By the OGJ Online Staff
HOUSTON, Nov. 27 -- Puget Sound Energy, claiming to be squeezed between high wholesale electricity and gas costs and fixed retail rates, asked Washington state regulators to approve a $228 million/year electricity rate increase and an $85.9 million/year natural gas rate increase Tuesday.
The utility unit of Puget Energy Inc., Bellevue, Wash., claimed it is not recovering $625,000/day from electricity rates.
"Presumably the company has supplied the numbers to justify their case," said Tim Sweeney, spokesman for the Washing Utilities and Transportation Commission. He said the commission rejected an emergency rate relief request that Puget Sound filed last month because of "insufficient evidence."
A spokesman blamed the shortfall on increased power costs and increased operating costs at the utility. Also contributing to the company's problems were decreased revenue from sale of surplus power into the wholesale market. The company said it will file promptly for interim rate relief while the rate case is processed.
"PSE has not had to ask for a general electricity rate increase since 1993 and a general natural gas increase since 1995," said Gary Swofford, PSE's vice-president. Puget filed for a 16.5% increase in electric revenues and 14.5% increase in base natural gas revenues.
The company said high purchased power electricity costs were driving the electricity rate increase. But electric power observers say the forward prices for electricity remain low for all of next year and current spot prices have also been low.
Just 2 weeks ago Puget Sound received regulatory permission to terminate its all-customer electric buy-back program 7 weeks early. Puget Sound claimed the program was losing money. Current wholesale electricity prices are about 3-4¢/kw-hr less than the 5¢ being credited to customers for their energy savings.
The purpose of the buy-back program was to encourage conservation and reduce the company's power supply expenses. Natural gas prices also have plummeted since an unusual spike last year.
The test year that the rate case will use to establish costs will be June 30, 2000 to June 30, 2001.
"We are looking for a recent typical year," said Sweeney. "What was atypical was the high cost of electricity last year. There will probably be a prudency review of electricity costs. But that is up to the parties in the case."
Puget Sound also asked commissioners to approve new automated meters that reflect real-time wholesale power prices. The utility said the meters will permit it to offer adjustable rates that move with market conditions.
"This plan rewards people for using energy more efficiently," Swofford said. There is also a fixed rate option that is adjusted once a year at a slightly higher price.
