UTC staff: Cascade revenue increase request not in ‘best interest of customers’

Staff with the Utilities and Transportation Commission have recommended a rate decrease for Cascade Natural Gas customers, saying the Kennewick-based company’s revenue increase request was not “in the best interest of customers.”

In testimony filed Nov. 20, UTC staff found that Cascade’s 5.5% requested revenue increase is not necessary to cover company costs or for customers, especially those facing significant pandemic-related financial hardships.

In its request, Cascade cited a
$14.3 million revenue deficit. UTC staff found fault with the company’s submitted costs and instead calculated a revenue surplus of $508,968, according to a UTC news release.

To avoid a future surplus, staff recommended the company reduce rates by the surplus amount.

A significant part of the company’s request was $66 million in projected plant investments for 2020. UTC staff verified that Cascade completed four projects totaling $6.9 million.

UTC staff objected to Cascade’s request to increase its rate of return to 7.54%, recommending the commission instead set the company’s rate of return to 6.93%.

Cascade also requested $1 million to increase employee salaries by 3%, which if approved would be the third year in a row for such a wage increase. UTC staff recommended that the commission deny this request.

Under the staff’s proposal, the average residential customer using 56 therms a month would see a bill of $56.61, a decrease of $0.11, or -0.19%.

The UTC will hold a virtual public comment hearing at 6 p.m. Jan. 26, 2021, for customers who want to comment on the rate proposal.

Customers also can submit comments online at utc.wa.gov/comments; via email to comment@utc.wa.gov; by mail to P.O. Box 47250, Olympia, WA, 98504; or toll-free at 1-888-333-9882.

The three-member commission, which is not bound by the company’s request or staff’s testimony, will make a final decision on the utility’s rate increase request in the spring. New rates would go into effect May 21, 2021.

Cascade serves almost 220,000 residential and business customers in 68 communities throughout the state, including Kennewick, Aberdeen, Bellingham, Bremerton, Longview, Moses Lake, Mount Vernon, Sunnyside, Walla Walla, Wenatchee and Yakima.

The UTC is the state agency that regulates private, investor-owned electric and natural gas utilities in Washington.

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