Reliability clean energy shape PSE rate proposal
BELLEVUE, Wash. (1/13/2017) PSE is targeting better reliability and cleaner energy for its customers with a new rate proposal filed with the Washington Utilities and Transportation Committee (UTC).
Electric rates would increase by a net 4.1 percent while natural gas customers would see a 2.4 percent rate decrease. For the average residential customer with both electric and natural gas service, the overall impact on their bill would be about $1.72 per month.
The increase in electric rates includes the cost of a proposed electric reliability program to replace aging underground cable—some of that cable in use since the 1960s—and upgrades to the least-reliable circuits on PSE’s system. The decline in gas rates is driven by a proposal to lower depreciation costs. PSE is able to keep the rate impact to a minimum because of progressive rate mechanisms put into place over the past five years in collaboration with the UTC and other stakeholders.
“Our customers want cleaner energy and they want safe and reliable power,” said Phil Bussey, PSE’s chief customer officer. “We’re committed to delivering greater value to our customers for their investment and keeping their energy costs reasonable.”
As ordered by the UTC, the rate case fully examines the economics surrounding the Colstrip Generating Station in eastern Montana. Colstrip Units 1 & 2 are set to shut down no later than July 2022 as part of a settlement reached last year and PSE is seeking approval from the commission to implement retirement plans. The rate case examines how energy markets, including the impacts of abundant and affordable natural gas, have affected the economic viability of the older Colstrip Units 1 & 2. The rate case also includes updated depreciation, decommissioning and remediation costs for the Colstrip units.
Also factored into the rate proposal are higher power costs to meet increased emission requirements, including $18 million to comply with the State of Washington’s Clean Air Rule.
This is PSE’s first general rate case since 2011 and is required by order of the UTC to be filed by Jan. 17, 2017. PSE is not seeking to change the current allowed return on common equity of 9.8 percent, in place since 2012. As a regulated utility, PSE must receive approval from the UTC for rate changes—increases and decreases—for the services provided to customers.