CUB Calls for Rejection of Avista 9.3% Rate Hike
Posted on March 2, 2017 by Bob Jenks
Tags, Energy
On Wednesday March 1, 2017, CUB called for the Oregon Public Utility Commission (PUC) to reject Avista Utilities’ proposal to raise residential rates by 9.3%. CUB did this because we believe Avista, the supplier of natural gas service to parts of Southern and Eastern Oregon, has failed to demonstrate that its current rates are inadequate. While it is common for CUB to call for significant reductions in rate increases proposed by utilities, it is unusual to ask that the entire rate hike be rejected.
CUB supported our request by showing that Avista misstated its level of earnings when filing the case; claiming its rate of return was 5.6%. Later Avista admitted that this figure was incorrect, claiming the error was inadvertent. CUB’s analysis shows that Avista’s actual earnings, while below the level authorized by the PUC, do not justify a rate increase.
Avista raised rates last year and its business plan suggests that it will continue to file for annual increases for the foreseeable future as it expects costs to increase well above the rate of inflation. CUB challenged this spending as unsustainable and noted that the State of Washington recently rejected Avista’s proposal to raise rates, noting that the Company could avoid further increases in revenue requirements if it moderates the pace of growth in its spending.
CUB criticized Avista for failing to provide the documentation required by the PUC to demonstrate that its investments were prudent and showed that many of its investments are not needed for Oregon gas service.
While proposing a 9.3% rate hike for residential customers, Avista proposed no rate increase for large industrial customers. CUB provided evidence that since Avista purchased its Oregon service territory in 1991, residential and small business customers have seen rate hikes of more than 60%, while industrial customers have seen their rates fall by nearly 40%. CUB argued that if Avista’s costs are increasing, all classes of customers should be asked to pay more.
CUB expects the PUC to render a decision on the Avista rate case in the Fall of this year.
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03/15/17 | 0 Comments | CUB Calls for Rejection of Avista 9.3% Rate Hike