Gas bill rates to increase for Puget Sound customers

Starting Oct. 1, Puget Sound Energy customers may notice their natural gas bills are a little higher. But the reason for the increase will not be on the bill is due to the recent ruling by the Washington Utilities and Transportation Commission (UTC).

The increase stems from Washington’s Climate Commitment Act, more commonly known as the “cap and invest” program. The legislation, passed in 2021, requires the state’s biggest polluters to reduce their carbon emissions or purchase allowances to cover them.

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Bellevue-based Puget Sound Energy provides electricity service to more than 1.1 million electric customers and natural gas service to more than 800,000 others. The company is currently required to pay $16.8 million for its emissions under the Climate Commitment Act, according to a letter earlier this month from the commission. That cost will now be passed on to customers. It’s estimated to be an average increase of around $3.71 per month or 3.89%, with lower rate increases for lower-income customers, according to recently released documents from the UTC.

“The program puts a price on greenhouse gas emissions emitted in the state and thereby increases the cost to deliver electricity and natural gas to our customers,” Puget Sound Energy Director of Communications Christine Donegan said.

Rate warning came in 2022

The company warned customers of this potential increase last year. To offset the new charges, Donegan explained the company purchases carbon “credits” at state auctions, “which are basically a compliance instrument to cover emissions and comply with the program.” Those credits ultimately reduce the cost passed down to consumers — but not enough to cover the charge — which is why rates will go up.

But in October, customers will only see the “credit” on their bills, not the charge.

“We wanted to put the charge on the bill,” said Donegan. “The idea is to always be transparent about any rate increase that’s occurring for our customers.”

But the commission ruled it would be too confusing.

“Only those charges or credits that inure to the benefit of customers should be included as line items on customer bills,” the UTC letter stated. “For that reason, we require (Puget Sound Energy) to include the ‘carbon reduction credit’ on customer bills, which will also signal an economic incentive for consumers to reduce their own carbon emissions.”

In a blog post Friday, Washington Policy Center Environmental Director Todd Myers wrote this policy is not only dishonest but violates the spirit of Washington’s laws and constitution.

“The position of the public counsel in the Attorney General’s office is that they know what the public should know and what they shouldn’t,” Myers wrote. “The claim that transparency is bad for the public is remarkable and revealing.”

The rate increase is also not finalized. Donegan said it could change due to the market-based nature of the cap-and-invest program.

“We started complying with the (Climate Commitment Act) Jan. 1, but we haven’t charged customers anything for it yet,” Donegan said. “So, there’s kind of a catch-up period. And we’ll also be doing a filing that looks at what those costs might be going forward.”

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That could mean another increase — or it could mean getting your money back. The commission ruled all costs PSE passes down to customers “should be subject to further review and possible refund in a future proceeding.”

And it’s possible the charge could appear as a line item on the bill at a later date. AGO Assistant Attorney General Nina Suetake wrote in a July 3 letter to the UTC that they “believe the issue of whether to itemize these charges and credits on bills requires more discussion in upcoming workshops to ensure that the itemization would add to customer understanding and experience, rather than unnecessarily complicate utility bills.”

While the “carbon reduction charge” may not show up on the bill, Donegan said the state has set clear expectations for educating the public about changes resulting from the Climate Commitment Act. “We’re talking with them, we’re out in-person meeting with them, answering questions about what this program is, and then referring them to resources.”

More information can be found on Puget Sound Energy’s website here.

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