Puget Sound Energy to transition customers from natural gas to electricity.
In a recent late-night session, the House narrowly decided to send Governor Jay Inslee one of his priority bills for the session. House Bill 1589 is a controversial measure that directs providers like Puget Sound Energy (PSE) to transition its customers from natural gas to electricity. The final vote was 50-45, with two members excused. The bill is a major priority for Inslee and the environmental community this year. The Governor signed the bill in late March.
PSE argues that it needs regulatory changes at the Utilities and Transportation Commission to allow it to meet its climate targets under the Clean Energy Transformation Act and the Climate Commitment Act. These acts envision the generation of far less carbon as utilities deliver energy to homes and businesses in greater Puget Sound.
The company has some 1.1 million electricity customers and 790,000 gas customers. It expects to have more of the former and fewer of the latter in the future as gas prices increase and consumers convert to heat pumps and electric stoves. Gas consumption across the company’s system is already down compared to a year ago, as are new hookups.
Among other things, the bill would allow PSE to seek to recoup the cost of its existing gas network from ratepayers more quickly while the company still has many gas customers. PSE would like to pass along the costs of building new sources of green electricity in the near future. These new costs would likely add up to higher rates for consumers. Even without the bill, PSE recently sought to increase rates, so these new costs are not the sole driver of increased rates for consumers.
Actual increases under the bill will likely take more than a year to kick in. Exactly who gets a rate hike will be complicated by the fact that PSE is just the gas company in some places, just the electric company in some places, and both in others. Critics of the bill argue that it’s a sweetheart deal for PSE that will drive up costs for ratepayers and saddle consumers with high costs for transitioning from gas to electric appliances. The bill drew strong opposition from business interests including the Building Industry Association of Washington and the Washington Hospitality Association.
Several groups, including Sierra Club, Washington State Budget and Policy Center, Washington State Community Action Partnership, and Sightline Institute, had urged Governor Inslee to provide a partial veto on “accelerated depreciation” language in the bill that would disproportionately affect low- and moderate-income households. The language remained in the bill at signing, which goes into effect immediately.