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Commission grants small electric and natural gas rate increase to Puget Sound Energy
April 2, 2010
Docket Number: UE-090704 & UG-090705
Olympia, Wash. – State regulators today approved a small rate increase for Puget Sound Energy’s (PSE) electric and natural gas customers.
The three-member Washington Utilities and Transportation Commission (UTC) is allowing the company to raise electric rates by about 2.8 percent and natural gas prices by .8 percent. New rates are expected to take effect approximately April 7.
Under the commission’s decision, the average PSE residential electric customer using 1000 kilowatt hours-a-month will see an increase of about $2.80, and the average natural-gas customer using 70 therms a month will pay about 87 cents more.
These rate hikes are in addition to amounts approved by the UTC April 1 for funding PSE’s conservation programs. Those amounts are $1.78 more a month for residential electric customers and 45 cents extra for natural gas customers. Including both increases the average residential customers’ monthly bill will rise to about $97 for electricity and $80 for natural gas service.
The utility originally asked the commission to increase its annual revenues by more than $148 million, or 7.4 percent for electric service, and nearly $27.2 million, or 2.2 percent, for natural gas service.
The UTC also agreed to raise the basic service charge for PSE’s electric customers to $7.25 a month from the current $7 charge. The basic service charge for natural gas customers will remain the same at $10 a month.
The UTC is allowing PSE the opportunity to earn a 10.1 percent rate of return on equity, not the 10.8 percent the company was requesting. This accounts for the majority for the difference between what the company requested and the commission approved.
Among several power-supply projects the commission deemed prudent are a 311-megawatt natural gas-fired generating plant called Mint Farm in Longview and an expansion of the Wild Horse wind project outside of Ellensburg. The UTC also agreed with the utility’s sale of the White River hydropower assets.
The commission excluded some PSE-requested expenses for salary increases and special retirement accounts for high-level executives. Other expenses disallowed by the UTC include estimated property tax calculations and some power-supply costs.
Twelve parties took part in the proceeding, including the UTC staff, PSE, the Attorney General’s Public Counsel Section, environmental groups, and advocates for large electricity and natural gas users, businesses and low-income customers.
The commission received 630 public comments on PSE’s rate increase proposal – with five in favor, 606 opposing and 19 undecided.
Bellevue-based PSE serves more than 1 million electric customers and about 750,000 natural gas customers, primarily in the Puget Sound region of Washington.
The UTC is the state agency that regulates private, investor-owned electric and natural gas utilities in Washington. It is the commission’s responsibility to ensure regulated companies provide safe and reliable service to customers at reasonable rates, while allowing them the opportunity to earn a fair profit.
Editor’s note: A copy of the commission’s decision is available at: http://www.utc.wa.gov.
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