PSE asks 14.5% rate hike, time-of-day pricing

Puget Sound Energy's electricity customers may see a big jump in their bills next summer if the state agrees with the company's proposed 14.5 percent price increase.

Last Thursday, PSE filed for its first general rate increase since 1993. After four years of seeing their electricity costs increase only 1.5 percent annually, the company's 930,000 electric customers can expect their bills to be an estimated $8.99 higher late next year, according to PSE.

To get the increase, the privately-owned utility has to make its case to the Washington Utilities and Trade Commission. Commission staff will spend the next 10 months under PSE's economic hood trying to determine if the company deserves a rate hike. It will make that decision in late October.

Tim Sweeny, a spokesman for the WUTC, said the investigation will work much as in a court of law. PSE will provide financial and other information to WUTC staff, while the agency's three commissioners wait to make a legal judgement on the findings.

Many of the documents requested by the WUTC and the state attorney general's office -- which represents ratepayers in the case -- will not be available to the public.

"A lot of this information is marked confidential," Sweeny said.

PSE claims to be losing $625,000 a day due to a flat wholesale electricity market and to low production at the company's hydroelectric plants. In all, the company is asking for a $228 million increase in its base electric revenues and $85.9 million in natural gas revenues. The company has no natural gas customers on Whidbey Island.

Today, the WUTC commissioners are expected to suspend the rate case, an action that will give the agency the months it needs to examine PSE's finances. Sweeny said large, industrial electric customers may also get their attorneys involved in the case to protect their interests.

PSE's case involves more than just finances. The utility is also asking for permission to put all of its electricity customers on an automatic meter reading system that will allow the company to track and bill for customer electricity use down to the hour. Grant Ringle, a PSE spokesman, said Tuesday this part of the plan could mean big savings for customers and PSE.

"It's really the most exciting part of the case," he said.

PSE also wants permission to offer electricity customers an annual choice about how they pay for their power. If the rate case is approved, electricity customers could choose to pay for their power on an adjustable rate that corresponds with the wholesale price of power or on a fixed rate that would initially cost more.

By having a payment choice each year, Ringle said, customers would be able to make their own adjustments to the electricity market.

"It will save customers money," he said.

Based on the company's past history with the WUTC and requested rate hikes, PSE may not get everything it wants. When the company asked for a 15 percent hike in 1994, the WUTC gave PSE a 5 percent increase initially, then another 5 percent the following year. In 1997, the WUTC reduced PSE rates by 3 percent before giving the company permission for 1.5 percent annual hikes during the past four years.

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