Avista files multi-year electric and natural gas rate plan in Idaho

Rhea-AI Summary

Avista (NYSE: AVA) has filed a multi-year rate plan with the Idaho Public Utilities Commission seeking to recover infrastructure investment costs. The two-year plan proposes electric rate increases of 14.4% ($43.0 million) effective September 2025 and 5.2% ($17.7 million) effective September 2026. For natural gas, increases of 10.3% ($8.8 million) and 1.0% ($1.0 million) are proposed for the same periods.

Idaho residential customers using 939 kWh monthly would see their electric bills rise by $15.36 to $119.66 in 2025, and by $6.36 to $126.02 in 2026. Natural gas customers using 66 therms monthly would experience increases of $6.29 and $0.88 in respective years. The plan includes infrastructure upgrades, wood pole management, wildfire resiliency measures, and technology improvements.

Positive

• Multi-year rate plan provides price predictability through September 2027
• Infrastructure investments enhance system reliability and safety
• Implementation of Wildfire Resiliency Plan strengthens grid security

Negative

• Significant electric rate increase of 14.4% in 2025
• Natural gas rate increase of 10.3% in 2025
• Basic charge for electric service increasing by $10 over two years
• Total monthly bill increase of $21.72 for average electric customers over two years

Insights

Utility Regulatory Expert

This rate case filing represents a strategically timed and comprehensive approach to cost recovery, with several notable elements that warrant careful analysis. The proposed return on equity of 10.4% with a 50% common equity ratio positions Avista in line with industry averages, though slightly aggressive in the current regulatory environment.

The two-year rate plan structure is particularly significant, as it provides regulatory certainty through September 2027. This "stay-out" provision typically appeals to regulators and stakeholders by reducing regulatory lag and providing rate predictability. The proposed basic charge increases for residential customers, rising by $5 per month in both years to reach $30, signals a shift toward fixed cost recovery – a growing trend in utility rate design.

The infrastructure investment focus aligns with industry priorities, particularly the emphasis on wildfire resilience and grid modernization. The systematic replacement of pre-1987 gas distribution infrastructure demonstrates proactive asset management, while technology upgrades suggest a forward-looking operational strategy.

Notable is the uniform rate increase approach across customer classes, ranging from 13.4% to 14.7% for electric service in 2025. This relatively even distribution of rate impacts helps avoid claims of cross-subsidization between customer classes, though industrial customers may challenge the proportional allocation of costs.

The regulatory timeline, with implementation targeted for September 2025, allows sufficient time for thorough regulatory review while avoiding rate case overlap. This timing also suggests careful consideration of inflation impacts and cost trajectories in the utility's financial planning.

Company’s filing seeks to recover infrastructure investments and expenses necessary to serve customers

SPOKANE, Wash., Jan. 31, 2025 (GLOBE NEWSWIRE) -- Today, Avista (NYSE: AVA) has filed a multi-year rate plan with the Idaho Public Utilities Commission (IPUC or Commission) that would allow the Company to recover costs for fixed expenses and ongoing investments to infrastructure, technology and more. If approved, new rates would be effective in Sept. 2025 and Sept. 2026.

“The cost of delivering safe and reliable energy includes maintaining and improving a massive infrastructure made up of pipes, poles, dams, and substations as well as technology upgrades. These expenses are necessary to ensure that we can continue to provide our customers with safe, efficient, and reliable power. We're managing these expenses on behalf of our customers because we understand the need to minimize the cost impact that our customers experience,” said Avista President and CEO Heather Rosentrater.

“Keeping costs affordable for customers is at the forefront of our decisions. We aim to save our customers money in a variety of ways, including implementing intentional purchase plans, offering natural gas for the same price we pay, and continuing to be thoughtful in how we prepare our generation mix. Even with these efforts in place, the costs to purchase power can and do fluctuate, and we need to continue to invest hundreds of millions of dollars in our system every year to continue providing safe, reliable service for our customers now and into the future,” Rosentrater said.

Avista’s Requests
The proposal is a two-year rate plan, with new rates taking effect in Sept. 2025 and Sept. 2026. This plan would create a stay-out period where Avista would not file a new general rate case for new rates to be effective before Sept. 2027. This would provide customers with some predictability in their expected future energy prices.

If approved, the electric general rate request is designed to increase annual base revenues by $43.0 million (or 14.4% on a billed basis) effective on Sept. 1, 2025, and $17.7 million (or 5.2% on a billed basis) effective on Sept. 1, 2026.

If approved, the natural gas general rate request is designed to increase annual revenues by $8.8 million (or 10.3% on a billed basis) effective on Sept. 1, 2025, and $1.0 million (or 1.0% on a billed basis) effective on Sept. 1, 2026.

The electric and natural gas requests are based on a proposed rate of return (ROR) of 7.68%, with a common equity ratio (CER) of 50%, and a 10.4% return on equity (ROE).

Infrastructure Investments

Avista needs to continue to replace infrastructure that has reached the end of its useful life, as well as respond to the need for reliability and technology investments required to build the integrated energy services grid that will take us into the future. Among the projects included in today’s filing are:

• Ongoing management, inspection, and replacement of 240,000 electric distribution wood poles through Avista’s wood pole management program to ensure poles and the equipment on them support the company’s ability to provide customers with safe and reliable power.
• Continued investment in Avista’s Wildfire Resiliency Plan, which outlines substantial steps that Avista has taken to guard against the growing threat of wildfires including grid hardening, enhanced vegetation management, and other industry-leading best practice measures.
  
• The ongoing project to systematically replace portions of natural gas distribution pipe in Avista’s service area that were installed before 1987, as well as replacement of other natural gas service equipment to strengthen the integrity, safety, and reliability of the system.
• Technology upgrades that support necessary business processes and operational efficiencies that allow Avista to effectively manage the utility and serve customers.

Idaho Residential Customer Bills

Electric
Effective Sept. 2025: Residential electric customers in Idaho using an average of 939 kilowatt hours per month could expect to see a total billed increase of 14.7% or $15.36 for a revised monthly bill of $119.66 from $104.30. The proposed monthly increase includes a $5 per month proposed increase in the basic charge to a level of $25.00 per month.

Effective Sept. 2026: Residential electric customers in Idaho using an average of 939 kilowatt hours per month could expect to see a total billed increase of 5.3% or $6.36 for a revised monthly bill of $126.02 from $119.66. The proposed monthly increase includes a $5 per month proposed increase in the basic charge to a level of $30.00 per month.

Natural gas

Effective Sept. 2025: Residential natural gas customers in Idaho using an average of 66 therms per month could expect to see a total billed increase of 10.4% or $6.29 for a revised monthly bill of $66.92 from $60.63.

Effective Sept. 2026: Residential natural gas customers in Idaho using an average of 66 therms per month could expect to see a total billed increase of 1.3% or $0.88 for a revised monthly bill of $67.80 from $66.92.

Proposed Changes by Service Schedule
The requested electric increase by service schedule is as follows:

Rate Schedule	Sept. 2025 Billing Increase	Sept. 2026 Billing Increase
Residential Service – Schedule 1	14.7%	5.3%
General Service - Schedules 11/12	14.2%	5.1%
Large General Service - Schedules 21/22	14.1%	5.1%
Extra Large General Service - Schedule 25	14.3%	5.2%
Extra Large General Service - Schedule 25P	14.4%	5.2%
Pumping Service - Schedules 31/32	14.1%	5.1%
Street & Area Lights - Schedules 41 – 49	13.4%	4.9%
Total	14.4%	5.2%

The requested natural gas increase by service schedule is as follows:

Rate Schedule	Sept. 2025 Billing Increase	Sept. 2026 Billing Increase
General Service Schedule 101	10.3%	1.3%
Large General Service Schedules 111/112	10.3%	0.0%
Interrupt. Sales Service Schedules 131/132	0.0%	0.0%
Transportation Service Schedule 146	10.3%	0.0%
Total	10.3%	1.0%

The actual percentage increase for electric and natural gas customers will vary by customer rate group and depend on how much energy a customer uses.

Customer Resources
To assist customers in managing their energy bills, Avista offers services for customers such as comfort level billing, payment arrangements and Customer Assistance Referral and Evaluation Services (CARES), which provide assistance to special-needs customers through referrals to area agencies and churches for help with housing, utilities, medical assistance and other needs. Avista provides energy efficiency and outreach programs that include rebates and incentives as well as tips and resources to help customers manage their energy use and energy bills. Customers can learn more at www.myavista.com.

Rate Application Procedure and Additional Information
Avista’s application is a proposal, subject to public review and a Commission decision. Copies of the applications are available for public review at the offices of both the Commission and Avista and on the Commission’s website (www.puc.idaho.gov). Customers may file with the Commission written comments related to the Company’s filing. Customers may also subscribe to the Commission’s RSS feed (https://puc.idaho.gov/RssPage) to receive periodic updates via e-mail about the case. Copies of the rate filing is also available on our website, www.myavista.com/rates.

The Commission will begin a comprehensive review of Avista’s application and will seek public input. If you would like to submit comments on the proposed increase (Case No. AVU-E-25-01 and AVU-G--01), you can do so by going to the Commission website or mailing comments to:

Idaho Public Utilities Commission
P. O. Box 83720
Boise, ID 83720-0074

About Avista Corp.
Avista Corp. is an energy company involved in the production, transmission and distribution of energy as well as other energy-related businesses. Avista Utilities is our operating division that provides electric service to 420,000 customers and natural gas to 381,000 customers. Our service territory covers 30,000 square miles in eastern Washington, northern Idaho and parts of southern and eastern Oregon, with a population of 1.7 million. AERC is an Avista subsidiary that, through its subsidiary AEL&P, provides retail electric service to 18,000 customers in the city and borough of Juneau, Alaska. Our stock is traded under the ticker symbol “AVA”. For more information about Avista, please visit www.avistacorp.com.

This news release contains forward-looking statements regarding the company’s current expectations. Forward-looking statements are all statements other than historical facts. Such statements speak only as of the date of the news release and are subject to a variety of risks and uncertainties, many of which are beyond the company’s control, which could cause actual results to differ materially from the expectations. These risks and uncertainties include, in addition to those discussed herein, all of the factors discussed in the company’s Annual Report on Form 10-K for the year ended Dec. 31, 2023 and the Quarterly Report on Form 10-Q for the quarter ended September 30, 2024.

SOURCE: Avista Corporation

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FAQ

How much will Avista's (AVA) electric rates increase in Idaho for 2025?

Avista's electric rates in Idaho will increase by 14.4% ($43.0 million) effective September 2025, raising the average residential bill by $15.36 to $119.66 monthly.

What is the proposed natural gas rate increase for Avista (AVA) in Idaho for 2025-2026?

Avista proposed a 10.3% natural gas rate increase ($8.8 million) for September 2025 and a 1.0% increase ($1.0 million) for September 2026.

How long will Avista's (AVA) new rate plan remain in effect?

The rate plan creates a stay-out period where Avista won't file a new general rate case for rates to be effective before September 2027.

What is Avista's (AVA) proposed return on equity (ROE) in the Idaho rate case?

Avista is proposing a 10.4% return on equity (ROE) with a common equity ratio of 50% and a rate of return of 7.68%.

How much will the average Idaho residential customer's electric bill increase over the two-year period?

The average Idaho residential customer's electric bill will increase by a total of $21.72 over the two-year period, from $104.30 to $126.02.