General Rate Case increase filed on July 5, but Power Cost Adjustment decrease filed today
I’m the first to admit that utility rates are complex and can be confusing. We may ask the utility commission for an increase in rates to recover certain costs, then ask for a decrease because other costs have declined.
View "Rates in Action" above to learn more about the
current Washington and Idaho general rate case requests,
including what's driving the cost of energy and perceptions
and facts about rates.
Confusing? In a word – yes.
But what you need to know is that your rates are made up of two components – base rates and other tariffs sometimes referred to as true-up tariffs. Base rates recover the company’s investment in generating and delivering energy to customers. True-up tariffs pass through certain costs that have no impact on the company’s earnings.
Today we asked the Idaho Public Utilities (IPUC) if we can decrease electric prices for our Idaho customers by an overall 5.99 percent because the cost of generating and purchasing power over the past 12 months was less than what is currently included in rates. It’s called a true-up of the Power Cost Adjustment (PCA) rate. We asked that, if approved, the new lower rates take effect on October 1
A fair question is why didn’t we make the requests at the same time? We filed the General Rate Case increase request on July 5. The IPUC has up to seven months from that date to conduct an extensive review of the request and make a determination. The PCA true-up (filed today), which we’re required by the IPUC to file annually by August 1, is a modified process. That’s why we’ve asked that, if approved, the new lower rates take effect on October 1.
The filings are for two different components of rates and work on different schedules. It’s important to know that both filings are requests because we’re a regulated utility. The IPUC will make a thorough review of both of the requests and make their determinations. As always, we’ll keep you posted here on the Avista blog.