Puget Sound Energy (PSE) would be allowed an interim increase in electric rates, but not at the level originally wanted, according to an agreement reached yesterday between the company, state regulatory staff, the Attorney General’s Public Counsel office and various consumer groups.
The agreement, which is subject to Washington Utility and Transportation Commission (WUTC) approval, will allow the publicly held utility to raise an additional $25 million through a temporary three-month electric rate surcharge.
The company originally sought $170 million to be collected over eight months.
The agreement calls for a major reduction in PSE’s general rate increase request, which is currently pending before the WUTC.
If approved, that rate increase would take effect this summer or fall.
The Attorney General’s Office contends the company’s reliance on debt helped create conditions that were largely responsible for its requested rate increase.
As a result, the agreement also calls for the company to rely less on debt to finance its ongoing operations.
Important provisions of the agreement include:
n PSE’s $25 million rate increase will be collected through a surcharge levied from April through June of this year, increasing the average residential ratepayer’s bill by about $4.80 per month.
n PSE agreed to improve its financial structure by reducing its reliance on debt. If the company doesn’t meet specific annual targets, it will be required to reduce electric and natural gas rates by 2 percent – approximately $40 million.
n PSE has agreed to reduce its pending request for a permanent rate increase in electric and gas rates to $146 million from its original $314 million request. This amount could drop further based on a review of the company’s books. Those new permanent rates would go into effect later this year, once the review is complete.
n PSE will withdraw its proposal for “real time pricing” under which rates were to be tied partly to changes in the wholesale electricity market price.
The company, the Attorney General’s office, WUTC staff and other parties also agreed to continue negotiating outstanding issues in the company’s general rate request, including providing low-income energy assistance and energy efficiency incentives.