Under the terms of the settlement agreement, electric revenues will increase by $21.25m and a revised level of power supply costs to be used in future power cost adjustment calculations will be set.
The revised power supply costs reflect a reduction of approximately $7m from the costs included in the company’s original revenue increase filing of $32.1m. The agreement is the result of concessions made by the parties on several issues to arrive at an outcome that is supported by the parties.
The $17m credit will offset electric prices for customers for two years, reducing the impact of the electric rate increase effective October 1, 2010, from an overall 9.3% to 3.59%. With the offsetting credit, a residential customer using an average of 1,000kWh a month will see a $3.50 per month increase, or 4.3%, for a revised monthly bill of $84.40.
Following the settlement agreement, electric rates will then increase 3.92% on October 1, 2011, and 1.74% on October 1, 2012, after which the temporary credit will expire. The return of deferred state income taxes to Avista’s 122,000 electric and 74,000 natural gas customers in Idaho will not affect net income for the company.
Natural gas revenues under terms of the settlement agreement will increase by $1.85m. A credit of $500,000 will reduce for one year the natural gas rate increase to 1.9%, or $1.71, for a revised monthly bill of $59.40 for a customer using an average of 65 therms a month. The rate change will also be effective October 1, 2010.
Avista is involved in the production, transmission and distribution of energy as well as other energy-related businesses.
