Home > Rates and Pricing > What's Driving the Cost?What's Driving the Cost of Energy?
Reliability – it’s what you expect as a customer and it’s what we pride ourselves in delivering every day.
To ensure the reliable power you expect, we’re focusing on replacing our equipment, some of which has been in operation for up to 70 years, and updating it with modern technology. Power lines, poles, transformers, substations and other equipment are being systematically replaced to ensure reliability and to carry additional power to meet the growing demand for energy.
We’re also in year four of a five-year project to upgrade the 1950s-era turbines at our Noxon Rapids hydroelectric project to improve the reliability and increase efficiency. When completed, the upgrades will increase the amount of clean, renewable power generated using the same amount of water.
But, the cost of the updated equipment is in some cases orders of magnitude more expensive that the equipment being replaced. One example is the cost of a 15 kVA transformer – that’s what you see mounted on poles in neighborhoods serving homes. Over the past 50 years, the cost has increased from $200 to over $1,400 today, and we have almost 26,500 of these transformers in our system.
The significant difference in costs between the aged infrastructure and the replacement equipment is a major driver in the need for annual rate adjustments. To continue delivering the reliable energy that you expect, we’re planning to invest approximately $1.2 billion in our system for the five-year period ending Dec. 31, 2015.
Ensuring reliability goes beyond aging equipment. It’s also about:
- keeping vegetation clear of our almost 10,500 miles of power lines, helping reduce the number of customer outages
- inspecting and maintaining over 273,000 wooden poles
- preparing for the future by having the transmission system in place to carry additional power and to meet national reliability requirements
- meeting an increasing number of federal and state mandates that cover a range of company operations, such as protecting fish and wildlife and delivering more renewable energy
- cost-effectively generating the power to serve customers
Increasing costs relating to replacing old equipment and the need for new power sources isn’t unique to Avista. Utilities across the country, both investor-owned and public utilities are facing the same challenges of rising energy costs. Although we continue to make changes to our business to operate more efficiently, it is not possible to cut costs enough to offset the increased costs to expand and replace our aging infrastructure and meet our obligation to serve all customers, regardless of the cost.
How are we dealing with a situation that’s common to all utilities? We’re focusing on long-term sustainable savings rather than just on short-terms actions.
Learn more about what we’re doing to help keep your cost of energy down.