Lacey City Council questions affordability of proposed PSE rate plan 

Puget Sound Energy (PSE) customers could see their monthly bills climb through 2029 under a proposed three-year rate plan that would kick in next year.

The proposed rate hikes prompted Lacey City Council members to question how further increases could squeeze family and city budgets. 

If approved, the first increase would start in February 2027. A typical residential electricity customer would pay about $28 more a month in 2027, followed by roughly $7 more in 2028 and almost $16 more in 2029.

Monthly natural gas bills would rise by about $14, $4 and nearly $5 over the same period of time. 

PSE Senior Local Government Affairs Representative Kristine Rompa presented the proposal during a Lacey City Council work session on Tuesday, Nov. 10. The utility serves about 140,000 electricity customers and 60,000 natural gas customers in Thurston County. 

PSE filed a general rate case in February 2026 with the Washington Utilities and Transportation Commission. The commission, which has 11 months to review the request, can approve rates that differ from what the utility proposed. 

Rising energy costs 

According to Rompa, three main factors are driving the proposed increases.

The largest is the cost of meeting clean energy requirements in the state. PSE plans to spend more than $3.6 billion on new wind, solar and battery projects, mostly in the states of Washington and Montana. 

The Clean Energy Transformation Act requires 80 percent non-emitting electricity by 2030 and 100 percent by 2045. PSE has stopped using coal and has more than doubled its clean energy since 2019, Rompa said.

Infrastructure improvements represent another major expense. PSE expects to invest more than $3.2 billion over three years, allocating 70 percent to electrical upgrades and 30 percent to natural gas infrastructure. Rompa said old equipment and more extreme storms and wildfires strain the system. 

Growing demand also adds further pressure. Electric vehicles, building electrification and population growth are pushing consumption higher, and data centers are competing for limited renewable supply. 

PSE annual power costs have jumped since 2019, from $750 million to over $2 billion. The Bonneville Power Administration (BPA) also raised transmission charges by close to 30 percent last year. 

Higher utility expenses are also straining the City of Lacey budget. City Manager Rick Walk said the proposed 2027 general fund budget includes about $850,000 in additional energy costs.

Finance Director Troy Woo estimated the increase at roughly $1.2 million over two years, although part of that amount resulted from previous budgets that underestimated utility expenses. 

Affordability concerns 

Council member Lenny Greenstein asked whether PSE is pressing state lawmakers for more time to spread clean energy costs. He said constituents have complained about rapidly increasing electricity bills. 

“I get the need for the clean energy,” Greenstein said. “But at the same time, people have to be able to afford to live in their houses as well.” 

Rompa said PSE is preparing proposals ahead of the 2027 legislative session, but did not confirm whether the company would seek changes to the 2045 deadline. The utility may request support from municipalities during legislative discussions, and Greenstein offered to testify. 

Council member Maren Turner said she sought public questions through Facebook before the meeting and received about 170 responses. Several people questioned why neighboring public utility districts (PUDs) generally charge lower electricity rates than PSE. 

Rompa said federal law restricts low-cost BPA hydropower sales to public utilities and cooperatives, shutting out investor-owned utilities, such as PSE. 

“We’re way, way, way behind our neighbors that are in PUDs, and so we have a lot of making up to do, and we’re working very hard to do that,” Rompa said. “But we just don’t have access to that energy.” 

Council member Kim Sauer asked whether PSE could postpone investments to ease costs. Rompa said delays could endanger employees and customers because equipment failures can be fatal. 

Turner also raised concerns from constituents that higher rates fund executive salaries and investor returns. 

Rompa said ratepayers cover only a small share of executive pay, for time spent overseeing utility operations. Investors fund the vast majority of executive compensation, plus marketing, her own position and political campaigns, she said, and the law prohibits passing those costs down to customers. 

For struggling households, PSE offers income-qualified monthly discounts of 5 percent to 45 percent through its Bill Discount Rate program. The Home Energy Lifeline Program offers credits up to $1,000.

Rompa said PSE has provided a record $97 million in bill assistance to more than 137,000 customers.  

“We have energy advisors (from) 8 a.m. to 5 p.m. Monday through Friday. You can pick up the phone and talk to them,” Rompa said. “We want to come out and help people save energy.”