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News / Northwest

Puget Sound Energy proposes rate increases

By Amanda Zhou, The Seattle Times
Published: March 2, 2024, 5:53am

SEATTLE — Puget Sound Energy, the state’s largest provider of electricity and natural gas, proposed its two-year rate hike to the Washington Utilities and Transportation Commission this month.

Under the proposal, the typical residential electricity customer would see a monthly increase of $7.84 starting in 2025 and an additional $11.20 in 2026. The typical natural gas customer would see a $13.96 increase in 2025 and $1.51 in 2026, according to the utility.

The increases would amount to increases of about 17 percent and 20 percent over two years for residential electric and gas customers, respectively, according to Puget Sound Energy.

PSE must have any rate increases approved by the utilities commission, which reviews them in proceedings that can take up to 11 months. The commission may choose to set and structure the rates differently.

The utility is arguing that the plan is necessary to provide safe and reliable energy to its 1.5 million customers, and the rates are intended to pay for a variety of investments, including around $430 million in upgrades to its hydroelectricity dams on the Baker River and a $530 million wind farm in Montana that will power 83,000 homes in 2025.

Puget Sound Energy’s last rate increase in 2022 was contentious as the utility, environmental groups and the utilities commission discussed how to cut emissions equitably. PSE has said that it will have a steep path to climb to comply with the state’s two landmark laws intended to mitigate the worst impacts of climate change: the 2019 Clean Energy Transformation Act and the 2021 Climate Commitment Act.

The laws require utilities to transition toward carbon-free or non-emitting sources of electricity and meet emissions targets, among other requirements. To comply, Puget Sound Energy will need to shift away from natural gas and coal, which made up nearly half of its electricity generation in 2022.

To meet that goal, PSE has said it will need to acquire 6,700 megawatts of renewable or non-emitting generating power by 2030, which is more than what the utility has acquired in its 150-year history. It is now advocating for a bill in the Legislature that would allow it to possibly combine its gas and electric ratepayers, among other changes that the utility argues are necessary for its clean energy transition.

In its last rate proceeding, the commission and the utility ultimately agreed to an increase of $4.88 and $1.33 per month for the typical residential natural gas customer in 2023 and 2024, respectively, and $8.73 and $1.43 for the typical residential electricity customer.

Also included in that settlement was a pilot program that would offer financial incentives for around 10,000 PSE customers to switch from gas to electric heat.

According to Puget Sound Energy, natural gas use declined 7 percent for residential customers and 3 percent for commercial users between 2022 and 2023 because of a combination of factors.