Avista reaches partial multiparty settlement in washington general rate case

Avista and certain parties to the company’s electric and natural gas general rate cases have reached a partial settlement agreement that has been submitted to the washington utilities and transportation commission (utc or commission) for its consideration. if approved, new rates would take effect april 1, 2020. the partial settlement agreement includes, among other things, agreement among all parties on the electric revenue increase and cost of capital as well as electric and natural gas rate spread and rate design. all parties, with the exception of the public counsel unit of the washington office of attorney general, agree on the natural gas revenue increase. if approved, the partial settlement agreement is designed to increase annual billed electric revenues by $28.5 million, or 5.4%, and annual natural gas billed revenues by $8.0 million, or 5.2%, effective april 1, 2020. the partial settlement revenue increases are based on a 9.4% return on equity (roe) with a common equity ratio of 48.5% and a rate of return (ror) on rate base of 7.21%. the other remaining issues to be resolved in the cases include the energy recovery mechanism (erm) deferral and the extension of the electric and natural gas decoupling mechanisms. the parties have agreed that the final erm rebate determined by the commission, after it resolves the remaining erm contested issues, should be returned to customers over a two-year period. the erm rebate is approximately $34.0 million. if the partial settlement is approved, a residential electric customer using an average of 918 kilowatt hours per month would see a billed increase of $5.41 per month, or 6.6%, for a revised monthly bill of $87.63, effective april 1, 2020. a residential natural gas customer using an average of 66 therms per month would see a billed increase of $2.91 per month, or 5.3%, for a revised monthly bill of $57.85, effective april 1, 2020. the actual percentage increase for individual electric and natural gas customers would depend on how much energy a customer uses. in addition to avista, the parties to the electric and natural gas rate cases include the staff of the utc, the public counsel unit of the washington office of attorney general, the alliance of western energy consumers, the nw energy coalition, the energy project, and sierra club. the recommendation to the commission by the utc staff or other parties to approve the partial multiparty settlement is not binding on the commission itself.
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