by Don Marsh
The Seattle Times editorial board is right about one thing: Puget Sound Energy’s bills have become unaffordable, with rates nearly doubling since 2020. A typical residential PSE electric customer saw a rate increase of 9% to 12% in 2026. PSE has filed a case with the Washington Utilities and Transportation Commission that proposes increases that total around 30% in 2027 through 2029.
These rate increases are driven by higher fossil gas prices, transmission costs, and the $235 million additional expense that PSE’s forecast assigns to buying carbon allowances for emissions from burning gas. None of the rate increases go toward building clean energy infrastructure. The increase reflects the cost of running a gas-heavy system. And it’s a preview of cost increases to come unless we address how PSE makes its money.
PSE’s profit rate on shareholder investment is almost 10% today, and PSE is asking regulators to raise it to 10.8%.
Sadly, PSE earns nothing for finding cheaper ways to better serve its customers — for example, helping customers install heat pumps and other energy efficiencies.
PSE has financial incentives to keep people buying gas
PSE has a financial incentive to defend its gas business. In Seattle, Tacoma, and other areas served by public electric utilities, PSE sells gas but not electricity. When those customers switch to heat pumps, PSE loses income from these customers. Those who remain on PSE gas must shoulder the cost of maintaining a sprawling fossil gas system.
Rising utility prices punish renters and low-income families who can’t afford to switch.
PSE’s incentives to build and keep people buying gas are now shaping the company’s first-ever “Integrated System Plan,” a 20-year plan for gas and electricity. The reference case at the heart of the plan would double PSE’s existing gas generation fleet and maintain all its retail gas customers for decades.
PSE says the plan would necessitate purchasing pollution allowances costing billions of dollars, and PSE will simply pass these costs on to customers. If you think energy prices are painful now, consider the company’s projections for 2050: electricity costs double and gas costs increase almost fivefold!
This is the fundamental economic conflict between investor-owned, profit-driven PSE and its customers.
Customers want affordable, reliable energy that doesn’t harm future generations. PSE wants to maximize returns for its investors. Until we align these conflicting priorities, PSE will find ways to preserve its fossil fuel investments and raise rates to continue polluting. PSE has dug us into a financial hole, but it was handed the shovel by rules that reward its most profitable business lines. State legislators, regulators, and customers will need to work together to find a clean way out.
Third Actor Don Marsh chairs the Washington Clean Energy Coalition and has participated in PSE’s long-term resource planning process for more than a decade.