Environmental justice organizations announced several victories in a Dec. 22 settlement with regulators and the for-profit utility company Puget Sound Energy (PSE) that limits the amount that the company can raise rates and locks in a commitment to move away from fossil fuels.
The deal allows the company to increase its monthly electricity rates for an average household by 8.4 percent in 2023 and 1.7 percent in 2024. Monthly gas rates will increase by 6.4 percent for the average customer in 2023 and 1.7 percent in 2024.
PSE is the largest private, investor-owned utility company in the state of Washington, serving approximately 1.1 million households with electricity and 900,000 households with natural gas. In 2021, the company made $260.8 million in profit.
For-profit utility companies are regulated by the Utility and Transportation Commission (UTC). Under state law, companies cannot increase rates by more than 3 percent without a settlement process.
In early 2022, PSE applied for this rate increase, which the UTC contested. This led to a series of negotiations between state regulators and the company. The process also allowed for other stakeholders, such as customers and advocacy organizations, to become parties in the dispute. In the end, PSE was able to reach a settlement with the other groups, allowing the company to increase its prices, though by not as much as its leadership initially hoped.
UTC Director of Consumer Protection and Communications Anna Gill said the commission is responsible for protecting customers and limiting excessive utility company profits.
“The reason that we exist is because these are monopoly services that we all need to survive, right? We need electricity; we need water,” she said.
One of the groups party to the process was Front and Centered, a statewide environmental justice coalition. In a press release, the coalition celebrated several commitments PSE made in the settlement, including an agreement to continue expanding renewable energy production, create a discount rate for lower income customers and begin a pilot program to assist 10,000 households with installing electric heat pumps to replace gas-fired furnaces.
Mariel Thuraisingham, the Front and Centered clean energy policy lead, said that the group would continue to advocate for equity to be prioritized as the utility company transitions to renewables.
“It’s just how [the transition] is done that we are really concerned with making sure that’s done appropriately, because a lot of decisions that are in line with making money are not really in line with making sure that people have access to affordable power,” she said.
Thuraisingham added that PSE being a private, for-profit corporation was a big obstacle to transition, since the company is narrowly focused on maintaining profitability.
“I think profit motives underlie everything that they do and they want to do,” she said. “But I will say that PSE is not overtly pushing back on all of the significant and successful efforts in Washington state to get coal out of the system. I think they’ve given up on that … Gas is getting a lot more pushback, and PSE is not alone there.”
A spokesperson for PSE said the company was unable to respond to a request for comment by press time.
In addition to this rate hike, PSE is also engaging with regulators around its legally mandated transition to clean energy. In 2021, the Washington state legislature passed a law requiring electricity providers to phase out the use of coal-fired power plants by 2025, reach carbon emission neutrality by 2030 and fully decarbonize by 2045.
PSE has begun the process of negotiating its Clean Energy Implementation Plan (CEIP) with the UTC and other stakeholder groups. The commission is soliciting feedback from the public in a video conference hearing scheduled for Jan. 24 at 6 p.m. A final CEIP settlement is expected in the spring.
Read more of the Jan. 11-17, 2023 issue.