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Proposed Avista settlement would mean no rate increase

| July 25, 2014 9:00 PM

Avista Utilities' North Idaho customers have until Aug. 15 to submit written comments or request a public hearing regarding a proposed settlement that would result in no electric or gas base rate increase until Jan. 1, 2016 at the earliest.

Because the settlement does not propose any base rate increases, the commission intends to process the case by a modified procedure that includes written comments rather than conducting public hearings. However, the commission may conduct a public hearing if customers request one by emailing secretary@puc.idaho.gov or mailing the commission at P.O. Box 83720, Boise, ID, 83720-0074.

A one-time credit resulting from a previous agreement between Avista and the Bonneville Power Administration expires on Jan. 1, 2015, which would have resulted in a 1.3 percent increase. A second credit to natural gas customers also expires on Jan. 1, and would have resulted in a 1.7 percent increase in natural gas rates.

The proposed settlement eliminates the need for both increases by using funds from a revenue-sharing program Avista has with customers. If the consolidated earnings from both Avista's electric and natural gas sectors exceed 9.8 percent, half those earnings are deferred to future credits for customers the following year.

If earnings are below 9.5 percent, Avista is allowed to apply previous years' earnings' deferral to bump its earnings to 9.5 percent.

The settlement proposes to apply a portion of Avista's 2013 deferral for earnings above 9.8 percent ($3.2 million) against the BPA credit expiration. The remaining $713,000 in the customer share of 2013 earnings would be applied against the next Power Cost Adjustment on Oct. 1, 2014.

The increase which would have occurred when the natural gas credit ends is proposed to be paid for from a $653,000 balance in the natural gas Energy Efficiency account plus $444,000 in natural gas earnings sharing with customers.

The proposed base rate freeze through 2015 does not apply to the company's annual Power Cost Adjustment (PCA) on Oct. 1 of each year.

Comments or requests for a hearing can be submitted through Aug. 15 at www.puc.idaho.gov. Click on "Case Comment Form," under either the "Electric" or "Natural Gas" heading, enter the case number (AVU-E-14-05 or AVU-G-14-01) and provide your comments. Comments or requests for a hearing can also be mailed to P.O. Box 83720, Boise, ID, 83720-0074.