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UTC enters final order on Avista's request for a general rate increase.

The commission enters Order 10 on December 22, 2009. The commission rejects revised tariff sheets Avista Corporation filed on January 23, 2009, but authorizes and requires the Company to file tariff sheets that will result in increases of about 2.8 percent for electric rates and 0.25 percent for natural gas rates, which are found on the record of this proceeding to be fair, just, reasonable and sufficient. In approving these rate increases, the Commission approves and adopts a Multi-Party Partial Settlement Stipulation filed by the parties to this general rate case that resolves the overall cost of capital, the majority of power supply costs, and various other issues. Among several contested issues, the Commission denies the Company’s proposed pro forma adjustments that are not demonstrated to be known and measurable and not offset by other factors, but accepts many proposed by Commission Staff. Further, the Commission authorizes Avista to defer its costs associated with the Lancaster power purchase agreement for possible later recovery, determining that Avista failed to make various factual and other showings that are prerequisite to immediate inclusion of such power costs in rates. These include failure to make the requisite showing of a binding agreement to purchase the power from the Lancaster plant, failure to make the required affiliated interest filing in compliance with RCW 80.16, and failure to demonstrate that this new power purchase agreement complies with the greenhouse gas emissions limits in RCW 80.80. Accordingly, the Commission will consider the recovery of the Lancaster costs in a later proceeding once those prerequisite showings have been made. In addition, we decline the Company’s request to prematurely terminate the energy recovery mechanism (ERM) surcharge. Finally, the Commission approves a continuation of Avista’s decoupling mechanism, with modifications including a lower maximum deferral rate of recovery for lost margins.

PROCEDURAL BACKGROUND: On May 15, 2009, the commission issued Order 06 -Second Prehearing Conference Order, which, in addition to addressing other issues, added a new starting date for the evidentiary hearing to be held in October, 2009. The evidentiary hearing will now being Monday, October 5, 2009, at 9:30 a.m.

The commission has suspended and consolidated tariff revisions filed by Avista Corporation, d/b/a Avista Utilities. The purpose of the filings is to increase rates and charges for electric and gas service provided to customers in the state of Washington. The company requests an electric rate increase of $69.8 million, or 16.0 percent, and a gas rate increase of $4.9 million or 2.4 percent. Avista also proposes to decrease the current Energy Recovery Mechanism surcharge by $32.4 million, or 7.4 percent for an overall net increase of 8.6 percent.

The commission held a prehearing conference on February 24, 2009, and entered a prehearing conference order on February 27, 2009, that adopts a procedural schedule. The commission will hold evidentiary hearings in this matter beginning on Tuesday, October 6, 2009, at 9:30 a.m. and continue daily thereafter, as necessary, until Friday, October 9, 2009.

The commission will also hold two public comment hearings on September 30, 2009, one in the Spokane Valley at 12:30 p.m. and one in downtwon Spokane at 5:30 p.m., to provide an opportunity for members of the public to provide oral or written comments to the commission.

On September 16, 2009, the commission issued a Notice Setting Prehearing Conference for September 23, 2009, beginning at 11:00 a.m. at the commission's headquarters. This prehearing conference will be to discuss the impact of the recently filed Partial Settlement Stipulation on the existing procedural schedule.

On September 24, 2009, the commission issued Order 09 - Third Prehearing Conference Order, which included an amended notice of hearing schedule, rescheduling the October 5, 2009 evidentiary hearing to now begin October 6, 2009, at 1:30 p.m.


(Docket 090134, see "Documents" link below for more information).

For more information, please contact Danny Kermode at (360) 664-1253 or by e-mail at dkermode@utc.wa.gov.


Posted/updated: 12/23/2009
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