Avista customers to see a rate increase

Avista customers will pay slightly more for electricity this fall after state regulators approved several rate adjustments.

Combined, the changes approved by the Idaho Public Utilities Commission will result in a 3.1 percent increase to residential rates on Oct. 1.

Residential electric customers in Idaho using an average of 898 kilowatt hours per month would see their monthly bills increase from $82.57 to $85.12, an increase of $2.55 per month, according to a press release by the commission.

Two of the changes are to annual rate adjustment mechanisms: the fixed cost adjustment is set to increase by 1.7 percent, while the power cost adjustment will increase by 2.91 percent.

The third adjustment results from Bonneville Power Administration’s residential exchange program. Customers will receive a credit on their power bill of 1.6 percent.

The commission annually reviews the rate calculations to determine whether customer rates should increase or decrease.

The fixed cost adjustment mechanism increased by 1.7 percent for residential customers on Oct. 1, IPUC officials said in the press release.

The FCA is an annual rate adjustment tool that separates or decouples energy use from the company’s revenue, removing a utility’s disincentive to invest in and promote energy efficiency and conservation that can lead to a decline in energy sales. If fixed costs recovered from customers are less than the fixed costs authorized by the commission, residential and small general service customers see a surcharge on their bill. If the company collects more in fixed costs than is authorized, customers in those classes receive a refund.

Last year, IPUC a FCA decrease of 2.9 percent.

The power cost adjustment mechanism, which also went into effect on Tuesday, Oct. 1, will increase by 3.3 percent for residential customers. The PCA is a cost-recovery tool that passes on to customers the benefits and costs of providing energy to Avista’s customers.

Like the FCA, it is adjusted each year to reflect the actual power-supply costs incurred by the company over the previous year. Costs can vary significantly from year to year based on hydroelectric generation, market prices for energy, fuel costs, and other factors, commission officials said.

The PCA has two main components: a forecast and true-up. The forecast projects the company’s anticipated power-supply costs, and the true-up balances those forecasted costs with the actual costs incurred by the company over the previous 12 months.

Last year, the commission approved a PCA decrease of 1.0 percent.

The residential exchange program was established by the Northwest Electric Power Planning and Conservation Act. That law makes low-cost power from the federal Columbia River power system available to investor-owned utilities in the Northwest. The statute permits utilities to “exchange power they have purchased or generated for lower-cost power generated by BPA.” The exchange is a paper transaction — a utility may offer to sell power to BPA at the utility’s average system cost for producing power. The utility must pass the benefit on to its qualifying customers.

Avista’s current rate credit is 0.069 cents per kWh, and was designed to pass through about $840,000 to customers. The Commission approved rate credit of 0.387 cents per kWh will pass through approximately $4.8 million to customers. The rate credit reflects Idaho’s share of BPA’s REP benefits, as offset by any over-refunded balance from the prior year. The $4.8 million in BPA benefits would decrease rates for qualifying customers by about $3.9 million, or 1.6 percent. This decrease in rates reflects the difference between this year’s $4.8 million proposed REP credit and last year’s $840,000 REP credit. The proposed REP credit is further offset by last year’s over-refunded balance of about $100,000.