Avista seeks increase in gas efficiency rider

Avista Utilities' customer response to more than 30 programs to reduce natural gas consumption has prompted the utility to ask for an increase in the fund that pays for the conservation program.

Avista, which serves about 72,300 natural gas customers in North Idaho, wants to increase its Energy Efficiency Rider by 2.6 percent, or about $1.52 a month for an average residential gas customer. Approval of the rider would not increase or decrease company earnings. All the money collected in the rider must go to fund gas conservation programs.

The commission suspended Avista's application for up to six months to allow time for review.

When utilities propose increases in efficiency riders, the commission investigates the conservation programs funded by the rider for their cost-effectiveness and approves them only if it has evidence demonstrating that lack of such programs would result in even higher rates for customers. For example, the reduction of more than 2 million therms by customers during 2009 prevented Avista from having to buy that 2 million therms. In its application, Avista contends that energy efficiency remains the lowest cost resource and that all customers, even those who do not directly participate in the programs, benefit from them. The company's most recent cost-benefit analysis (2008) indicates the net benefit to customers from the programs was more than $8.9 million.

Customer participation in the program continues to exceed funding, according to Avista. During 2009, the company set a target of 1.6 million therms in savings and more than exceeded that target with consumption reduced by 2 million therms.

Avista's programs consist primarily of providing financial incentive or rebates for cost-effective efficiency measures installed by customers with a simple payback of greater than one year. This includes more than 300 measures packaged into 30-plus programs. Some of the measures include programs for appliances, compressed air and HVAC systems and motors. There are also industrial applications, maintenance strategies and sustainable building measures.

Portions of rider revenue go toward low-income weatherization, direct aid ($465,000) to Idaho electric and natural gas low-income customers and $25,000 to Idaho Community Action Partnership agencies for low-income outreach and conservation education.

On the electric side, Avista is not proposing an increase to its energy efficiency rider, even though it anticipates a shortfall of about $600,000 at the close of 2010. Avista's 2009 energy efficiency savings in electricity in Idaho and Washington was more than 82 million kilowatt hours, or about 9.4 average megawatts. That was 143 percent of the company's target of 57.2 million kWh. The company claims the net benefit to customers from the electric programs during 2008 was more than $39 million.

As the commission's investigation of the case progresses, it will announce dates for any public workshops or hearings and public comment deadlines. To read the entire application, you can access the commission's Web site at www.puc.idaho.gov. Click on the gas icon, then on "Open Gas Cases," and scroll down to Case No. AVU-G-10-02.