AG Brown fights to save Avista customers over $600 million on energy bills

The Washington State Attorney General’s Office is challenging the energy utility Avista’s proposal to increase customer electric rates by 25% and gas rates by 10% over the next four years. 

In expert testimony filed Monday with the Utilities and Transportation Commission (UTC), the AG’s office argues that Avista could forego most of these increases and save customers as much as $626 million over the next four years, while still maintaining a healthy profit. The AG’s office also argues that shareholders should share the costs of its CEO and executive pay and incentives, investor relations expenses, trade group membership costs, and lobbying rather than making its customers foot the bill.. 

“Utilities should be prioritizing affordability for consumers, not increased dividends for wealthy investors,” said Brown. “Utility rates should reflect the actual cost of providing these services, which are far lower than this request.”

Avista serves 275,000 electric and 179,000 natural gas customers in Washington. If the proposed rate increases are approved by the UTC, Avista would increase electric rates by 13.9% in January 2027 or $17.21 per month for the average household. Gas rates would increase by 4.7% in January 2027 or $4.14 per month for the average household. 

Rates would continue to increase in 2028, 2029, and 2030. By 2030, the average customer’s electric bill would have increased by $33.71 a month, or roughly $404.52 per year, and their gas bill would have increased by $9.40 a month, or $112.80 per year, compared with current rates. Over the next four years, Avista would raise rates by $750 million compared with today’s energy bills.

Avista has increased its dividend payouts to shareholders every year for the past 24 years. In 2025, it paid a total of $159 million to their shareholders. This means that, on average, 9% of customers’ electric bills and 11% of their gas bills go to paying investors rather than for services. Avista’s biggest investors include some of the nation’s largest venture capital firms.

Avista also spends customer money on projects that are not related to providing services. The AG’s office argues that spending on these items should come out of the pot of money Avista uses to pay shareholder dividends, rather than money customers pay as part of their electric and gas rates:

• Increasing the pay of executives. Avista’s CEO received total compensation of nearly $5 million in 2024, including almost a million dollars in bonuses because Avista exceeded its profit goals. Avista’s CEO was paid 23 times more than the median Avista employee last year.
• Marketing. Avista spends customer money to market itself to shareholders. 
• Lobbying elected officials. Avista also spends customer money to lobby Washington state government with the goal of increasing its own profits. 

Avista also spends Washington customers’ money on extravagant out-of-state projects. For example, Washington consumers are paying for Avista’s project to provide transmission to a number of development projects on the east side of Coeur d’Alene Lake including a golf course enclave called Gozzer Ranch. This private community has only 370 households, yet Avista plans to spend about $35.9 million to meet the needs of this exclusive Idaho community. Washington households will foot 65.15% of the transmission costs. 

Avista is a private, for-profit utility company which the state has licensed to operate as a monopoly in eastern Washington. Private utilities in Washington don’t get to unilaterally set customer rates. Instead, they propose rates which are then approved or denied by the UTC. 

The AG’s office represents and advocates for Washington consumers through its Public Counsel Unit, which is leading this challenge. Utility companies may only impose rate increases on customers that are “fair, just, and reasonable” and are in the public interest. The Public Counsel opposes rate increases that do not meet these standards. The UTC is responsible for approving or rejecting such rate increases. 

Avista’s requested rate increase would guarantee Avista a profit margin of 10.2% over the next four years. The AG’s office instead urges the UTC to support a lower rate of 7.2%. By lowering Avista’s return on equity to the actual cost of capital, restricting Avista’s ability to raise rates more than the inflation rate, asking shareholders to pay their fair share of expenses such as insurance, investor relations, and executive compensation costs, and by demanding Avista more accurately estimate future costs, the AG’s office believes Avista could save customers $626 million and still make a healthy profit.

Utility companies often argue that they need to raise rates on customers to help pay compliance costs for the Climate Commitment Act (CCA), which helps promote clean energy and reduce pollution in Washington. Avista expects to pay an estimated $87.8 million in compliance costs related to the Climate Commitment Act in 2026. They paid $159 million to their investors in 2025 and want to raise rates by $110 million next year. The CCA simply does not explain the steep rate hikes that Avista is proposing.

The AG’s office will continue to take a firm line with Washington utility companies who overcharge their customers. The current cost of living is too high, and energy costs are a burden for many households. Research shows that high utility prices are correlated with more evictions. No one should lose their home because a utility company unnecessarily increased the cost of electricity. 

The UTC will host a virtual public comment hearing in this case at 6:30 p.m. on August 27. The public may participate through Zoom or phone. The Zoom link and phone participation information can be found on the UTC website at https://www.utc.wa.gov/event/88953.

Comments may also be sent to the Commission by email at comment@utc.wa.gov, by mail at P.O. Box 47250, Olympia, WA 98504, or by phone at 888-333-9882 (toll-free).

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