PSE customers to pay more for electricity, gas

By Mary L. Grady

Both electric and natural gas customers of Puget Sound Energy (PSE) will pay more for energy this fall.

Even without the full effect of Hurricane Katrina and Rita factored in, natural gas customers will pay an average of 14.7 percent more for natural gas beginning Oct. 1. In addition, electricity rates will also rise an average of 3.65 percent. PSE said it needs the additional revenue to recover higher power supply costs and the utility's investment in a wind power generating project.

The request to bump up natural gas rates was filed with state regulators just two days before Hurricane Katrina hit the Gulf Coast, shaking up oil and gas markets nationwide.

Despite the sudden jump in energy prices in the aftermath of the first storm, Puget Sound Energy was not planning to revise the rate change request.

Dorothy Bracken, a PSE spokesperson, said that the purchased gas rate adjustment just filed with the state, ``obviously did not take into consideration the effect of Hurricane Katrina's effects on energy costs.''

``(The company) will keep the (current) filing as is,'' Bracken said. ``The adjustment is based both on cost of gas purchased plus some forward-priced gas. We will look ahead going into 2006 as to how gas prices will be looking for the next 12 months. It is just too soon to tell how Katrina will affect our prices.''

The utility increases or decreases customer rates to pass on changes in wholesale power supply prices.

The new electric rates would increase the typical residential electric bill by 4.4 percent, about $3 per month.

For households that use an average of 80 therms of gas per month, bills would increase by 13.3 percent, or $11.31 a month, bringing the average monthly bill for residential customers to $96.48. Commercial and industrial customers pay different amounts for both natural gas and electricity based on use.

In a statement released just before the hurricane, the utility stated that the projected price of wholesale natural gas has risen by 60 percent over the past year. The increase is being driven primarily by demand, tight supplies and record crude oil prices.

State regulated utilities cannot profit on the increased price of customers' natural gas supplies, said Marilyn Meehan, spokesperson for the Washington state Utilities and Transportation Commission. ``Under the Purchased Gas Adjustment, the utilities can only pass along to their customers the changes, in either direction, of gas supply costs.''

The utility said the proposed rate increase could have been higher but is mitigated by the fact that PSE has already secured a large share of its future gas supply needs at lower prices.

Conservation services and financial incentives, such as rebates on energy efficient appliances, to help customers to reduce usage and bills are available through the utility.

Low income PSE customers can also get help with their utility bills. The Salvation Army Warm Home Fund is another source of energy assistance. Information on these programs is available from PSE at 1-888-225-5773.

PSE is an investor-owned electric and natural gas utility. It serves more than 680,000 natural gas customers in Snohomish, King, Pierce, Thurston, Lewis, and Kittitas counties.

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