It’s a busy year for Avista Utilities as the company is making some major infrastructure upgrades. Avista Utilities has operated several dams on the Spokane River for a long time now; in fact some are over a hundred years old. Despite their age, many still use machines and systems dating back to their beginning.
Now the company is taking some big steps to improve those systems. At the Post falls dam, they are updating the century-old south channel spillway. At Nine Mile dam, the company is putting in two new turbines that will have vastly improved power generation.
While standing under a massive crane that looms over the dam, program manager for rehab project, David Schwall says the upgrades have been in the planning stages for some time.
Schwall: "“We have the one two turbine upgrade project that was initiated back in 2008, that should be on line by December, were upgrading the turbines from 3 megawatts to 8 megawatts each.(but the turbines that were dated back to one hundred years old right?) Yes, the original 1908 turbines.”
But that is just a part of the upgrades underway there:
Schwall: “Once the unit one/two upgrade is complete we still have to upgrade the sediment bypass pipe, upgrade the trash system, upgrade the electrical upgrade for 3 and 4, and additionally we still have to do an historic renovation of the powerhouse building itself.”
Avista is also starting to do major work on the Little Falls dam downstream, and has plans to replace turbines there.
Vice President of state and federal regulation for the company, Kelly Norwood, says the company developed it’s first hydro projects in the early 20th century on the Spokane River, then added newer ones in the mid 50’s in Montana, but now is looking to make major renovations to those older facilities:
Norwood: “So now we're at the point where growth is really slow when it comes to revenues, because customers are paying attention to using less energy, which is a good thing. But because ou have slow revenue growth but you have to replace equipment from the 50’s and 60’s, what you end up with is low revenue growth but your cost is growing faster than your revenues.”
Even so, Norwood says because of economic factors, this is an excellent time for the company to make those infrastructure investments.
Norwood: “Because interest rates are low, inflation is very low, commodity princes are pretty flat right now, so those things are not creating a lot of price pressure for our customers.”
Norwood says the improvements will mean eventual price increases for Avista customers. The most recent increases approved by the utilities commission in Washington were for a 3 percent increase for electric rates, and one percent for natural gas.
He says the eventual price increases will come, but He doesn’t expect them to be “in the double digits”. The average rate increase per year has been 3 and half percent for the last several years.