Utility commission listens while mulling Avista’s proposed rate hike

The hardship homeowners would bear under a proposed compromise for an Avista rate hike request in Idaho was a concern of a Lewiston resident who testified at a Tuesday hearing.

“The outcome of this increase is a fair return to support their efforts to maintain their infrastructure and I fully support (that),” Russell Gee said. “But if it is indeed fair, why should the homeowners be penalized by assuming such a huge part of the burden?”

Gee was one of three people to testify before the three-member Idaho Public Utilities Commission, which visited Lewiston for the hearing. The commission had a second hearing Tuesday in Coeur d’Alene and will have a third today in Sandpoint.

It is taking the comments provided at the sessions under advisement. At a separate time, the commission will approve, deny or modify the proposed compromise in Avista’s request.

Avista’s annual base electricity revenue would rise by $22.1 million or 8% on Sept. 1 and by $4.3 million or 1.4% on Sept. 1, 2024, under the compromise. Its annual base natural gas revenue would increase by $1.3 million or 2.7% on Sept. 1 and $3,000 or .01% on Sept. 1, 2024.

The percentage increase for customers would vary by category under the proposed compromise.

Residential electricity rates would rise by 11.8% on Sept. 1. Proposed rate increases for businesses range from a low of 3% in the first year for Clearwater Paper, Avista’s largest Idaho customer, and small business and industrial users, to a high of 11% for larger commercial and pumping service customers.

Residential customers presently are responsible for $135 million of annual revenue from Avista’s base electricity rates.

Clearwater Paper’s annual share is $19.1 million, while small businesses pay $43.8 million and industrial users are charged $20.7 million.

Larger commercial customers provide $47 million and pumping services are responsible for $6.2 million each year.

The proposed way to divide the potential increase isn’t the right approach, Gee said, partly because, unlike homeowners, businesses can pass along their costs to their customers.

In some cases, the customers are outside Idaho in other parts of the world and nation, he said.

“Consumers can choose where to shop and can look for the best price,” Gee said. “That’s the free market system.”

The reason for the differences in the categories is that Avista is trying to make what it charges customers more closely reflect the actual cost of the service, said Liz Andrews, senior manager of revenue requirements and regulatory affairs for Avista in Spokane.

Traditionally large industrial and commercial customers have subsidized residential rates and even with the proposed adjustments some of the subsidizing is continuing, she said.

Gee also objected to the commission’s practice of allowing parties approved by the commission to be “intervenors” in rate cases.

In the Avista requests for rate hikes, the Idaho Public Utilities Commission staff represented all customers. The commission staff reached the proposed compromise with the intervenors Clearwater Paper, Idaho Forest Group and Walmart.

The Idaho Conservation League and NW Energy Coalition, a joint intervenor, has not joined in the compromise.

“(The business intervenors have) been able to lobby for favorable rates,” Gee said. “To me, this is an unfair advantage, when the average consumer feels, forgive the pun, powerless and often remains silent as a result.”

Williams may be contacted at ewilliam@lmtribune.com or (208) 848-2261.