Gas rates may go up

By KATHY DAY

Herald Writer

The energy crunch just got louder as Puget Sound Energy announced it must seek a 25 percent rate hike to cover increasing costs of natural gas.

The utility, whose service area includes Snohomish County, has filed a rate increase request that would allow adjustments to keep up with the cost of natural gas.

On Monday, gas prices hit a record, due in part to blizzards in the Midwest and colder than normal temperatures in the Northwest.

Puget Sound’s move comes on the heels of warnings from Snohomish County PUD General Manager Paul Elias that an emergency rate adjustment is needed to cover its costs of buying electricity on the open market and as state and local officials renewed calls for conservation.

The gas rate increase, which would take effect Jan. 12 if approved by the state Utilities and Transportation Commission, would raise the average household bill from $64 to about $80.

Industrial and commercial customers would also be subject to the same increase of 19.4 cents per therm, the unit of measurement used in billing.

The publicly held company, which also supplies electricity to parts or all of eight counties, including Island County, raised rates in August by 27.5 percent — about $13.23 for the average consumer — and in November 1999 by 15 percent. Under state law, the utility will not profit from the latest change, which is essentially a pass-through to cover its costs.

At the PUD on Monday, officials were completing presentations that they will make to the board today detailing how the district has been affected by dramatically rising power costs that have forced the utility to spend $8 million more than budgeted so far this month.

Commissioners will consider the report during the afternoon session, which begins at 1:30 p.m. They also are likely to schedule a special meeting for Wednesday morning to discuss an emergency rate hike.

Elsewhere on Monday, Gov. Gary Locke repeated his call for state residents and businesses to watch how they use power, particularly during the early morning and early evening when demand is the highest.

PUD managers took steps to do their part, among other things switching to backup generators at utility facilities to save money, and lowering temperatures to 66 degrees. Elias said the combined measures should save about 1 megawatt of electricity, enough for 600 houses.

Officials also spent time with the district’s largest electricity consumers — the Boeing Co., area schools, Kimberly Clark Corp., Naval Station Everett and the county government — to figure out ways to reduce their use. Garth Williams, a PUD accounts manager, said the agency is also talking about financial incentives that might be used to get customers to cut power or sell unneeded power back to the district.

At Boeing’s Everett plant, which is not heated, managers have redoubled efforts to conserve energy, according to spokesman Dean Tougas

That means buildings and other sites are being surveyed for "extra opportunities" to save money by turning off lights, computers and equipment when not in use and rescheduling use of high-energy equipment like autoclaves used to cure paint to off-peak times, he said.

Attention was focused late last week on potential power shortages because of unseasonably cold weather that brought touches of snow on Sunday and temperatures in the low 30s Monday.

Things are expected to warm a bit — good news for power purchasers — said Dick Watson of the Northwest Power Planning Council. The forecast on Monday wasn’t enough to lift the warning of possible shortages, but it was enough for them to schedule another conference call today to re-evaluate the situation, he added.

"We look to be OK because of the extraordinary measures the utilities and consumers have been taking," he said.

Officials at Bonneville Power Administration, who on Monday had upstream facilities on the Snake and Columbia rivers running at full tilt, will also take another look at the demands for power today, said agency spokesman Ed Mosey.

Kaiser Aluminum Corp., a major Northwest electricity user, added a little more power to Bonneville’s supply. The company agreed to close its smelting plant in Mead for 10 months and resold the electricity it had committed to purchase.

The temporary shutdown of the Kaiser Aluminum smelter, which idled about 400 workers at midnight Sunday, will free up 190 megawatts of power for BPA, which paid $52 million to repurchase the December allotments. Under its contract with BPA, Kaiser must reinvest the money and use part of it to pay workers up to 70 percent of their salaries and medical benefits while they’re not working.