Apr 01 , 2010
Spring is here, but for some, in this difficult economy, the mild winter didn’t ease the burden of their home energy bill. Each year Avista partners with regional community action agencies to provide qualified households financial assistance to pay their utility bills.
 
“Typically, energy assistance funds are depleted by this time. This year, however, there are still funds available to help those in need who have not yet received energy assistance,” said Anne Marie Axworthy, Avista’s director of community development. “We’re working closely with our community partners to increase awareness of the funds and to help people access them in a timely manner.”
 
 
Published: 4/1/2010  3:01 PM | 0  Comments | 0  Links to this post

Mar 31 , 2010
2009 Annual Report
Post by Jessie Wuerst

We’ve talked in this blog before about Avista being an investor-owned company. Because we are publicly owned by our shareholders, we have reporting requirements, which we meet each year. These reports are available to the public, and we believe they are a good way for people to gain a better understanding of how we do business.

At the end of February we filed our annual report and today we filed our proxy statement with the Securities and Exchange Commission. This is a great opportunity for shareholders and the public to read about how our company performed in 2009. The annual report takes an in-depth look at the financial operations of Avista Corp. and talks about the issues that may impact or are impacting our company.

The proxy statement provides information for shareholders who will vote on issues at the company’s upcoming annual meeting. There is a complete description of how the company is governed by the Board of Directors, their roles and responsibilities and information about directors who are nominated for election.

The proxy also contains in-depth information about executive compensation at Avista. Given the stories in the national news over the past couple of years, there is more and more attention to executive compensation. Some of our customers think that one of the reasons we request a rate increase is to pay the salaries of our executives. That’s not the case. You may or may not agree, so I hope you’ll read on to learn more about salaries and your bill.

The first thing to know is that all employee salaries, including executives, are targeted to be in the middle of the range for similar jobs at similar companies in our region. We review what’s happening in the market regularly. Salaries and incentives are reviewed by the state utility commissions each time we ask for a change to rates, and they determine what is reasonable to include when rates are set. 

Less than one-half cent of each dollar in your energy bill goes to pay for the salaries and incentives for all of our officers. That’s less than 75 cents on a monthly bill of $150.  Any remainder is paid by shareholders.

Okay, what’s driving the rest of the compensation you see for executives? A part of their compensation is based solely on achieving the targets set for the company’s performance. This means that a part of their compensation is at risk and not guaranteed to be paid. In other words, if we don’t meet goals for customer satisfaction, service reliability and overhead costs, that part of their compensation isn’t paid. Not all industries or all companies set these kinds of targets, but we do and we have for many years.

Some of what is included in the Total Compensation chart in the proxy is a change in the value of the top five executives’ pension – it’s not money they’re taking home – it’s a change in value of their future pension based on length of service with the company, age and other factors. And I want to assure you that Avista doesn’t give perquisites (perks) – no personal private club memberships or discounts on energy bills or cars or boats or vacation homes.

I hope I’ve been able to give you a little more information about our company than you had before you read this post. If you’re interested in more information about executive compensation or how our company runs or our annual report and proxy statement, you can read more here or contact us at conversation@avistautilities.com. We’ll do our best to give you the information you request as quickly as possible.
 
Published: 3/31/2010  8:36 AM | 0  Comments | 0  Links to this post

Mar 30 , 2010
Smart grid work
Avista crews adding new,
larger power lines to area
in North Spokane.
Post by Hugh Imhof

Avista’s Spokane Smart Circuits project is officially off and rolling. On March 23, 2010 The U.S. Department of Energy and Avista signed off on an agreement that will start $20 million in investment grant funds flowing to our community.

The Department of Energy chose Avista’s smart grid project to receive the largest matching grant in Washington.  Avista will contribute $22 million for a total planned project investment of $42 million. The overall project includes the deployment of a distribution management system, intelligent end devices and a communications network along 59 distribution circuits and 14 substations, which will benefit more than 110,000 electric customers

Since January Avista line crews have been preparing the distribution system for the new hardware and software additions that will be elements of the Smart Circuits project. The crews have upgraded power lines along 5.5 miles of the system.

Smart grid work
The cross-arm extensions were
added to this utility pole, so crews
can add new, higher capacity power
lines, while keeping customers in
service.
The new gear to be installed includes smart switches, transformers, regulators, communication devices, capacitors and more. It will take about two years to install all the new equipment and bring the system to functionality.

Once everything is completed, the project will reduce energy losses, lower system costs, increase reliability and enhance the ability to integrate distributed renewable generation resources. Customers will see fewer and shorter outages. The system efficiencies will save about 42,000 Megawatt hours a year and will prevent some 15,000 tons of carbon from being released into the atmosphere from power generation.

It is a complicated project involving many individuals and teams from throughout the company. In addition to technical design and engineering the project requires careful timing of purchasing, equipment staging, testing, training, crew scheduling, hiring personnel and much more.

We’ll post updated information about the project as it moves along further.
Published: 3/30/2010  3:19 PM | 0  Comments | 0  Links to this post

Mar 30 , 2010

We’ve been engaging with customers online for some time now and over the last few weeks, I’ve spent a bit of time commenting on the discussion forums of our local news media. I’ve tried to correct misconceptions about our activities and direct people to places online where they can find more information about the subjects they are passionate about.

These customer outreach efforts drew the attention of The Spokesman-Review recently, because frankly, there aren’t many companies doing what we’re doing online. Yesterday reporter John Stucke’s question and answer with me ran and I was honored to participate and talk about our efforts online. Read the article, "Avista social media man talks his trade."

If you’ve been following this blog for any length of time, you know that it’s the centerpiece of our social media efforts. We write posts, do videos and podcasts for the blog, while promoting that work on twitter and discussion forums. We’re also participating in chats and other activities that allow you to talk with us about what’s on your mind. We even did a video earlier this year that discussed our social media focus.

When stories about Avista run in the news or people write about us in any format, we pay attention (just like any other company). I read what people say and what sparks their interest. Oftentimes the comments following these stories contain common misconceptions about how we do things, and that’s when I step in to offer some additional thoughts. Most people are simply offering their opinion and there’s nothing wrong with that. I don’t aim to change anyone’s mind, just offer additional resources so people can decide for themselves. 

It’s certainly an interesting time to be online talking with people about the utility business – yes, even those who disagree with what we say or do. I’ll continue to talk to people online in reaction to comments and e-mails, but if you’d like us to spend some time talking about a particular subject on the blog, e-mail me at conversation@avistautilties.com.
 
Published: 3/30/2010  3:19 PM | 0  Comments | 0  Links to this post

Mar 26 , 2010
Infrastructure video
 
Post by Dan Kolbet

1950s era transformer
Massive 1950s era
substation transformer.
Brand new substration transformer.
New substation transformer.
Roughly 20 feet tall.
I think there’s a misperception about what an “infrastructure upgrade” is. The idea of an upgrade says that you’re getting something extra, but maybe you don’t need it. I upgraded my burger combo meal to the large size or upgraded to a new socket set. I could have done without either one (especially the burger, trust me). So when Avista says we’re using ratepayer money to make “upgrades,” it just might make you say, “Nope, the same old system was fine, stick with that – no upgrades needed.”

The trouble is, we’re not able to mess around when it comes to the reliability of our system. And it’s a big system – we have about 275,000 poles for example, some of which are 60 to 70 years old. Now, I know plenty of 60 to 70-year-olds out there who are doing just fine, but they’ve probably not been working every second of every single day, exposed to the elements since the end of World War II like some of our poles and transformers.

Continuing to run a system and handle increasing demands means putting up new stuff.

So the idea of an upgrade rings true in this sense: When we put up a new transformer for example, it is more efficient, better for the environment and will last for decades into the future. That’s an upgrade over an aging piece of equipment. But these things are costly. The substation transformer shown on the top right cost about $35,000 in the 1950s. This equipment has long since been paid off, of course. Today its replacement, shown on the bottom right, costs between $300,000 to $500,000.

Why can’t Avista just tighten its belt and absorb those costs? In many cases, we have. A few examples include centralizing internal processes like supply chain, dispatch, meter change-outs; modifying company printers to default to black and white two-sided jobs, shelving plans to build an office building, continuing a hiring freeze, optimizing our automated phone system to handle more transactions, using more efficient and faster equipment in the field – and more. These savings, while good, just aren’t enough to off-set the capital dollars that have to be spent to “upgrade” our system.

Infrastructure upgrades are just one example of what we’re doing with the additional funds we’re requesting in these rate cases. We produced a video, titled “Our Infrastructure: Providing Safe, Reliable Energy” that reviews this subject. It’s around two minutes long and worth a look if you want to know where the money goes.
Published: 3/26/2010  8:18 AM | 0  Comments | 0  Links to this post

Mar 25 , 2010
Power strip
Post by Sarah Hilbert
 
Been on spring break yet? Here’s some tips that could help give your energy use a break.

If you’re a college student, depending on which school you attend, you may have recently returned from a much needed spring break. Or, you may be counting down the days to one coming up. Either way, if you’re a college student who rents, then here’s some low-cost, no-cost ways to save energy while you are at home or away enjoying your break. Even if you rent an apartment, townhouse or a home, you can make a difference on your energy bill and the environment.

Lighting and electronics
Consumer electronics are becoming a large part of everyday life, accounting for 15 percent of household electricity use. Many consumer electronics use energy even when turned off, which is called phantom energy use.

Buy a smart power strip. Smart power strips can shut down auxiliary items when the main device is shut off, but leave some devices left on, such as clocks. Search for one online by “smart” or “controlled” plug strips.

Unplug any battery chargers or power adapters, such as a cell phone charger, when not in use. Each individual charger doesn’t use much energy, however, every little bit adds up, especially with roommates.

Remember to turn your computer off at night and use the built-in energy savings standby and hibernate functions. Computers left on 24/7 can add about $12 a month to your energy bill. If you have more than one computer in your residence, the potential energy savings can really add up.

Install high efficiency compact fluorescent bulbs (CFLs) in place of incandescent bulbs. CFLs last up to seven times longer than an incandescent bulb (7,000 hours versus 1,000 hours). It will take about six months at three hours burn-time per day to pay for the CFLs, which are available for every lighting need.

Reducing your energy use in the kitchen
-Use the microwave, a pressure cooker, electric pan or a toaster oven for smaller meals.

-Take advantage of residual heat by turning the oven or burners off a few minutes before you’re done cooking.

-One dishwasher load usually uses less hot water than three washings by hand.

-Vacuum the condenser coils on your refrigerator every three months to remove dust so it can operate more efficiently. Coils are located on the bottom or rear of the unit.

Tips for vacation
Water Heater: Turn down the temperature on your water heater to 120 degrees. If you are away for a week or longer, turn off an electric water heater or put a natural gas water heater in vacation mode, if your water heater has one.

Refrigerator: Fill your refrigerator or freezer with plastic milk containers filled with water, if you’ll be away for less than a month. A full refrigerator or freezer uses the smallest amount of energy. Also, turn off your ice-maker.

Lights: Turn off all lights in your home before leaving except for security lighting. Consider installing a timer to limit the time the security lights are on and to make it appear you are home.

Electronics: Unplug all electronic appliances such as computers, stereos, TV’s, DVR’s, cable and satellite boxes, cell phone chargers and DVD players. Electronics with digital displays, instant-on features and remote controls use electricity even when they are turned off.

Windows: In summer, close drapes and blinds to block out the sun and keep your home from heating up and provide security while you are away.

If you have roommates, try to reach an agreement about a comfortable temperature for all. Running the heat or air conditioning (A/C) with windows open will quickly add to your energy bill.
 
Published: 3/25/2010  2:05 PM | 0  Comments | 0  Links to this post

Mar 24 , 2010
Power Supply video
 
Post by Dan Kolbet
 
The cost of energy itself (generating or purchasing) makes up about 60 percent of the cost customers pay each month. So, when those costs go up, it makes a significant impact on rates. To help work through this topic we created the video, “Power Supply: What’s Driving Rates.”

The details
Avista generates about 93 percent of the power customers use with our own hydro, biomass, natural gas and coal generation resources. The additional power our customers need comes from resources owned by other Northwest producers via some long-term, low-cost contracts.

The demand for electricity continues to increase, so when those long-term contracts expire, as they have and will continue to do so over the next several years, we have to replace that low-cost electricity with reliable, but more expensive power.

Today, the commodity portion of a customer’s bill is about 4 and one half cents a kilowatt-hour for electricity. But, as those long-term contracts expire, the replacement power will cost between 7 and 11 cents, depending on the resource.

Learn more about power supply costs by watching the video (under two minutes).
Published: 3/24/2010  3:33 PM | 0  Comments | 0  Links to this post

Mar 23 , 2010
Utility pole circa 1937
Utility pole from 1937.
Does this look like a tree
or what?
Transformer circa 1958
A transformer in use
since 1958.
Post by Dan Kolbet
 
So, today we filed the electric and natural gas rate cases in Washington and Idaho that we’ve been talking about for the last few months. This kicks off up to 7 months of discussion of these rate case filings in Idaho and 11 months in Washington. We file the requests with each state commission, but they ultimately set the rates you pay after a public, transparent process that you can get involved in.

No one around here is happy that we’re filing for a rate increase. We see everyday how the rising cost of energy impacts families in the communities we serve. It’s no small consideration in nearly every meeting I’ve had with my co-workers and our leadership on this subject. It’s one of the reasons we offer many programs to help customers with energy assistance.  But the fact remains, that these requests are necessary to continue to provide you with the safe, reliable energy you depend on.

The demand for electricity is continuing to increase and that places a greater demand on our electric system. So each year we have to look at what our system needs to keep your lights on and comply with regulatory mandates. We refer to the work we need to do as upgrading our infrastructure – which isn’t the catchiest term - but probably the most accurate.

We have poles and transformers in our system that are 60 to 70 years old. Imagine what those transformers were used for in 1940 or 1950. Now think of how we use electricity today. Nearly everything in your house is wired.

Click to play
Infrastructure upgrades are just one example of what we’re doing with the additional funds we’re requesting in these rate cases. We produced a video, titled “Our Infrastructure: Providing Safe, Reliable Energy” that reviews this subject. It’s around two minutes long and worth a look if you want to know where the money goes.

I know that filing rate cases will generate questions and we’re here to answer them. You can drop us a note in the comments section of this post or e-mail us at conversation@avistautilities.com.

More info
Click here to learn more about our recently filed rate cases.
Published: 3/23/2010  1:07 PM | 0  Comments | 0  Links to this post

Mar 23 , 2010
Click to play podcast
 
Post by Dan Kolbet

Anytime we file a rate case, it’s certain to generate questions and concerns from customers and there’s nothing wrong with that. So in order to provide you with the answers, you no doubt seek I interviewed Avista Vice President for State and Federal Regulation, Kelly Norwood.

This episode is about 5 minutes long and offers a great insight into the reasons Avista filed for rate increases in Washington and Idaho.

We also discuss what a rate case is, the expected timeline for these cases, what’s in them, power supply and infrastructure needs, executive compensation, profits and shareholders and more.
 
UPDATE: This post was updated July 1. Click onthe graphic above to play the podcast.
 
 
 
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Published: 3/23/2010  1:07 PM | 0  Comments | 0  Links to this post

Mar 15 , 2010
Reading by lamp light.
Reading by lamp light.
Post by Dan Kolbet

This morning I had the pleasure of working with my 4-year-old daughter on a video I’m producing for customers. It’s going to be about Power Supply and how those costs are driving the rates you pay. The image on the right is from the video. I’m not sure just yet what will make the final cut and end up in the video, but she was pretty excited to watch herself on camera nonetheless.

I told her I wanted to show someone using electricity, so we flipped on a lamp and she read some books while I fiddled with the camera for about 20 minutes. I probably got about 6 seconds of good video. That’s about par for the course for me.

She asked me why we turned on the lamp. I said it was because it used electricity, like nearly everything in the house. She then started pointing to things around the house that use electricity, like the TV, refrigerator, DVD player, laptop, lights, clocks, microwave, her princess nightlight. This is by no means an exhaustive list. This went on for 10 minutes in nearly every room in the house. She had a couple misses – no electricity with the dog, door or carpet. Yet the carpet brought up “getting shocked,” referring to static electricity, but that’s for another day.

Anyhow, the point is that we have a lot of electronics in the house and I bet you do too. We didn’t have Blu-ray players, DVRs or computers (at least not a home), when I was a preschooler. And while we could live without some of the stuff we plug-in everyday – I’m glad I don’t have too.

The increasing demand for electricity can be directly tied to all the cool technical stuff we can buy for our homes today. That doesn’t mean I don’t want to be smart about my use though.

I suspect if you send your kids on a (supervised) electricity scavenger hunt around the house, you’d be able to keep them occupied for an hour or so. For more ideas about teaching kids about electricity and natural gas, check out www.avistakids.com.
Published: 3/15/2010  3:38 PM | 0  Comments | 0  Links to this post

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