State regulators keep Puget Sound Energy rates steady

Seeking to reduce the economic impacts during the COVID-19 pandemic, the state Utilities and Transportation Commission in Olympia used a set of cost-saving measures to limit increases in Puget Sound Energy (PSE) rates to less than a half percent, while authorizing additional support for the company’s most vulnerable customers.

As a result, PSE’s average residential electric customer using 900 kWh a month will see a rate increase of .05% and can expect to pay $0.04 more, for an average monthly bill of $90.14; while the average residential natural gas customer using 64 therms a month will see a 0.15% increase and pay $0.09 more for an average monthly bill of $59.69, according to a July 8 Utilities and Transportation Commission news release.

PSE originally requested an increase of $139.9 million, or 6.9%, in additional electric revenue and $65.5 million, or 7.9%, in additional natural gas revenue. The commission approved a total combined revenue increase of approximately $66 million, but under the commission’s order almost $64 million of that won’t be reflected on customer bills for at least two years.

“In the throes of the COVID-19 pandemic, it is not fair either to significantly increase customer rates or to deny the company recovery of the costs it must incur to continue providing safe and reliable service,” the commission said in its order, according to the news release.

The commission denied PSE’s request for an attrition adjustment to address revenue shortfalls of $23.9 million for electric and $11.7 million for natural gas, determining that a rate adjustment was not in the public interest at this time.

Instead, the commission authorized PSE to recover funds through several methods including allowing the company to include short-term technological investments that would otherwise be excluded; deferral of certain investment costs to be considered in a future rate case; and adjustments of amortization periods to ease the cost burden on rate payers.

The commission also focused on providing additional aid to PSE’s most vulnerable customers – who are disproportionally affected by the economic downturn – by increasing the company’s Home Energy Lifeline Program (HELP) funding by either twice the amount of the base rate increase, or $1.4 million, whichever is greater. HELP provides bill payment assistance to customers experiencing financial hardship.

Additionally, the commission ordered PSE to work with their Low-Income Advisory Group to develop a disconnection reduction plan within one year and file a detailed annual report to better monitor and analyze customer disconnect trends.

Finally, PSE must speed up the return of $51.7 million in federal tax savings resulting from the decrease to corporate income tax rates in the 2017 Tax Cut and Jobs Act. PSE will now need to pass back these savings to customers in three years instead of four as originally proposed by the company, according to the news release.

The commission also accepted PSE’s proposal to adjust the annual depreciation expense of Colstrip Units 3 and 4, a coal-fired power plant in Montana. A portion of the expense includes decommissioning and remediation costs, to ensure those plants are fully depreciated by 2025, as required by the Clean Energy Transformation Act (CETA).

The commission has received 720 public comments to date on Puget Sound Energy’s rate proposal—712 opposed, three in favor, and five undecided.

The new rates will become effective July 20.

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. They also provide 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.