State Utilities and Transportation Commission staff recommend lower PSE rate increases

UTC board to make final decision in spring

The PSE-operated Baker Dam along the Baker River near Concrete. COURTESY PHOTO, PSE

The PSE-operated Baker Dam along the Baker River near Concrete. COURTESY PHOTO, PSE

Staff members of the Washington Utilities and Transportation Commission (UTC) recommended rejecting Puget Sound Energy’s requested electric and natural gas rate increase, proposing smaller increases instead.

In June, Puget Sound Energy requested an increase of $139.9 million, or 6.9%, in additional electric revenue and $65.5 million, or 7.9%, in additional gas revenue. Under UTC staff’s recommendation, the company would receive an electric revenue increase of approximately $50 million, or 2.5%, and a natural gas revenue increase of $38.4 million, or 4.6%, according to a Nov. 22 UTC news release.

Commission energy staff recommended smaller increases to electric and natural gas rates after reviewing the company’s costs to supply power and for infrastructure investments.

The proposal also recovers in rates the remaining costs associated with PSE’s partial ownership of the Colstrip coal-fired power plant in Montana, which by law must not serve Washington customers after 2025.

Under UTC staff’s proposed rates, PSE’s average residential electric customer using 900 kilowatt hours a month would pay $1.13 more a month, for an average monthly bill of $91.23. The company’s proposed rates would have increased the average residential electric customer’s bill by $5.51, for an average monthly bill of $95.61, according to the news release.

PSE’s average residential natural gas customer using 64 therms a month would pay $2.14 more under staff’s recommendation, for an average monthly bill of $61.74. The company’s proposal would have raised the average residential natural gas customer’s bill by $2.45, for an average monthly bill of $62.05.

The three-member commission, which is not bound by the staff recommendation, will make a final decision on the utility’s rate request next spring. New rates would go into effect in April.

PSE customers will be able to comment to state regulators on the proposed rate increases at public meetings scheduled for Jan. 7, starting at 6 p.m. at the UTC headquarters in Lacey and Jan. 22, starting at 6 p.m. at the Bellevue City Hall Council Chamber.

Customers who want to comment on the proposed plans can submit comments online at utc.wa.gov/comments; write to P.O. Box 47250, Olympia, WA, 98504; email comments@utc.wa.gov; or call toll-free 1-888-333-9882.

Staff’s proposal includes in rates the recovery of costs associated with Colstrip Power Plant Units 3 and 4 two years ahead of the previously planned 2027 date. This is to comply with the Clean Energy Transformation Act, which requires companies to phase coal out of their energy mix by 2025. The company previously committed to retiring Units 1 and 2 by the end of 2019.

Commission staff also recommended that PSE be allowed to earn a 7.33% overall rate of return, instead of the 7.62% the company requested, and a 9.2% on return on equity instead of the company’s proposed 9.8%.

The company last filed a rate case in 2018.

Bellevue-based PSE provides electricity service to more than 1.1 million electric customers in eight Washington counties: Island, King, Kitsap, Kittitas, Pierce, Skagit, Thurston and Whatcom. PSE also provides natural gas service to more than 800,000 customers in six Washington counties: King, Kittitas, Lewis, Pierce, Snohomish and Thurston.

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.

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