The commission also directed the company to file for deferred accounting treatment of $12.2m of annual costs associated with the Lancaster generating project, including a carrying charge, with the opportunity to recover the costs in the next rate case. The commission approved a 10.2% return on equity and a 46.5% common equity ratio. Rates will be effective January 1, 2010.
Following the execution of an all-party partial settlement agreement in September, Avista revised downward its electric rate increase request from $69.8m to $37.5m, primarily due to the decline in the wholesale prices of electricity and natural gas. Avista also reduced its natural gas request from $4.9m to $2.8m. The company’s original request was based on a proposed 11% return on equity and a 47.5 common equity ratio.
Scott Morris, chairman, president and CEO of Avista, said: “The approved rates will not allow us to fully recover our costs for the significant investments made in the generation and transmission infrastructure to serve our customers’ energy needs.
“However, the commission’s order does provide additional guidance for procedures and documentation that we believe will facilitate improved cost recovery for both operating expenses and capital in the future. We anticipate filing general rate cases in Washington as early as the end of the first quarter 2010.”
