PSE bid to raise electricity rates again is denied

Associated Press

OLYMPIA — State regulators have once again rejected Puget Sound Energy’s bid for an $84 million emergency electrical rate increase.

Wednesday’s ruling on the Bellevue-based utility’s appeal echoed the Washington Utilities and Transportation Commission’s original position in its Oct. 4 ruling on the original request: The company didn’t put provide enough proof that it was in financial trouble.

Puget Sound Energy requested the increase in August to cover losses it said it suffered in the volatile wholesale power market caused by the recent energy crunch.

"We repeat that our decision to dismiss its request for extraordinary rate relief is based solely on PSE’s failure to provide sufficient evidence showing that its actual financial condition warrants any kind of rate relief, let alone a power cost adjustment applied on an extraordinary basis," the commission wrote.

The company contends its current rates aren’t sufficient to cover its costs — a situation that could lead to financial disaster.

The company could appeal the commission’s ruling to Superior Court or simply go ahead with a planned proposal to the UTC to completely overhaul its rate structure, a process called a "rate case."

"We intend to file a general rate case in November," said Puget Energy spokesman Grant Ringel. "There are provisions for interim relief during a rate case. Our concern is that it is an 11-month process." The company hasn’t decided whether to take the UTC to court, Ringel said.

The emergency rate increase would have taken effect Nov. 1 and bumped the average residential customer’s electricity rate $11.06 a month, to $71.80.

In its appeal filed Oct. 12, Puget Sound Energy cited comments from bond rating agencies about its financial health but provided no additional internal information, the commission said.

"If PSE has presented financial information to the ratings agencies that would support its position, we invite PSE to share that information with the commission in a new filing so that we may consider it," the commission wrote.

Puget Sound Energy is the state’s largest electricity provider, serving 930,000 customers in 10 counties, including Island and Skagit.

The emergency proposal also would have linked the bills of its customers directly to the company’s wholesale power costs, an idea that drew fire from consumer advocates.

PSE says its losses are associated with buying and selling power in a spot market made volatile by California’s failed energy deregulation scheme and the Federal Energy Regulatory Commission’s decision to impose price caps on wholesale electricity.

The company’s current rate structure, set when Puget Sound Power &Light Co. merged with Washington Energy Co. in 1997, expires Dec. 31.