Could Puget Sound Energy customers soon lose access to natural gas service?

A potential ban on natural gas lines in new construction in the state appears to be off the table— but now existing Puget Sound Energy (PSE) customers may no longer be guaranteed natural gas service if a new bill passes the legislature.

The amendment proposed by Senator Joe Nguyen, D-White Center, removes a potential ban on natural gas hookups but also changes the definition of what PSE’s “obligation to serve” means.

At the state Senate Environment, Energy & Technology Committee hearing Wednesday, lawmakers considered a new version of House Bill 1589.

The bill’s text reads:

A large combination utility’s obligation to serve may be met by providing a customer with non-emitting energy including, but not limited to, renewable natural gas, green hydrogen, thermal energy networks, electricity, or other sources.”

That means PSE does not have to offer natural gas service to customers if it believes a better option exists.

Critics of the legislation argue it is a step closer to a total ban on natural gas in the state.

Brent Ludeman spoke on behalf of the Building Industry Association of Washington (BIAW) — one of nearly 80 people who signed up to testify about the bill at Wednesday’s hearing. He argued a switch from natural gas to green options is not that simple.

“For consumers to retrofit their homes, we’re talking tens of thousands of dollars to convert their systems. We’re talking about electric and gas rates that are going to go up by 37% or up to 151% for natural gas,” Ludeman said. “Who’s going to pay that cost? Is it going to be Puget Sound Energy? Or is it going to be the consumer?”

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The Senate amendment also prohibits Puget Sound Energy from offering customers rebates to purchase any natural gas appliance or equipment starting in 2025. Commercial and industrial gas customers can still get rebates until 2031. Additionally, companies may offer rebates and incentives for electric heat pumps, including natural gas backups until Jan. 1, 2031.

The original bill would have banned any gas company that serves more than 500,000 customers — specifically, Puget Sound Energy — from connecting new natural gas line hookups to new residential or commercial buildings — with limited exemptions for certain manufacturing, medical care, correctional, and military facilities. That part has been shelved. But now PSE’s legal obligation to provide natural gas service to existing customers, which has been state law since 1911, could be loosened.

The original House bill’s sponsor, Rep. Beth Doglio, D-Olympia, told the committee she is on board with the changes and believes it will help PSE plan for a greener energy future. “This bill doesn’t remove that obligation to provide natural gas,” she testified at the hearing. “But it does include newer energy resources like RNG and green hydrogen, and lets the Washington Utilities and Transportation Commission evaluate and approve the utilities’ use of these technologies to meet customers energy needs.”

Scott Hazelgrove with the Master Builders Association of King and Snohomish County disagreed. “Under the current system Puget Sound Energy is struggling to be able to run its utilities in a way that is dependable for consumers,” he said. “We do not believe that it’s appropriate at this time to move forward with a plan that will further jeopardize customers.”

Puget Sound Energy emphasized that even if the bill passes, existing customers will not be left out in the cold as the company works towards replacing natural gas with cleaner energy options.

“We think the gas business is vital to meeting our customers’ current energy needs. We’re approaching decarbonization of our system in a measured, thoughtful way that considers the impact to our customers and our energy delivery systems.” a PSE spokesperson told KIRO Newsradio.

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The company is hard pressed to decarbonize rapidly, mainly due to the Clean Energy Transformation Act that requires Washington’s electric utilities like Puget Sound Energy to eliminate carbon emissions from their energy resources by 2045. Washington law also mandates the state become carbon-neutral by 2050. The ambitious goals have Puget Sound Energy under pressure put changes in place for the future as quickly as possible. The legislation removes some red tape to allow the company to combine its plan for electrical service and natural gas service into one cohesive utility strategy.

“This bill will allow us to figure out how to plan for a future where we have these really ambitious climate targets, and we have customers who want safe, affordable, reliable and green energy supply,” says Matt Steuerwalt, PSE’s senior vice president for external affairs.

Whether or not the bill passes— limitations on natural gas may be coming regardless. The Washington State Building Code Council is already adopting many of the same restrictions that the legislation covers. The move faces legal challenges, including one from BIAW and an additional federal lawsuit. As of now, the council has voted to delay the codes’ implementation date to Mar. 15.