AG Brown continues fight against excessive energy rate increases with challenge to PSE rate increase

Washington Attorney General Nick Brown today took another important step in his effort to defend consumers from fast-rising utility bills, arguing against Puget Sound Energy’s (PSE) steep price hikes for gas and electric service.

“We need to fight to keep Washington affordable for everyone,” said Brown. “PSE should only raise prices on consumers when necessary and reasonable, and we do not think that is the case here.”

In expert testimony filed Tuesday with the Utilities and Transportation Commission (UTC), the AG’s office is challenging the energy utility PSE’s proposal to increase customer electric rates by 29% and gas rates by 20% over the next three years. The AG’s office argues that these increases are excessive and unreasonable. 

The AG’s office offers a different plan. By lowering PSE’s return on equity to the actual cost of capital, asking shareholders to pay their fair share of expenses such as insurance, investor relations, and executive compensation costs, and by demanding PSE more accurately estimate future costs, the AG’s office believes PSE could save customers as much as $695 million in 2027 alone. The AG’s office will continue to identify more potential savings as the case progresses. 

The AG’s Public Counsel Unit keeps private utilities accountable to ratepayers by opposing unfair or unreasonable price increases. This role is more important than ever as many private utilities are dramatically raising prices, and the cost of living is increasing. This year, the Public Counsel Unit has also advocated for lower prices in Southwest Washington and Eastern Washington. 

PSE is a private, for-profit utility company which the state has licensed to operate as a monopoly in western Washington, serving 1.2 million electric and 900,000 natural gas customers. Private utilities in Washington don’t get to unilaterally set customer rates. Instead, they propose rates which are then approved or denied by the UTC. Under state law, utility companies may only impose rate increases on customers that are “fair, just, and reasonable” and are in the public interest. 

If the proposed rate increases are approved by the UTC, PSE would increase electric rates by 17% in January 2027 or $28.31 per month for the average household. Gas rates would increase by 13% in January 2027 or $13.63 per month for the average household. 

Rates would continue to increase in 2028 and 2029. By 2029, the average customer’s electric bill would have increased $50.58 a month or $606.96 per year, and their gas bill would have increased by $21.96 a month or $263.52 per year, compared with current rates. Under PSE’s proposal, they would collect an extra $3.396 billion from customers over the next three years. These increases are on top of the massive rate increases PSE customers have already endured: between 2020 and 2025, PSE’s electric rates nearly doubled. 

In 2025, PSE paid $62.9 million in dividends to their shareholders. In 2024, it was an eye-popping $175.9 million in dividends. On average, 12% of customers’ electric bills and 11% of their gas bills go to paying investors rather than for services. 

PSE also spends customer money on projects that are not related to providing services. The AG’s office argues that spending on these items should come out of the pot of money PSE uses to pay shareholder dividends, rather than money customers pay as part of their electric and gas rates:

• Increasing the pay of executives. PSE’s CEO received total compensation of $6.4 million in 2024. PSE’s CEO was paid 55 times more than the median PSE employee last year.
• Marketing. PSE spends customer money to advertise itself to its own customers, who have no choice about their electric or gas service.
• Lobbying elected officials. PSE also spends customer money to lobby Washington state government. 

PSE’s requested rate increase would guarantee PSE a profit margin of 10.8% over the next four years. Their current profit margin is 9.9%. The AG’s office instead urges the UTC to support a lower profit margin of 8.17%. 

In addition to its proposed rate increase, PSE also wants to shift all the risk for power market volatility onto customers. Currently, when power is more expensive than PSE expects, customers and the company share that unexpected cost. Under PSE’s proposal, customers would instead foot the bill for 100% of higher power costs from events like the Iran War. These costs would be in addition to the rate increases over the next three years. PSE has not provided any estimates of how much this change would cost customers.

The AG’s office will continue to take a firm line with Washington utility companies who overcharge their customers. Attorney General Brown says that energy costs are a burden for many households, particularly on top of other increases in the cost of living. More than 30% of people living in PSE’s service area are housing-burdened, meaning that they spend more than 30% of their income on housing. Research shows that high utility prices are correlated with more evictions. Brown says that no one should lose their home because a utility company unnecessarily raised the cost of electricity. 

The UTC will host an in-person comment hearing at 6:00 p.m. on September 29, and a virtual public comment hearing at 6:00 p.m. on October 7. The public may participate in the virtual hearing through Zoom or phone.

Comments may also be sent to the Commission by email at comment@utc.wa.gov, by mail at P.O. Box 47250, Olympia, WA 98504, or by phone at 888-333-9882 (toll-free).

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