PSE raises rates for residential natural gas

OLYMPIA — Natural-gas costs for residential customers of Puget Sound Energy will increase by nearly 9 percent as of Sunday, the state Utilities and Transportation Commission announced Wednesday.

The commission approved Puget Sound Energy's request to raise the average gas customer's bill by 8.8 percent, which would raise the average customer's monthly gas bill by $7.26.

The Utilities and Transportation Commission (UTC) will decide Oct. 26 on rate-increase requests by Northwest Natural Gas and Avista.

The rate-increase announcement comes a day after the commission announced that electricity costs for residential customers of Puget Sound Energy will increase when power-supply contracts with the Bonneville Power Administration (BPA) go into effect Sunday.

A typical PSE residential customer's electricity bill will increase 9.8 percent, about $7.12 a month.

Federal law requires BPA to provide benefits from its low-cost hydropower system on the Columbia and Snake rivers to residential and farm customers of private utilities.

The UTC said that in the five-year contract that expires Saturday, PSE customers received a higher-than-normal benefit from the federal hydropower system. The contract was negotiated to help the region's utilities and BPA survive the energy crisis that hit the West in 2001.

Under the new contract, the benefits are considerably lower: $105.5 million in 2007 compared with $175.5 million in 2006 for PSE.

Bellevue-based PSE, the state's largest electric utility, provides electricity to more than 1 million customers in King, Pierce, Jefferson, Island, Kitsap, Skagit, Whatcom, Thurston and Kittitas counties.