Avista Seeks 8% Bill Increase in 2023
Posted on May 24, 2023 by Charlotte Shuff
Tags, Energy, General Interest
This summer, Avista is asking regulators to approve a new bill increase for its Oregon gas customers. It would result in an 8.1% increase for residential customers, about $6.20 per month for households. Winter bills could increase by around $13 a month. If approved, the increase would go into effect on November 1, 2023.
At $10.9 million, Avista’s requested rate hike seeks to raise customers’ bills for:
- Higher profit margins for shareholders
- Adjusting for inflation (higher cost of goods/services)
- Replacing old pipes to improve system safety
- Customer-funded subsidies for expanding the gas system
CUB’s priority is a safe and affordable gas system for Oregon households. Some of these costs, like replacing dangerous pipes, are likely reasonable. However, we have major concerns with Avista’s customer-funded subsidies to expand its system. These subsidies are unreasonably expensive and could put customers at financial risk as the gas utility must cut emissions to meet climate regulations.
Climate organizations, like Climate Solutions and Sierra Club, are also criticizing Avista for their efforts to continue expanding the fossil fuel system on customers’ dimes. These organizations are opposing the expansion subsidy, various “anti-climate” political activities, and pro-gas advertising.
Avista’s Customer-Funded Subsidy Added $6.9 Million in 2022
Existing customers pay for expanding Avista’s business through a subsidy called a “line extension allowance.” These funds offset the costs to connect a new building to the gas pipeline system. This encourages new homes to be built with gas.
In 2022, each new line Avista adds costs existing customers $6409 - for one single building. This added up to approximately $6.9 million last year. And that does not include the profit Avista is allowed to make on the new infrastructure, which customers must pay for in addition to the subsidy. Further, each new customer added to Avista’s system increases the costs that all customers must pay for the utility to comply with Oregon climate regulations.
By comparison, NW Natural’s version of this subsidy was $2300 in 2022. NW Natural is Oregon’s largest gas utility at 688,000 customers. Avista has only 106,000 gas customers in Oregon. Avista’s subsidy is not only significantly higher than NW Natural’s but also has a much greater impact on each individual customer.
Regulators decided to cut NW Natural’s subsidy to $1300 per new hookup by 2024. We know this is possible for Avista, too. In fact, Avista agreed to completely eliminate this cost for Washington customers. Now, we need Oregon regulators to do the same and significantly reduce or eliminate Avista’s costly subsidy.
What Customers Could Expect in New Bills
Avista’s proposal would be an 8.1% increase for residential customers. Over the full year, that would be about $6.20 per month. Customers could see an average bill go from $77.01 to $83.21. Any approved change in bills will go into effect on November 1, 2023.
The majority of this bill increase would be based on energy use. This means winter bills could increase by around $13 a month. The proposal includes a $1.50 per month increase on the basic charge, which would be in effect all year long. (Read: Understanding Your Avista Gas Bill)
What is Included in This Rate Increase
More Profits: Avista is increasing its profit margin allowance. This would not add any concrete benefit to customers. It would, however, make shareholders more money.
Adjustments for Inflation: The utility is reporting a higher cost for goods and services related to keeping its system running. This includes increased costs for physical items like pipes and meters, as well as maintenance and labor costs.
Upgrading Existing Pipelines: Avista is replacing old pipes from the 1970s with new ones. These new pipes are less likely to fracture, leak, or explode. This is an investment into the safety of the existing gas system.
Customers Have the Opportunity to Weigh In
On June 7, 2023, Avista customers and community advocates will have a chance to weigh in on this rate increase. The Public Utility Commission, Oregon’s utility regulators, will be hosting a Public Comment Hearing at 6:00 pm via Zoom. For instructions on how to join this meeting by Zoom or phone, visit the Public Utility Commission website.
For more information on what to expect from a public hearing, visit this recent post from the CUB Blog!
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05/25/23 | 0 Comments | Avista Seeks 8% Bill Increase in 2023