Avista reaches all-party settlement in Idaho general rate case

If approved, customer tax credits will offset overall proposed base rate changes over the two-year plan

SPOKANE, Wash., June 14, 2021 (GLOBE NEWSWIRE) -- Avista (NYSE: AVA) and all parties to the Company’s electric and natural gas general rate case have reached a settlement agreement that has been submitted to the Idaho Public Utilities Commission for its consideration.

If approved, the settlement agreement is designed to increase annual base electric revenues by $10.6 million or 4.3%, effective Sept. 1, 2021, and by $8.0 million or 3.1%, effective Sept. 1, 2022. For natural gas, the settlement agreement is designed to decrease annual base natural gas revenues by $1.6 million or 3.7%, effective Sept. 1, 2021, and increase annual base natural gas revenues by $0.9 million or 2.2%, effective Sept. 1, 2022. The parties have agreed to use the customer tax credits included in Avista’s original filing to offset overall proposed changes to base electric and natural gas rates over the two-year plan.

After accounting for the base rate change and the tax customer credits, the overall billed revenue changes agreed to by the parties are provided below:

Electric Year 1= no change
Electric Year 2 = decrease of 0.8%
Natural Gas Year 1 = decrease of 4.5%
Natural Gas Year 2 = increase of 1.5%

The settlement capital structure includes a 9.4% return on equity (ROE) with a common equity ratio of 50% and a rate of return (ROR) on rate base of 7.05%. The overall outcome is in line with the Company’s expected margin in this case. The primary element of the difference in the agreed upon base revenues in the settlement agreement from Avista’s original request is the continued recovery of costs for Avista’s wind generation power purchase agreements, which will include Palouse Wind and Rattlesnake Flat, through the power cost adjustment mechanism rather than through base rates, as well as reductions in overall net power supply costs, together totaling $5 million. 

“We’re pleased to pass the benefits of the offsetting tax credits to our customers at this time. This settlement agreement will provide new rates in Idaho that are fair and reasonable for our customers, the Company, and our shareholders,” said Dennis Vermillion, Avista president and CEO. “This outcome provides us the opportunity to continue to earn a fair return in Idaho and supports Avista’s efforts to invest in and maintain our infrastructure so we can continue to provide the reliable energy our customers expect.”