Avista (NYSE:AVA) on June 10 said that it has filed an electric rate request with the Idaho Public Utilities Commission that would increase annual billed revenues by $5.3m, or 2.1%, effective Jan. 1, 2020, in order to recover costs related to investments in infrastructure, system maintenance, and technology.
The company said that the request is based on a proposed rate of return (ROR) on rate base of 7.55% with a common equity ratio of 50% and a 9.9% return on equity (ROE).
If approved, residential electric customers in Idaho using an average of 898 kWh per month could expect to see a bill increase of $2.89 per month, or 3.5%, for a monthly bill change from $82.57 to $85.46, effective Jan. 1, 2020, the company said.
In its application, Avista said that the primary factor driving its electric revenue increase requests in 2020 is an increase in net plant investment from currently authorized; for 2020, there is also an offsetting decrease in power supply expenses.
Unless the increased rates as requested in the application are approved, Avista’s rates would not be fair, just, and reasonable, the company said, adding that it would not have the opportunity to realize a fair rate of return on its investment.
The company noted that its plans call for a continuation of utility capital investments in generation, transmission, and distribution systems, as well as technology to preserve and enhance service reliability for customers. Capital expenditures of $405m per year (system) are planned for the five-year period ending Dec. 31, 2023.
According to the testimony of Jason Thackston, senior vice president of Energy Resources at Avista, that was filed with the application, generation-related capital projects that are included in the case for 2019 total – on a system basis – about $36.8m.
Those projects include about $2.9m for the Base Load Thermal Plant program, which is an ongoing program necessary to sustain or improve the operation of Avista’s base load thermal generating plants, Coyote Springs 2 and Kettle Falls. Thackston added that capital projects include replacement of items identified through asset management decisions and programs necessary to maintain reliable operations of those plants. The program also includes initiatives associated with regulatory mandates for air emissions and monitoring, as well as projects to meet NERC compliance requirements, Thackston said.
According to the testimony of Heather Rosentrater, vice president of Energy Delivery for Avista Utilities, the company’s distribution capital projects (system) include about $10.2m in distribution grid modernization and about $10.5m in distribution wood pole management.
Rosentrater also said that electric transmission capital projects (system) include about $7.1m in substation-station rebuilds, noting that that program replaces and/or rebuilds existing substations as they reach the end of their useful lives or where installed equipment that fails or is being replaced for capacity needs cannot be accommodated within the physical constraints of the small, older stations.