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Aug 31 , 2010
Today a different type of Avista rate request is in the news – the annual Purchase Gas Cost Adjustment (PGA) that we filed with the public utility commission in Oregon. Avista and other natural gas utilities in the Northwest typically file these requests each fall to true-up the difference between the costs of wholesale natural gas purchased to serve customers with the amount included in rates. PGAs have no impact on company earnings, since the cost of the natural gas is passed through to customers without being marked up.
Wholesale natural gas prices go up or down depending on market conditions, so some years the PGA may mean a rate increase to customers and some years a decrease in rates. Last year natural prices decreased by 21 percent for our Oregon customers and by about 30 percent for our Washington and Idaho customers. Robust natural gas supplies and lower demand caused the steep decline in wholesale natural gas prices that we passed on to our customers.
Today we requested to decrease natural gas prices for our Oregon customers by another 2.1 percent, effective on November 1. Since Avista is a regulated utility, any change in customer rates, including a decrease, must be thoroughly reviewed and approved by the state’s utility commission.
We’d like to hear what you think about natural gas prices or any other topic that’s on your mind. Post a comment in the block below or send us an email at conversation@avistautilities.com. Aug 27 , 2010
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Note the white sandbags, called weirs, lined up in the Spokane River. These temporary dams help divert
water during the aesthetic spill tests. They will be removed from the river once testing is complete. |
We received this message to conversation@avistautilities.com yesterday from a concerned customer. I thought this might be a question that other customers may be asking, so I’ve posted the full e-mail and our reply below.
E-mail
I have seen the crews at work on the Aesthetic Spill Pilot Test in the River Front Park area. It appears the purpose of this pilot test is to assess the feasibility of diverting water that would normally flow through the south channel to the north channel. Do any practical benefits exist for this kind of diversion? Or, as the pilot study name suggests, are the benefits purely aesthetic?
If the no practical benefits exist, I object to the use of my utility rates for a purely aesthetic project which only benefits a small portion of the rate paying customers.
Please shed some light on the driving force for this project.
-Jesse
Reply
Dear Jesse, Thanks for your inquiry about the work being done on the Spokane River channels in Riverfront Park.
As you may know, we received a new operating license for our hydro facilities last year. With the new license came some new conditions that we are required to meet. Among those is an aesthetic spill in the north and middle channels of the river.
Currently the requirement is for a minimum 500 cfs to be diverted from the south channel. But there is a provision in the license that allows us to attempt to modify the riverbed so that we can make the flows just as appealing with only 300 cfs.
What we are doing is filling in the artificial cuts in the rock that were done in the early days of Spokane’s development. These were done to divert naturally low river flows to various mill wheels and laundries, etc. Those same cuts prevent the aesthetic affect that people want to see in the river.
Presently we have a group of stakeholders evaluating the modified river flows for the most effective configuration. Once that is established we can begin to make permanent modifications and hopefully divert less generating water from the powerhouse at Upper Falls.
I hope that addresses your concerns. Please let me know if you have further questions.
-Hugh Imhof, Avista Communications Manager
Aug 25 , 2010
Today we announced a settlement agreement in the electric and natural gas rate requests Avista filed with the Washington Utilities and Transportation Commission (WUTC) last March. As in the Idaho requests, filed at the same time, the rate changes were requested to recover the costs of buying and generating power and upgrading the equipment needed to deliver the safe, reliable energy our customers need. Watch this video to learn more about the drivers of the rate filings and the rates process.
If the agreement is approved by the WUTC, a residential customer using an average of 1,000 kilowatt-hours of electricity a month would see an increase of $5.62 a month, or 7.8 percent, for a revised monthly bill of $77.41. A natural gas customer using an average of 69 therms a month would see a $2.17 increase, or 3.6 percent, for a revised monthly bill of $62.20. The new prices would take effect Dec. 1.
We know the rising cost of energy impacts families, especially those on limited incomes and seniors. That’s why the settlement agreement includes an increase in our Low Income Rate Assistance Program, or LIRAP, which provides energy assistance to qualifying customers. We’re also increasing funding for our energy efficiency programs for limited-income customers.
The next step in this rates request is a public hearing being held by the WUTC in Spokane on Oct. 6, at 5:30 p.m., in the Spokane City Council Chambers. This open meeting will provide customers with an opportunity to provide comments to the commissioners.
You may have questions about this proposed rate change in Washington or any other topic and we’d like to help answer them. You can post a comment on this blog or send us an email to conversation@avistautilities.com. Jul 26 , 2010
Last March a posting on this blog told you about the request we made of the utility commissions in Washington and Idaho requesting rate changes to recover the costs of buying and generating power and upgrading the pipes, poles and wires that bring you energy when you want it. Today a settlement agreement was filed with the Idaho Public Utilities Commission (IPUC) that would result in an overall electric rate increase of 9.3 percent and a 2.6 percent increase in natural gas rates for our Idaho customers. The settlement must still be approved by the IPUC. The request in Washington is still pending.
Partially offsetting the increase for the next three years will be a bill credit customers will receive to return the balance of Avista’s deferred Idaho state income taxes from prior years.
Today Avista also filed its annual Power Cost Adjustment, also known as PCA, which requests an overall 2.6 percent increase in electric rates. The PCA is the difference between Avista’s actual costs of generating and purchasing power over the past 12 months and the cost currently included in customer rates.
It’s a lot of detailed rates information with ups and down. But, the bottom line - if you are a residential customer in Idaho using an average 1,000 kilowatt-hours a month, you could expect to see a $5.37 month increase beginning on October 1, for a revised bill of $86.27. If you’re a natural gas customer, your bill would increase about $1.71 per month for a revised bill of $59.40, also beginning October 1.
Avista also agreed to increase annual low-income weatherization programs and to increase funds for low-income energy efficiency and education. Idaho Community Action Programs administer these programs.
We see everyday how the rising cost of energy impacts families in the communities we serve. It’s one of the reasons we offer many programs to help customers with energy assistance. Nobody likes an increase in their costs of everyday living like gasoline, food and energy. But the fact remains, that we need to make these requests to continue to provide you with the safe, reliable energy you depend on.
You may have questions about this rate change in Idaho and we’d like to help answer them or provide more information. You can post a comment below in the block or send us an email to conversations@avistautilities.com.
Jun 16 , 2010
Back in March Avista filed for electric and natural gas rate increases in Idaho (and Washington). The Idaho Public Utilities Commission has up to seven months from the initial filing to make a ruling on our request. One of the important steps in this transparent process is for the commission to hear from you directly. Today the commission announced public workshops where commission staff will provide customers an overview of our rate request application and answer questions. Avista representatives will also be on hand for the workshop.
The workshops are Monday night, June 28, at the Brammer Building, 1225 Idaho St., in Lewiston and Tuesday, June 29, in the student union building on the North Idaho College campus, 1000 W. Garden Ave., in Coeur d’Alene. Both workshops begin at 7 p.m.
Tell me more about Avista’s Idaho general rate request filed in March.
What about Washington?
Public hearings/workshops have not yet been announced by the WUTC, but we’ll keep you posted when the information is available.
Tell me more about Avista’s Washington general rate request filed in March.
Apr 14 , 2010
Over the next few days, Avista will be sending out e-mails to Washington and Idaho customers (who have provided us their e-mail address through their utility account). The message, from Avista Utilities President Dennis Vermillion is pasted below in its entirety. The e-mail is a notification of our recent rates filings and directions where customers can learn more about the details of those requests.
Last year, we sent many customer conversation e-mails. They happened to coincide with three requests to lower natural gas rates throughout the year in Washington and Idaho. We received many thank you replies, but also many notes that asked us to continue sending informational e-mails when requests go the other direction. This e-mail recognizes that.
I, along with another co-worker, personally responded to anyone who replied to those e-mails – we’ll continue that practice as long as you continue to e-mail us back and find value in it.
If you don’t receive an e-mail from Avista by the end of the week, login to your MyAccount and double check that you’ve provided us your current e-mail address. You may also want to add conversation@avistautilities.com to your address book, so it doesn’t fall into your spam folder.
Below is the entire e-mail from Dennis Vermillion.
Taking a closer look at rates
You may have heard that Avista recently filed a request with the state utility commission to raise electric and natural gas rates. This request was necessary to recover the higher costs we are paying for energy as well as the increasing costs of getting that energy to your home or business.
State regulators will now conduct a public review process (which could take up to seven or 11 months). As a regulated utility, it is the state utility commission who will set our prices only after this thorough review is complete. You can learn more about how the process works by clicking here for a short video.
Our commitment to you is to listen and share information on energy issues that affect us all. We encourage you to visit our website at www.avistautilities.com where you will find more information about the current rate requests and the major investments we’re making to keep serving you well.
Since we launched our conversation web pages and blog last summer, thousands of you have visited, read posts, left comments through your MyAccount sign-in or e-mailed us at conversation@avistautilities.com. Thank you! We hope you’ll continue learning, sharing and joining this important conversation.
Sincerely,
Dennis Vermillion
President, Avista Utilities
Apr 05 , 2010
Post by Dan Kolbet
Over the past few weeks we’ve been posting a lot of materials on the blog and the rest of our website about our recently filed rate cases in Washington and Idaho. The more informed you are about our requests, the better you can form an opinion as an educated customer. No one around here is happy that we have to file rate cases for potential rate increases, but the fact is we must do so to operate the system our customers rely on.
Unless you’re me (or most Avista employees), you probably don’t go to bed every night thinking about energy – nor should you. That’s what we’re here for. As long as the lights turn on every day, the furnace fires up with natural gas every morning and your power is restored if it ever goes out, you probably don’t put much thought into your energy.
Of course we want you to take energy efficiency to heart, so don’t get me wrong, but for the most part, out of sight, out of mind, right? You think about us when the bill comes, or when it’s really cold outside and you know your home is cranking out the juice. Fair enough. Like I mentioned – that’s what we’re here for.
But, if in the next seven months (Idaho) or 11 months (Washington), as our electric and natural gas rate cases are being reviewed by state regulators, you want to learn more – check out this website. Here you can find out why we’ve requested rate increases and how they would impact you. 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. Mar 26 , 2010
Post by Dan Kolbet
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Massive 1950s era
substation transformer. |
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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. Mar 24 , 2010
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.
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