Natural gas customers in southwest Washington could be staring down a hefty increase on their monthly bills, and the state’s top lawyer is not having it.
On Wednesday, Washington Attorney General Nick Brown formally challenged a proposed settlement that would raise natural gas rates for tens of thousands of households in the region. The multi-party deal would deliver roughly a 19% jump in the first year, which works out to about $13 more per month for a typical household, followed by smaller increases in 2027 and 2028. Brown argues the proposal locks in an overly rich profit margin for the utility and pushes costs that should fall to investors onto customers who have no real choice but to pay.
AG’s challenge
Brown’s Public Counsel unit filed testimony saying the settlement would guarantee Northwest Natural a 9.5% return on equity while letting the company recover about $4 million in added expenses for executive pay, trade group dues and investor relations. That is on top of roughly $81 million the company is expected to return to shareholders in 2025, according to the office. “Utility companies provide critical services, but the push for profits should not be forced onto the backs of captive consumers,” Brown said in a statement. Public Counsel declined to sign onto the settlement and urged the Utilities & Transportation Commission to reject it, according to the Washington Attorney General's Office.
What the settlement would do
Most of the parties in the case filed a stipulation on March 23 that would spread about $36.5 million in revenue requirement increases over three years: $20.1 million in Year 1, $7.7 million in Year 2 and $8.7 million in Year 3. The increases are tied to new plant investment and a growing rate base. The deal assumes a 50/50 debt to equity capital structure and a 9.5% return on equity, and it would take effect starting Aug. 1, 2026 if state regulators sign off, according to Northwest Natural’s filing with the Securities and Exchange Commission.
Northwest Natural responds
NW Natural, for its part, told reporters the increases reflect rising costs to operate and maintain a safe and reliable gas system. The company said the settlement trims back its original request while still funding work it views as necessary, and that spacing the hikes over three years helps balance customer impacts with investment needs, according to KOIN. NW Natural did not immediately offer additional comment beyond what is in its filings and public statements to regulators.
Regulatory path and public input
The case, filed as docket UG-250610, is now in the hands of the Washington Utilities & Transportation Commission. Regulators have scheduled a virtual public comment hearing for April 30 and a hybrid evidentiary hearing for May 4, where commissioners will dig into the settlement terms. Materials in the commission’s docket lay out projected bill impacts for customers with different usage levels and note that regulators must decide whether the agreement results in rates that are fair, just and reasonable. Members of the public can review documents and submit comments through the commission’s online case page, according to the UTC docket.
Why customers are watching
Consumer advocates and the Attorney General’s Office say that a guaranteed 9.5% return, combined with the ability to recover certain corporate expenses, raises the risk that households are effectively asked to underwrite shareholder payouts and higher executive compensation. Public Counsel highlighted the dividend payments and top executive pay cited in its testimony as reasons for regulators to tighten the deal, according to the AG's filing. The utility counters that the commission will fully review what costs are prudent and what customer protections are needed before any new rates take effect, and that an approved profit level is part of how it continues to invest in system safety and reliability.
