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PSE Requests Immediate 12.5 Percent Decrease in Natural Gas Rates and 11-Month Review Process for Modest Electric and Natural Gas General Rate Case Increase for Spring 2010

Updated June 4, 2009 -  PSE revised its original purchased gas adjustment to spread out the pass-through of a $21 million refund to customers over a 12-month period, rather than the originally proposed four-month period, which altered the percentage amount of the decreased rate.

Read about the May 28 approval by the Washington Utilities and Transportation Commission to lower natural gas rates.

BELLEVUE, Wash., May 08, 2009 - Puget Sound Energy today filed a request with the Washington Utilities and Transportation Commission to immediately decrease natural gas rates by an overall 12.5 percent for all customer groups and 16.4 percent for residential customers effective June 1, 2009.

A typical household’s natural gas bill, based on 68 therms of average monthly usage over a 12-month period, would fall by 16.4 percent, or $15.58, to $79.22, about what PSE customers were paying in 2005.

“We are mindful of the difficulties our customers are facing during this challenging economic period — especially after the unusually cold winter and spring,” said Stephen P. Reynolds, president and CEO of PSE. “We are pleased to be able to bring our customers double-digit rate relief now and hopefully additional rate reductions before next winter and spring.”

If the projected wholesale price of natural gas remains low, PSE hopes to file another Purchase Gas Adjustment request this summer to extend these cost reductions in October 2009 before the next winter heating season.

PSE is also taking advantage of the current low wholesale price of natural gas by securing supplies for the balance of 2009 and storing natural gas for next winter to capture these benefits for customers.

In a separate filing today, PSE requested the UTC to initiate the 11-month review process to approve a moderate increase of an overall 2.2 percent in natural gas rates and 7.4 percent in electric rates for all customer groups. If approved by the UTC, effective April 1, 2010, a typical monthly household natural gas bill (based on 68 therms of natural gas) would increase 2.5 percent, or $2.40 from today’s rates. A typical monthly electricity bill (based on 1,000 kilowatt-hours of electricity) would increase 9.1 percent, or $8.23, from today’s rates.

"We have and continue to work hard to manage costs and minimize our electric rate increase request. Our company absorbed $21 million by deliberately postponing our filing with the UTC to recover our 2008 expenditures in energy delivery infrastructure and power supplies,” said Reynolds. “We are also freezing officer salaries and scrutinizing the timing and need for all our major projects. The rate of return we are seeking is less than other utilities in the region.

“Throughout this 11-month process we will continue to work to identify additional opportunities to further reduce our request, including selling the excess renewable attributes of our wind facilities to maximize their economic benefits for our customers,” added Reynolds.

“At the same time, we are fortunate, under our new ownership to have obtained the equity capital needed to be able to take advantage of cost saving opportunities in this down market to make prudent investments and move ahead with key projects that will support jobs to meet the needs of the customers we serve in Western Washington now and for decades to come,” said Reynolds.

The general rate case filing is not related to PSE’s merger and no expenditures for the merger will be paid for by PSE customers. PSE would have filed to recover costs regardless of ownership.

The electric revenue request would recover costs for purchasing new electric generation resources, including the $240 million Mint Farm Generating Facility acquired in December 2008 and an expansion of PSE’s Wild Horse wind generation facility, with the balance attributed to investments in electric-system infrastructure and power-supply costs.

The bulk of the natural gas revenue request can be attributed to recovering 2008 expenditures for infrastructure investments to improve reliability and serve new customers.

In 2008 PSE invested $421 million to serve new customers and upgrade and improve the electric and natural gas infrastructure and $346 million on new energy supplies. The investments included building six new and rebuilding seven electric substations, installing 220 miles of natural gas pipeline, building 125 miles of transmission and distribution lines, and replacing 800 utility poles.

About Puget Sound Energy

Washington state’s oldest and largest energy utility, with a 6,000-square-mile service area stretching across 11 counties, Puget Sound Energy serves more than 1 million electric customers and nearly 750,000 natural gas customers. PSE, a subsidiary of Puget Energy, meets the energy needs of its growing customer base primarily in Western Washington through incremental, cost-effective energy conservation, procurement of sustainable energy resources, and far-sighted investment in the energy-delivery infrastructure. PSE employees are dedicated to providing great customer service to deliver energy that is safe, reliable, reasonably priced, and environmentally responsible. For more information, visit www.PSE.com.

Contact information:

Puget Sound Energy
Martha Monfried, 1-888-831-7250