Title

State utility staff recommend deep cuts in Puget Sound Energy’s rate increase request

Published

12/7/2011

Details


Editor’s note: This news release reflects the position of energy staff of the Washington Utilities and Transportation Commission (UTC) and NOT the views of the three-member commission. It discusses a staff recommendation that the commissioners have not yet reviewed. Any positions taken or comments offered by the commission staff regarding this proceeding should be attributed clearly to staff members and NOT to the UTC.
 
Media contact: (360) 664-1116 or media@utc.wa.gov
Docket Number: UE-111048 and UG-111049
 
State utility staff recommend deep cuts in Puget Sound Energy’s rate increase request
Public invited to comment at February hearings
 
OLYMPIA, Wash. – State regulatory staff are proposing to give only a fraction of the revenues Puget Sound Energy (PSE) is seeking in its latest electric and natural gas rate increase request.
 
In testimony filed today, staff members of the Washington Utilities and Transportation Commission (UTC) are recommending PSE be allowed to raise electric rates by only $39 million a year and $1.5 million for natural gas rates, significantly less than the $152 million and $30 million, respectively, the utility originally requested last June.
 
The three-member UTC, which is not bound by the staff recommendation, will make a final decision on the utility’s rate-hike request next spring. The proposed increase is slated to take effect May 2012.
 
Under the staff proposal, a PSE average residential electric customer using 1,000 kilowatt hours-per-month would see their electric bill increase by $2.05, for a bill total of $98.84. The typical natural-gas customer using 68 therms a month would pay $0.13 more, for a revised bill of $81.72.
 
On June 13, PSE filed a general rate case with the UTC requesting an annual $182 million overall rate increase for both electricity and natural gas service. Commission staff is recommending a $40 million overall rate hike for both services.
 
Among the major differences between the company’s request and the UTC staff’s recommendation are reductions for PSE’s development of the Lower Snake River Wind Project, power costs, storm-damage costs, incentive pay, federal income-tax issues and the utility’s profit level.
 
Commission staff also recommends rejecting PSE’s request for a Conservation Savings Adjustment representing an additional increase of $7.4 million or 0.4 percent for electric service, and $1.5 million or 0.1 percent for natural gas service.
 
Staff also submitted testimony to address an ongoing problem with inaccurate meters, which has resulted in large retroactive bills for some customers. In 2008, the company was ordered by the commission to identify and correct the meter problems; however, the number of retroactive bills remains high. Staff is recommending that all inaccurate meter problems be resolved within four months for electric meters and six months for natural gas meters from the initial occurrence of the problem.
 
The UTC regulatory staff recommends the company be provided the opportunity to earn a 7.59 percent overall rate of return, not the 8.42 percent the company originally sought. The company’s current target rate of return is 8.1 percent. This accounts for $85 million of the difference between what the company requested and the UTC staff proposed for combined gas and electric operations.
 
PSE customers will be able to comment to state regulators at two public meetings scheduled at 6 p.m. Wednesday, Feb. 1 at Bellevue City Hall, 450 110th Ave. NE, Bellevue, and 6 p.m. Wednesday, Feb. 15 at commission headquarters, 1300 S. Evergreen Park Dr. SW, Olympia.
 
The commission has received 62 public comments on PSE’s rate-increase proposal – 49 opposed, one in favor and 12 undecided. Customers who would like to comment on the case are encouraged to write the UTC at: P.O. Box 47250 Olympia, Wash. 98504, submit comments online at www.utc.wa.gov/comment, e-mail comments to comment@utc.wa.gov or call toll-free 1-888-333-9882. The commission’s deadline for accepting public comments is Feb. 17.
 
In addition to the UTC staff and the company, other parties taking part in the proceeding include advocates for large electricity and natural gas users, advocates for low-income customers, the Attorney General’s Public Counsel Section, The Energy Project and the NW Energy Coalition.
 
Bellevue-based Puget Sound Energy serves more than 1 million electric customers and nearly 750,000 natural gas customers in parts of Snohomish, King, Pierce, Lewis, Thurston and Kittitas counties.
 
The UTC is the state agency in charge of regulating the private, investor-owned electric companies 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.
 
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Editor’s Note: A copy of the UTC staff recommendation is available at the commission’s website: www.utc.wa.gov.
 
 

News Category

Consumer; Energy

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Content Type: Announcement
Created at 12/7/2011 3:22 PM by Maxwell, Amanda (UTC)
Last modified at 12/7/2011 3:22 PM by Maxwell, Amanda (UTC)