Mar 23 , 2010
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.
Feb 11 , 2010
I always enjoy customer comments on the blog, even if we don’t get flooded with them
. I wanted to share this one from a customer named Vivian, who posted a comment on our announcement of a Washington electric rate decrease request
in early January.
Vivian said: “Now, if this rate "decrease" is approved, will it be 7% off the new rate effective Jan 1st, just 43 days earlier, or will it be 7% off the old rate? It is very, very frustrating, to reduce our usage by 30 kwH/day, only to have our rates increased by 2.7%! This is on top of 3 increases for 2009. Gotta get it back some way, don't you? Frustrated, as I said.”
To which I replied: Vivian, I understand your frustration, we seem to have rate changes (up and down) a lot and it’s hard to keep track (even for me). To answer your question the requested 7% decrease in Washington would be based on the current rate being charged, which includes the increase in January. The timing isn’t very convenient, but it’s a decrease and it’s part of the regulatory process.
But the bottom line is this: This time last year a Wash. residential customer using 1000 kwh would be billed $75.94. Today its $77.14. If our decrease request is approved, the new rate would be $71.79 – down even from this time last year.
Since Avista is a regulated utility, we’re required to ask regulators for rate changes, up or down. It’s no surprise that people would rather see rates go down rather than up, but that’s challenging considering the increasing demand for energy. Sometimes we’re even required to request a rate change for various programs or adjustments based on regulatory requirements like the upcoming tariff filings in Washington and Idaho for energy efficiency programs. Sometimes the timing of rate filings is out of our control.
We’ve already stated publically that we anticipate filing a general rate case in Washington as early as the end of the first quarter 2010
. General rate cases in Washington can take up to 11 months to come to resolution. (The length of a general rate case can be up to seven months in Idaho and 10 months in Oregon.)
So there is always some time in between the filing and the resolution, making both events seem independent, but they are really just bookends of the same public process. Unfortunately every filing, hearing, newspaper article, blog, TV interview or news release about a rate activity sounds like an increase and like Vivian said, that certainly can be frustrating.
So whether we’re requesting an increase or decrease; or whether it becomes effective in a few weeks or takes as much as 11 months – you’re probably like me – you want to know what impact any changes will have on your bill and there’s certainly nothing wrong with that. Since regulators set our rates, we don’t know the result of our request until the state commission makes a decision. On the blog, we’ll always give you the details when we file and when a ruling by the state commission is announced.
So, don’t be surprised when you see Avista filing some type of rate activity in the future, whether it be an increase or a decrease, it’s part of the regulatory process. If you want more details about any of this stuff, we’re always here to talk with you. You can follow our rates activities online
and even here on the blog.
Feb 03 , 2010
Last night was great chatting with KHQ viewers about energy assistance and Avista. If you didn't have a chance to join in you can view the chat log here.
Do you find value in live chats? Should we do them more? E-mail me to offer your thoughts. We did a previous live chat in November - read about it here
Feb 02 , 2010
Tonight Avista employees will be answering questions on the KHQ evening newscasts
. You can call in or login to their online chat.
I'll be on the chat, and my co-workers will be handling the phones. The first broadcast is at 5:00 p.m., the next at 6 p.m.
Just like to blog, nothing is off limits and we'll do our best to get you what you need to know (even if that means a call or e-mail back later). Energy efficiency, rates, services - you name it.
Feb 01 , 2010
My feet have stopped hurting. I got a little rest, and I now have a little perspective on Avista’s 2010 Energy Fair held last Saturday. It was great! Some 325 people of all ages and interests came through the Lair Student Center at Spokane Community College from 10 a.m. until 3 p.m. They talked with Avista staff and our community partners about topics that ranged from installing energy saving door sweeps to filing for earned income tax credits. We were very pleased to partner with Community Colleges of Spokane for this first annual event. Also attending and providing valuable information were staff members from SNAP, Work Source Spokane and the CASH Coalition.
Camille shows how to help insulate
One of the biggest hits of the day was the interactive singing and dancing program from Wattson, our energy watchdog and his friend Edison. It was so fun to see the kids – their parents and a few Avista staffers – singing and dancing right along with the big dog and his pal, learning energy efficiency tips at the same time.
It warmed my heart to see a family relaxing around a table in the Lair Café, talking about the Wattson activity sheet the kids colored. Or catching bits of conversation from the older couple who discussed which lamp in their home would get the free CFL bulb they received at the fair.
A little excitement was in the air at least once an hour, when door prize winners were announced. And a lot of excitement followed the announcement of the two grand prize winners. Avista House Warming certificates, cozy blankets, and other energy-saving goodies were the coveted prizes.
All in all, I thought the fair was a wonderful success. Attendees told us the information was very helpful and they appreciated the free samples they received after each demonstration. We learned some things that will make it even better next year and we’re looking forward to it.
Nov 17 , 2009
This morning – really early this morning – I was lucky enough to host KHQ’s live chat session during the news station’s morning show. All they had to say was, “visit khq.com and ask this guy from Avista anything you want.” And the questions poured in for two hours.
It was great to have so many conversations with customers over a relatively short period of time. We do the same sort of Q and A conversation through our blog inbox, firstname.lastname@example.org
, but this was so different because it was not just two-way, but an entire community of people talking about energy.
It was busy and exciting, and in the end I was pretty pleased with the number of topics we covered. We talked about rates, energy efficiency, natural gas markets, land use, relicensing, regulated and investor-owned utilities, power outages, the Avista blog, Comfort Level Billing, the Online Bill Analyzer, estimated meter reads and a lot of stuff in between.
I’d like to say thanks to KHQ and everyone who chatted with me – I’d love to do it again, but if you have questions in the meantime contact us at email@example.com
Nov 12 , 2009
Earlier this week I received an e-mail from an Avista customer named Steve who wanted to know about time of use rates. Coincidentally on Wednesday we had a similar question and answer published in e.view, an Avista employee publication. The info, provided here by Communications Manager Hugh Imhof is good stuff, so – here’s a Q and A about smart grid, peak power usage and time of use rates.
Question: I have been hearing a lot about smart grid technology and how the utilities will have the ability to turn off appliances especially during times of peak power usage. How do I found out when Avista's peak power usage hours are in my area? Thank you!
Answer: Smart grid technology will mean a number of different things for the electric system. Mainly it is a way to provide automation, using two-way communications within the grid, in order to increase efficiency and reliability, thereby reducing the need for new generation resources.
There is technology involved that would allow customers to monitor and better understand their usage and adjust it for greater efficiency and a savings on their bill. If customers allow us to, the utility will also have the ability to send signals to the home to reduce demand during heavy load periods (extreme weather conditions for example). This could mean turning the thermostat up or down a couple of degrees, or turning off the water heater for a couple of hours… something along those lines. By doing this we reduce overall demand and don’t have to buy expensive power on the market.
Peak loads (when electric use is high) generally occur in the morning and evening hours, before and after normal work times. Loads are lowest in the middle of the night.
In some regions utilities have what is known as “time of use” rates. This allows customers to shift their heavy usage to times when the rates are lower, i.e. late at night when demand is low. This kind of rate structure exists in areas where there is a big differential in what the utility must pay to obtain power between high load and low load periods. This mainly applies where they use a lot of coal-fired generation.
Northwest utilities, like Avista, are mainly hydro based and even though market power prices may vary greatly, there is not a big difference in the cost of generating power at different times of day. Avista has enough of its own resources that we don’t usually need to purchase market power during low load times. Someday, as our mix of generation facilities changes we may have time of use metering. For now we do offer a lot of other ways customers can reduce their energy use. Check out www.everylittlebit.com
Nov 05 , 2009
In the last two weeks we sent out an e-mail to customers about what it means to be a regulated utility and I’ve been able to respond to dozens and dozens of e-mails from customers based off of that e-mail. One question popped up a few times - it was about our electric rates compared to PUDs and Co-ops.
Here’s what Julie, and Avista customer asked: “I was wondering why the cost of both energy, and delivering it are higher than others like say Modern Electric.”
That’s a good and fair question. Some PUDs and Co-ops (and Modern) have access to very low-cost power from the Bonneville Power Administration. So their rates are sometimes, but not always lower. The cost of delivering it – such as a monthly charge - also varies per company.
The problem is that BPA has a limited amount of low-cost power. As customer loads continue to grow, BPA and the public utilities will need to acquire new resources at higher prices than the utility industry is experiencing today. Modern also serves significantly fewer customers than Avista, 10,000, compared to our 355,000 electric customers. We have to build or buy diversified resources to meet that demand and renewable energy requirements, while many Co-ops or PUDs don’t even generate their own power.
The history of how electric utilities sprung up around the country is actually pretty interesting and part of the reason Co-ops and PUDs were originally formed in many rural areas. Last year we created a website to talk about our company’s history from the early days (like 1889) to today. There is an interactive timeline that walks you through major events in our history. Check it out at: http://www.avistalegacy.com/
We’re still the same company, but we’ve been through a lot of changes.
Sep 03 , 2009
For the past few days I’ve been talking to customers on e-mail about our requested natural gas decrease in Oregon
. As you might expect, just about everyone I’ve talked to has been appreciative of the decrease request. (Who wouldn’t be happy about paying less, right?)
But a few people have asked a question about why the rate reduction we requested in Oregon, and those we’ve already requested in Washington and Idaho, don’t mirror the current price of natural gas on the wholesale market. It’s a great question and there are several reasons.
The lowest cost on a trading market can never be predicted in advance, so companies hedge their buys to round out the lowest price in an attempt to smooth out the volatility of the wholesale markets. We purchase gas periodically throughout the year with price being a primary consideration. We buy enough gas this way to meet about two-thirds of what our customers will use throughout the winter. The remaining gas is purchased as it is needed to meet your needs. If prices are favorable, we may also purchase gas at a fixed price into the future.
This aspect of natural gas is always a bit tricky to understand, and a lot of that comes from people making comparisons to the price you pay for gasoline or diesel fuel for your car. Unlike those fuels, of which the ups and downs are readily apparent when you fill up your car, we set a price for a longer period of time and then make up the difference (up or down) later with the state commissions. During that time we use pricing strategies to minimize volatility. We’re always working to get you the most fair and reasonable price for your energy dollar.
So while you don’t immediately see reductions to your natural gas prices when the wholesale market costs fall, you’re also protected from the sudden spikes as well. Remember two years ago when the price of gasoline was nearly $5 a gallon? You couldn’t help but buy it if you needed it. Our buying strategies help us avoid buying at high prices, unless it’s really necessary.
It’s also worth noting that 75 percent of your natural gas bill is the cost of the gas itself. We don’t mark up the cost of gas. You pay what we pay. It’s a pass through cost. The remaining 25 percent of your bill covers our cost of providing service through our distribution system.
If you have any additional questions about natural gas, drop us a line in the comment section. There is also a lot of information over on our Conversation page