Power rate hike deal reached

The agreement calls for a 1.5 percent hike for Pacific Power customers.

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WALLA WALLA -- Pacific Power's rate increase won't be quite the jolt on monthly bills as originally expected under a new settlement agreement announced this morning.

The Portland-based utility has reached an agreement with staff members for the state's Utilities and Transportation Commission on a 1.5 percent rate increase for customers, officials said.

The decision still needs approval from the three-member Utilities and Transportation Commission, which is not bound by the staff recommendation.

If the recommendation is approved, the increase will take effect June 1. However, as part of the agreement, Pacific Power will not be able to file another general rate case with the commission, the agency that regulates private and investor-owned electric companies, before next January.

Under the settlement agreement, Pacific Power's annual electric revenue would increase by $4.5 million.

The average residential customer using about 1,000 kilowatt hours per month will see an increase of $1.24 for a total monthly bill of $77.65. The basic monthly service charge of $6, which is paid by all customers regardless of the amount of electricity used, would stay the same.

Pacific Power, a division of Portland-based PacifiCorp, asked for a 4.3 percent increase when it filed its request last July. At that rate, its annual electric revenue would have jumped $12.9 million.

Officials with PacifiCorp had testified that the previous rate increase last April was not enough to enable the company to meet the return on equity previously approved by the commission.

The inability to earn the authorized revenue has been driven by increases in operating costs and decreases in revenue, officials testified.

Increases in power expenses and coal costs from the company's Jim Bridger plant, removal of a hydroelectric facility and decreases in revenues from wholesale sales are among the factors contributing to the need for a rate increase, Pacific Power officials said. They said the company has taken measures to reduce costs, including the introduction of automated meter reading.

In response to the most recent filing, the Utilities and Transportation Commission received 89 public comments. Five of those were undecided, and 84 were opposed to the increase. Outspoken opposition came during a meeting Jan. 24 public meeting from employees at Wallula's Boise Inc. mill.

This morning's announcement also had support from three other parties in addition to Utilities and Transportation Commission staff and Pacific Power. They are the Attorney General's Public Counsel Section, Industrial Customers of Northwest Utilities and the Energy Project.

PacifiCorp serves about 127,000 Washington customers through Pacific Power, including in Walla Walla, Columbia and Garfield counties.

Vicki Hillhouse can be reached at vickihillhouse@wwub.com or 526-8321.

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