Avista has filed a two-year rate plan in Idaho that would raise annual electric revenues by $13.2 million (5.2%) in 2016 and $13.7 million (5.1%) in 2017. The requested increase includes relatively modest higher customer fixed charges, primarily targeting smaller customer classes. Avista has proposed establishing a Fixed Cost Adjustment mechanism, under which the utility’s revenue would be adjusted monthly to reflect revenues based on the number of customers, rather than on kWh sales. This model would result in either surcharges or rebates to customers in the following year. The charge would apply to most rate schedules.
Interestingly, Avista claims that its proposed FCA mechanism would allow it “to partner with customers and other stakeholders to support new [DG] resources, without the additional DG resources having a negative impact on the recovery of utility fixed costs.” However, Avista also claims that the proposed FCA mechanism would not impact the utility’s need to raise the monthly basic charge for smaller customers, adding that the FCA “does not fix the problem of intra-schedule cross subsidization.”