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Avista Files Request to Eliminate Energy Cost Surcharge Electricity prices for Avista's 232,000 Washington customers will decrease by an overall 7 percent beginning Feb. 12, 2010, if the Washington Utilities and Transportation Commission (WUTC) approves Avista's request to eliminate an existing energy cost surcharge.
The Energy Recovery Mechanism (ERM) surcharge is designed to recover, or rebate to customers, extraordinary changes in certain power supply costs that are above or below the amount included in base customer rates. The elimination of the ERM surcharge has no impact on company earnings.
If the request is approved, a residential customer using an average of 1,000 kilowatt-hours per month will see a $5.35 decrease in their monthly bill, from $77.14 to $71.79, which is about a 7 percent reduction. Commercial customers will also see an average 7 percent decrease.
"We are pleased to be able to eliminate the ERM surcharge and reduce rates for our customers during this heating season," said Kelly Norwood, vice president of state and federal regulation for Avista. "The surcharge was mainly caused by below-normal hydroelectric conditions and higher natural gas prices for thermal generation in previous years. The combination of a decline in natural gas prices, near-normal hydroelectric conditions in the past year, and the collection of prior-period costs now allows us to eliminate the surcharge." The major portion of an Avista customer's monthly bill, about 60 percent, is the cost of generating or purchasing electricity to meet customer needs. These costs fluctuate up or down depending on market conditions, and the ERM is associated with the variability in these costs. The remaining 40 percent covers the cost of delivering the electricity--the equipment and people needed to provide safe, reliable service. |
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