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Court order reverses Puget Sound Energy rate plan charges

The following is a release from the Washington State Attorney General's Office:

Thurston County Superior Court Judge Carol Murphy has reversed a key portion of a decision approving Puget Sound Energy’s multi-year energy rate plan, which could roll back automatic rate increases for PSE customers. The Washington Utilities and Transportation Commission (UTC) approved the rate plan for PSE in 2013.

The plan included automatic rate increases for PSE customers beginning in 2013 and continuing until 2016 or 2017— at PSE’s option.

The Attorney General’s Public Counsel Unit appealed the decision on behalf of PSE customers. Industrial Customers of NW Utilities (ICNU) also challenged the order.

Both consumer advocates argued that the rates approved in the plan were too high because they included an unduly high rate of return for Puget Sound Energy.

“This is an important win for PSE’s ratepayers,” said Washington State Attorney General Bob Ferguson. “The court’s ruling will ensure that customers’ rates under the multiyear plan will be fairly calculated. Our Public Counsel believes this ruling could potentially save residential and industrial customers as much as $10 million per year.”

Public Counsel and ICNU presented evidence that given declining costs in the capital markets, and the reduced financial risk for PSE resulting from the plan, rates should be approximately $10 million lower annually. The rates approved in the UTC decision were based on the rate of return approved for PSE in its last rate case in 2011.

In her ruling, Murphy stated the case would be returned to the UTC for further legal proceedings to determine the rates.

Public Counsel also challenged the rate plan’s automatic annual increases over several years, but the court denied that portion of the appeal.

The PSE rate also plan included a “decoupling mechanism” designed to stabilize utility revenue and help encourage conservation.

The decoupling mechanism was not challenged by Public Counsel or ICNU in the appeal. PSE is the state’s largest investor owned electric and natural gas utility, providing service in Western Washington and Kittitas County to more than 1 million customers.

The Public Counsel Unit advocates for the interests of consumers on major rate cases, mergers, rulemakings, and other proceedings before the WUTC.

More information about Public Counsel’s work is available online athttp://www.atg.wa.gov/Utilities/AboutPublicCounsel.aspx.

 

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