You may have heard that Avista settled its electric and natural gas rate requests in Idaho. What exactly does this mean?
The bottom line is this: On August 1, if approved, residential electric rates in Idaho could go up just under two percent, while natural gas rates won’t change. Read the news release
for all the details of how these percentages are factored.
So why is the electric rate increase in the settlement agreement smaller than the company requested in January? And why didn’t natural gas rates increase? In January, we filed for a net electric rate increase of 7.8 percent. The natural gas request was 3 percent. We heard from a lot of you about this request – and we’re still listening.
Rates should be based on the best information available, following a full review by the state regulatory commission. So what this settlement means is that the system works. From the time we filed in January through the approximate seven-month approval process, circumstances changed. The big one was the cost of natural gas on the wholesale market.
Strange as it might sound, we use natural gas to make electricity too. In 2008 it was about 24 percent of our power supply mix. (Hydro-power was at the top at around 55 percent.) So, if it costs us less to buy the gas we use, then it costs less to make the electricity we provide as well.
For customers in Washington and Idaho that use natural gas in their homes for things like space and water heating, we’ve already lower gas rates twice this year
. As prices dropped, it made sense to have a smaller electric rate increase, based on the more recent natural gas prices.
The Idaho Public Utilities Commission still has to approve the all-party settlement, and we hope it will. In addition to the IPUC staff, other parties in the case include large industrial customers and low-income advocates. Input was given directly to the IPUC by other customers through written and electronic comments, as well as public hearings.
We’re a regulated utility, which means we can’t simply charge you whatever we want, at any time. Many stakeholders – you included – are watching us to make sure we provide you with fair prices, reliable service and are good stewards of the environment. No customer wants higher prices, but it’s good to know that the rate-making process is transparent and provides a fair outcome for all involved.
Share your thoughts: What do you think about the settlement agreement in Idaho? Click on 'comments' below and you'll be re-directed to where you can comment.
This news release contains forward-looking statements regarding the company’s current expectations. Forward-looking statements are all statements other than historical facts. Such statements speak only as of the date of the news release and are subject to a variety of risks and uncertainties, many of which are beyond the company’s control, which could cause actual results to differ materially from the expectations. These risks and uncertainties include, in addition to those discussed herein, all of the factors discussed in the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2008, and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2009.