Item 8.01 Other Events.
On January 21, 2022, Avista Corporation (Avista Corp. or the Company) filed
multiyear electric and natural gas general rate cases with the Washington
Utilities and Transportation Commission (WUTC or Commission). If approved, new
rates would be effective in December 2022 and December 2023.
The proposed rates are designed to increase annual base electric revenues by
$52.9 million (or 9.6 percent of base revenues), effective in December 2022, and
$17.1 million (or 2.8 percent of base revenues), effective in December 2023.
For natural gas, the proposed rates are designed to increase annual base natural
gas revenues by $10.9 million (or 9.5 percent of base revenues), effective in
December 2022, and $2.2 million (or 1.7 percent of base revenues), effective in
December 2023.
The Company proposes to offset part of the 2022 base rate request with a
Residual Tax Customer Credit that arose out of the Company's Washington electric
and natural gas general rate cases that went into effect on October 1, 2021. The
order for those general rate cases stipulated that the Residual Tax Customer
Credit was to be flowed through to customers over a 10-year period beginning in
2023; however, the Company is now proposing that this credit be incrementally
flowed through to customers over a two-year period. The estimated benefits to
customers of this credit would be $25.5 million for electric customers and $12.5
million for natural gas customers over a two-year period from December 2022 to
December 2024.
The proposed electric and natural gas revenue increase requests are based on a
10.25 percent return on equity with a common equity ratio of 48.5 percent and a
rate of return on rate base of 7.3 percent. Increasing fixed expenses and
ongoing capital investments (including replacement of wood poles and natural gas
distribution pipe, continued investment in the wildfire resiliency plan, and
technology) were the main drivers of proposed increases.
As a part of the multiyear rate plan, if approved, Avista Corp. would not file a
new general rate case for a new rate plan to be effective prior to December
2024.
The WUTC has up to eleven months to review the general rate case filings and
issue a decision.
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