Wash AG looking at rate increase proposed by Northwest Natural Gas

Chris Rizo Mar. 28, 2008, 6:00pm


OLYMPIA -- The Washington attorney general's office said Friday that it is taking a deep look at a proposal by Northwest Natural Gas to increase rates for its approximately 66,000 residential customers in the southwest part of the state.

"We are very concerned with the size of the proposed increase and the impact it will have on residential and small business customers," said Simon Ffitch, chief of the attorney general's Public Counsel Section.

The utility's request, filed Friday with the state Utilities and Transportation Commission, asks for a 4.8 percent general rate increase, the first such request in Washington since 2003.

The rate increase is aimed at generating $4.34 million in additional revenues for the Portland, Ore.-based company.

"We know rate increases are hard on our customers and we're doing everything we can to hold costs down," said Northwest CEO Gregg Kantor.

Kantor said over the last two years the utility has sought to restructure its business to become more efficient.

"Unfortunately, despite the reductions we've made, cost increases over the last five years and increased investment in our distribution system are more than we can continue to absorb," he said.

Under the Northwest plan, the usage rate that customers pay regardless of how much gas they use would increase from $5 to $12.

The utility is asking also for the authority to adopt "decoupling," which would allow the company pass along a surcharge to customers to make up for lost revenue that results when customers use less energy.

The attorney general's office said if approved, average residential ratepayers would see about an 18 percent increase in their monthly bills.

"We are particularly concerned with Northwest Natural Gas' proposal to introduce decoupling to its Washington customers," Ffitch said. "Decoupling removes the incentive for customers to conserve energy and can potentially be an unfair windfall for company revenues."

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