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Mar 15 , 2010
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. Mar 01 , 2010
Post by Dan KolbetI’ve often said that Avista’s rate requests and rate cases that go before the utility commissions are part of a public and transparent process. This is still true, but I’d like to add a bit of an addendum to that statement. They are part of a public and transparent process – but they aren’t always extremely clear for the layman because the requests and cases can be complicated.
That’s no one’s fault really, as a regulated utility we are watched very closely by the regulators who set our rates and we provide a great deal of information to help them reach a decision. The utility business is complex and seemingly thousands of pieces of information go into one rate action.
You have every right to know what we include in our rate requests and we’ll be talking about our rate cases quite a bit over the next few months.
We will file electric and natural gas general rate cases in Washington and Idaho before the end of the first quarter of the year – the end of March. We don’t have the requested numbers yet because they are still being finalized. Washington’s general rate case decision can take up to 11 months. In Idaho it’s around 7 months.
In the meantime before we file the cases, I encourage you to watch this short video that explains the rate case process in just a little detail. While it’s not specific any one case, it’s a nice overview of how the system works. The video is on a section of our website that has a bunch of information about rates. Check it out.
I’d also be happy to answer any questions in the comment section for everyone to read. Just leave a comment.
Feb 15 , 2010
Kudos to our customers who in 2009 saved enough electricity to power over 6,800 Inland Northwest homes for a year and enough natural gas to serve over 3,000 homes! These savings show that every little bit we do in our homes and businesses to save energy really do add up.
What did customers do to save so much energy last year? They looked for the Energy Star ® label when buying new appliances, installed high efficiency water heaters and furnaces, and upgraded windows and insulation to help keep their homes warm in winter and cool in summer.
For their efforts, customers qualified for rebates and incentives from Avista and reduced the amount of energy used in their homes. Commercial customers also received incentives for making energy efficiency improvements which helps manage their operating costs.
In total almost 35,000 rebates and incentives totaling about $18.1 million were given to residential, commercial, industrial and limited-income customers in 2009 through energy efficiency programs. But offering energy savings programs to customers is nothing new to us – we’ve been doing for more than 30 years.
To make sure we’re able to keep up with the increasing demand from customers for the popular energy efficiency programs, we filed requests today with the utility commissions in Washington and Idaho for modest increases in the natural gas tariffs which fund these programs. If approved by the utility commissions, residential natural gas customers in Washington will see a $2.54 increase in their bill starting March 15, and Idaho residential customers will see a $1.52 monthly increase.
This leads to the question – why do we help customers use less of our product? Because generally it costs less to help customers reduce their energy use than it would cost to build new power plants or purchase additional energy to meet customer demand. Plus, using less energy is the best option for our environment.
Feb 11 , 2010
Avista filed a request to reduce rates back in January. This decrease centers on the removal of a surcharge. The Energy Recovery Mechanism - or ERM - was in place to recover extraordinary changes in certain power supply costs that are above or below the amount included in customer base rates.
So, what does this mean for you if you live in Washington? You will be paying less for your electricity starting Friday.
Point of clarification: This is a decrease, but that doesn’t mean Avista won’t file for other rate changes in the near future. As we noted this morning on the blog, we’re planning to file requests in Washington and Idaho for energy efficiency program tariffs. We’re also going to file general rate cases in Idaho and Washington by the end of the first quarter this year.
We’ll have all the details of these filings here on the blog when they happen.
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. Jan 11 , 2010
Avista customers in Washington will see an overall 7 percent decrease in electric rates if the Washington Utilities and Transportation Commission approves a recent request to lower rates. The new rate would take effect February 12 if approved by the WUTC.
This decrease centers on the removal of a surcharge. The Energy Recovery Mechanism - or ERM - was in place to recover extraordinary changes in certain power supply costs that are above or below the amount included in customer base rates.
“The surcharge was mainly caused by below-normal hydroelectric conditions and higher natural gas prices for thermal generation in previous years,” said Kelly Norwood, Avista vice president of state and federal regulation, in a media release today. “The combination of a decline in natural gas prices, near-normal hydroelectric conditions in the past year, and the collection of prior-period costs now allows us to eliminate the surcharge.”
Requests to lower rates, such as this one, take considerably less time to approve than increase requests. (We filed it last Friday, Jan. 8). The WUTC has up to 11 months to approve rate increase requests. The WUTC issued a decision on Avista’s most recent Washington general rate case on Dec. 22, 2009. That rate case, which was originally filed in January 2009, resulted in a 2.8 percent increase in electric rates and 0.3 percent increase in gas rates.
Idaho electric customers might be asking, “What about us?” Idaho doesn’t use the ERM mechanism like Washington, but rather uses a similar mechanism called a Power Cost Adjustment (PCA). The Idaho PCA was adjusted with a general rate case ruling effective August 1, 2009. Read, “ Multiple Idaho rate adjustments result in slight increase.” The PCA portion of that ruling was a 4.2 percent decrease. Dec 23 , 2009
Yesterday the Washington Utilities and Transportation Commission (WUTC) issued a decision on Avista’s electric and natural gas general rate case. I wrote a post about this pending decision on Dec. 18., noting that this case has been in the works since Jan. 23, and discussed the activities in the case since it was originally filed.
In the news release announcing the decision yesterday, the WUTC said it approved a 2.8 percent increase in annual electric revenue, or $12.1 million a year, and a 0.3 percent natural gas increase, or $557,000 in additional revenue.
In addition, the commission authorized deferred accounting treatment for the Lancaster power plant which would equal approximately $12 million. Avista will have the opportunity to recover these costs in a future rate case.
A partial settlement agreement between Avista and interveners in the case was reached on Sept. 4 that reduced Avista’s original electric request from $69.8 million to $38 million, mainly because of decreased power supply costs.
The decision document is 148-pages and we didn’t get it until late Tuesday afternoon, so our rates folks are still reviewing it. Watch this blog for more information about your rates and feel free to e-mail us with any questions. Dec 18 , 2009
Throughout 2009 we’ve been talking a lot about natural gas rate reductions in Washington and for good reason; we’ve lowered gas rates in Washington and Idaho three times this year for a total reduction in each state of around 30%.
But any request – up or down – has to be approved by a state commission. It takes up to 11 months for the Washington Utilities and Transportation Commission (WUTC) to review and reach a decision in a general rate request.
This brings us to next week – Dec. 23 to be exact. Way back on Jan. 23, 2009, we filed an electric and natural gas general rate increase request with the WUTC. If you do the math, 11 months puts a ruling due by Dec. 23. The ruling could come anytime between now and next Wednesday.
Since the ruling hasn’t been issued, we don’t know what the exact numbers will be, but the partial settlement agreement we reached in September was for about a 3% increase in electric prices; that’s down significantly from the amount we originally requested in our January filing. A lot changed in the 11 months since the original filing with the WUTC, especially with steep declines in wholesale natural gas prices. That’s why we reduced the amount in our partial settlement agreement.
One of the most confusing things I’ve encountered working in the utility industry is rate making. It’s a long, rather complicated process that is at times difficult to follow. Sometimes it seems that every mention of a rate case, such as in public hearings, filed testimony before the commissions, mailed brochures and media articles – all sound like separate rate increases. Yet, each event is all a part of the public, transparent rate-making process; one that you’ve been able to participate in all year long.
Utilities like Avista must file rate cases to recover costs, which are explicitly detailed in rates filings. The commission makes the final decisions about what is fair and reasonable for you and for Avista.
Again, we don’t yet know what the rates impact will be on this general rate case, but we do know it will be issued on or before Dec. 23. So please don’t be shocked if you hear about a rate decision – it’s the same rate case we’ve been talking about all year finally coming to a conclusion.
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 for more. 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.
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