vision2020
Re: Avista's Surcharge
My thanks to Rep. Tom Trail's responsiveness in forwarding these concerns
onto the Idaho Public Utilities Commission.
As we all know, the Northwest has enjoyed very low electric rates in
comparison to the rest of the country. It appears that those days have long
since come to an end. De-regulation of the power industry without
appropriate levels of accountability, increasing demand and what many
suspect was a contrived energy crisis in 2000-01 are a few reasons why
Avista finds itself in such a deep hole. I can only hope Avista and the
IPUC have learned a valuable lesson. We are all now paying for their
education.
I would like to see Avista increase it's promotion of the Project Share
program which provides relief for low-income families that are struggling
to pay this surcharge. It also seems reasonable that IPUC would consider
holding a public hearing on this issue in North Central Idaho.
John Cronin
----------
> From: Tom Trail <ttrail@moscow.com>
> To: vision2020@whale2.fsr.net
> Subject: RE: Avista's Surcharge
> Date: Friday, September 13, 2002 10:08 AM
>
> >Visionaires:
>
> Ther have been a number of inquiries and discussion on vision2020
recently
> about the Avista
> surcharge. I requested some additional information from the Idaho Public
> Utility Commission
> concerning this issue. Included in my inquiry was the e mail message
from
> John Cronin. Listed
> below in the IPUC response.
>
> Rep. Tom Trail/Dist. 5
> >
> >9/13
> >Dear Representative Trail:
> > The short answer is that by Idaho law utilities are allowed to
recover
> >legitimate costs. Avista has had high power purchase costs that were
> >deferred and have not yet been recovered. For the complete history of
> >this issue you and Mr. Cronin should visit the PUC web page and refer to
> >Avista's application which can be found at
> >www.puc.state.id.us.fileroom/electric/avu.e.-02-06. Additional history
> >will be found in last year's case, AVU-E-01-11 also available in the
"file
> >room." There is a workshop scheduled in Sandpoint next Wednesday,
9/18,
> >at 6:30 p.m. at the Edgewater. PUC staff members as well as utility
> >employees will be in attendance to answer questions the public may have.
> >The following is a PUC press release regarding the surcharge workshop.
> >
> >Marge Maxwell
> >Utilities Compliance Investigator
> >
> >
> >IDAHO PUBLIC UTILITIES COMMISSION
> >FOR IMMEDIATE RELEASE September 6, 2002
> >Case No. AVU-E-02-06
> >Contact: Gene Fadness (208) 334-0339
> >
> >Commission to conduct Avista surcharge workshop Sept. 18
> >
> >BOISE - Staff of the Idaho Public Utilities Commission and
representatives
> >of Avista Utilities will hold a public workshop in Sandpoint on Sept. 18
> >to answer questions regarding Avista's request to continue its 19.4
> >percent surcharge to recover costs the company incurred during 2000 and
> >2001 buying electricity on the wholesale market.
> >
> >Rates won't increase from current levels if the commission approves
> >extension of the surcharge for another year. The surcharge was
implemented
> >last year to recover $23.6 million of a power supply expense that
totaled
> >about $78 million during a two-year period when water supplies were low
> >and prices on the wholesale electricity market reached record levels.
> >Avista's request would continue the surcharge until Oct. 11, 2003,
> >allowing the company to recover another $23.6 million of the same debt.
> >
> >The workshop will begin at 6:30 p.m. at the Best Western Edgewater
Resort,
> >56 Bridge Street, in Sandpoint.
> >
> >The commission has also extended the deadline to receive written
comments
> >on the case from Sept. 18 to Sept. 20.
> >
> >Very low stream flow conditions through the end of 2001 produced a
> >shortfall in generation for the Spokane-based utility. That forced the
> >utility into the expensive wholesale market to buy electricity to meet
> >customer demand.
> >
> > At this time last year, the company asked for a 27-month surcharge
> >through 2003 to recover the debt incurred in 2000 and 2001. Instead, the
> >commission approved a 12-month surcharge of 19.4 percent and directed
the
> >company to report back in one year on the status of the account. In that
> >order last year, the commission said, "If the status report and our
review
> >of the actual PCA deferral balance (at the end of 12 months) support
> >continuation of the surcharge, we anticipate continuation of the
surcharge
> >for an additional period." Even though water and market conditions have
> >since improved, Avista still has debt remaining from the 2000 and 2001
> >electricity crisis that impacted much of the western United States.
> >
> >Avista's credit ratings are below investment grade and the company
> >contends it is important to regain investment grade ratings so it can
> >refinance long-term debt on more reasonable terms. Continuation of the
> >current surcharge is necessary for the company to improve its financial
> >condition, the company contends.
> >
> >Also at issue is the carrying charge the company wants to receive on the
> >deferred balance. Currently, the commission allows a carrying charge
based
> >on the interest rate on customer deposits, which this year is 4 percent.
> >The company is requesting 6 percent, noting that its current embedded
cost
> >of both short- and long-term debt is at 8.88 percent.
> >
> >Those wishing to comment via e-mail may do so by accessing the
> >commission's homepage at www.puc.state.id.us under the heading, "Contact
> >Us." Then select, "E-mail question or comment regarding a formal utility
> >case," fill in the case number (AVU-E-02-06) and enter your comments.
> >Comments can also be mailed to P.O. Box 83720, Boise, ID 83720-0074 or
> >faxed to (208) 334-3762. You can also view the company's application on
> >the commission Web site. Click on "File Room" and then on "Recent
Orders"
> >and search for the case number.
> >
> >
> > A portion of last year's recovery of high power costs was deferred (see
> >AVU-E-01-11 case).
> >
> >
> >
> >
> >
> >-----Original Message-----
> >From: Tom Trail [mailto:ttrail@moscow.com]
> >Sent: Thursday, September 12, 2002 10:13 PM
> >To: Marge Maxwell
> >Subject: Avista's Surcharge
> >
> >
> >>X-From_: vision2020-request@moscow.com Thu Sep 12 18:00:47 2002
> >>Resent-Date: Thu, 12 Sep 2002 18:00:37 -0700 (PDT)
> >>X-Authentication-Warning: whale2.fsr.net: slist set sender to
> >>vision2020-request@moscow.com using -f
> >>Reply-To: <jaycron@turbonet.com>
> >>From: "John Cronin" <jaycron@turbonet.com>
> >>To: "\"Vision 2020 (E-mail)\" <Vision 2020" <vision2020@moscow.com>
> >>Subject: Avista's Surcharge
> >>Date: Thu, 12 Sep 2002 17:53:54 -0700
> >>X-MSMail-Priority: Normal
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> >>Resent-From: vision2020@moscow.com
> >>X-Mailing-List: <vision2020@moscow.com> archive/latest/3362
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> >>
> >>We all received a notice in our most recent Avista bill informing us
that
> >>Avista has filed "a request to continue the existing Power Cost
Adjustment
> >>surcharge of 19.4% for an additional 12 months. The current surcharge
at
> >>the same rate will expire on October 11th.
> >>
> >>The notice tells us the purpose is to "recover excess power costs"
> >>Avista admits that they are due to collect $23.6 million annually. The
> >>notice goes on to say, "Avista makes no profit from surcharge revenues
and
> >>actually is required to absorb 10% of excess power costs" Mmmm.
> >>
> >>Why is Avista in such financial trouble? Will this surcharge become
> >>permanent? Are there reasons that justify a customer bailout of
Avista?
> >>
> >>
> >>John
> >>
> >Margie--what is the scoop on this issue?
> >
> >Tom
> >
> >Dr. Tom Trail
> >International Trails
> >1375 Mt. View Rd.
> >Moscow, Id. 83843
> >Tel: (208) 882-6077
> >Fax: (208) 882-0896
> >e mail ttrail@moscow.com
> >
>
> Dr. Tom Trail
> International Trails
> 1375 Mt. View Rd.
> Moscow, Id. 83843
> Tel: (208) 882-6077
> Fax: (208) 882-0896
> e mail ttrail@moscow.com
>
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