AVISTA CORPORATION (NYSE:AVA) Files An 8-K Other Events
Item 8.01 Other Events.
Commission (Commission or UTC) issued an order related to Avista
Corporation’s (Avista Corp. or the Company) Washington electric
and natural gas general rate cases that were originally filed with
the UTC in February 2016. The UTC order denied the Company’s
proposed electric and natural gas rate increase requests of $38.6
million and $4.4 million, respectively.
for reconsideration and alternately for rehearing (Petition) of
the Companys 2016 general rate cases to arrive at new electric
and natural gas rates that are fair, just, reasonable and
sufficient.
in reaching its conclusion is that, in Avista Corp.’s request, the
Company did not follow an appropriate methodology to show the
existence of attrition, as between historical data and current and
projected data. Further, the order states that among other things,
the Company did not demonstrate, as a necessary condition to being
allowed an attrition adjustment, that the Company has suffered from
chronic under-earning caused by circumstances beyond its ability to
control. The Company disagrees with the UTC as to various questions
of fact and law.
did not demonstrate that the Companys current revenue is
insufficient for covering costs and providing the opportunity to
earn a reasonable return during the 2017 rate period. The
Commission also stated that Avista Corp. did not demonstrate that
the Companys capital expenditures and increased operating costs are
both necessary and immediate.
points to evidence in the case that demonstrates, contrary to the
Commissions findings, the following:
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Current retail rates are not sufficient for the 2017 rate
period, and therefore a revenue increase is necessary. Commission Staff agrees that current rates are not sufficient. |
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The costs associated with the growth in rate base and
operating expenses are growing at a faster pace than revenue from retail sales, and therefore a revenue adjustment is necessary to close this gap. The revenue adjustment to close this gap is sometimes called an attrition adjustment. Commission Staff agrees that a revenue adjustment is necessary to close this gap. |
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All of the capital projects and operating expenses included
in the case by Avista Corp. are necessary in the time frame proposed in order for the Company to continue to provide safe, reliable service to customers. No party in the case identified a single capital project that should not be completed in the time frame proposed by Avista Corp. (other than Public Counsels general opposition to Advanced Metering Infrastructure). |
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Avista Corp. presented all of the studies and analyses in
this case, consistent with the Company’s previous filings with the Commission, and the Commission Staff acknowledged that Avista Corp. provided such studies. |
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Avista Corp. earned close to its allowed return on equity
during each of the years 2013 through 2015, and into 2016. This opportunity was possible only with the revenue increases related to attrition adjustments, and an attrition adjustment is also necessary for 2017. |
revenue increases totaling over $20 million. Commissioner Jones
dissented and did not support the decision. In his dissent,
Commissioner Jones supported an electric revenue increase of $26
million, and a natural gas increase of $2.4 million.
Answers to Petition for Reconsideration or Rehearing. In its Notice
the Commission requested parties to the case to file written
answers to Avista Corp.s Petition no later than January 13, 2017.
The Commission also provided notice that it expects to enter an
order resolving the Petition no later than March 16, 2017.
rehearing, Avista Corp. may seek judicial review.
About AVISTA CORPORATION (NYSE:AVA)
Avista Corporation is an electric and natural gas utility with certain other business ventures. The Company operates through two business segments: Avista Utilities, and Alaska Electric Light and Power Company (AEL&P). Avista Utilities segment generates, transmits and distributes electricity, and distributes natural gas serving electric and natural gas customers in eastern Washington and northern Idaho and natural gas customers in parts of Oregon. AEL&P is a utility providing electric services in Juneau, Alaska. It operates other businesses, including sheet metal fabrication, venture fund investments and real estate investments, as well as certain other investments of Avista Capital, Inc., a subsidiary of the Company. Through Advanced Manufacturing and Development (AM&D), doing business as METALfx, the Company performs custom sheet metal fabrication of electronic enclosures, parts and systems for the computer, construction, telecommunication, renewable energy and medical industries. AVISTA CORPORATION (NYSE:AVA) Recent Trading Information
AVISTA CORPORATION (NYSE:AVA) closed its last trading session down -0.52 at 39.47 with 292,967 shares trading hands.
