State regulators approve Puget Sound Energy rate case settlements

LACEY, Wash., December 23, 2022—On Thursday, state regulators approved hundreds of millions of dollars in rate increases for Puget Sound Energy electric and natural gas customers beginning January 1, 2023. PSE services natural gas to Snohomish County.

The Utilities and Transportation Commission approved three settlement agreements establishing a multi-year rate plan for the company as required by recently enacted legislation.  The approved settlements cover a two-year period beginning Jan. 1, 2023.

PSE’s electric net revenue will increase by $223 million on Jan. 1, 2023, followed by an additional increase of $38 million on Jan. 1, 2024. PSE’s natural gas net revenue will increase by $70.6 million on Jan. 1, 2023, and by $18.8 million on Jan. 1, 2024. 

The typical residential electric customer using 800 kWh of energy per month can expect an increase of $7.75 or 8.7% per month in 2023 for an average monthly bill of $96.65 and an additional $1.67 or 1.7% increase per month in 2024 for an average monthly bill of $98.32. 

The typical natural gas residential customer using 64 therms per month can expect an increase of $4.87 or 6.4% per month in 2023 for an average monthly bill of $80.56, and an additional $1.34 or 1.7% per month in 2024 for an average monthly bill of $81.90. 

The three settlements address issues around establishing the company’s overall revenue requirement; credits for customers of PSE’s Green Direct program, which provides clean power to corporate and government customers; and the recovery of costs for a portion of the Tacoma Liquified Natural Gas Facility.  

In October PSE filed with the UTC to increase natural gas rates effective on November 1, 2022.

Revenue Requirements Settlement 

Under the settlement, PSE must improve the distribution of low-income assistance, map and address long-term overdue bills, and improve low-income conservation and weatherization incentives. 

PSE also agrees to a partial write-off of certain costs associated with the coronavirus pandemic. To support low-income customers, the settlement requires PSE to work with its Low-Income Advisory Committee to develop, and submit to the commission for approval, a plan for low-income discounted rates and managing increased customer debts due to the pandemic.  

Additionally, the settlement addresses environmental and clean energy considerations, allowing recovery for: 

  • costs to increase public access to electric vehicle charging, 
  • decarbonization research, 
  • a pilot program to promote electric heat pump use for home and building heating, and 
  • reporting requirements to measure PSE’s carbon emissions. 

Parties to the revenue requirement settlement are UTC staff, Puget Sound Energy, the Alliance of Western Energy Consumers, Federal Executive Agencies, Walmart, Inc., The Energy Project, Kroger, Co., the Northwest Energy Coalition, the Sierra Club, Front and Centered, Microsoft, and Nucor Steel Seattle, Inc. 

The Public Counsel Unit of the Attorney General’s Office – which represents residential and small business customer interests before the commission – supported the revenue requirement settlement with certain exceptions. King County did not join or oppose this settlement. The Coalition of Eastside Neighborhoods for Sensible Energy opposed the portion of the settlement relating to transmission investments in King County east of Lake Washington, which the commission approved.    

Green Direct Program Settlement 

PSE’s Green Direct program allows corporate and governmental customers, such as cities or counties, to voluntarily purchase 100% of their energy from dedicated local and renewable energy sources. The costs of this program must be funded by Green Direct customers, and PSE may not shift costs to other PSE ratepayers.  

PSE serves its Green Direct customers statewide using dedicated wind and solar facilities in Thurston, Lewis, and Klickitat County. Because the power generated from these facilities does not precisely match the customers’ power needs, the company uses any excess power for its system and pays an energy credit to Green Direct customers. The settlement provides Green Direct customers a credit of $47.826 per MWh, increasing by 2% annually.  

The agreement does not make any changes to the Green Direct energy charge or the program’s cost and benefits tracking. 

Parties to the Green Direct Settlement include UTC staff, Puget Sound Energy, the Public Counsel Unit of the Attorney General’s office, and Green Direct customers King County and Walmart, Inc.  

Other parties to PSE’s rate case who neither joined nor opposed the settlement include the Alliance of Western Energy Consumers, The Energy Project, the Northwest Energy Coalition, Front and Centered, the Sierra Club, Federal Executive Agencies, and Kroger Co. 

Tacoma LNG Plant Settlement 

The commission approved the Tacoma LNG Plant Settlement, which allows PSE to begin recovering costs, subject to later review and possible refund, for the portion of the Tacoma Liquefied Natural Gas facility that serves customers of PSE’s natural gas utility. The approved settlement relates only to the allocation of costs to PSE’s utility customers and is designed to ensure that PSE’s gas customers are not subsidizing PSE’s unregulated activities, such as providing LNG to marine shippers.  

The commission is not responsible for siting or permitting the LNG facility, and its order focuses only on the allocation of costs. The company must file a request to recover additional costs when it files its annual Purchased Gas Adjustment in 2023. Parties to the Tacoma LNG settlement are UTC staff, Puget Sound Energy, the Alliance of Western Energy Consumers, Walmart, Inc., Kroger Co., and Nucor Steel Seattle, Inc. 

Customer advocate groups The Energy Project, the Northwest Energy Coalition, the Sierra Club, and Front and Centered did not join or oppose the Tacoma LNG settlement. The Puyallup Tribe of Indians and the Public Counsel Unit of the Attorney General’s Office opposed this settlement agreement. Other parties to the rate case did not participate in the Tacoma LNG settlement. 

Bellevue-based PSE provides electricity service to more than 1.1 million electric customers in eight Washington counties: Island, King, Kitsap, Kittitas, Pierce, Skagit, Thurston, and Whatcom. PSE also provides natural gas service to more than 800,000 customers in six Washington counties: King, Kittitas, Lewis, Pierce, Snohomish, and Thurston.   

The UTC is the state agency that regulates private, investor-owned electric and natural gas utilities in Washington. It is the commission’s responsibility to ensure regulated companies provide equitable, safe, and reliable service to customers at reasonable rates, while allowing them the opportunity to earn a fair profit.   


SOURCE: Utilities and Transportation Commission press release

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