Washington State Legislature Rejects Natural Gas Prohibition Measure

The Washington state legislature failed to pass a measure that would have established a national precedent by prohibiting Puget Sound Energy from using natural gas in new projects. House Bill 1589, which had passed the House with a large majority on March 6, had made it to the Senate Rules Committee and was ready for a vote on the Senate floor.

On the last day of the session, the measure was sent back to the House Rules Committee, which will remain until it is reintroduced next year.

The bill’s opponents raised concerns since the natural gas prohibition would go into effect at the start of July. Still, supporters pointed out that it only affects future building projects, not the existing stock.

On March 28, at an Environment, Energy, and Technology Committee hearing, R-Shelton Senator Drew MacEwen criticized the measure for moving “too far and too fast.” Dropping the price of natural gas over the edge tomorrow would be disastrous for households and companies that rely on it.

The law doesn’t single out PSE, but since the natural gas prohibition only applies to utilities with more than 500,000 retail gas customers in the state, the idea would only apply to PSE. PSE is the biggest utility supplier in the state, with 800,000 natural gas consumers across six counties, and is a staunch supporter of the measure.

The requirements of this law are closely related to the Clean Energy Transformation Act of 2019, or CETA, which mandates that utilities achieve carbon neutrality by 2030 and carbon neutrality without emissions by 2045.

In a statement, PSE Media Engagement Program Manager Gerald Tracy wrote to The Center Square that “we believe that additional complementary policies are still needed for us to deliver on these laws and protect our customers, which is why we supported HB 1589. Regardless of the state session outcome, we will continue on our path to deliver clean, affordable, and reliable energy to our customers.”

All of PSE’s required renewable energy to meet CETA standards would have been owned by PSE at a 60% stake if the original law had passed. The figure was lowered to 50% in later drafts of the law. At the committee hearing, Addy Republican Sen. Shelly Short said the plan was an “arbitrary micromanagement of our utilities” and sought an amendment to eliminate that clause.

Legal ramifications were another issue brought up by the bill’s detractors. State Attorney General’s Office: “Require integrated system planning, or de-carbonization and electrification plan rulemaking, and the plans themselves would be heavily litigated.”

The fiscal note for this measure estimates that the Attorney General’s Office would incur an extra $1.3 million in expenses through the 2027-29 biennium. The Alliance of Western Energy customers, representing 40 industrial and data center energy customers, was among the entities that lobbied against the law.

According to Executive Director Measure Gaines’s interview with The Center Square, the organization has two key concerns with HB 1589: content and presentation. “This kind of came out of the blue for most of us,” he said. Gaines was the Vice President of Energy Supply at PSE, where he had worked for the company for 25 years.

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He called the plan to prohibit new natural gas connections in homes and businesses “premature.” He said that in the long run, natural gas would be necessary to switch to greener energy sources.

“The industrial [consumers] weren’t mentioned, but you could imagine evolving to that before long,” he said. “Industrial don’t have the ability to move and react very quickly.” Members of the sector also voiced concern about the bill’s potential financial effect on customers and the absence of a price ceiling or maximum rate rise.

“My guess is the number would be very high,” Gaines said. “My hope is the company will be more open to engaging with customers and their fellow gas utilities in the state.”

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