Advocates Win Reduced Bill Increase, Stronger Environmental Protections for Avista Customers

Posted on August 8, 2023 by Charlotte Shuff
Tags, Energy, General Interest

Image: Klamath Lake with mountains in the background; Text: Victory!

This summer, Avista asked regulators to approve a new bill increase for its Southern Oregon gas customers. Thanks to advocacy from CUB and a host of environmental organizations, Avista has settled for a smaller increase than requested. This agreement reduces the bill increase and makes significant strides for environmental protections.

CUB worked hard to oppose this rate increase with other advocate groups. These groups include Climate Solutions, the Sierra Club, the Green Energy Institute, the Community Action Partnership of Oregon, and Earthjustice.

Reducing the Bill Increase

CUB’s and environmental groups’ advocacy helped bring down the overall rate increase from Avista’s initial request. Residential customers will see bills increase January 2024. An average household’s bill will increase by $4.07 per month (5.3%), from $77.01 to $81.08. Regulators will have to approve the final agreement in December. CUB expects these changes to be approved, going into effect on January 1, 2024.

The original ask was for an 8.1% increase for residential customers, about $6.20 per month for households.

Avista rates have increased 51% from 2020 to 2023. In 2020, an average household Avista bill was $53.27. This sharp increase is largely due to the rising cost of methane, the main component of natural gas.

Advocates Win Environmental Protections

Eliminating Avista’s Subsidy to Add New Customers

This year, Avista agreed to phase out its customer-funded expansion subsidy over the next four years. CUB had major concerns with Avista’s customer-funded subsidies to expand its system and covered this issue thoroughly. These costs are unreasonably expensive and put customers at financial risk. Every new customer added means more emissions that will have to be reduced and paid for by Avista’s existing customers.

Avista’s customer-funded subsidy previously had no monetary cap. The average cost for a new customer hookup in 2022 was $5,644. In 2020, one very high subsidy cost existing customers $42,032 for adding a single home to the system.

Now, Avista’s expansion subsidy will be capped and phased out by 2027. The amount allowed for connecting new customers will be $2,500 in 2024, $1,250 in 2025, $750 in 2026, and $0 in 2027. This will save existing customers money now and into the future.

Avoiding Investing in New Pipe

Advocates won an agreement that Avista begin to look for alternatives to adding new gas pipeline systems. As more pipes are added to the system, the more Oregon is tied to relying on fossil fuels. Instead of investing in high-cost projects to build more pipelines, Avista will look for alternatives to meet customer needs.

Now, anytime Avista considers a new pipeline project over $1 million, it must also consider non-pipe options. This is true for single projects or geographically connected projects that total over $1 million.

Alternatives include electrification investments (moving customers from gas to electric), energy efficiency upgrades, and other methods. The goal with this approach is to look at how the utility can reduce the amount of gas customers are using first. This will also help to reduce the amount of emissions being produced.

By looking at the alternatives, customers may also avoid expensive investments in new pipelines. As many Oregonians switch to electric, these costs could pile up for those left on the gas system without the choice or resources to leave. This agreement will help both current and future customers of Avista.

Customers Will Not Pay for Pro-Fossil Fuel Lobbying & Legal Expenses

Environmental groups successfully removed pro-fossil fuel lobbying costs totaling $90,000. Avista was attempting to charge customers for costs relating to the American Gas Association and Northwest Gas Association. These industry groups lobby for policies that support the interests of gas companies, not customers.

These groups also successfully prevented customers from paying for Avista’s lawsuit to block state climate regulation. Avista was asking customers to pay $57,000 for its litigation costs to overturn the Oregon Climate Protection Program (CPP). The program requires gas utilities like Avista to reduce emissions by 90% by 2050.

CUB supports the efforts to reduce lobbying and litigation costs charged to customers, But in this case, credit is due to Climate Solutions, the Sierra Club, the Green Energy Institution, the Community Action Partnership of Oregon, and Earthjustice. These groups led the charge in uncovering and pushing back on these costs. Customers should not be paying for attempts to create pro-fossil fuel policies in Oregon and beyond.

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