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Avista and climate groups reach settlement over proposed rate increases in Oregon

A gas-lit flame burns on a stove. A California restaurant organization is suing Berkeley over the city's ban on natural gas, which is set to take effect in January, 2020.
Thomas Kienzle

The utility Avista, which provides natural gas to parts of Oregon, reached a settlement with climate groups on Thursday over proposed rate hikes for gas services.

In the settlement, Avista has agreed to drop a controversial practice of using its customer’s money to pay for legal fees while they’re suing the state over its Climate Protection Program. They also agreed to stop charging ratepayers for lobbying through the American Gas Association and Northwest Gas Association.

“Avista can still pay for it out of shareholder dollars if they want to," said Greer Ryan, Clean Buildings Policy Manager with Climate Solutions. "But, Avista customers won’t have their energy bills go towards that litigation, which is great.”

Avista did not have anyone available to respond to questions about the settlement on Friday. In a statement on their website, the company's President, Dennis Vermillion, said, “This outcome allows us to recover our costs in a timely manner and supports Avista’s efforts to invest in and maintain our infrastructure so we can continue to provide the reliable energy our customers expect.”

The company also agreed to phase out having its customers subsidize new natural gas connections to the network over the next four years.

"The subsidy program was extremely generous," said Jaimini Parekh, lead attorney at Earth Justice who worked on the settlement. "In one case they spent as much as $42,000 to connect one home to gas utility service."

The subsidies meant customers were essentially paying to make it cheaper for others to connect their homes or businesses to Avista's natural gas lines.

Parekh said the settlement was a compromise between the two sides. The climate groups got Avista to agree to many of their priorities. However, Avista will continue to use customer money to expand their main natural gas pipelines, which activists also opposed.

Additionally, the company agreed to more than double it's investments in its low-income weatherization program, which helps customers improve their home insulation to save on energy costs.

The Oregon Public Utility Commission still needs to approve the changes, which Ryan says could happen in the next few weeks.

The commission previously suspended Avista's original proposed rate increase on March 2, to investigate the proposal.

Roman Battaglia is a regional reporter for Jefferson Public Radio. After graduating from Oregon State University, Roman came to JPR as part of the Charles Snowden Program for Excellence in Journalism in 2019. He then joined Delaware Public Media as a Report For America fellow before returning to the JPR newsroom.