Avista just filed their general rate case here in Washington and they're proposing to eliminate most of their optional rate schedules. They want to consolidate 12 commercial schedules down to just 3, and they're getting rid of time-of-use options for small commercial customers. The justification is 'administrative simplification' but I think they're trying to eliminate rate arbitrage opportunities. Several of my clients are on Schedule 25 (medium commercial TOU) and would be forced onto much higher flat rates. Has anyone seen other utilities doing similar consolidations?
Avista's proposed rate restructure - anyone else seeing this trend?
Mike, we're seeing this everywhere. Utilities are realizing that optional rate schedules create revenue leakage when customers optimize their usage. MLGW here in Memphis eliminated several industrial rate options last year for the same reason. The problem is customers lose the ability to manage their costs through behavioral changes. Have you calculated the bill impacts for your Schedule 25 customers if they're forced onto standard rates?
Randy, I'm looking at about 15-25% increases for most of them. These are customers who invested in energy management systems specifically to take advantage of TOU pricing. Now Avista wants to eliminate that option and force them onto rates that don't reward load shifting. It feels like a bait-and-switch. The worst part is they're proposing this in the middle of winter when usage is highest and customers are already dealing with supply cost increases.
This is exactly what happened with DTE Energy in Michigan two years ago. They eliminated most of their commercial TOU schedules and forced everyone onto demand-heavy rate structures. The Michigan PSC required a 2-year transition period, but customers still saw significant increases. Mike, are you planning to intervene in the Avista case? The Washington UTC is usually pretty responsive to customer impact arguments.
Tina, yes, I'm filing intervention papers next week. I've got detailed usage data for 8 commercial accounts that show exactly how much their bills would increase. The key argument is that eliminating TOU options reduces customer choice and removes incentives for efficient usage patterns. I'm also highlighting the stranded investment issue - these customers bought expensive load management equipment based on existing rate structures.
Mike, that's a solid strategy. Here in Pennsylvania, we successfully argued against PPL's schedule consolidation by showing the environmental benefits of TOU pricing. Customers who can shift load away from peak hours reduce the need for peaking plants, which are usually the dirtiest and most expensive. The environmental angle sometimes resonates better with commissioners than pure customer impact arguments.