Washington State Utility Regulators Reject Pacific Power Rate Proposal
On September 1, the Washington Utilities and Transportation Commission (UTC) rejected (Docket No. UE-152253) Pacific Power & Light’s request to increase revenue in 2016 and 2017 by $10 million annually for its 128,982 customers in the Evergreen State.
Denying the utility’s request to earn a return on upgrades to its Wyoming coal-fired power plants, the UTC instead approved a two-year rate plan with an annual revenue increase of about $4.4 million, or 1.3 percent, for the first year; and about $6.6 million, or 1.9 percent, for the second year.
New rates go into effect next week on September 15. The rates for the second year of the rate plan will go into effect September 15, 2017.
For the first year of the rate plan, an average residential customer using 1,200 kilowatt hours (kWh) per month would see his or her electric bill increase by $1.32, for a bill of $103.97.
Next year, that same customer will see his or her electric bill increase by $1.98, for an average monthly bill of 105.95.
The UTC also approved the company’s proposed accelerated depreciation schedule of two coal-powered electric generating plants serving Washington customers, Unit 4 of the Colstrip Power Plant in Montana (in which the utility has 10 percent ownership) and the Jim Bridger Power Plant in Wyoming.
The new depreciation schedule is designed to cover all capital costs of the Bridger Plant by 2025, and of Colstrip Unit 4 by 2032, although the company is not committing to closing the plants at that time. For that reason, the commission is requiring the company to hold any money collected above the current depreciation rates in a separate account until the commission reviews the company’s next regularly-scheduled depreciation study, due in 2018.
The commission denied Pacific Power a return on selective catalytic reduction system (SCR) investments at Jim Bridger Units 3 and 4. The investments in the pollution control equipment were made as one option for complying with the federal Clean Air Act and Wyoming State Implementation Plan to reduce regional haze. The commission found that Pacific Power failed to re-evaluate its options of closing the units or converting them to natural gas, despite significant changes occurring to natural gas pricing and coal mining operations. Thus, the company failed to demonstrate the investments were prudent and placed ratepayers at undue risk.
Pacific Power filed its initial request for an increase with the UTC in November 2015.The commission received 34 public comments on Pacific Power’s rate increase proposal – 28 opposed, five undecided, and one in favor.
Pacific Power is a division of Portland, Oregon-based PacifiCorp, which, in turn, is owned by Berkshire Hathaway Energy of Des Moines, Iowa.
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