Another sign that the bloom may be off the deregulation bushsurfaced this week in the state of Washington when the state’smajor combination investor-owned utility butted heads with some ofthe region’s industrial giants, including Boeing, Equilon andGeorgia-Pacific, over the large energy users’ request to stateregulators Tuesday (Dec. 12) to get out of a special pricing dealthey cut four years ago when wholesale power prices were rockbottom.

Seven energy-dependent industrial customers and Puget SoundEnergy squared off last Wednesday (Dec. 13) in separate filings tothe Washington Utilities and Transportation Commission over thecustomers’ request to return to more traditional cost-based utilityrates. Puget Sound is opposing the proposed move because of itspotential added costs to the mass smaller energy customers.

The industrial customers, including the area’s two majorrefineries, collectively representing a 197-MW load and more than$100 million in electricity revenues, obtained state regulatoryapprovals for special rates based on the wholesale prices ofelectricity in 1996 when wholesale markets were offering low-costpower.

“As a condition of that agreement (with the Washington Utilitiesand Transportation Commission), those customers indicated that theynever again would come back and ask to share in the benefits of thepool of power resources that (we) were thereafter reserving for(our) other customers,” said Puget Sound’s Tim Hogan, vicepresident, external affairs.

In previous years, the arrangement saved the large energy users”millions of dollars in energy costs,” Puget Sound argues. Inrecent months, however, wholesale electric costs have increasedsignificantly. Thus, the big industrial users want to come back totraditionally regulated rates.

“The actions of the complaining customers are an obvious attemptto make all Puget Sound customers pay for the failure of thosecustomers to properly manage their energy risks,” Hogan said. “It’soutrageous and our filing asks the (state regulators) to considerthe impacts on all of our customers at the same time they reviewthe customers’ filings.”

Puget Sound is the state of Washington’s largest energy utility,providing electricity and natural gas services to more than 1.2million customers, primarily in the Puget Sound region of westernWashington.

©Copyright 2000 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.