Washington Utilities and Transportation Commission staff members reached a multi-party settlement agreement on a four-year plan for PSE’s request to increase electric and natural gas rates. The proposal includes a mechanism for "decoupling" the company’s revenues from how much electricity the customer uses. Decoupling proponents argue that this removes the utility’s disincentive to conserve energy because its revenues are no longer based on the customers’ usage.
The three-member commission, which is not bound by the staff recommendation, will make a final decision on the utility’s rate request this spring. The agreement could become effective as early as July 1.
PSE and the commission staff calculated that if the settlement agreement is approved by the commission, a residential electric customer using an average of 1,000 kilowatt-hours-a-month would pay 3.4 percent, or $3.29, more each month for service. A residential natural gas customer using an average of 68 therms per month would see a 1.7 percent, or $1.33, increase in their monthly gas bill. In each of the subsequent years of the settlement agreement, PSE electric and natural gas customers would see about a 1 percent average annual increase in rates at least through 2015.
Under the terms of the settlement agreement, PSE annual electric revenues would increase $53.1 million or 2.6 percent and annual natural gas revenues would rise by $9.6 million or 1.0 percent.
If approved by the commission, this proposed settlement resolves several pending PSE issues, including a coal-transition contract with TransAlta, a rate case and a decoupling plan. The TransAlta purchase power agreement sets the stage for closing the state’s remaining coal-fired electric generating plant by 2025. Decoupling is a program that reimburses the utility when it fails to recover its fixed cost of providing electricity due to customer participation in conservation programs. PSE will expand conservation programs for customers to receive rebates for high-efficiency appliances, insulation and water heaters. Additional money from the decoupling program will allow PSE to increase low-income bill assistance funding by 20 percent.
A provision in the settlement agreement states PSE cannot file for further rate increases before April 1, 2015.