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Avista rates
Posted by Steven A. Smith | 30 Jul 2:29 PM
Good afternoon,
The story is still developing, of course. But I suspect many of you saw the online report that Avista's second quarter profits rose 69% year over year. (Link here)
Utility financials are more complicated than those of the newspaper industry. So I'm the last person to question whether such profits are too high or just right.
But from a PR standpoint, I can predict Avista will be in for another rough ride. Natural gas rate hikes already have been foreshadowed for this fall, and they will be steep.
And we know that every time Avista releases executive salaries, the public responds angrily even though those salaries may be in line with industry standards.
But whether or not the profits are justifiable isn't really the point from a PR standpoint.
A population reeling from increases in food and gas is likely to respond badly to this latest news.
steve
There are 11 comments on this post. (XML Subscribe to comments on this post)
And Avista continues to argue about putting water back in our waterfalls. Remarkable.
Steve, you are right on the money on this one. It's a PR nightmare for Avista, but its a nightmare of Avista's own making. Good luck trying to explain this one, Avista Execs.
I'm sure we'll hear the same old excuse we always hear:
'We need the rate increase to stay competitive.'
'We're just passing the cost onto customers'
'We're really not making that much money compared with other utilities.'
'We're having to upgrade all of our substations and equipment and that is expensive.'
Am I missing any?
You forgot executive compensation -- which is totally in line with that of other utility company executives and let's not forget that the market for smart, giant heads is really competitive so in order to attract and retain top talent blah, blah, blah...
Steve, who you are is the FIRST person that should give a reporter the task of questioning utility and regulatory experts about whether such profits are too high or just right. Such experts exist in economics and business departments at major universities. But please don't ask the economist at Avista to comment on how this fall's proposed rate increases are going to affect the local economy. I am still amazed at the number of times the S-R asks him -- an employee of a company that has an obvious vested interest in saying that things are hunky-dory --for his analyses of regional economic conditions. Is everyone around here living in Avista's pockets one way or another? It's creepy -- like a giant Ouroboros.
If any Commanding General/Admiral can pull down $150K for leading 20,000 military personal in combat, I'm sure we can find a competent person to be able to run a little water over a generator or burn some carbon to do the same.
Go take a little drive past the Avista Corporate HQ and you wont find a single hooptie.
Ready Kilowatt (img src ="http://www.viridiandesign.org/images/reddy.gif"> is rolling over in his grave.
It isn't an answer of producing more energy its THE answer of reducing consumption by not building any more Glutton Houses and Driving one person occupied SUV's. My 72 VW still gets 28 mpg. In 35 years there hasn't been motivation to significantly increase that beyond normal technology evolution.
It was determined several decades ago that 10% of the Worlds population consumes 90% of the produced energy. If we dont throttle back on our gorging of the energy supply we are going to bankrupt ourselves. Thats already happening to Banking, Airlines and auto producers. Avista will always skim a large profit off the top with the flimsy excuse that their investors "deserve" a nice tidy profit each quarter. When there is no competition in the market space its called a Monopoly and there is not a shread of motivation to be better, faster or cheaper just to be greedier. As much as I disdain the bloat of government managed entities (City of Spokane Dept. Heads), it cant be any worse than a "Private" company that turns OUR natural resources into a fat check/Golden Parachute for themselves. Avista should be liable for Public Disclosure if it uses public resources.
I think Avista looks at the whole PNW for its energy prices. It looks at Puget Sound Energy and sees the rates the West side pays for electricity and gas, higher than Spokane. And it says,"why cant we have the same rates here in Spokane"? They pay higher in Seattle, and we can pay the same rates. Montana Energy is sky high also, $1.42 per therm for gas!! And it gets 30 below zero over there!! Elect rate are also higher than in Spokane. So....Avista wants to keep up with the surrounding regions rates.."competitive rates" !
Zelda says, "Such experts exist in economics and business departments at major universities. But please don't ask the economist at Avista to comment --"
Zelda, you've hit a real pet peeve of my mine. I know I'm not alone in wondering why economists from WSU or GU are not asked to comment on local economic conditions, rather than Avista or downtown bankers and investors. It's puzzling.
As someone who used to talk to Avista's economist regularly when I was a reporter, I went back and searched our stories in which we used the word "local" and "economist" going back to the first of the year.
The Avista economist was quoted in two stories, one on the real estate market and the other on the economy. In contrast, economists from the state of Washington, the state of Idaho, EWU, WSU, Gonzaga and UW all were quoted in other stories. So far this year, we're pretty balanced.
That said, Avista is one of the few companies -- perhaps the only company -- to employ a local economist, so it's not out of line for reporters to use that person as a source. What's more, academic economists can be much harder to reach on a tight deadline.
I don't doubt what you're saying, Addy, if one counts solely news stories. But I'm looking at the overall perception created by the marketing tie-ups between the S-R and Avista when they sponsor the economic outlook event. Avista has a unified purpose in being part of that event while the S-R segments itself and says, "Oh, well that's the *marketing* part of The Spokesman-Review that does that." I venture to say that to most readers that's a distinction without a difference. So the impression that's created is that Sean Higgins and an exec from Avista get together once a year to offer their prognosis on the region's economy, sell tickets to the forecasting event and advertise it quite heavily in the S-R and elsewhere.
Point of clarification: we don't co-sponsor the economic outlook event with Avista. Avista's Scott Morris was the featured speaker last year; the previous year it was Gov. Gregoire. We co-sponsor that event with the Spokane Valley Chamber of Commerce.
Point of clarification: Avista sponsors the GoGreen Magazine. That is what is called "green washing". http://www.sourcewatch.org/index.php?title=Greenwashing
(See page 1,2, 4, 22, 28, 30, and 31 of the most recent GoGreen).
Milton Friedman stated that the "social responsibility of business if profit". Not clean water, not affordable heat in the winter, not media in the public interest. Profit. Period.
That applies to Avista just as it does to the Spokesman-Review and the GoGreen directory.
Avista may or may not suffer a PR nightmare. What leverage do we have over their monopoly anyway? Besides, they have some very highly paid PR people -- including a few prominent former Spokane news personalities, if I am not mistaken -- whose job it is to turn those lemons into lemonaid, something they do partly through their sponsorship of the GoGreen Magazine and website.
But you can be certain, many people in Spokane -- including the same poor children that S-R blog writers are expressing so much concern about today on other S-R blogs -- will be facing another kind of nightmare in the dark and cold of the coming winter as the same Avista with its 69% rise in profits raises energy prices another 40% for Spokane children and families.
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Steve Smith has been editor of The Spokesman- Review since July 2002. Before coming to Spokane, he served as editor of The Statesman-Journal in Salem, Ore., and The Gazette in Colorado Springs, Colo. Smith is married to Alexa Conway Smith, an independent computer consultant and has two children by a previous marriage, Sam and Alissa.