New PSE rates could punish big energy users by 2002
June 25, 2008 · Updated 1:22 PM
"Sandy Ferre and Wendy Wright prepare lunch in the kitchen at Freeland's La Creperie. Business owners like Ferre will have to pay more for their electricity if a new rate schedule proposed by Puget Sound Energy is approved by the state.Matt Johnson / staff photoHave your say about electric ratesTo comment on PSE's proposed rate structure before it goes before the WUTC commissioners, e-mail the WUTC at comments@UTC.wa.gov, or send a letter to the Washington Utilities and Transportation Commission at P.O. Box 47250, Olympia, WA 98504-7250.In less than a year, Puget Sound Energy customers living on South Whidbey could feel the sting of the West Coast's energy crisis where it hurts most -- in their wallets.Last week, the private utility company announced that it will ask the state for permission to change its electric rate structure in a way that will force customers who consume more electricity to pay more. The company announced that it wants to make the change by the middle of this month.Pointing to continuing increases in the price of electricity on the open market during peak use hours and empty hydroelectric reservoirs, the company plans to introduce a graduated rate structure that would charge more per kilowatt hour (kWh) during day and evening peak hours than the off-peak hours of the late evening and early morning.We're trying to encourage conservation so we don't have to buy power at peak prices, said PSE spokesman Karl Kirn last Wednesday.Though PSE is not in the same situation as the California utilities, which are purchasing power for far more than state law allows them to charge customers, Kirn said that scenario could play out in Western Washington if the demand for power grows beyond the amount PSE can provide through long-term power purchases and its own generating capacity. Earlier this year, the company estimated that it can meet the needs of their existing customers through the end of 2002 without buying power on the open market.The proposed rate structure, which went under review by the state's Utilities and Transportation Commission last week, would charge residential customers as much as 8 cents per kilowatt hour during peak hours and as little as 2.5 cents per kWh during off-peak periods, Sundays, and holidays. PSE customers -- including all of Whidbey Island -- currently pay the lowest rate in the state, 5.4 cents per kWh, a rate mandated by the WUTC in 1997 when PSE merged with its natural gas subsidiary.Included in the rate proposal is a conservation credit, which would chop 5 cents per kilowatt hour off a ratepayer's bill for every kilowatt hour saved beyond a 10 percent energy-use reduction. For example, if a household uses an average of 40 kWh every day, if it cuts its consumption to 32 kWh (a 20-percent savings), the household would save $12 during a 60-day billing cycle from the conservation credit alone. Energy-use reduction is based upon a customer's billing history.The new rate would apply initially to about 420,000 of the company's 924,000 customers, none of whom are on Whidbey Island. Those customers have been part of the company's automated meter reading program, in which the company uses computerized electric meters to monitor customer electric use every 15 minutes. For the past few months, those customers have received bills that show their electrical usage during four periods of the day. Those bills were designed, Kirn said, to allow electric customers to create their own personal energy management (PEM) program.The company expects to install the same type of meters for its South Whidbey customers later this year. However, South Whidbey customers will not get a trial period to get used to the PEM-oriented bills before the new rate structure would take effect.Kirn said PSE is pitching its rate proposal to WUTC based on the fact that it is revenue neutral, meaning the new rates will not increase the amount of money the company makes off its electric customers.Present conservers can't save moreHowever, many PSE customers, including businesses and families in which the children and a parent stay home during the day, will face much bigger electric bills because the bulk of their electric use will continue to be during peak daytime and early evening hours. Even customers who do currently conserve electricity but who cannot shift their consumption to off-peak hours might wind up paying more.Laurie Keith, a Langley homeowner who conserves in her own home, said she does not think her three-person family can cut back on electricity use. She said she has already installed low-wattage compact florescent light bulbs in most of her home's light fixtures and air dries her clothes instead of using an electric dryer. PSE might better serve customers like her, she said, if they based her rates on how little electricity her family uses based on its size, not on how much it can slash consumption.Business owners concernedHerb and Marilyn Helsel, owners of Langley's Shops on Frick Lane building, will also undoubtedly pay more for their renters' electricity. Although PSE has not yet filed PEM billing rates for commercial businesses, the 174 kWh the Frick Lane shops use every day probably cannot be reduced by much. The building houses a photo-processing business, a business services center, a leather shop, and the Helsel's clock shop. Applied even to the low electricity prices on the residential scale, Frick Lane's daily electrical draw would still cost about $20 more per month than it does now at a flat rate of 6.5 cents per kWh.Still, Kirn maintained, residential customers who conserve moderately will see little change in their bills.I think there's almost always something they could do, he said.The three commissioners of the WUTC will vote to approve, reject, change, or delay PSE's proposed rate plan at its April 11 meeting. "