Opinion: In support of honest, accountable, affordable energy policy

🎧 WA Clean Energy Laws Driving a 30% Rate Hike?

Bill Gaines, executive director
Alliance of Western Energy Consumers

Puget Sound Energy’s proposed retail rate increases under consideration at the Washington Utilities and Transportation Commission (20 percent for natural gas and 30 percent for electricity) are garnering lots of press attention. Deservedly so, as they are very significant increases on top of a 12-percent bump for electricity about a year ago.

Bill Gaines

There are a handful of cost drivers at play, but most significant are Washington’s Climate Commitment Act (CCA) and Clean Energy Transformation Act (CETA).

An Aug. 3, 2026, Clearing Up article, “Environmental Groups Contest Puget Sound Energy’s Proposed Rate Hike Request,” is dripping with irony. The same environmental groups that brought us the CCA and CETA now object to the utility’s consequent rate increase proposals and double down by advocating for even more renewable resources, which—on an unsubsidized apple-to-apples basis that accounts for capacity and reliability attributes—are not cheaper than traditional resources.

Similar sentiments were recently expressed in an op-ed in The Seattle Times by KC Golden, a member of the Northwest Power and Conservation Council and longtime environmental advocate. Golden, who has a dubious diagnosis and prescription for electric reliability, objects to new natural gas-fired generation and says Washington’s climate laws need no change.

But the enviro groups and agencies do not object when a significant share of CCA allowance auction revenues get spent on things completely unrelated to carbon/climate mitigation, presumably due to their unholy alliance with the social justice groups and progressive politicians who want money to use for their own purposes.

As just one example, Washington Gov. Bob Ferguson explicitly announced a diversion of hundreds of millions of dollars of CCA revenues at the beginning of the 2026 legislative session and budgeting process. These same folks try to hide and obfuscate the costs of CCA and CETA by publishing misleading reports about carbon mitigation accomplishments funded by CCA revenues, disallowing (until recently) reporting of CCA costs on utility bills, writing articles about the supposed cost-effectiveness of renewables, ignoring reliability concerns, etc. This is not coherent, accountable policymaking.

It is time to talk straight with ourselves, and with the public, about the energy affordability crisis being caused by Washington’s clean-energy laws, and follow the lead of other blue states and nations that have adjusted their regulations to ensure affordability.

Canada has scrapped its federal fuel charge, with the prime minister calling it “too expensive” and “divisive.” Quebec is considering reforms to address cap-and-trade allowance prices. California has extended operation of large gas-fired generators to ensure reliability. And New York has delayed and modified emissions regulations in response to affordability concerns, with the governor saying the “costly and unattainable” targets impose “crushing costs on New York businesses and residents.”

The ultimate goal of Washington’s laws—CETA and the CCA—has never been coherently articulated. Of course the stated objective is to make the state’s energy sector 100 percent carbon-free, but to what end? Washington could eliminate all of its emissions and it would have essentially no impact on climate change.

There has not been a material change in the percentage of fossil fuel consumed on a global basis for the past 25 years. While Washington and other West Coast states continue to practice economic self-flagellation by trying to curtail the use of abundant and low-cost natural gas, the rest of the U.S. and the world are producing and utilizing gas at ever-increasing rates and are liquefying and shipping it overseas for use by others. This is not to say that Washington should do nothing to address climate change, but what it does do should be accomplished responsibly in a manner that explicitly acknowledges and manages the associated trade-offs, particularly cost and reliability. Good policymaking can never be accomplished through the self-deception of climate absolutism.

It is clear that the CETA timelines for renewable resource acquisition will not be met. This should not be surprising, considering that they were initially set based on climate aspirations, not achievability.

When CETA was passed, the Legislature set the targets out far enough into the future that it could ignore the likely cost increases as theoretical. Now that those requirements are less than four years away and the cost increases are real, advocates for CETA want to continue to ignore them. Forcing utilities to strive for these unrealistic timelines, coupled with new data center and electrification demand, creates intense competition for scarce renewable resources, driving prices up to unanticipated and unnecessary levels.

Legislators wisely included a cost cap in the CETA legislation to protect consumers by allowing utilities an off-ramp if the incremental costs exceed 2 percent of retail sales. However, the cap is not working because the WUTC implemented rules that effectively create a 5 percent (versus a 2 percent) cost cap, apply retroactively—meaning that costs already incurred must be paid by customers—and are unclear as to what costs apply to the cap. PSE indicated it has already exceeded the cap, but it is unclear how the WUTC will react to that. We need to fix the cost-cap rules and set more realistic timelines.

The CCA, once advertised by then-Gov. Jay Inslee as adding only “pennies,” has increased the cost of gasoline by around 60 cents per gallon—an amount roughly equal to the state’s longstanding gas tax, which is the third highest in the nation. The CCA is already impacting natural gas rates, as shown in a recent NW Natural sample bill calculation for southwest Washington customers showing a 9-percent impact. It will get significantly worse as no-cost allowances provided to utilities are ramped down over time.

Meanwhile, the cost of CCA allowances borne by Washington companies and their customers has been $4.5 billion over 3.5 years, already about 80 percent of the $5.6 billion over a 10-year period estimated in the fiscal note when the CCA was adopted. Much of that money is not being used for carbon mitigation efforts as was originally intended. The money that is being used to reduce carbon has not been very effective, as reflected in a recent correction of Washington State Department of Ecology reporting errors that reduced a claimed 7.8 million metric tons of carbon reduction to a mere 0.078 million tons of actual reductions.

Changes to the CCA should consider more stringent allowance price caps, modifications to the emissions reduction trajectory, limits on the use of allowance auction revenues to fund real and high-value emissions reductions, support for industrial decarbonization efforts, and greater flexibility.

The costs of these laws are having real economic consequences. Not just for my members (note Packing Corporation of America’s recent partial shutdown of its mill at Wallula, Washington, citing high energy costs), but for everyone in the state.

By continuing down this path, Washington risks a collapse of its already fragile manufacturing base, requiring the state to import the products it used to make locally with some of the cleanest energy in the country. It is time to get real, get honest, and get to work on necessary improvements to Washington’s (and Oregon’s) clean-energy laws.

Bill Gaines is executive director of the Alliance of Western Energy Consumers, representing the interests of around 40 large industrial consumers of natural gas and electricity. He has had a long career as a senior executive in the regional energy utility industry.

Also read:

share