Avista and all of the other parties in the company's electric rate case filing have reached a settlement agreement that, if approved by the Idaho Public Utilities Commission, would conclude the proceedings related to the general rate request filed on May 26, 2016. New rates would take effect Jan. 1, 2017.
If approved, the settlement agreement is designed to increase annual electric revenues by $6.3 million, or 2.5 percent. The settlement revenue increase is based on a 9.5 percent return on equity (ROE) with a common equity ratio of 50 percent.
In addition to the agreed-upon increase in electric revenues to recover costs primarily driven by Avista's increased capital investments in infrastructure to serve customers, the settlement includes the continued recovery of about $4.1 million in costs related to the Palouse Wind Project through the power cost adjustment mechanism rather than through base rates.
"This settlement agreement will provide new electric rates in Idaho that are fair and reasonable for our customers, the Company and our shareholders," said Dennis Vermillion, Avista Corp. senior vice president and president of Avista Utilities. "This outcome provides us the opportunity to continue to earn a fair return in Idaho and supports Avista's efforts to make key capital investments so we can continue to provide the reliable energy our customers expect."
If the settlement is approved, a residential customer using an average of 918 kilowatt hours per month could expect to see a bill increase of $2.64 per month, or 3.1 percent, for a revised monthly bill of $87.15. The total revised average monthly bill amount includes the effects of an increase in the basic charge of $0.50, from $5.25 to $5.75 per month.
Avista serves more than 128,200 electric customers in Idaho.