Avista Asks for 7% Rate Increase in 2025
Posted on January 23, 2025 by Charlotte Shuff
Tags, Energy, General Interest
This year, Avista is asking to increase billing rates by 5-7% for its gas customers in Southern and Eastern Oregon. If approved, any changes would go into effect September 1, 2025.
Avista last asked for a rate increase in 2023, bringing an average bill to $81 per month with a 5.3% increase. These billing rates went into effect on January 1, 2024. This year is the third time in the last 5 years that Avista has requested to raise customers’ gas bills.
Want even more information on this case? Access the full docket through the Public Utility Commission!
How Would This Impact Customers?
If approved, customers could see bills increase starting September 1, 2025. Single-family homes would see an increase of $4.27 on average each month (7%) for an average monthly bill of $69. Multi-family homes would see an increase of $3.16 on average each month (5%) for an average monthly bill of $66.
The dollar amount increase would be higher during the winter heating season. For the coldest month, an average single-family household could see a $130 bill in December 2025. An average multifamily household could see a $126 bill in December 2025.
What is Avista Asking For?
Avista’s request to increase customers’ billing rates comes from three main categories in 2025:
- Investments: replacing old pipes, new customer connections, general system maintenance
- Higher Profits: increasing how much the company can earn for investors
- Inflation: higher material and labor costs
CUB is particularly concerned with the request to increase profits and investments that would expand the gas system. Both of these requests could have long-lasting consequences for Oregonians for many years to come.
Investments in the Gas System
The largest investment Avista is making in its system is a pipe replacement project. One particular type of pipe, called Aldyl-A, that was used in the 1970s is now considered a safety concern. Replacing these pipes requires tearing up roads and other infrastructure, which really adds up across all of Avista’s customers. Since this type of pipe was widely used, getting it off the system is a massive (and expensive), but needed undertaking.
Replacing this pipe is expensive and will add to customers’ bills for many decades to come. Since 2012, Avista has spent millions of dollars a year replacing this pipe. And it is allowed to make an additional profit off of each of these millions of dollars, adding even more costs to customers.
CUB is exploring alternative options that would save customers money and prevent rising costs down the line.
Non-Pipe Alternatives
Instead of going home by home and business by business replacing old pipes, CUB is exploring solutions that would not require a pipe at all. Since this replacement is extremely expensive, we are looking into switching customers to all-electric as a more cost-effective option.
Instead of replacing the pipes going into a home, Avista could offer customers money to switch to electric appliances. This could help avoid driving up bills for remaining customers, reduce the cost of highly energy-efficient appliances for those who leave, and help Avista meet its emission reduction requirements—a win-win-win!
Increasing Profits for Shareholders
Avista is asking to increase how much of a profit it is allowed to make on its investments. If this request is approved, it would add $1.75 million to customers’ bills next year. That profit allowance would stick around for years, which could add even more than that to future bills.
This would not add any concrete benefit to customers. It would, however, make shareholders more money. Avista is already making a higher profit than Oregon’s other gas utilities. CUB is opposing this proposal.
Inflation is Driving Up Costs
As we all know, the cost of everything has gone up over the last few years. For utilities, this is no different. We’re seeing higher material costs, higher labor costs, and general operating expenses going up for our utilities.
CUB will work to ensure that only the necessary expenses are being passed onto customers this year.
Should We be Expanding the Gas System in 2025?
The short answer: No.
It no longer makes financial sense to continue to expand the gas system and Oregon gas utilities should be trimming where possible. Given the requirements for our gas utilities to reduce emissions by 2050, every new customer and big investment poses a financial risk to existing customers. We should be avoiding adding new pipelines, expanding existing ones, and find places to reduce gas usage wherever possible to prevent adding even more to customers’ bills. Many investments in 2025 will stay on bills into the 2070s.
Trimming the system now avoids costs that will be with customers until the 2070s. When a utility invests in big projects, like systematically replacing pipes or building a pipe expansion, these costs don’t get paid for all at once. To reduce the burden on customers, they are spread out over 30-50 years. If we can avoid a cost now, it will have impacts that last until our grandchildren or great-grandchildren are adults with gas bills.
If we keep investing in upgrading and expanding the gas system, gas bills will keep getting more expensive. Avista is currently spending millions of dollars a year on replacing pipes alone. Add in the cost of reducing emissions over the next 25 years and we’re looking at a large expense that will be pushed onto customers. As we move closer to deadlines for emissions reductions, the cost of the gas transition is only going to increase. By cutting out pipe costs now, we can also reduce emissions early by encouraging willing customers to transition to electricity. This saves money now and well into the future.
The future of gas is uncertain and potentially harmful to customers. As Oregon moves forward with addressing climate change, the future of fossil gas like the methane that heats our homes is uncertain. Electric appliances are getting more efficient and cheaper. Renewable energy may make electricity prices more favorable than gas. Many people may leave the gas system by choice in favor of cleaner and cheaper energy. We need to make sure that those who do not have the choice to leave gas—renters and those with limited financial resources—are not left footing the bill for unwise investments made today.
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03/14/25 | 1 Comment | Avista Asks for 7% Rate Increase in 2025