Avista's rates will be contained to a 4.7% increase in 2024 under a settlement agreement approved Thursday, Oct. 26, 2023, by the Oregon Public Utility Commission.

SALEM — Oregon’s second largest natural gas utility won’t be able to charge customers to pay for its political and lobbying activities and will have to decrease its proposed 2024 rate increase under a settlement agreement approved Thursday, Oct. 26, by the Oregon Public Utility Commission.

The commission’s order follows a tentative August settlement between Avista and climate groups including the Sierra Club, Climate Solutions and Earthjustice. Avista’s rates have increased 18% since November 2022.

Now, the company will be limited to a 4.7% increase in 2024, down from the 8% the company proposed. The settlement also blocks Avista from charging customers to pay for the company’s membership dues for gas industry associations and its ongoing lawsuit against the Climate Protection Program, the state rules that require gas companies and major industrial facilities to progressively cut greenhouse gas emissions. Avista wanted $57,000 to pay for its lawsuit and $90,000 for dues to the American Gas Association and NW Gas Association.

Avista Utilities serves nearly 106,000 customers in portions of the state, including Northeast Oregon.

Environmental groups and the Earthjustice attorneys who challenged Avista praised the settlement.

“This is a big win for working Oregonians who will no longer have to pay for fossil fuel subsidies or political activities that prolong dependence on harmful methane gas,” said Jan Hasselman, senior attorney for Earthjustice. “This settlement supports Avista’s transition to clean energy and propels Oregon forward on the path to electrification.”

The settlement also requires Avista to phase out a process of charging existing customers to pay for the cost of adding new gas lines. That means a lower upfront cost for new customers, but that all customers will pay higher rates than they would have otherwise. Avista has charged ratepayers more than $42,000 to connect a single house to gas utility services, according to a review by the Oregon Citizens’ Utility Board.

The agreement further requires Avista to consider whether it can meet increased demand without expanding gas pipelines. An effort to ban natural gas from all new construction in Eugene faltered this summer, but Ashland is moving ahead with plans to require all-electric homes.

While cutting Avista’s budgets for legal and political activities, the settlement requires the company to increase its budget for low-income home weatherization from $800,000 to $2 million. The company helps pay for insulation, duct sealing and other tools to keep older homes warm, reducing the amount of energy used.

An Avista spokesperson didn’t immediately respond Oct. 26. In August, a spokesperson described the tentative agreement as a “balanced and constructive outcome.”