Avista Corporation
(
AVA
) has received approval for its electric and natural gas
rate-hike appeal from the Washington Utilities and Transportation
Commission ("UTC"). The new rates will be applicable from the
first day of 2013 and 2014. Per the agreement, the company has
agreed not to file a general rate case in the UTC till January 1,
2015.
This agreed electricity rate, effective from January 1, 2013 and
January 1, 2014, will be increased overall by 3% in both years.
However, due to the existing Energy Recovery Mechanism ("ERM"),
the net average electricity rate will increase by 2% in 2013 and
2014. A Washington-based residential electricity customer, using
an average of 989 kilowatt hours ("KWh") per month, will pay an
extra of $1.20 per month with a total of $78.69 in 2013, and
$1.60 per month with a total of $80.29 in 2014. Overall, this
rate revision will provide an additional $13.65 million and $14
million in 2013 and 2014.
This approved natural gas rate, effective from January 1, 2013
and January 1, 2014, will be increased by 3.6% and 0.9%,
respectively. A Washington-based customer's bill, using an
average of 68 therms per month, will decrease 38 cents to $60.37
in 2013 and increase of 57 cents to $60.94 in 2014. Overall, this
rate revision will provide an additional $5.3 million in 2013 and
$1.4 million in 2014.
Initially, the company filed for an electric and natural gas rate
increase with the UTC on April 2, 2012. If the new rates are
approved by the commission, a Washington-based residential
electric customer, consuming an average of 989 KWh per month,
will have to pay an extra of $4.94 to $83.91. The natural gas
customers, using an average of 68 therms per month, will have to
pay an extra of $4.23 to $65.78. In October 2012, Avista made
another filling to the UTC to revise its initial rate-hike
appeal.
It is a normal practice for regulated utility providers to
recover their invested funds on infrastructural development
through rate hikes. Avista's previous electric and natural gas
rate hike was implemented in December 2011, to continue its
infrastructure development plans and the Low Income Rate
Assistance Program ("LIRAP").
We expect the company's future earnings growth to be backed by
high quality utility services, continued investments in
infrastructure-upgrade program and strong customer service.
Spokane, Washington-based Avista Corporation is an energy company
involved in the production, transmission and distribution of
energy as well as other energy-related businesses. It currently
has a short-term Zacks #2 Rank (Buy rating).
AVISTA CORP (AVA): Free Stock Analysis Report
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