The staff of the state Utilities and Transportation Commission (UTC) has rejected most of a proposed rate increase for Puget Sound Energy electric and natural-gas customers.

PSE wants permission to increase its annual revenues by more than $148 million for electric service and $27 million for natural-gas service.

UTC staff members have said the company should only be allowed revenue increases of $6 million a year for electric and $7 million for gas.

Commission staff have also recommended slight increases of 2 cents per month for the basic-service charge to electric customers, and 19 cents per month customer-service charge for natural-gas customers.

According to the UTC staff, the average residential electric customer using 1,000 kilowatt hours per month would see an increase of 30 cents each month, while the average natural-gas customer using 70 therms per month would pay an additional 64 cents per month under these recommendations.

PSE has also asked to increase its shareholder profit margin from 10.15 percent to 10.8 percent. The UTC staff is recommending that the rate be lowered to 10 percent.

The three-member UTC board will make a final decision on PSE’s request for rate increases early next spring, with the changes expected to take effect around April 1.

The Washington State Attorney General’s Office Public Counsel Section, which represents residential and small-business customers in utility-rate cases, is calling PSE’s request “excessive and unsupported.”

“In this economy, PSE could be doing a better job of finding a way to live within its means,” said Public Counsel Chief Simon Fitch.

PSE has made 10 requests to increase rates in the past seven years, but the company also reduced its rates by around 18 percent in 2009.

Public Counsel made a list of recommendations to the UTC staff regarding PSE’s proposal. Among them are suggestions that the company credit ratepayers with $51 million in revenues from its sale of renewable-energy credits to California, and eliminate the cost of a supplemental retirement plan for PSE’s highest paid officers and executives.

PSE says it requested the rate increase to recoup costs from investments made in 2008, such as a $240-million gas power plant in Cowlitz County and a $100-million expansion of a wind-generator facility near Ellensburg.

“The rate request seeks recovery of costs for new resources like that, and for infrastructure – what we call pipes and wires – to serve new customers and improve reliability,” said PSE spokeswoman Dorothy Bracken.

PSE customers will have a chance to comment about the proposed rate increases at a series of meetings throughout Western Washington between Dec. 7 and Jan. 19. One of the events will take place on the Eastside Dec. 10, 6 p.m. at the Lake Washington Technical College Auditorium (11605 132nd Avenue Northeast, Kirkland).

Customers who are unable to attend the meetings can submit statements one of three ways:

• Mail to P.O. Box 47250 Olympia, WA 98504

• E-mail comments@utc.wa.gov

• Call 888-333-9882

The UTC staff has received 131 public comments to date on PSE’s proposed rate increase, with none the opinions in favor of it, 125 opposed, and six undecided.

PSE plans to issue a full response to the UTC recommendations on Dec. 17. The company serves more than 1 million electric and 725,000 gas customers in Western Washington.