Puget Sound Energy receives OK to boost natural gas rates

OLYMPIA — Natural gas rate increases for Washington customers of Puget Sound Energy and Northwest Natural Gas were approved Wednesday by state regulators.

The companies are allowed to adjust rates according to their wholesale costs for natural gas. Last year, rates went down due to abundant supply, but the hard winter in the Northeast is driving costs up this year.

Puget Sound Energy rates will increase 12.5 percent Oct. 1, a boost that comes on top of the 18.5 percent increase approved in April, said Marilyn Meehan, a spokeswoman for the Washington Utilities and Transportation Commission. The second increase is expected to boost average monthly bills from $62.40 to $70.21.

Because natural gas usage drops off in the spring and summer, consumers may feel both increases at once.

"Come November or December when they get that first bill, I think it’s probably going to be sticker shock for a lot of people," Meehan said.

The Bellevue-based company serves 645,731 Western Washington natural-gas customers in Pierce, Thurston, Lewis, Snohomish, Kittitas and King counties.

Northwest Natural Gas customers will see an average increase of 16 percent starting Oct. 1, boosting the monthly bill from $47.61 to $55.53. The Portland-based company serves 51,173 customers in Clark and Klickitat counties.

Puget Sound Energy spokeswoman Dorothy Bracken said supply and demand are out of whack since the utility was able cut costs in 2002.

"In the past year drilling activity subsided because there was a plentiful supply," Bracken said.

Then came that prolonged cold spell in the East.

"We’re seeing the effects of that demand from last winter elsewhere in the nation drive up the price of natural gas," Bracken said.

Companies buy gas in a variety of ways, including long-term contracts that lock in low prices and expensive spot purchases during periods of high demand. When they seek rate increases, the commission reviews their books to make sure the boost is for cost recovery and not profiteering, Meehan said.

The rates will be reviewed again next year, Bracken said, and if customers were overcharged, prices will be adjusted.