On Monday, electricity in large portions of Western Washington and on all of Whidbey Island got more expensive.
April Fools Day brought in the first substantial electricity rate increase for Puget Sound Energy customers in the past several years. Last Friday, state utility regulators and PSE officials agreed on a temporary 8.7 percent rate increase that will bring the company $25 million in additional revenue over the next three months. The move is intended to shore up the company’s financial situation, which PSE officials have painted as dire since last summer due to claimed losses of up to $600,000 a day.
What the agreement means to residential electric customers is an average $5 per month increase in their bill, based on usage of 1,031 kilowatt hours per month.
Also affected by the agreement, which was hammered out between the state’s three-member Utilities and Transportation Commission and PSE, are PSE stockholders, who received word late last month that their annual dividend will drop from $1.84 per share to $1 per share. An outgrowth of the commissioners’ demand that PSE increase its equity to investment ratio, the dividend decrease has brought the UTC its biggest batch of complaints over the past few days. Tim Sweeny, a spokesman for the agency, said the reduction is something PSE ordered, not the UTC.
“We’re getting kinda beat up over it,” he said Monday.
The temporary rate increase is expected to be the first taste for consumers of what is likely to become a permanent increase later this year. While this month’s hike will increase rates by only about a half-cent per kilowatt hour of electricity, a permanent, 14 to 18 percent increase sought by PSE could take companywide rates over 6 cents per kilowatt hour.
Originally expected to go into effect this fall if approved by the state, an increase could come sooner. In last week’s agreement, the UTC commissioners expedited the argument and investigation phase for the permanent rate increase, saying they want to have new rates in place as early as July 1 — which is the end date for the temporary rate hike.
Last week’s agreement was not everything PSE wanted. The company originally asked for a 21.6 percent temporary rate hike, which would have brought the company $171 million between now and July 1. That increase would have also cost the average household about $11 extra per month.
The UTC also convinced the company to make its time-of-day electricity pricing program optional for customers. The company has been promoting the program for about a year as a way to reduce the demand for electricity at peak times.
Sweeny said the three-month rate increase will be tempered by the change from winter electric rates to the lower summer rates.
