By BRIAN WALKER

Staff writer

COEUR d'ALENE — A public workshop on Avista Utilities' proposed rate hikes for electric and natural gas service will be next Thursday.

If approved as requested, the average electric user would see a 7.9 percent increase ($7.03 per month) starting Jan. 1, 2018 and a 4.2 percent ($4.02) increase on Jan. 1, 2019.

For natural gas customers, the proposal would increase rates for the average customer 5.7 percent ($3.37) in 2018 and 3.3 percent ($2.07) in 2019.

The Idaho Public Utilities Commission will host the workshop at the Coeur d'Alene School District's Midtown Center, 1505 N. Fifth St., from 6 to 8 p.m. Thursday, Aug. 31.

"There is a short presentation outlining the commission's procedure in deciding a rate case and then it's turned over to customers for comments and questions," said Matt Evans, IPUC spokesman.

Attendees will also be provided a summary of Avista's increase application that was filed in June.

"The primary drivers behind the general rate requests are ongoing capital investments in our infrastructure — the systems, equipment and technology that serves our customers," said Casey Fielder, Avista spokeswoman.

Avista serves about 125,000 electric and 75,000 natural gas customers in North Idaho. If approved in full, the rate changes would increase Avista's revenue by a combined total of $34.1 million.

The company's infrastructure projects include the rehabilitation and maintenance of the Kettle Falls electric generating facility that provides electricity for Idaho and Washington customers. The $6.3 million project would rewind the 30-plus-year-old generator that is at the end of its expected life.

More than $25 million in substation rebuilds are planned in the next two years. Substations in Priest River and Kamiah are among those proposed to be rebuilt because they have reached the end of their useful lives.

Several transmission projects totaling $25 million over the next two years that are required to comply with federal standards are also planned, including the Coeur d'Alene to Pine Creek line.

Avista also plans to remove and replace natural gas lines that are more than 30 years old throughout its service territory.

Both Fielder and Evans said the rate increase proposals are separate from and not related to the proposed acquisition of Avista by the Canadian firm Hydro One.

"Avista has not filed for commission approval of the sale, but is expected to do so in mid-September," Evans said.

Evans said Avista proposed a similar two-year rate hike plan in 2015, but reached a settlement late that year that resulted in a smaller increase than was originally proposed.

Several area residents have already blasted Avista's latest rate increase proposals.

"I say let them figure out how to cut costs and stay in business without gouging the end user," Steven King wrote to the IPUC. "When is Avista going to give back to the consumer on a regular basis, saying 'We found how to do it better. Here is your refund.' Furthermore, when is it OK to sell out to a foreign entity to control our infrastructure?"

Reid Harlocker is urging the commission to either deny the request or proceed with smaller increases comparable to other utilities.

"While I can accept that the company needs to attract investor interest, allowing them to increase approximately three times what Idaho Power received cannot be justified, especially when Avista has been on the generous receiving end of customer growth in North Idaho," Harlocker wrote.

IPUC staff and parties to the case, including environmental groups, Avista and the Community Action Partnership Association of Idaho that represents customers on low- and fixed-incomes, will participate in a settlement conference on Sept. 29.

Comment sheets will be available at the workshop.

Customers can also submit comments at www.puc.idaho.gov, where Avista's application is also available. To comment, click on "Case Comment Form" under the "Electric" or "Natural Gas" heading and enter the case number(s), AVU-E-17-01 (Electric) and/or AVU-G-17-01. Comments can also be mailed to the Idaho Public Utilities Commission, P.O. Box 83720, Boise, ID, 83720-0074.

As the case progresses, customer comments and other information will be posted to the website.

- In addition to the rate increase proposals, Avista is seeking 3 percent increases for electric and natural gas serves to recover expenses incurred in 2016.

The increases, which would be $2.56 per month for the average electric users and $1.51 for natural gas customers, would take effect Oct. 1 for electric and Nov. 1 for natural gas.

Company officials said Avista under-collected the fixed costs of serving its Idaho customers by a combined $9.6 million in 2016. To recover those costs, Avista has asked the IPUC to approve increases to a billing mechanism knowing as a fixed cost adjustment (FCA).

The adjustment allows Avista to recover the fixed costs it loses when energy sales decline due to decreased consumption among its customers. Though energy consumption fluctuates, the fixed costs associated with providing serve are more stable. The FCA is designed to provide the utility with a financial incentive to promote energy efficiency and conservation among its customers.

The IPUC is accepting comments on the electric case (AVU-E-17-04) through Thursday and the natural gas case (AVU-G-10-03) until Sept. 27.