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FOR IMMEDIATE RELEASE
May 30, 2008
Public Counsel recommends major reduction in PSE’s proposed electric and gas rate increases

SEATTLE – The Public Counsel Section of the Washington State Attorney General’s Office today challenged electric and gas rate increases proposed by Puget Sound Energy (PSE).

PSE’s request would generate an additional $237 million in revenues. Simon ffitch, chief of the Public Counsel Section, which represents residential and small business customers in utility rate cases, called the request unjustified.

 “PSE’s request is much larger than the evidence supports is necessary to cover costs,” ffitch said. “PSE’s customers have been hit hard recently with frequent rate hikes – it’s important that this increase be no more than absolutely necessary.”

In expert testimony to be filed today with the state Utilities and Transportation Commission (UTC), Public Counsel's experts concluded that a reasonable revenue increase for PSE should be limited to $4.3 million from electric rates and $7 million from increased gas rates. This is a dramatic reduction – approximately $226 million less than the requested amount ($175 million less for electric; $51 million less for gas).

Additional testimony and recommendations addressing energy efficiency and rate assistance programs for limited-income customers were jointly filed by Public Counsel and the Energy Project, an advocacy group representing programs for limited-income customers.

The testimony filed today includes analysis from Public Counsel’s expert witnesses on numerous elements of PSE’s proposal. Highlights include recommendations that the UTC:
• Decrease the company’s shareholder profit margin to 9.25 percent from its current level of 10.4 percent, rather than allowing a 10.8 percent increase as the company requests.  This decrease would mean a $51.9 million reduction of PSE’s request.
• Reduce expense for depreciation of company plant and equipment by $43 million.
• Reduce executive compensation by more than $4.8 million for executive salaries and retirement benefits and remove $8.8 million of incentive program costs.
• Reject $500,000 for the cost of PSE’s privately owned aircraft.
• Not require customers to pay for any of the costs for executive parking at SeaTac Airport or for PSE’s Safeco Field corporate suite.
• Reduce PSE’s recovery of storm costs by 5 percent to account for PSE’s failure to have adequate storm preparation and response programs in place.
• Order additional requirements for PSE’s Service Quality Index related to phone call response time and duration and frequency of outages.
• Require PSE to enhance its low-income programs by increasing the enrollment of eligible customers in the rate assistance plan and adding funding for low-income energy efficiency and weatherization.
• Reject PSE’s proposal to increase fixed monthly charges for gas service by nearly $10 and electric service by nearly $3. Public Counsel is asking that there be no change in the basic customer charge.

The UTC will examine the testimony and evidence presented by Public Counsel and other parties. Hearings to cross-examine expert witnesses will begin on Aug. 25, 2008. The UTC is expected to issue a decision by November 2008.

PSE has also filed a request with the UTC to approve a proposed sale to a group of Australian and Canadian private equity investors. The UTC is considering the sale proposal separately from the rate request and will issue a decision in that case in September or October 2008. Public Counsel’s recommendation in that case will be filed on June 18.

Bellevue-based PSE, Washington’s oldest and largest energy utility, serves more than 1 million electric customers and 725,000 gas customers in Western Washington.

PUBLIC COMMENT:
Members of the public can comment on the rate case and the sale case.

The Commission will hold a public comment gearing at 6:30 p.m. Wednesday, June 4 at:
Utilities and Transportation Commission Office
1300 S. Evergreen Park Dr. S.W., Olympia

Written comments may be sent to UTC, P.O. Box 47250, Olympia, WA, 98504 or e-mail comments@utc.wa.gov. Include your name and mailing address, the name of the company (PSE), and docket no.  072300 (electric and gas consolidated) or 072375 (sale).

For more information, customers may contact either the WUTC or Public Counsel:
• UTC – (800) 562-6150, e-mail at comments@wutc.wa.gov. Information is available online at www.wutc.wa.gov. Enter docket no. 072300 (electric and gas consolidated) or 072375 (sale).
• Attorney General’s Office Public Counsel Section -- Public Counsel, Attorney General’s Office, 900 Fourth Avenue, Suite 2000, Seattle, WA 98164-1012, or e-mail utility@atg.wa.gov


The Public Counsel Section advocates for the interests of consumers on major rate cases, mergers and other rulemakings before the UTC. Public Counsel also advocates for consumers in court appeals, through technical study groups and before the Legislature and other policy makers. The office maintains contact with the public through a citizen advisory committee, community organizations, public hearings and personal contact with consumers in major cases. More information about Public Counsel’s work is available online at http://www.atg.wa.gov/utility/index.shtml.

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Contacts: Kristin Alexander, Media Relations Manager - Seattle, (206) 464-6432
Simon ffitch, Public Counsel Section Chief, (206) 389-2055

Editor’s Note: The spelling of Simon ffitch is correct – the surname begins with two lowercase f’s.

 


 

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