Washington Superior Court Reverses Part of PSE’s Energy Rate Plan

On July 25, 2014, Washington Superior Court Judge Carol Murphy issued a decision affirming most, but reversing a key part, of Puget Sound Energy’s (PSE) multi-year rate plan. 

The Washington Utilities and Transportation Commission (Washington Commission) had approved PSE’s rate plan that allowed PSE to increase rates on an annual basis and implement a decoupling program.  The rate plan included automatic rate increases for PSE customers beginning in 2013 and potentially continuing until 2017.  Utility “decoupling” separates a utility’s profits or revenues from its energy sales.  Typically, utilities obtain more revenue by selling more output (gas, electricity, etc.).  Under decoupling, utilities can obtain a set amount of revenues regardless of their actual sales.  Conservation and environmental organizations often support decoupling because it is seen as reducing some utilities’ disincentive to invest in conservation.

Over the objections of ratepayer advocates, the Washington Commission approved PSE’s rate plan and decoupling mechanism. The Washington Commission’s decision regarding the rate plan (but not decoupling) was then appealed to Thurston County Superior Court.  Judge Murphy rejected two challenges, finding that: 1) PSE did not need to file a general rate case to have the rate and decoupling programs approved; and 2) the Washington Commission’s departure from precedent in approving the programs was not arbitrary or capricious.

Judge Murphy, however, concluded that there was not substantial evidence in the record to support the finding that any rate changes would be fair, just, reasonable, and sufficient.  Judge Murphy explained that the Washington Commission did not rely upon the quality of evidence it usually does, but instead based the order upon evidence from an earlier, previous general rate case.  In addition, the Washington Commission did not hold PSE to its burden of proof.  Utilities, as the proponents of a rate change, have the burden to submit evidence that proves that the rate change should be approved.  Judge Murphy concluded that the Washington Commission allowed PSE merely to rebut the evidence presented by ratepayer advocates, rather than submit its own evidence demonstrating the reasonableness of the rate plan.


A copy of a Seattle Times Article is HERE



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