Puget Sound Energy files two-year electric and natural gas rate plan

Rate request driven by state’s ambitious clean energy laws, investments in safety and reliability

Bellevue, Washington (2/16/2024) Puget Sound Energy is filing a two-year rate plan request with the Washington Utilities and Transportation Commission (UTC) — a plan necessary for maintaining essential utility services and investing in our infrastructure to ensure the safe and reliable delivery of energy to our customers, while implementing some of the most aggressive energy, environmental and climate policies in the nation.

To comply with Washington state’s Clean Energy Transformation Act (CETA), PSE must acquire new renewable and non-emitting resources of approximately 6,700 MW by 2030. This effectively doubles PSE’s current owned and contracted generating capacity and is more than PSE has acquired in its 150-year history.

“PSE is aggressively pursuing renewable energy resources, from large, utility-scale generation projects to energy produced locally and in partnership with the neighborhoods and communities we serve,” said PSE President and CEO Mary Kipp. “At the same time, we must continue to invest in the safety and reliability of our electric and natural gas infrastructure. This plan sets us on the path to meet the current and future needs of our customers while ensuring that everyone can access and benefit from the transition to a clean energy future.”

Clean energy, reliability, safety and grid modernization

The plan includes significant investments being made to advance clean energy and provide safe and reliable service to PSE’s more than 1.5 million customers. Examples include:

• PSE’s new $530 million Beaver Creek wind farm that will come online in 2025 and provide 248 MW of clean energy to about 83,000 homes
• Large upgrades or modernization projects to existing facilities, including over $430 million to maintain safety and reliability at PSE’s Baker River hydroelectric project, a vital source of clean energy
• Long term power purchase agreements to ensure reliability for customers as coal-fired generation comes out PSE’s generation supply in compliance with state law
• Automation programs using smart technology to considerably reduce the length of power outages
• Circuit modernization programs, such as replacing overhead distribution lines with covered conductor “tree wire,” helping to reduce or shorten power outages
• Deploying an advanced distribution management system to support customers’ growing use of electric vehicles and distributed energy resources, such as rooftop solar, to reduce the need for large infrastructure projects
• Wildfire mitigation and response that includes enhanced vegetation management and infrastructure upgrades, weather stations, AI cameras, advanced safety settings on power lines, and communications and community engagement
• Extending PSE’s efforts to help its customers transition to more efficient and sustainable home heating and cooling technology, focused primarily on underserved customers who face barriers to electrification
• Pipeline reliability investments to ensure PSE’s natural gas delivery system operates safely and is ready to meet customer demands at times of peak need, such as the extreme cold temperatures seen this past January

If the request is approved by the UTC, a typical residential electric customer would see an average monthly bill increase of $7.84 and monthly increase of $13.96 for a typical residential natural gas customer, starting in January 2025. That increases by $11.20 in 2026 for residential electric customers and by $1.51 for residential natural gas customers.

Natural gas rates impacted by reduced customer usage

Natural gas energy use is declining — down 7% for residential and 3% for commercial in 2023 and PSE forecasts a continued decline over the next five years. This is driven by a number of factors including building code changes, the elimination of allowances for gas line extensions, continued energy efficiency and warmer winters on average that mean less demand for heating. Also included is a proposal to accelerate depreciation of the existing natural gas delivery system to help protect against an undue share of the cost burden falling on an increasingly smaller group of customers, particularly those who can least afford it. PSE continues to prioritize investments in the safety and reliability of the natural gas delivery system

Affordability and equity are core components

PSE continually works to keep costs reasonable for customers. Included in the rate proposal are PSE’s new bill discount rate that allows qualified customers to save between 5% and 45% on their bill each month and another program rolling out in fall 2024 that will help customers with past due balances. The bill discount rate and the arrearages program add to a wide variety of PSE assistance programs intended to reduce qualifying customers’ energy burden and increase energy security.

As laid out in CETA and other state policies, a priority is making sure all customers can access and benefit from the clean energy transition. PSE has incorporated equity across the organization in areas ranging from investment decision making, pilot programs, low-income program design, and performance metrics. PSE is committed to ensuring that at least 30% of the energy benefits of energy efficiency, distributed solar and storage and demand response programs benefit historically underserved communities and vulnerable populations.

To help customers and regulators assess PSE’s performance, the company is proposing metrics that cover customer satisfaction, affordability, equity, reliability, resiliency and safety, clean energy progress, load management, adoption of distributed energy resources, electrification, greenhouse gas emissions, and cost controls.

In Washington, any proposed rate changes for an investor-owned utility undergo a review process of up to 11 months by the UTC, which has the authority to set final rates that may vary from PSE’s requests, either higher, lower or structured differently, depending on the results of its review.

Proposed changes by service schedule

The requested electric increase by service schedule is as follows:

The requested natural gas increase by service schedule is as follows: