Facts about HB 1589

BELLEVUE, Wash. (3/29/2024) HB 1589, passed by the state legislature in March 2024, is a planning bill. It will help PSE, under the supervision of the Washington Utilities and Transportation Commission (UTC), thoughtfully plan for the electric and natural gas choices of our customers consistent with our state’s aggressive climate goals.

There has been a lot of misinformation about HB 1589 as it changed over the course of two legislative sessions, from when it was first introduced in January 2023 to passage by the legislature in March 2024.

HB 1589 does not include a ban on natural gas, and it does not change PSE’s obligation to serve natural gas to our customers.

Why is this necessary?
  • PSE is currently required to file a multitude of different plans for the gas and electric business on different timelines with the UTC. These plans are duplicative and time consuming. This process brings more alignment to our planning for customers and stakeholders while maintaining important standards and benchmarks.
  • Natural gas energy use is declining—down 7% for residential and 3% for commercial customers in 2023 and forecasted to continue to decline over the next five years. Electricity use is increasing and forecasted to continue to rise.
  • Washington state has some of the most aggressive climate policies in the nation. Under state law, PSE must have 80% non-emitting resources by 2030 and 100% by 2045.
  • PSE has dramatically expanded our low-income bill assistance programs and established a new bill discount rate for qualifying customers to protect them through this long transition.

Key provisions
  • Planning — The bill consolidates multiple existing system plans into an integrated plan, streamlining processes and providing more transparency for customers. There will be three years of rulemaking and planning prior to the submission in 2027 of PSE’s first integrated system plan to the UTC.
  • Regulatory mechanisms — The bill clarifies the application of three important regulatory mechanisms for PSE.

    • Certificate of Public Convenience and Necessity (CPCN): To reach our state’s 2030 targets as established by the Clean Energy Transformation Act (CETA), PSE must build or buy more electric generation than we have in our past 150-plus years. A CPCN would help us do that more efficiently. For example, when PSE has a major project—like a transmission line or generation facility--the UTC would review the project at the outset, and then again once the project is completed. This gives the UTC two reviews to make sure the project is prudent and allows regulatory review before PSE invests a significant amount of money.
    • Construction Work in Progress (CWIP): With this tool, costs associated with capital intensive projects with longer lead times could be recovered before the project is completed with UTC approval. This helps protect customers from rate shock as costs are captured over time in smaller amounts, as opposed to being added to customer bills all at once.
    • Accelerated Depreciation: The bill requires PSE to file new depreciation schedules for the natural gas business each time the company files a multi-year rate plan (which PSE did in the filing we made in February). It requires the UTC to set depreciation rates for all the gas plants in service as of July 2024 so that those assets are fully depreciated by 2050. Accelerated depreciation ensures that current customers who are benefiting from the gas infrastructure pay their fair share of the costs before leaving the system, helping to protect against an undue cost burden falling on an increasingly smaller group of customers, particularly those who can least afford it.

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Puget Sound Energy is proud to serve our neighbors and communities in 10 Washington counties.
We're the state’s largest utility, supporting more than 1.2 million electric customers and nearly 900,000 natural gas customers.
We aspire to be a beyond net zero carbon energy company by 2045.
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