Case No. AVU-E-05-06, Order No. 29881

October 4, 2005

Contact: Gene Fadness (208) 334-0339 office; (208) 841-1107 cell




Avista Utilities granted surcharge extension


The Idaho Public Utilities Commission today approved Avista Utilities’ application for a 12-month extension of a 2.45 percent surcharge that allows the utility to recover above-normal costs of supplying power to its customers. Extension of the surcharge does not increase rates. It leaves the surcharge – about 0.163 cents per kWh for residential customers – in place for another year.


The normal costs for supplying power to customers are recovered in the utility’s base rates. However, a utility may incur higher than normal costs from unusual circumstances, such as low water conditions or higher than anticipated market conditions. In those circumstances, the commission has approved a temporary “purchase cost adjustment” (PCA) process enabling Idaho utilities to recover higher than normal costs. Revenues from a PCA surcharge are used only to pay the increased power costs and do not increase company earnings. Idaho statute requires that regulated utilities be allowed to recover all prudently incurred costs of serving their customers.


The commission approved a PCA for Avista after the unprecedented increase in power supply costs following the 2000-01 Western energy crisis. That crisis resulted in a deferral account of $78 million for Avista. Since then, the debt has been reduced to $5.9 million and the surcharge reduced from 19.4 percent to 2.45 percent.


By leaving the PCA in place for another year, Avista will be able to further reduce the power cost deferral balance and customers will not experience an increase in existing rates. Extension of the surcharge will raise about  $4,268,000. The commission directed Avisa to file a status report on or before Aug. 15, 2006 to determine whether the PCA surcharge should again be lowered or to make other appropriate adjustments.


A full text of the commission’s order, along with other documents related to this case, are available on the commission’s Web site at Click on “File Room” and then on “Electric Cases” and scroll down to Case Number AVU-E-05-06.


Interested parties may petition the commission for reconsideration by no later than Oct. 25. Petitions for reconsideration must set forth specifically why the petitioner contends that the order is unreasonable, unlawful or erroneous. Petitions should include a statement of the nature and quantity of evidence the petitioner will offer if reconsideration is granted.


Petitions can be delivered to the commission at 472 W. Washington St. in Boise, mailed to P.O. Box 83720, Boise, ID, 83720-0074, or faxed to 208-334-3762.