Avista requests Tax Credits to offset costs of improvements without increased bills
By Paul Hall on Tuesday, October 26th, 2021 in More Top Stories Northeastern Oregon News
LA GRANDE – (Information provided by Avista) Avista, the natural gas company that covers the La Grande region filed a request with the Public Utility Commission of Oregon (PUC) that, if approved, would allow the Company to recover costs for ongoing natural gas infrastructure and other investments without increasing customer bills.
The proposal is designed to increase overall natural gas base revenue by approximately $3.8 million and is based on a proposed rate of return of 7.35% with a common equity ratio of 50% and a 9.9% return on equity.
“Avista has maintained focus on our essential service and providing our customers with safe, reliable, and affordable energy,” said Avista President and CEO, Dennis Vermillion. “This means that we’ve continued to make important and necessary investments in our infrastructure, including replacement of aging natural gas infrastructure, expansions to accommodate customer needs, and upgrading customer-facing technology, among other things. We’ve made these investments on behalf of our customers because it’s the right thing to do. Our customers expect the energy to be there when they need it.”
The ongoing effort to align Avista’s costs to serve customers with the rates customers pay is one of the main reasons the Company files general rate requests. Avista understands that rate cases can be challenging. By using tax credits, this rate proposal would allow the Company to recover costs for the important capital investments that make providing safe and reliable energy possible without increasing customer bills.
Capital Investments
The majority of the current capital investments include upgrades and maintenance of natural gas pipe and distribution equipment as well as other information technology improvements. Major capital investments included in today’s filing are Continued investments in upgrading hundreds of miles of natural gas distribution pipelines that were installed 34 years ago or more to ensure safe and reliable service.
Expansion of the natural gas system to meet the growing needs of customers. Replacement of natural gas pipes will improve the operation of the natural gas system and accommodate development and construction projects.
Implementation and upgrades of technology systems that make it easier for customers to do business with Avista and that allow employees to perform their jobs and serve customers in a safe, reliable, and efficient manner.
Customer Bills
If approved by the PUC, the proposal is designed to increase annual billed revenues by $3.8 million, but at that same time be fully offset for two years with tax customer credits of the same amount. The net result would be no change in billed revenues effective Sept. 1, 2022, for two years.
Residential natural gas customers in Oregon using an average of 48 therms per month would expect to see no change in their average monthly bill, which as of November 1, 2021, will be $66.97 per month.
