Volume 3, Number 9 - May 29, 2003
brought to you online by Pinedale Online
Pacific Power files for rate increase
Pacific Power filed a request Tuesday with the Wyoming Public Service Commission to increase electric prices for its Wyoming customers, including customers in Sublette County.
The company is seeking an increase of about $42 million in Wyoming revenues. That equals an increase in base electric prices of about 13.1 percent. Increases to customers would vary depending on customer location and whether the customer is residential or commercial. The price changes would take effect in 2004.
If the price changes are approved, the monthly increase for an average standard residential customer in the company's east Wyoming service area would be $3.57. In its western Wyoming area (Uinta, Lincoln and Sublette counties), the increase for an average standard residential customer would be $2.30 a month.
The increase in electric prices is necessary due to significant cost increases the company has experienced over the last 12-18 months. Among the costs cited by the company in its request are triple-digit percentage increases in some insurance costs and double-digit percentage increases in pension and health care costs along with increases in other operating costs.
"Cost increases are a fact of life for all businesses," said Bob Tarantola, Pacific Power's Wyoming vice president. "We have an excellent record of managing our costs over the last 15 years or more. That effort has resulted in extraordinary price stability for our Wyoming customers through the years and electric prices that are among the very lowest in the state and even the nation."
Added Tarantola: "The cost increases we have experienced are significant and were driven by external conditions beyond our control. The price increase we've requested is necessary for us to improve our financial strength to enable us to maintain our electric infrastructure and ensure continued reliable service to customers."
Adding to the need for a price increase, according to Tarantola, is the increasing risk facing the nation's electric power industry. "This is not the same business it was even just a few years ago," Tarantola said. "The recent energy crisis, the security concerns we face in our post-September 11 world and other factors add up to significantly higher risk in this industry. Higher risk means a higher return is needed to attract necessary investment in the company and that, unfortunately, means higher prices for our customers."
Other factors contributing to the need for a price increase are specific deferred tax issues and a reduction in wheeling revenues and other non-power cost-related revenue credits.
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