Perceptions and Facts about Energy Pricing

Energy pricing and the process of requesting price changes are complex and can be confusing. That’s why we want to make sure you have the facts.

Perception: Energy prices for Avista customers are above the national average.

Fact: Our residential electric prices are among the lowest in the nation. For January 2010, the national average for a residential customer using 1,000 kilowatt hours of electricity a month is $116.54 or 11.65 cents per kilowatt-hour. Avista’s average residential price for our Washington and Idaho customers is 7 cents per kilowatt-hour or $71.79 in Washington or $80.90 in Idaho for 1,000 kilowatt hours.

We work hard to manage our costs to help keep your costs as reasonable as possible. Click here for more information on rates.

Perception: Avista can change its energy prices any time it wants.

Fact: Avista is a regulated utility which means any change in customer prices – increase or decrease - must be reviewed and approved by the state utility commission before the change can be made. Changing customer prices involves an extensive process that includes many people, thousands of pages of information and can take from seven to 11 months, depending on the state.

Perception: Avista wants customers to use more energy because it benefits the company.

Fact: For decades, Avista has partnered with our customers to help them use less energy. You probably wonder why we would help customers use less of our product. Simply put, it costs less to help customers reduce their energy use than it costs to build new generating plants or purchase additional energy on the wholesale market.

Through our Every Little Bit energy efficiency programs, customers can receive information about rebates and incentives for implementing energy saving measures in their homes or businesses. To learn more about how we can help you reduce your energy use, visit us at www.everylittlebit.com.

In 2009, we provided more than 32,500 rebates and incentives totaling over $17.1 million to residential, commercial and limited income customers in Washington and Idaho. The funding for the program comes from a small charge or tariff on customer bills. For a Washington customer using an average of 1,000 kilowatt-hours a month, this amounts to $3.75 a month and $3.03 for a natural gas customer using an average of 70 therms a month. In Idaho, it amounts to $2.58 for a customer using 1,000 kilowatt-hours a month and $2.25 for a customer using 65 therms a month.

Perception: A large portion of my energy bill goes to pay for executive salaries and incentives.

Fact: Out of every dollar you pay on your energy bill, only 1/2 of one penny goes to pay salary and incentives for all Avista officers. What’s really driving prices is the cost of generating and purchasing to serve customers, investments we’ve made in our complex system of pipes, poles, wires, generating facilities and substations, and an increasing number of compliance mandates. Click here for more information on compensation.

Perception: Avista is a monopoly, so it can do anything it wants.

Fact: Although Avista is a monopoly, we are a regulated monopoly. That means the public utility commissions in the states in which we operate – Washington, Idaho and Oregon – oversee all aspects of our operations. This includes the reliability of our service, the level of our costs and investments made in our system, as well as the level of earnings for shareholders who invest in our company. We cannot adjust our prices or earnings without the state regulatory commission first reviewing and approving the changes, ensuring that they are fair and reasonable. Click here for information on profits and shareholders.

Most utilities in the U.S., whether an investor-owned utility like Avista, or a public utility, are a monopoly. It would be very expensive to duplicate facilities to serve geographic areas with more than one electric system.

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