OLYMPIA, Wash. (Legal Newsline)-Washington Attorney General Rob McKenna's office has reached a deal with Puget Sound Energy to impose a smaller rate increase than the utility had requested initially.

The Seattle-based company, which is Washington's largest utility, will request that the state Utilities and Transportation Commission approve an electricity revenue increase of $130 million, or 7 percent, and a natural-gas revenue increase of $49 million, or 4.6 percent.

Puget Sound Energy originally sought in December a $174.5 million revenue increase for electricity and $56.8 million for natural gas.

The proposed rate schedule, if approved by state regulators, would raise a typical monthly residential electrical bill $7.65, or 8.25 percent. A typical natural-gas customer would pay 5 percent, or $4.15, more a month, the utility said.

The agreement also stipulates that PSE will not to file a new general rate case before April 2009.

"This is a reasonable compromise that will soften the impact to family budgets," said McKenna's Public Counsel Section Chief Simon ffitch.

If approved, the rates would be effective on Nov. 1.

PSE has also agreed to increase low-income resident-assistance programs by $5 million, to $15 million, and to reimburse $50 to customers who report power outages exceeding 120 hours.

Ffitch said one issue that remains unresolved is whether PSE should lose the ability to file for permission to change rates between general rate cases in order to offset additional claimed power expenses.

"These types of cases are part of the reason why customers feel like there is a never-ending cycle of PSE rate hikes," ffitch said.

From Legal Newsline: Reach reporter Chris Rizo at chrisrizo@legalnewsline.com.