Case No. AVU-G-07-02, Order No. 30444

September 28, 2007

Contact: Gene Fadness (208) 334-0339, 890-2712




Avista seeks approval for 4.5 percent PGA reduction


Avista Utilities is seeking authority from state regulators to decrease its annual Purchased Gas Cost Adjustment (PGA) by about 4.5 percent effective Nov. 1.


Customers have until Oct. 24 to comment to the Idaho Public Utilities Commission regarding Avista’s proposal. Avista serves about 70,000 households in its northern Idaho territory.


If the commission adopts the company’s proposal, an average resident using about 65 therms per month would experience about a $3.65 monthly decrease, according to the company’s application. More stability in wholesale gas prices, increased storage capacity and no supply interruptions caused by hurricanes all account for lower future price projections for the 2007-08 season.


Avista’s fixed costs of supplying gas and some variable costs of gas supply are covered in base rates. Those base rates are adjusted only when the company comes before the commission with a rate case. But variable costs, such as wholesale market prices for gas, transportation and storage are adjusted yearly through the PGA mechanism. The PGA does not change the base rates paid by customers, but does impact the size of a yearly surcharge or credit to adapt to the always changing costs of buying gas from suppliers and related transportation and storage expenses. Surcharges collected to pay for variable gas supply, storage and transportation costs not already included in base rates do not enhance company earnings. Money collected from the PGA is placed in a deferred account and must go directly toward paying wholesale suppliers of natural gas or to providers of storage and pipeline capacity.


The commission will take written public comments through Oct. 24. Comments are accepted via e-mail by accessing the commission’s homepage at and clicking on "Comments & Questions." Fill in the case number (AVU-G-07-02) and enter your comments. Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or faxed to (208) 334-3762.


A full text of the commission’s order, along with other documents related to this case, are available on the commission’s Web site. Click on “File Room” and then on “Electric Cases” and scroll down to the above case number.