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FOR IMMEDIATE RELEASE
January 05, 2007
Public Counsel Applauds the UTC for Rejecting Puget Sound Energy’s Request for 'Novel' Ratemaking Methods

SEATTLE – The Public Counsel Section of the Washington State Attorney General’s Office said today’s decision by the Washington Utilities and Transportation Commission rejecting Puget Sound Energy’s effort to use "novel" ratemaking methods is an important victory for consumers.

"The Utilities and Transportation Commission’s decision today is a victory for Puget Sound Energy customers because they will continue to enjoy the financial protections that come with requiring a utility to justify each and every penny it receives from rates," said Assistant Attorney General Judith Krebs.

Puget Sound Energy wanted to increase customer rates in the future without a general rate case by using accounting methods known as "trackers." In a normal rate hike request, all of the company's costs and revenues are on the table, and it must show that it needs a rate increase before it can raise rates. The trackers proposed by Puget Sound Energy would have allowed the company to raise rates without reviewing its finances as a whole.

One of the trackers, the "depreciation tracker," would have allowed the company to raise an additional $7.9 million in revenues by increasing electric rates and $10.9 million in revenues by hiking natural gas rates.

The other tracker, a "decoupling mechanism," could have increased gas rates nearly $25.6 million in 2008. Even with these trackers, Puget Sound Energy could still have filed for a general rate increase at any time.

In rejecting Puget Sound Energy’s bid to sidestep the normal way rates are set, the commission announced that departures from "fundamental ratemaking principles" require that a utility show extraordinary circumstances. The commission said that Puget Sound Energy did not make such a showing.

The Public Counsel Section advocates for the interests of consumers on major rate cases, mergers and other rulemakings before the UTC. Public Counsel also advocates for consumers in court appeals, through technical study groups and before the Legislature and other policy makers. The office maintains contact with the public through a citizen advisory committee, community organizations, public hearings and personal contact with consumers in major cases. More information about Public Counsel’s work is available online.

More information about the commission’s decision can be found on the UTC Web site at www.utc.wa.gov.

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Media Contacts: Kristin Alexander, Public Information Officer, (206) 464-6432
Judy Krebs, Assistant Attorney General, (206) 464-6595

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