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FOR IMMEDIATE RELEASE
January 27, 2009
Public Counsel appeals UTC’s approval of 2008 Avista rate case settlement

SEATTLE – The Public Counsel Section of the Washington State Attorney General’s Office today filed an appeal challenging the Washington Utilities and Transportation Commission’s approval of Avista’s last electric and gas rate general rate increases that took effect on Jan. 1.

“Public Counsel believes there are key legal errors in the commission’s decision that warrant an appeal,” said Simon ffitch, chief of the Public Counsel Section, which represents residential and small business customers in utility rate cases.

The appeal filed in Thurston County Superior Court concerns the commission’s Dec. 29 order approving a settlement between Avista, UTC staff and other parties. It coincidentally overlaps with a new rate increase requested last week by Avista that commissioners will consider separately.

The Dec. 29 order authorized rate increases to generate an additional $37.3 million in revenues ($32.5 million from electric and $4.8 million from gas). The additional revenues equate to a 9.1 percent boost in the company’s revenues from electric rates and a 2.4 percent hike in gas revenues.

Public Counsel and the Industrial Customers of Northwest Utilities (ICNU), a non-profit trade association, recommended that the increase be no greater than $24.8 million for electric customers and $3.4 million for gas customers.

The appeal challenges the commission’s Dec. 29 decision in three basic areas:

  • Allowing unlawful or improper costs in rates. The commission’s decision failed to subtract the costs of advertising, charitable donations and certain other company expenses from Avista’s revenue increase request.
  • Retroactive recovery of charges for past use of Lake Coeur d’Alene. In 2008, Avista  signed a settlement agreement with the Coeur d’Alene Tribe regarding disputed use and ownership of Lake Coeur d’Alene. The settlement resolved the tribe’s claim for damages related to Avista’s use of the lake as a water storage facility for its Spokane River Hydroelectric Project. As compensation for these past trespass and water storage claims, Avista will pay the tribe a total of $39 million. In addition, Avista agreed to make payments for future use of the lake for the next 50 years. The UTC order allows Avista to recover all these payments from current and future ratepayers, including the $39 million for the company’s past conduct. Public Counsel believes this part of the order violates the legal doctrine against retroactive ratemaking. That doctrine makes it unlawful to recover from current and future ratepayers expenses of this type from a prior period. Public Counsel is not challenging recovery of payments to the tribe for future use of the lake.
  • Inflated rate request. The commission allowed Avista to increase its electric revenue request by 30 percent nearly half way through the case without requiring the company to file new tariffs to reflect the increase. Public Counsel believes this violates the tariff filing requirements in Washington law. Tariffs are publications that set forth a schedule of proposed charges and are fundamental to ratemaking as a means of providing legal notice to the commission, the public, customers and interested parties of the impact of requested rate increases. Tariffs also trigger a 10-month review period. So failure to file new tariffs cuts the time that the public and commission can review a request.

If the appeal is successful, the court could order refunds or remand the case to the commission to correct errors in its legal and factual analysis.

DOCUMENT:

Petition for Judicial Review of Final Agency Order


 


The Public Counsel Section advocates for the interests of consumers on major rate cases, mergers and other rulemakings before the UTC. Public Counsel also advocates for consumers in court appeals, through technical study groups and before the Legislature and other policy makers. The office maintains contact with the public through a citizen advisory committee, community organizations, public hearings and personal contact with consumers in major cases. More information about Public Counsel’s work is available online athttp://www.atg.wa.gov/utilities.aspx.


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Media Contacts: Kristin Alexander, Public Information Officer, (206) 464-6432, kalexander@atg.wa.gov

Simon ffitch, Public Counsel Section Chief, (206) 389-2055

Editor’s Note: The spelling of Simon ffitch is correct – the surname begins with two lowercase f’s.


 

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