised monthly bill of $110.20. The monthly increase includes a proposed $6.00 per month increase in the basic charge to a level of $15.00 per month.
Effective Dec. 2025: Residential electric customers in Washington using an average of 945 kWhs per month could expect to see a total billed increase of 6.2%, or $6.87 for a revised monthly bill of $117.07 from $110.20. The monthly increase includes a proposed $5.00 per month increase in the basic charge to a level of $20.00 per month.
Natural Gas
Effective Dec. 2024: Residential natural gas customers in Washington using an average of 66 therms per month could expect to see a total billed increase of 6.7%, or $6.36 for a revised monthly bill of $101.22. The monthly increase includes a proposed $5.50 per month increase in the basic charge to a level of $15.00 per month.
Effective Dec. 2025: Residential natural gas customers using an average of 66 therms per month could expect to see a total billed increase of 2.0%, or $2.04 for a revised monthly bill of $103.26 from $101.22. The proposed monthly increase includes a ...