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FOR IMMEDIATE RELEASE
February 20, 2002
AG Reaches Settlement with Avista Utilities to Lower Rate Increase


Olympia - February 20, 2002 - In a settlement with the state filed today, Avista Utilities has agreed to cut in half its proposed interim rate increase and contribute $50,000 to a fund providing emergency energy assistance to consumers, Attorney General Christine Gregoire announced.

“While no one likes to see rate increases, this agreement protects customers from a far more drastic hike,” the Attorney General said. “At the same time, it provides much-needed assistance for those consumers least able to absorb these higher costs into the family budget.”

Gregoire said the settlement will give Avista the additional capital it needs to avoid further deterioration of its financial condition. “If allowed to continue, that financial deterioration could well have resulted in even more severe impact to Avista’s customers,” Gregoire said.

“This settlement provides important financial and regulatory certainty to the utility at an important time,” she said.

Avista, a Spokane-based utility, had filed a petition with the Washington Utilities and Transportation Commission (WUTC) to raise electricity rates by 10 percent beginning March 15. The increase would come on top of a temporary 25 percent surcharge the WUTC granted the utility on Oct. 1, 2001 to recover power supply costs.

In the agreement filed today, Avista agreed to an increase of just 5 percent on top of the previously granted surcharge.

The 5 percent hike translates to an additional $4.08 per month for 1,400 kilowatt hours, the average residential electric heat customer’s usage.

The agreement also allows Avista to avoid paying refunds to customers for any part of the 25 percent emergency surcharge the WUTC granted last fall.The agreement was reached by the Attorney General’s Office, the staff of the Washington Utilities and Transportation Commission, the Industrial Customers of Northwest Utilities, and Avista Utilities. It remains subject to the approval of the WUTC.

If approved, the settlement will control rates until the WUTC rules later this year on Avista’s permanent rate hike request.

In that case, Avista is asking the WUTC to replace the emergency surcharge and the 5 percent interim rate hike with a permanent rate increase of 22.5 percent plus a five-year 15 percent surcharge to recover power supply costs.
The Attorney General’s Office will represent consumers before the WUTC in that case.
In the meantime, if approved by the WUTC, Wednesday’s agreement would reduce the immediate rate impact on consumers and provide assistance for those struggling to pay the rising energy costs.

Under this agreement the company will contribute $50,000 to Project SHARE, which provides emergency energy assistance. It will also make changes to enhance its current efforts to help customers pay their bills.

Avista serves approximately 210,000 electric customers in Adams, Asotin, Ferry, Franklin, Lincoln, Spokane, Stevens and Whitman Counties.


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