Puget Sound Energy to ask for 18% gas rate raise
Published 11:44 am Thursday, October 2, 2008
BELLEVUE – Puget Sound Energy on Aug. 31 asked state regulators for permission to raise natural gas rates for its customers by 17.9 percent.
The new rates, which the company has requested to take effect Oct. 1, would increase the average monthly bill for PSE residential customers by 16.7 percent, or $11.90, to $82.02, which would be the most that the company has ever charged for natural gas.
The previous high, not adjusted for inflation, was the $79.03 a month that average residential customers of PSE paid for natural gas in January 2001, during the height of the 2000-2001 energy crisis.
Adjusting for inflation, natural gas rates for this area hit an all-time high of nearly $100 a month in 1982. The unadjusted rate was $49.89.
A typical PSE residential customer uses 80 therms of natural gas a month, according to the company.
Small and medium-sized business customers would see their natural gas bills rise by an average of 18.7 percent, said PSE spokesman Roger Thompson.
Bellevue-based PSE, the state’s largest utility company, said its latest rate hike request simply seeks to pass through to customers, at no profit, the increased costs it is paying to wholesale natural gas suppliers, primarily in British Columbia and Alberta, Canada.
PSE said the short-term wholesale price of natural gas in Washington has risen more than 36 percent in the past year and has nearly tripled since August 2002.
The company said increased demand, tight supplies and anticipation of a colder winter than last year, which could cause wholesale prices for natural gas to rise even higher, were among the reasons for its request to raise rates for customers.
State law prohibits utility companies from making a profit on pass-through increases in natural gas rates.
Thompson said the company’s natural gas business makes a profit, not from the sale of the actual gas itself, but from the delivery of that gas to customers.
If wholesale prices for natural gas do not rise this winter as anticipated, then PSE would seek permission to lower rates accordingly, as it did three straight times in 2002, Thompson said. The company raised natural gas rates twice last year.
Thompson compared PSE’s rate adjustment requests to “looking both into the rearview mirror” in terms of historical wholesale prices as well as at the road ahead in predicting whether rates are likely to rise or fall.
The company on Aug. 5 reported a net loss of $6.8 million for the three-month period that ended June 30 — its first-ever quarterly loss.
PSE officials blamed the second-quarter loss on the decision in May by state regulators to reject the company’s request to raise electricity rates by 3.9 percent to recover higher power-supply costs.
The Washington Utilities and Transportation Commission instead elected to authorize a rate increase of only 3.2 percent.
Marilyn Meehan, a spokeswoman for the WUTC, said PSE’s request to raise natural gas rates is fairly typical for this time of year. The commission will consider the matter at its Sept. 29 meeting.
“These are generally non-controversial requests,” Meehan said. “We usually just check for mathematical errors.”
Meehan said PSE’s rate hike request appears to be in line with what other utility companies in the region are requesting.
“Prices of natural gas in the Northwest are expected to be much lower than in other parts of the country,” thanks to the region’s proximity to natural gas producers in British Columbia and Alberta, Canada, Meehan said.
“The good news is that there will be adequate natural gas supplies here in the Northwest, but the bad news is that consumers will be paying much higher fuel prices in general, especially for natural gas,” Meehan said.
Puget Sound Energy, as of June 30, had 655,000 natural gas customers in six western Washington counties. It provides natural gas service to homes and businesses throughout most of King County, including Seattle, the Eastside and south King County, with the exception of Enumclaw.
