Puget Sound Energy’s most recent rate proposal would increase electricity rates by nearly 30 percent over three years and gas rates by nearly 20 percent in the same timespan. The proposal also calls for tens of millions of dollars to be paid to the company’s shareholders.
“It is a big rate increase, and it’s on top of another big rate increase that occurred not so long ago.” Bill Gaines said.
Gaines is the Executive Director for the Alliance of Northwest Energy Consumers, an organization that tracks rate filings and advocates for 40 of the largest employers in the Pacific Northwest.
PSE estimated the cost of the increase based on 800 kWh of electricity, 200 kWh more than its tier two rates threshold:
Electricity:
2027: 16.75% ($28/ month)
2028: 3.76% ($7/ month)
2029: 8.91% ($16/ month)
Gas:
2027: 13.32% ($14/ month)
2028: 3.04% ($4/ month)
2029: 3.27% ($5/month)
In 2029, based on that usage, an electricity customer would pay $612 more in a year and a gas customer would pay $276.
“I about crapped my pants,” Jamie Martin, a PSE ratepayer, said when she heard about the proposed increase, “We can’t do that, we can’t afford that. I mean, it’s crazy and I thought last year was bad.”
In 2025 and 2026, PSE increased rates by 11.5 percent and 12 percent, respectively, for electricity customers. Martin, who lives in Mount Vernon, says that forced big changes in their home.
“We’re rarely going out to eat, turning down the thermostat a couple degrees so when we watch TV in the evening, we’re piling on the blankets now,” Martin said.
She’s cancelled vacations to see family and camping trips because of the strain of utility prices and the rising cost of other household staples.
PSE says roughly 70 percent of the rate increase will go towards the electric system that is “under increasing strain.” $3.2 Billion would be spent on improving system safety and reliability, meeting growing demand, and improving the system that will hold up better to severe weather and wildfires, as well as meeting the goal of providing 80 percent of electricity from renewable, non-emitting power sources.
“The rate at which they’re required to aggregate those resources is pretty rapid. And so that’s driving [the cost].” Gaines said.
It comes as solar energy and on-shore wind energy costs less to produce per kWh than coal and some traditional gas-powered generation, even when federal subsidies are excluded. Gaines says the trouble comes with the incentives for utilities to depreciate gas-generating or coal-generating facilities on their balance sheets more quickly than would normally happen and cost of paying for other forms of electricity when solar and wind can’t generate enough power.
“Any existing resource that they own and they’ve made an investment in some time ago is likely to be lower in cost than a new resource,” Gaines said.
Gaines says some states are softening green energy goals to make them ‘achievable in a way that’s affordable for people."
He says there’s more than just energy investments in the proposal. PSE is also asking the Washington Public Utility Commission to raise its return on equity threshold from 9.9% to 10.8%, increasing the money it can give back to shareholders in dividends.
According to the company’s Securities and Exchange Commission filings, it paid $62,887,000 in dividends to shareholders. In 2024, $175,861,000 was paid out in dividends, though a PSE spokesperson says some of that pays off interest on loans and “the bulk of the 2024 payment was to pay off the loan related to [the] Enbridge” gas line rupture from 2018. Still, the spokesperson says that increases returns for shareholders “must be sufficient to attract investors so we can meet growing energy needs and work to comply with Washington’s ambitious clean energy laws.”
A different Jamie Martin, this one is the senior VP and Chief Financial Officer for PSE, testified that customers benefit from giving shareholders more of their rates to get better borrowing costs in the future.
“If the Commission were to authorize a [return of equity] that were too low, borrowing costs would increase, financial and regulatory pressures would intensify, and customers would face higher costs over time.” Martin testified to the commission.
Gaines worked for Puget Sound Energy before private equity purchased the company. He thinks the motivations of the company have changed now that it’s backed by investment firms.
“In my experience, it does increase the pressure on the utility management for financial returns,” Gaines said, “There’s an expectation of financial returns that’s heightened.”
“I’m sure that’s important to the private equity owners,” Gaines continued, “it puts the company, unfortunately, in a position where they maybe are not as much of an advocate for customer interests as we would like to see.”