Avista’s Rates Just Went Up, and May Go Up Again!
Posted on November 5, 2014 by Bob Jenks
Tags, Consumers and Utility Customers, Utility Regulation
Avista, a gas utility with customers in southern and northeastern Oregon, recently requested a 9.8% rate increase for residential customers. Avista has already received permission to raise residential rates by more than 9.1% in November this year. Combined, these increases will add more than $10 per month to the average residential bill in less than one year. With 97,486 Oregon customers, Avista is Oregon’s second largest gas utility. By comparison, Oregon’s other two gas companies, NW Natural and Cascade Natural Gas, are raising rates by 2% and 0.7% respectively over the same time period.
This big rate increase is a bit of a surprise, because natural gas prices are pretty stable and Avista’s loads are not growing significantly. Avista claims that the rate hike is necessary because of the need to replace some pipes that are cracking and to upgrade its billing system. Avista is also proposing that residential and small business customers absorb nearly the entire rate increase, while allowing most industrial customers to avoid it.
CUB has been digging into the details of this case, and we are seeing issues that concern us. After spending most of the last year focused on purchasing an Alaska utility, Avista is asking for an increase in their profit margin (return on equity). Simply based on the size of the rate increase, CUB questions whether management should be rewarded with higher profits. Did their focus on purchasing the Alaska utility distract them from their core business as a regulated utility?
In addition, there have been significant cost overruns related to the new customer information system, raising questions about whether this project has been properly managed.
Finally, CUB is concerned that placing all the costs on residential and small commercial customers fails a basic fairness test. If costs are going up, shouldn’t all customers bear a portion of the burden?
We will be sure to keep you posted as the case develops. In the meantime, we are putting together an educational update for customers on how to make your home more energy efficient and reduce your heating costs. Stay tuned to the CUB blog for updates!
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04/24/17 | 0 Comments | Avista’s Rates Just Went Up, and May Go Up Again!