Avista seeks electric rate hike, natural gas cut in Idaho filings
Avista Corporation filed annual rate adjustments with the Idaho Public Utilities Commission, proposing a 6.5% increase in residential electric bills and a 1.5% decrease in natural gas bills. The electric hike is driven by higher power costs and expired credits, while the gas cut reflects lower wholesale prices. Changes are effective October-November 2026 pending approval.
*this image is generated using AI for illustrative purposes only.
Avista Corporation (NYSE: AVA) has submitted annual price adjustment filings to the Idaho Public Utilities Commission (IPUC), proposing changes that would increase residential electric bills by approximately 6.5% and decrease natural gas bills by 1.5%. The filings, which have no impact on Avista’s earnings as they merely true-up costs, seek to align customer rates with actual incurred costs for power generation, purchased gas, and fixed infrastructure expenses. The proposed adjustments are driven by higher wholesale electricity costs and the expiration of previous rate credits for electric service, contrasted with lower wholesale natural gas prices observed during the recent winter season.
The regulatory filings are subject to public review and Commission approval before implementation. Avista’s Board of Directors authorized the submissions, which detail specific adjustments across six categories: Power Cost Adjustment (PCA), Fixed Cost Adjustment (FCA), Bonneville Power Administration Residential Exchange (ResEx) Program for electric services, and Purchased Gas Adjustment (PGA), Fixed Cost Adjustment (FCA), and Natural Gas Energy Efficiency Adjustment for natural gas services. The company emphasized that it does not profit from or markup the wholesale cost of natural gas, ensuring customers pay only what Avista pays, dollar for dollar.
Electric Rate Adjustments
The proposed electric rate changes would take effect on October 1, 2026. Residential customers using an average of 939 kilowatt hours per month would see their monthly bills increase from $119.52 to $127.28, an increase of $7.76 per month. This overall 5.3% revenue-based increase is primarily attributed to the Power Cost Adjustment (PCA), which reflects the difference between actual generation/purchase costs and current rates. The PCA increase is largely due to the expiration of a rate credit associated with the 2025 PCA on October 1, 2026, coupled with higher power costs and increased electricity usage during the adjustment period.
| Rate Schedule | Revenue Impact |
|---|---|
| Residential Service - Schedule 1 | 6.4% |
| General Service - Schedules 11 & 12 | 3.2% |
| Large General Service - Schedules 21 & 22 | 2.9% |
| Extra Large General Service - Schedule 25 | 6.6% |
| Extra Large General Service - Schedule 25P | 7.9% |
| Pumping Service - Schedules 31 & 32 | 2.6% |
| Street & Area Lights - Schedules 42-49 | 1.0% |
| Overall | 5.3% |
Additionally, the Fixed Cost Adjustment (FCA) for electric services proposes a $4.0 million (1.2%) increase to break the link between revenues and customer energy usage, adjusting revenues based on the number of customers rather than kilowatt-hour sales. The ResEx Program adjustment seeks a $0.3 million (0.1%) decrease to return under-rebated benefits from the federal Columbia River power system to qualifying residential and small farm customers.
Natural Gas Rate Adjustments
Natural gas rate adjustments would become effective on November 1, 2026. Residential customers using an average of 66 therms per month would see their monthly bills decrease from $59.28 to $58.38, a reduction of $0.90 per month. The net revenue impact across all natural gas schedules is a decrease of 1.8%. The primary driver is the Purchased Gas Adjustment (PGA), which requests a $2.5 million (3.0%) decrease due to lower wholesale natural gas prices compared to amounts included in current rates.
| Rate Schedule | Revenue Impact |
|---|---|
| General Service - Schedule 101 | -1.5% |
| Large General Service - Schedules 111 & 112 | -3.1% |
| Interruptible Service - Schedules 131 & 132 | 0.0% |
| Transportation Service - Schedule 146 | 0.0% |
| Overall | -1.8% |
The Natural Gas Energy Efficiency Adjustment proposes a $1.4 million (1.6%) decrease, reflecting Avista’s request to set collection rates to $0.00 per therm effective November 1, 2026. This change aligns with the company’s decision to temporarily suspend its natural gas energy efficiency programs at the end of 2026 to ensure they continue delivering value under strong cost-effectiveness standards. The Natural Gas FCA proposes a $2.4 million (2.8%) increase to adjust for variations in customer usage related to weather and efficiency program savings.
What the Numbers Show
The divergent trends in electric and natural gas filings highlight distinct market dynamics: electric rates are rising due to structural cost increases and credit expirations, while natural gas rates are falling due to favorable wholesale pricing conditions. Notably, the suspension of natural gas efficiency programs removes a cost recovery mechanism, contributing to the overall decrease in natural gas revenue requirements despite the FCA increase. Customers may file written comments with the IPUC or subscribe to updates via the Commission’s website.
How might the expiration of the 2025 Power Cost Adjustment credit in October 2026 influence Avista's long-term capital investment strategy for renewable energy infrastructure?
What is the potential impact of suspending natural gas energy efficiency programs on Avista's ability to meet future state-mandated decarbonization targets?
Could the proposed 6.5% increase in residential electric bills accelerate customer adoption of home battery storage or solar panels, thereby affecting Avista's future load growth projections?
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