In the midst of a proposed merger with a consortium of private equity firms in which rates were deemed unaffected, Bellevue, WA-based Puget Sound Energy (PSE) last Monday filed a $231.3 million general rate case with the Washington Utilities and Transportation Commission. The primary reason cited for the filing was large infrastructure investments by PSE this year and last year that it needs to recover in future retail natural gas and electric utility rates.
“The recently proposed merger has no bearing on [the general rate case] filing,” according to PSE CFO Eric Markell. “The revenues sought by the rate proposal are aimed solely at recovering costs and providing the financial resources PSE needs to ensure safe and reliable service to a growing region.”
PSE’s filing asks for the new rates to be effective Nov. 1 next year. If approved as requested, the rate hikes would mean a $174.5 million, or 9.5%, boost in electric rates, and a $56.8 million, or 5.31%, increase in natural gas rates. The Puget Energy utility said a typical general rate case takes 11 months to process by the Washington state regulators.
Utility officials said there was some “cushioning” of the proposed upcoming increases from the fact that PSE lowered its natural gas rates 13% last October due to wholesale gas prices going down over the past year, and it still hopes to reach an agreement in ongoing negotiations with the Bonneville Power Administration (BPA) to restore federal power benefits for residential and small-farm customers.
“We are asking the [Washington state regulatory commission] to allow us to recover the investments we have made and will continue to make in our pipes, wires and power supplies to provide the service our customers have come to expect, and to meet the growing needs of the vibrant Puget Sound region,” said Markell, who attributed the rising infrastructure costs to global increases in the cost of steel, copper and fuel.
“While our utility serves a remarkably growing and prosperous region, we recognize the strain that rising costs, including energy costs, can place on our most vulnerable citizens. Consequently, this filing also proposes to increase bill-payment assistance to our low-income customers.”
In announcing its proposed merger with a consortium of private investors led by Macquarie Infrastructure Partners (MIP) last October, PSE CEO Stephen Reynolds and his Australian-led private investment partners said they wanted to create a “sustainable model” for the energy industry to allow electric and natural gas utilities to come up with staggering new capital funding levels to meet future infrastructure needs. Reynolds specifically said the deal would not require any change in the rates for PSE.
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