Today Avista
(NYSE: AVA) has filed a multiyear
rate plan with the Washington Utilities and Transportation
Commission (WUTC or Commission) that would allow the Company to
recover costs for fixed expenses and ongoing investments to
infrastructure, technology and more. If approved, new rates would
be effective in Dec. 2022 and Dec. 2023.
“We take our responsibility to provide you with energy at an
affordable price very seriously,” Avista President and CEO Dennis
Vermillion said. “In fact, the total average monthly cost of
Avista’s residential electric service is almost 40% lower than the
national average for investor-owned utilities. Our customers remain
our primary focus as we make decisions about how and where to
invest across the company.”
“Part of the responsibility of providing an essential service is
to make sure customers have energy when they need it. This means
that we must continue to make important and necessary investments
to the infrastructure that serves our customers such as replacing
wood distribution poles and natural gas pipelines, taking steps to
meet our clean electricity requirements and goals, making our
system more resilient to the threat of wildfires, and upgrading
customer-facing technology and substations, and much more. We’ve
made these investments on behalf of our customers because it’s the
right thing to do.
“As we see the effects of inflation impact the entire country,
the cost of doing business is going up for all companies and
industries. Utilities across the nation work to replace
infrastructure and meet increasing compliance obligations while the
fixed costs of operating and maintaining our systems are
increasing, too. Avista is not unique in this regard, and our costs
to deliver energy continues to outpace our revenue.
“Despite the rising costs, we are always looking for ways to
keep rates affordable. The Residual Tax Customer Credit would offer
a total of $38 million in estimated benefits to be incrementally
returned to electric and natural gas customers over two years, from
Dec. 2022 – Dec. 2024, to partially offset the first year of the
proposed increase.
The ongoing effort to align the rates customers pay with
Avista’s costs to serve is one of the main reasons we file general
rate requests. It’s important for the health of the company and an
essential part of providing safe and reliable energy,” Vermillion
said.
Two-Year Rate PlanThe proposal is a two-year
rate plan, with new rates taking effect in Dec. 2022 and Dec. 2023.
This plan would create a stay out period where Avista would not
file a new general rate case for new rates to be effective prior to
Dec. 2024. This would provide customers with some predictability in
their expected future energy prices.
Avista’s RequestsGeneral Rate
CaseIf approved, the electric general rate request is
designed to increase annual base revenues by $52.9 million (or 7.4%
on a billed basis) effective in Dec. 2022, and $17.1 million (or
3.0% on a billed basis) effective in Dec. 2023.
If approved, the natural gas general rate request is designed to
increase annual revenues by $10.9 million (or 2.5% on a billed
basis) effective in Dec. 2022, and $2.2 million (or 1.1% on a
billed basis) effective in Dec. 2023.
The electric and natural gas requests are based on a proposed
rate of return (ROR) of 7.31%, with a common equity ratio (CER) of
48.5%, and a 10.25% return on equity (ROE).
Residual Tax Customer CreditConcurrent with the
effective date of this rate case, the Company proposes to offset
part of the 2022 base rate request with a Residual Tax Customer
Credit. The estimated benefits of $25.5 million for electric
customers and $12.5 million for natural gas customers will be
incrementally returned over a two-year period from Dec. 2022 – Dec.
2024.
LIRAP ModificationSince 2001, Avista’s
Low-Income Rate Assistance Program (LIRAP) has collected funds
through certain electric and natural gas tariffs and distributes
them through Community Action Agencies. LIRAP helps customers who
may be struggling to keep their energy services on, pay for ongoing
energy costs, or reestablish service. Avista is focused on further
reducing the energy burden for customers. To meet this objective,
we are requesting that the Commission approve substantial program
and funding modifications for LIRAP. The general rate case proposes
to replace the existing grant-based LIRAP components with an
income-based bill discount model for all eligible low-income
customers which would drive more benefits to those who are least
able to afford utility service.
Infrastructure InvestmentsAvista needs to
continue to replace infrastructure that has reached the end of its
useful life, as well as respond to the need for reliability and
technology investments required to build the integrated energy
services grid that will take us into the future. Among the projects
included in today’s filing are:
- Ongoing management, inspection and replacement of 240,000
electric distribution wood poles through Avista’s wood pole
management program to ensure poles and the equipment on them
support the company’s ability to provide customers with safe and
reliable power.
- Continued investment in Avista’s
Wildfire Resiliency Plan, which outlines substantial steps that
Avista has taken to guard against the growing threat of wildfires
including grid hardening, enhanced vegetation management, and other
industry-leading best practice measures.
- The ongoing project to
systematically replace portions of natural gas distribution pipe in
Avista’s service area that were installed prior to 1987, as well as
replacement of other natural gas service equipment to strengthen
the integrity, safety, and reliability of the system.
- Technology upgrades that support necessary business processes
and operational efficiencies that allow Avista to effectively
manage the utility and serve customers.
Washington Residential Customer BillsSince Jan.
2016, overall average electricity prices have increased only 0.5%
per year and natural gas prices have increased less than 1% per
year (including the effects of the recent rise in wholesale natural
gas prices). This is lower than the rate of inflation during this
time, when compared to the Consumer Price Index.
Electric Effective Dec. 2022: Residential
electric customers in Washington using an average of 932 kilowatt
hours per month could expect to see a total billed increase of 7.9%
or $6.52 for a revised monthly bill of $89.08 from $82.56.
Effective Dec. 2023: Residential electric customers in
Washington using an average of 932 kilowatt hours per month could
expect to see a total billed increase of 3.1% or $2.80 for a
revised monthly bill of $91.88 from $89.08.
Natural gasEffective Dec. 2022: Residential
natural gas customers in Washington using an average of 67 therms
per month could expect to see a total billed increase of 2.4% or
$1.54 for a revised monthly bill of $66.40 from $64.86.
Effective Dec. 2023: Residential natural gas customers in
Washington using an average of 67 therms per month could expect to
see a total billed increase of 1.1% or $0.75 for a revised monthly
bill of $67.15 from $66.40.
Proposed Changes by Service Schedule
The requested electric increase by service schedule is as
follows:
Rate Schedule |
2022 Billing Increase |
2023 Billing Increase |
Residential Service - Schedules 1/2 |
7.9% |
3.1% |
General Service - Schedules 11/12 |
7.0% |
2.8% |
Large General Service - Schedules 21/22 |
6.9% |
2.8% |
Extra Large General Service - Schedule 25 |
7.6% |
3.0% |
Extra Large Special Contract |
7.6% |
3.0% |
Pumping Service - Schedules 31/32 |
7.0% |
2.8% |
Street & Area Lights - Schedules 41 – 48 |
7.1% |
2.8% |
Total |
7.4% |
3.0% |
The requested natural gas increase by service schedule is as
follows:
Rate Schedule |
2022 Billing Increase |
2023 Billing Increase |
General Service Schedules 102/103 |
2.7% |
1.2% |
Large General Service Schedules 111/112/116 |
1.9% |
0.9% |
Interrupt. Sales Service Schedules 131/132 |
1.7% |
0.8% |
Transportation Service Schedule 146 |
4.4% |
1.9% |
Total |
2.5% |
1.1% |
The actual percentage increase for electric and natural gas
customers will vary by customer class and depend on how much energy
a customer uses.
Customer ResourcesTo assist customers in
managing their energy bills, Avista offers services for
customers such as comfort level billing, payment arrangements and
Customer Assistance Referral and Evaluation Services (CARES), which
provide assistance to special-needs customers through referrals to
area agencies and churches for help with housing, utilities,
medical assistance and other needs. Avista also provides
funding for energy assistance programs Project Share and the
company’s LIRAP, which are administered through community action
agencies.
Avista provides energy efficiency and outreach programs
that include rebates and incentives as well as tips and resources
to help customers manage their energy use and energy bills.
Customers can learn more at www.myavista.com.
About Avista Corp.Avista Corp. is an energy
company involved in the production, transmission and distribution
of energy as well as other energy-related businesses. Avista
Utilities is our operating division that provides electric service
to 403,000 customers and natural gas to 369,000 customers. Its
service territory covers 30,000 square miles in eastern Washington,
northern Idaho and parts of southern and eastern Oregon, with a
population of 1.6 million. Alaska Energy and Resources Company is
an Avista subsidiary that provides retail electric service in the
city and borough of Juneau, Alaska, through its subsidiary Alaska
Electric Light and Power Company. Avista stock is traded under the
ticker symbol "AVA." For more information about Avista,
please visit www.avistacorp.com.
This news release contains forward-looking statements regarding
the company’s current expectations. Forward-looking statements are
all statements other than historical facts. Such statements speak
only as of the date of the news release and are subject to a
variety of risks and uncertainties, many of which are beyond the
company’s control, which could cause actual results to differ
materially from the expectations. These risks and uncertainties
include, in addition to those discussed herein, all of the factors
discussed in the company’s Annual Report on Form 10-K for the year
ended Dec. 31, 2020 and the Quarterly Report on Form 10-Q for the
quarter ended Sept. 30, 2021.
SOURCE: Avista Corporation
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Contact:
Media: Celena Mock (509) 495-4923 celena.mock@avistacorp.com
Investors: Stacey Wenz (509) 495-2046 stacey.wenz@avistacorp.com
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