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June 06, 2002
Agreement Limits PSE Rate Hike on Electricity

Seattle - Puget Sound Energy will be limited to a 4.6 percent overall electric rate hike, will embark on a broad, new energy conservation program and will provide new assistance to low-income customers under a settlement reached today between the company, state regulators, the state Attorney General's Office of Public Counsel and others.

The agreement, which is subject to approval by the Washington Utility and Transportation Commission (WUTC), limits PSE to an electric revenue increase of $59 million, far less than the $228 million (16.5%) the company first asked when it filed in December 2001.

While an average residential customer's bill will rise by about $2.70 over 2001 levels, that customer will actually see a reduction of about $1.85 per month because an "interim" increase granted earlier this year will expire on June 30. The proposed rate changes would take effect July 1, 2002.

The agreement also makes significant changes to PSE's "Time of Use" pilot plan that charges some consumers varying rates depending on the time of day power is used.

The Time of Use pilot plan will continue through September 2003. However, starting in July, participating customers will be charged $1 per month toward the cost of Time of Use metering. These customers will also receive individualized reports on whether the plan is cost-effective for them and will be allowed to opt-out of the program if they choose. Customers not currently on the Time of Use plan must specifically ask to participate in the plan.

Meanwhile, the company, WUTC staff, Public Counsel and others will continue to evaluate whether Time of Use billing is cost effective and has any environmental benefits.

The company also has agreed to more than double its energy conservation program over recent levels, provide a Conservation Report Card to customers and pay a financial penalty if it fails to meet conservation targets. The program will help PSE acquire the resources it needs to meet near term energy demand.

Under the program, the company will help businesses and homes increase energy efficiency through more affordable and available energy-efficient programs. These conservation programs are intended to make more efficient use of regional generating capabilities and distribution systems, lessen environmental impact and reduce overall energy costs.

Other highlights of the settlement include:

  • Low-income assistance: A new $8.6 million low-income assistance program for electric and gas customers. PSE did not previously have a significant low-income rate assistance program.
  • Service Quality Index: The company will continue its existing "Service Quality Index," under which it provides an annual service quality report card to customers and pays financial penalties of up to $10 million if it fails to meet specified customer service targets. These include such things as keeping scheduled appointments and answering phones in a timely manner.
  • Power Cost Adjustment (PCA): A PCA mechanism will be adopted that allows PSE to more promptly deal with extraordinary fluctuations in power costs by adding a surcharge to bills between formal rate change requests. The agreement places specific restrictions, however, on when such costs can be passed through to consumers, and requires PSE to continue to absorb a portion of such costs.

This settlement announced today deals with electric rate issues. Rates for gas customers will be considered later in the summer.

The Public Counsel Section of the Washington Attorney General's office represents utility customers before the Washington Utilities and Transportation Commission.


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