What today’s Wash. rates filing means for you   

Tags: Avista Utilities, Electricity, Natural Gas, Rates, Infrastructure upgrades, Washington

We need to invest about $250 million each year over the next five years to continue updating and maintaining our system to serve our customers’ energy needs
 

Noxon Rapids Unit 4 turbine
The new Noxon Rapids Dam Unit 4 turbine is
lowered into place earlier this year. This 4-year,
$45-million project is coming to a close in 2012.
Pole replacement
An employee works to replace old wooden poles
(left) with a new steel structure (right). Steel
structures are more expensive, but typically last
longer than wooden ones.
New power lines
A line crew runs a new, higher-gauge power lines
over a two block distance in downtown Spokane.
Work like this ensures a more reliable system
that’s ready when you need it.
Working safely
An employee wears protective gear while using a
grinder at a natural gas job site in Spokane
Valley. We do our best to work safely on the
system that delivers you energy. 
Today Avista filed requests with the Washington Utilities and Transportation Commission to increase overall net electric rates by 5.9 percent, and natural gas rates by 6.8 percent in Washington only. The UTC has up to 11 months to review the filings and issue a decision.
 
What does this mean to you? If you’re an Avista electric customer in Washington with average use and the Commission approves the requests, you would see an increase of $4.94 per month or about 16 cents a day, for a revised bill of $83.91. If you’re a natural gas customer in Washington with average use, you would see an increase of $4.23, or about 14 cents a day, for a revised monthly bill of $65.78.

So why is Avista asking for more rate increases? The simple answer is that it costs more each year to provide safe, reliable energy to you. Meeting our customers’ energy needs reliably and responsibly, while still complying with state and federal requirements, is our first obligation, even when it costs more.

About 40 percent of your electric bill and 35 percent of your natural gas bill covers the cost of delivery – the equipment and people needed to provide safe, reliable energy service to you. Maintaining and updating our generation plants (some that are more than 100 years old) and substations, along with more than 18,000 miles of power lines, a quarter of a million poles, and nearly 8,000 miles of gas pipeline, is a big job that doesn’t stop, and one that costs more each year. When we replace or update old equipment with new equipment and technology, it costs many times more than when it was installed. It’s much like when you update your older home or vehicle. Imagine replacing flooring, cabinets and appliances in a kitchen built 40 years ago, and how much more those items cost today than they did in the 1970s.

This was the primary reason for the proposed increase in our last request and we expect it to continue to cause a need for increased rates in the future. We’ll need to invest about $250 million each year over the next five years to continue updating and maintaining our system to serve our customers’ energy needs. And, while our customers still pay some of the lowest prices in the northwest, we’re not the only utility facing rising costs and an aging system.

Keeping rates increases as low as possible
Even so, we work hard to manage our own costs and keep rate increases as low as possible. In the filings, Avista proposed a proposed one-year Energy Recovery Mechanism bill decrease, which is a rebate to customers based on power supply costs, to help offset the increase. About 60 percent of a customer’s electric bill and 65 percent of a natural gas bill is the cost of generating or purchasing electricity and purchasing natural gas to meet customer needs. Power supply costs were lower in 2011, due to factors such as declining natural gas prices and favorable hydroelectric conditions.

We also proposed through this request to help ease the burden of the increase on low-income customers with increased funding for Avista’s energy assistance programs.

Don’t forget, Avista offers services for customers such as comfort level billing, payment arrangements and Customer Assistance Referral and Evaluation Services (CARES), which provides assistance to special-needs customers through referrals to area agencies and churches for help with housing, utilities, medical assistance and other needs. To learn more, visit www.avistautilities.com.

Executive salaries in Wash. rates aren’t going up
So what about executive salaries, and how much do the salaries and incentives of our executive officers affect your rates? Not as much as you might think. Avista has proposed that the amount of executive officer salaries and incentives included in rates remain at their 2011 levels.

Approximately 25% of total officer salary and incentives is included in Washington retail rates, which makes up less than ½ a penny of every dollar you pay in rates. This adds up to about 40 cents of your monthly bill if you’re an electric customer with average use, and less than 75 cents if you get both electric and natural gas service. The bottom line is executive salaries aren’t driving energy costs up, rather it’s the rising costs of doing business and taking care of our system.

We realize in these difficult economic times it can be a struggle for people to pay their energy bills. We’ll keep working to reduce costs and improve efficiency while continuing to provide reliable, responsible energy at some of the lowest prices in the Northwest.
 
 
Posted by  System Account  on  4/2/2012
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