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Attorney General’s Office challenges PSE’s rate increase

Post by Kelly Kearsley on May 30, 2008 at 3:26 pm with No Comments »
May 30, 2008 3:26 pm

The Washington State Attorney General’s Office has challenged proposed gas and electric rate increases by Puget Sound Energy, saying they are unjustified.

PSE’s rate increases would generate an additional $237 million in revenue, according to a news release from the AGO today.

Simon ffitch, chief of the AGO’s Public Counsel Section, said the utility’s request is much larger than is needed to cover its costs.

“PSE’s customers have been hit hard recently with frequent rate hikes – it’s important that this increase be no more than absolutely necessary,” ffitch said.

The state contends that a total of $11.3 million in increased revenue – $4.3 million in revenue from electric rates and $7 million in revenue from gas rates – would be more reasonable.

That’s $226 million in revenue less than PSE is requesting, according to the news release.

Dorothy Bracken, PSE’s spokeswoman, said the utility had not yet seen how the state came up with its numbers.

But, she said, PSE’s proposed increases are to cover the company’s higher costs.

“The amount of the revenue request that PSE put in the rate increase reflects actual cost of doing business,” Bracken said.

The AGO’s Public Counsel experts provided the state Utility and Transportation Commission with recommendations on reducing PSE’s proposed rate increases.

They included:

- Reducing the company’s shareholder profit margin.

– Reducing executive compensation.

– Rejecting the $500,000 cost of PSE’s privately owned aircraft.

– Not requiring customers to pay for costs of executive parking at Sea-Tac or for PSE’s corporate suite at Safeco field.

– Requiring the company to enhance low income programs.

Bracken said that PSE will be reviewing the state’s testimony over the next month and preparing its response.

The UTC is expected to issue a decision on whether the proposed rate increase stands by November.

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