Regulators set to OK increase in natural gas rates

By HUNTER T. GEORGE The Associated Press 1/9/01 10:00 PM

OLYMPIA (AP) -- Natural gas rates for homes and businesses around Washington state will soar on Friday if regulators, as expected, approve requests from three utilities.

Staff advisers to the Washington Utilities and Transportation Commission on Tuesday endorsed the requests by Puget Sound Energy, Avista Corp. and Cascade Natural Gas.

The three utilities, which together serve some 860,000 customers, filed the requests under a program that allows them to pass on higher costs directly to customers. None of the extra revenue goes toward profit.

The three-member commission is scheduled to issue a decision Thursday. If approved, the new rates take effect Friday.

The utilities said the higher rates, which would boost the average monthly residential bill by $13 to $15, are needed to cover the increased cost of natural gas, which has more than doubled over the past four months, according to commission records.

Low prices for natural gas in recent years discouraged development of new sources, the commission staff said. As a result, prices shot upward when production and delivery of natural gas failed to keep up with a substantial increase in demand, particularly from power plants that need more gas to generate more electricity.

Another factor is the construction of new pipelines that carry Canadian gas to the Midwest and Eastern United States markets, reducing the supply in the Northwest, the WUTC staff said.

The staff's report noted that more than 300 people called or wrote the commission to complain about the large increase requests.

The public counsel section of the Washington attorney general's office, which represents consumers before the commission, opposes the increases "in principle," attorney Robert W. Cromwell said. But he acknowledged that utilities are simply passing along costs from a volatile market.

"Our position is we're concerned about the price impact that these rate increases will have on consumers," he said, noting that rates have increased 85 percent over the past two years. "You've got a fairly staggering long-term impact here."

Consumers can reduce the impact of the rate increases by making sure their homes and businesses use energy as efficiently as possible, he added.

A breakdown of the rate requests:

Puget Sound Energy filed two requests that, combined, would increase the monthly rate for the average residential customer by nearly 25 percent, or $15.19. Commercial rates would increase 26 percent, and industrial rates would go up 31 percent. The increased rates would generate an extra $171 million a year in revenue.

Avista's residential rates would increase 28 percent, or $14.95 for the average customer. Commercial rates would increase 34 percent, and industrial rates would go up 38 percent. The rates would generate $33 million.

Cascade's residential rates would increase 22 percent, or $13.16 for the average customer. Commercial rates would increase 29 percent and industrial rates would go up 33 percent. The rates would generate $40 million.

Puget serves 590,000 natural gas customers in Western Washington, according to the WUTC. Avista serves about 126,000 customers in Spokane and elsewhere in Eastern Washington. Cascade serves about 145,000 customers in such areas as Bellingham, Bremerton, Yakima and Walla Walla.

http://www.oregonlive.com/newsflash/index.ssf?/cgi-free/getstory_ssf.cgi?o1752_BC_WA--GasRates&&news&newsflash-oregon

-- Martin Thompson (mthom1927@aol.com), January 09, 2001