Rate Case Roundup: Oregon

Affirming the terms recorded in a proffered all-party settlement, the Oregon Public Utility Commission allowed a natural gas LDC, Avista Utilities, to raise its rates by $3.5 million, an increase of about 3.7%. The majority of the increase, $2.6 million, went into effect on October 1. The remaining $900,000 will take effect as of November 1, coincident with completion of three specific capital projects. The company had originally asked for a 9%, $8.54 million increase in revenues. 

The commission related that the settling parties had succeeded in trimming more than $5 million from the LDC's initial expense claims. Such reductions and disallowances pertained to a wide list of cost categories, from uncollectibles to franchise fees to property taxes to depreciation. Of particular note, the commission said, was the company's concession with respect to employee compensation and other benefits. The commission stated that total employee pay accounts were decreased by $593,000 while pension costs were lowered by $264,000. 

Despite the number and extent of the disallowances, the commission held that the stipulation still offers the company a fair and equitable revenue requirement. The commission said that from its perspective, the newly agreed-upon rates should enable the LDC to maintain and even expand its various capital projects, which had been identified as the primary driver behind the rate application. Avista had averred that it has been actively investing in numerous system upgrades and infrastructure replacements so as to ensure safety and reliability. 

The commission observed that the stipulation includes a provision retaining the existing system charge for general service customers at $17 per month but increasing the residential customer charge by more than 10%, going from $9 per month to $10 a month. Despite that discrepancy, the commission said it was satisfied that the revised schedule of customer charges was reasonable and appropriately cost-based. 

The commission similarly accepted as within the range of reasonableness the ROE values recommended by the parties. The commission ruled that the 9.4% ROE reflected current market conditions for entities comparable to Avista. And, it stated, the ROE approved by the settlement participants clearly was an improvement over the 9.9% ROE initially proposed by the LDC. Re Avista Corp. dba Avista Utilities, UG 325, Order No. 17-344, Sept. 13, 2017 (Ore.P.U.C.).