Puget Sound Energy pushes to curtail its own gas business
Plus an update on prison labor, some recommended reading, and an Observer event after cutoff
It’s not often that a major company asks the state to halt the growth of one of its largest lines of business. But that’s exactly what Puget Sound Energy is doing in the form of House Bill 1589, which would ban most extensionsof the company’s natural gas network as of June 30.
PSE, the state’s largest gas company with nearly 840,000 customers, faces a variety of state mandates to decarbonize its energy mix, including the Clean Energy Transformation Act — mandating a greener power supply — and the Climate Commitment Act, which established a cap-and-trade system for major carbon emitters.
Meanwhile, the state and some local governments have been tweaking building codes to ban the use of gas furnaces and water heaters in favor of heat pumps in new construction. There are also pushes from local, state, and federal governments to replace existing gas-fired appliances with electrical alternatives. All that limits the number of potential future gas customers.
However, PSE is also the state’s largest supplier of electricity, with 1.1 million customers on that side of its business. So it’s looking to come out a net winner as folks shift their energy use from fossil fuels to clean electricity. For example, it figures to take a boatload of customers from oil companies as drivers switch to electric vehicles.
The problem is how to pay for the cost of the transition, including the cost of the existing gas infrastructure, which is currently baked into natural gas rates. Under the current system, that cost could fall heavily on a shrinking base of gas ratepayers in the form of escalating rates. Meanwhile, the shift away from gas envisions a much larger supply of electricity that does not presently exist. Power plants, green or otherwise, are very, very expensive.
This gets us to the parts of the bill, sponsored by House Environment & Energy Chair Beth Doglio, that would actually benefit PSE: Gas and electric rates would eventually get rolled into one rate, spreading the cost across the company’s customers. New mandates for the company to own more of its own generation and how much it should pay others for power would also benefit the company.
Exactly how those costs get passed on to the ratepayers figures to be the real sticking point. PSE says something close to 40 percent of its customers are already “energy-burdened” meaning they struggle to pay the bills. Protecting those folks from big spikes raises some interesting questions.
For example, PSE gas customers in Seattle, Tacoma, and Snohomish County get their electricity from Seattle City Light, Tacoma Power, and the Snohomish Public Utilities District. As they electrify, who gets their share of PSE’s gas infrastructure costs? Conversely, here at Observer World Headquarters on the edge of Vashon Island, we get electricity from PSE but not gas, a situationwe share with a big swath of rural King County and all of Whatcom, Skagit, Island, and Kitsap counties. Do we get to assume the legacy costs of a system that never reached us?
The bill has enthusiastic support from major labor unions, who see decarbonization as decades of work for electricians and others trades. Independent power producers, which currently make money supplying PSE with electricity, are at a hard “no” on the company owning more of its own generation. Although the bill's carefully written to apply only to PSE, other gas companies and Spokane-based Avista, which provides both gas and electricity east of the Cascades, are looking askance.
PSE is among the biggest and most free-spending bipartisan players in Washington politics, both in terms of campaign money and lobbying spending. A bill of this sweep and complexity is a heavy lift. It’ll be interesting to see if they can get it done.
The bill cleared Environment & Energy on a party-line vote on Monday. Its Senate companion, Senate Bill 5562, cleared the Environment, Energy & Technology Committee on Tuesday.
Prisoner pay bill gets whittled down
A bid to end exploitive prison labor we wrote about passed a major hurdle this week, but it took a few hits along the way.
House Bill 1024 from Rep. Tarra Simmons, D-Bremerton, would have guaranteed that prisoners earn no less than the state minimum wageand keep prisoners from paying the financial cost of their imprisonment. Simmons spent years earning little more than a dollar an hour while working in the very prison programs HB 1024 is meant to reform.
Like many ambitious ideas, it came with a steep price tag: some $275 million per two-year budget cycle.
So the version that emerged from the House Appropriations Committee on Monday is about a 10th the size Simmons was looking for, even though Appropriations Chair Timm Ormsby, D-Spokane, was a co-sponsor.
It now guarantees prisoners working under private and non-profit prison programs make at least $1.50 per hour. Prisoners in workforce training programs could earn a maximum of $200 per month.
The amended version also allows higher deductions from inmate pay, including 5 percent for their stint in the clink, and 20 percent each for civil judgments and legal obligations.
Realtors serve up housing policy with your football
Scott Greenstone of KNKX jumped on the big ad push that the Washington Association of Realtors has been running during the NFL playoffs in support of their housing-policy agenda this year. The Realtors spend aggressively in support of their policy goals in general, and they see a unique opportunity this year in the broad push for solutions to the state’s housing crisis. As Greenstone notes, the Realtorsare pushing for things that would stimulate private-sector housing development because more housing transactions equal more sales commissions for Realtors. They've spent nearly $1 million on the campaign so far.
Few felons use restored voting rights
Brandon Block over at Crosscut has an interesting piece on voting — or rather lack of voting — by felons released from prisons. There’s been a big push in recent years to restore voting rights to citizens who have spent time behind bars. The biggest takeaways: Just 414 of the 24,000 state residents with past felony convictions who are now eligible cast ballots in the midterm election last year. Fewer than 10 percent of eligible voters with past felonies have registered to vote.
Come join us to hash over the aftermath of the cutoff
The house-of-origin cutoff — the deadline by which most House bills have to pass the House and Senate bills have to clear the Senate — is traditionally a time for raising a celebratory glass or crying in your beer, depending on how things went. (There was a lot of tear-diluted beer last year. )
Cutoff is March 8 this year, and we’re planning a little shindig the following week to hash over what died and what survived. So mark your calendars for 6 p.m. on March 16 in Olympia and watch this space for details.
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This just in: There’s still some winter left
Pending applications as of that date would still be honored.
PSE was a sponsor of the Observer’s Re-Wire Policy Conference in December.
While Vashon is marked as “combined” on PSE’s service map, large chunks of the island have no gas infrastructure, presumably because not enough people wanted to pay for it.
Which stands at $15.74 per hour in 2023
The Realtors were also sponsors of Re-Wire.