# Washington Natural Gas Policy, Electrification & Ratepayer Brief

**For:** Anton Stetner (Washington State)  
**Prepared:** Oct 1–2, 2026 (PT)  
**Scope:** Evidence-backed policy/energy brief after the WA Supreme Court struck down Initiative 2066

---

## Key findings

1. **The court did not create a “gas ban.”** On **Sept 17, 2026**, the Washington Supreme Court struck down **Initiative 2066 (I-2066)** — a voter-approved *pro-gas* measure that would have rolled back electrification policies — for violating the constitutional **single-subject rule**. What remains in force are prior policies: chiefly the **2021 Washington State Energy Code (WSEC)** heat-pump rules for **new construction**, plus **HB 1589** obligations for PSE.

2. **Existing homeowners are not forced to retrofit.** Neither the court ruling nor the statewide energy code requires current residents to rip out gas furnaces, water heaters, or ranges. Gas remains legal for cooking/fireplaces in new homes under WSEC, with limits on **primary** space and water heating.

3. **Roughly one-third of WA homes heat with utility gas** (~32.5% in 2023 ACS-derived figures); electricity heats ~60%. About **40% of WA single-family** homes use gas for heating (NEEA). King County ~**41.3%** gas / **54.5%** electric; Snohomish County ~**43.1%** gas / **52.8%** electric (ACS 2020–2024).

4. **New-build impact, not forced existing-stock conversion.** King County alone authorized on the order of **~10,000** private housing units via permits in recent years; those new homes must generally use heat pumps for primary space/water heat. Existing gas customers (~900k PSE gas accounts statewide) are **not** ordered off gas.

5. **PSE bills are rising hard** — driven by CCA compliance, CETA resource buildout, and grid investment — not by a court-ordered retrofit mandate. Net **~12% electric** and **~7% gas** residential increases effective **Jan 1, 2026**; a further multi-year GRC proposes large 2027–2029 increases.

6. **Common confusion:** This is mainly **building-code regulation of new construction** (and some commercial remodel triggers), **not** a statewide ban on selling gas appliances to existing homeowners, and **not** a forced retrofit law.

---

## 1) Natural gas ban / court ruling

### What was at issue?

- **Initiative Measure No. 2066**, approved by voters in the **November 2024** general election. Ballot title: regulating energy services including natural gas and electrification; would “repeal or prohibit certain laws and regulations that discourage natural gas use and/or promote electrification” and require certain utilities/local governments to provide gas to eligible customers.
- I-2066 was a **pro-access / anti-electrification-policy** measure, not a gas ban. It sought to:
  - Require gas companies, large combination utilities, and some cities to **provide natural gas** to eligible customers;
  - Bar UTC approval of rate plans that terminate or restrict gas access;
  - Strip zero-emission goals from the state energy code and **bar the State Building Code Council** from codes that “prohibit, penalize, or discourage” gas;
  - Bar cities/counties/air agencies from discouraging gas;
  - Amend/repeal parts of the **Washington Decarbonization Act for Large Combination Utilities** (HB 1589 / ch. 80.86 RCW).

### What did the Court decide, and when?

- **Case:** *Climate Solutions et al. v. State of Washington et al.*, No. **104240-0**
- **Filed:** **September 17, 2026**
- **Holding:** I-2066 violates **Wash. Const. art. II, § 19** (single-subject rule). Distinct subjects lack rational unity; provisions are **not severable** → initiative invalid **in its entirety**.

### What takes effect now?

With I-2066 void, **pre-initiative law remains**:

- **2021 WSEC** (residential and commercial) heat-pump-oriented rules for **new construction** (phased in ~**July 1, 2023**; WSEC-R 2nd Ed. effective Mar 15, 2024) stay in place.
- **HB 1589** Decarbonization Act provisions remain operative (integrated system planning; cost-effective electrification evaluation for PSE).
- Local governments are **not** bound by I-2066’s blanket “shall not discourage gas” language.

### Scope after the ruling

| Topic | Status |
| --- | --- |
| **New residential construction** | Primary **space heating** and (1–2 family / townhouses) **water heating** generally must be **heat pump**. Gas OK for cooking, fireplaces, and **supplementary** heat (with thermostat lockout limits). |
| **New commercial** | Fossil-fuel HVAC space/water heating largely restricted; listed exceptions. |
| **Existing homes** | **No statewide forced retrofit.** Like-for-like gas replacements often still allowed under remodel/exception paths. |
| **Appliance sales ban?** | **No statewide sales ban** on gas ranges/furnaces for existing stock. Policy operates through **energy/building codes** at permit time. |
| **Statewide vs local** | WSEC is **statewide** (SBCC). Cities/counties may have additional commercial/remodel rules. |

---

## 2) People / homes affected

### Share of homes using natural gas

| Geography | Metric | Share |
| --- | --- | --- |
| **Washington State** | Utility gas as primary **house heating fuel** | **32.5%** (2023) |
| **Washington State** | Electricity heating | **59.7%** (2023) |
| **Washington State** | Single-family heated by natural gas | **~40%** (NEEA 2022 RBSA) |
| **Washington State** | Single-family gas **water heating** | **~40%** |
| **King County** | Gas / electricity heating | **~41.3%** / **~54.5%** (ACS 2020–2024) |
| **Snohomish County** | Gas / electricity heating | **~43.1%** / **~52.8%** (ACS 2020–2024) |

**Scale:** ~**3.02 million** occupied housing units statewide → on the order of **~980,000** gas-heated occupied units (derived). PSE: ~**900,000** natural gas customers; ~**1.2 million** electric.

### Do existing owners have to switch?

**No.** Impacts are:

1. **New construction (primary impact):** New homes/buildings permitted under WSEC must use heat pumps for primary space/water heat (with exceptions). King County private residential permits: ~**10,000** units/year order of magnitude.
2. **Eventual replacement cycles:** Market/policy/incentives — not a court mandate. King County cites aspirational retrofit *goals* (CETI Operation 2030) that are **not** statutory mandates.
3. **Cooking:** WSEC still allows gas cooking in new homes.

---

## 3) Forced change, remodel, and breakage

### Can they force you to change existing appliances?

**No** statewide mandate forces replacement of working gas furnace/WH/range.

| Jurisdiction | Forced retrofit of working SFH gas appliances? | Notes |
| --- | --- | --- |
| **Statewide (WSEC-R)** | **No** | Heat-pump rules for new construction and certain altered systems — not for leaving lawful equipment in place (R503.1). |
| **Seattle** | **No** for typical 1–2 family | BEPS applies to buildings **>20,000 GSF**, not SFH. |
| **King County** | **No mandate found** | Decarbonization strategy is planning/advocacy + incentives. |
| **Bellingham / Spokane / Snohomish** | **No SFH rip-out mandate found** | Follow WSEC; confirm local AHJ. |

Gas uses still allowed even in new homes (Cascade CNG FAQ): cooking, fireplaces, dryers, emergency generators; gas as supplemental heat to a heat pump; gas heat pumps where available.

### What happens on a remodel?

| Trigger | Rule | Cite |
| --- | --- | --- |
| **Alteration** | New heating/cooling/duct systems that are **part of the alteration** must comply with R403 (includes heat-pump space heat R403.13) | R503.1.2 |
| **Like-capacity heating replacement** | **Exempt** from R403.13 if new rated capacity **does not exceed** existing | **R503.1.2 Exception 3** |
| **New service water system in alteration** | Must meet R403.5 | R503.1.3 |
| **Like-capacity WH replacement** | **Exempt** from HPWH requirement if capacity ≤ existing | **R503.1.3 Exception 2** |
| **Addition** | Addition’s new systems treated like new construction | R502 |
| **Panel upgrade alone** | Does **not** by itself force HVAC electrification under WSEC | — |
| **Kitchen-only (no HVAC swap)** | Gas range → gas range **allowed** | — |

**Seattle commercial / larger multifamily:** Much stricter (C503.4.6 / C503.5), with limited emergency like-for-like paths and bonds. Not the same as SFH WSEC-R.

### What happens when appliances break?

| Appliance | Gas→gas allowed? | Key condition |
| --- | --- | --- |
| Furnace | **Yes** | New rated capacity ≤ existing (R503.1.2 Exc. 3) |
| Water heater | **Yes** | New rated capacity ≤ existing (R503.1.3 Exc. 2) |
| Range / cooktop | **Yes** | Not covered by HP space/water rules |

**Permits:** Seattle requires a permit for any furnace replacement. Elsewhere, mechanical/plumbing permits are standard — confirm AHJ.

**Zero-NOx / appliance sales standards:** Advocated (King County strategy, past PSCAA talk) — **not adopted** as of this research. Future SBCC or air-agency rules could change what can be *sold* without forcing rip-outs of existing equipment.

**Practical takeaway:** If the furnace dies tomorrow in a typical King/Snohomish/Seattle single-family home, **you can replace it with a same-or-smaller gas furnace under WSEC-R**, with a mechanical permit. A gut remodel that installs a **new or larger** heating system is where heat-pump rules bite.

---

## 4) Cost difference & retrofit

### Operating cost (PSE Residential Energy Cost Guide; rates as of July 1, 2026)

| System | Approx. annual heating cost |
| --- | --- |
| Standard gas furnace | **$1,074** |
| Efficient gas furnace (95%+) | **$904** |
| High-efficiency cold-climate heat pump | **$1,071** |
| High-efficiency ductless heat pump | **$804** |

Water heating (annual): HPWH ~**$364**; standard gas WH ~**$252**; efficient gas ~**$231**.

### Retrofit installed ranges (Puget Sound market)

| Measure | Typical installed cost |
| --- | --- |
| Ducted whole-home heat pump | **~$14,000–$23,000** |
| Single-zone ductless | **~$4,500–$8,000** |
| HPWH | **~$3,500–$6,500** |
| Induction range + circuit | **~$2,200–$5,000+** |
| 100A→200A panel/service | **~$5,500–$8,500+** (complex **$10k–$20k**) |
| **Full package ballpark** | **~$25,000–$55,000+** before incentives |

### Documented incentives (verify current schedules)

| Program | Who | Amounts (documented snapshots) |
| --- | --- | --- |
| **PSE** gas→electric HP | Standard / Efficiency Boost | **~$3,000** standard; up to **~$4,000** boost |
| **PSE** income-qualified fuel-switch HP | Income-qualified | **~$4,000** |
| **WA HEAR** (Commerce) | ≤**150% AMI** | Can cover HP, HPWH, induction, dryer, **necessary panel/wiring** |
| **Seattle Clean Heat** | Seattle (oil-focused historically) | Up to **$2,000** base + income bonus |

Market-rate households often still face **high five figures** net; income-qualified can land much lower. Federal IRA stack availability for late 2026 is uncertain — check current IRS/DOE guidance.

---

## 5) Puget Sound Energy (PSE)

### CETA obligations (all electric utilities)

- **2025:** Coal-fired generation eliminated for WA customers  
- **2030:** Greenhouse-gas **neutral**  
- **2045:** **100%** renewable or non-emitting  
- PSE cites ~**80%** renewable/non-emitting for the 2030–2033 compliance window  

### Climate Commitment Act (CCA) → bills

Cap-and-invest (RCW 70A.65). Utilities get **partial no-cost allowances**; remainder purchased → recovered in rates.

**Jan 1, 2026 package (UTC):**

| | Typical residential impact | % | Drivers |
| --- | --- | --- | --- |
| **Electric** (~800 kWh) | **+$16.84 / mo** | **~12.2%** | Power costs ~+$28 (CCA/CETA/reliability); no-cost allowance credit ~−$10; Colstrip removal; bill discount |
| **Gas** (~64 therms) | **+$6.59 / mo** | **~6.7%** | CCA ~+$5.24; bill discount |

Illustrative PSE Sch 7 @ 800 kWh: ~**$161**/mo before city tax (~**20¢/kWh** all-in).

### Pending 2026 GRC (proposed; not yet approved)

| Year | Electric res. (~800 kWh) | Gas res. (~64 therms) | Res. Sch 7 % (filed) |
| --- | --- | --- | --- |
| 2027 | ~**+$28**/mo | ~**+$14**/mo | **16.75%** |
| 2028 | ~+$7 | ~+$4 | 3.76% |
| 2029 | ~+$16 | ~+$5 | 8.81% |

Capex cited: **>$3.2B** gas+electric system over 3 years; **>$3.6B** new generation capital; **$529M** federal tax credits in plan.

### Meeting load growth

- 2023 Electric Progress Report: base energy demand rising ~**1.8%/yr**; peaks climbing; EVs and new customers key drivers.
- Resource plan: wind, solar, storage, demand response, and **transitional peaking / gas capacity** for reliability while meeting CETA.
- **HB 1589:** PSE must file an **integrated electric–gas system plan** by **Jan 1, 2027**.

---

## 6) Other electric utilities — King & Snohomish

| Utility | Type | Customers (approx.) | Recent rate move | Fuel mix (2023 Commerce) |
| --- | --- | --- | --- | --- |
| **PSE** | IOU (electric + gas) | ~1.2M electric, ~900k gas | Steepest path; CCA-heavy | Hydro 30%, **gas 30%**, wind 22%, **coal 18%** |
| **Seattle City Light** | Municipal | ~525k | +5.4% Jan 1, 2026 | **~78% hydro**, no coal/gas in mix |
| **Snohomish PUD** | PUD | ~385k | +2.8% Apr 1, 2026 | **~68% hydro**, 0% coal/gas |

### Bill comparison (~800 kWh, order-of-magnitude)

| | Typical bill / rate | CCA exposure |
| --- | --- | --- |
| **PSE** | ~**$161**/mo all-in | **Yes** — IOU Cap-and-Invest |
| **Seattle City Light** | ~**$119** energy+basic | Municipal; low carbon intensity |
| **Snohomish PUD** | **~10.6¢/kWh** + daily base | BPA-heavy; limited vs IOUs |

### Natural gas utilities

- **PSE Gas:** Dominant in King County and most of Snohomish.
- **Cascade Natural Gas:** Limited Snohomish pockets (e.g., Arlington, Stanwood).

---

## 7) Grid capacity & infrastructure

- **PSE 2023 EPR:** Winter peak **~5,197 MW (2030)** / **~5,693 MW (2035)**; additional “perfect capacity” need on order of **~1.3–1.7 GW winter** and **~1.9–2.9 GW summer** in late 2020s–mid 2030s.
- **NWPCC draft Ninth Power Plan (Aug 2026):** By ~2032, roughly **>11,000 MW** new generation, **>5,000 MW** storage, **~1,060 aMW** efficiency; load growth **1.8–3.1%/yr**; system may grow **50–100%** by 2046. Drivers: data centers near-term; vehicle/building electrification longer-term.
- **BPA / transmission:** Multi-billion reinforcement portfolios; transmission is a **binding constraint**.
- **Distribution:** Neighborhood electrification (HP + HPWH + EV) often stresses **secondary transformers and service drops** first.

No single published “spare MW left” number for the whole state. Planners expect large load growth and are sizing tens of GW of regional additions.

---

## 8) Power mix

### Statewide (WA Commerce Fuel Mix Disclosure, CY 2023)

| Fuel | Share |
| --- | --- |
| Hydro | **49.0%** |
| Unspecified | **14.9%** |
| Natural gas | **12.4%** |
| Wind | **10.7%** |
| Coal | **6.6%** |
| Nuclear | **4.3%** |
| Solar | **0.9%** |

### Utility-level (Commerce 2023)

| Utility | Hydro | Gas | Wind | Coal | Nuclear | Solar / other |
| --- | --- | --- | --- | --- | --- | --- |
| **PSE** | 29.6% | **29.9%** | **21.6%** | **17.6%** | 0.2% | ~0% |
| **Seattle City Light** | **~78%** | 0% | ~8–11% | 0% | ~5–6% | — |
| **Snohomish PUD** | **68.1%** | 0% | 8.6% | 0% | **9.8%** | Solar 3.2% |

Trends: coal exiting (CETA); wind/solar/storage accelerating; some gas capacity retained for regional adequacy.

---

## Bottom line for ratepayers

- **You do not have to rip out your gas furnace or stove** because of the September 2026 Supreme Court decision. The Court killed a *pro-gas ballot initiative*; it did **not** enact a retrofit mandate.
- **If you build new**, expect **heat-pump** primary space (and often water) heating — with gas still allowed for cooking/fireplaces/limited backup.
- **If equipment fails**, same-or-smaller gas replacement is generally still allowed for SFH under WSEC-R (with a permit).
- **If you remodel** and upsize HVAC or install new primary heating as part of the alteration, heat-pump rules can trigger.
- **If you stay with gas**, expect **higher gas bills** (CCA + shrinking throughput spreading fixed costs).
- **If you electrify** — voluntarily or in a new home — expect **higher electric rates** as PSE funds CETA, CCA compliance, and grid upgrades; SCL and SnoPUD remain comparatively cleaner with smaller recent percentage jumps.
- **Policy risk ahead:** Narrower legislation or local appliance/NOx rules could still change appliance replacement markets; watch SBCC code cycles, PSCAA, and HB 1589 (PSE integrated plan due **2027**).

---

## Uncertainty / verify before acting

1. **Exact AHJ** (Seattle vs unincorporated King vs Bellevue vs Everett, etc.) — commercial Seattle C503 ≠ SFH WSEC-R.
2. **“Rated capacity”** for Exception 3 is a plan-check judgment — upsizing even slightly can lose the exception.
3. **Rebate stacking and HEAR funding** change; amounts above are documented snapshots.
4. **Zero-NOx sales rules** are policy proposals, not current law in PSCAA/King County.
5. Live WAC HTML sometimes omits exceptions in the rendered page — rely on the **SBCC published WSEC-R PDF** + Cascade FAQ + WAC archive for Exc. 3/2 text.

---

## Sources

1. [WA Supreme Court opinion, *Climate Solutions v. State*, No. 104240-0 (Sept 17, 2026)](https://www.courts.wa.gov/opinions/pdf/1042400.pdf)
2. [Axios Seattle coverage of I-2066 ruling](https://www.axios.com/local/seattle/2026/09/17/washington-supreme-court-strikes-down-natural-gas-initiative-2066)
3. [WAC 51-11R-50300 (residential alterations)](https://apps.leg.wa.gov/wac/default.aspx?cite=51-11R-50300)
4. [2021 WSEC-R 2nd Ed. (SBCC)](https://sbcc.wa.gov/sites/default/files/2024-01/2021_WSEC_R_2ndEd_012524.pdf)
5. [SBCC HP space-heating proposal (R403.13 + R503 Exc. 3)](https://sbcc.wa.gov/sites/default/files/2022-06/065R_HP_Space_060122.pdf)
6. [Cascade CNG Residential Flowchart](https://www.cngc.com/wp-content/uploads/2023/02/Residential-Flowchart-Summary-and-Posters.pdf)
7. [Cascade CNG WSEC FAQs v2](https://www.cngc.com/wp-content/uploads/PDFs/energy_choice/washington/Washington-State-Energy-Code-FAQs-V2.pdf)
8. [WAC 51-11C-50300 (commercial alterations)](https://apps.leg.wa.gov/wac/default.aspx?cite=51-11C-50300)
9. [Seattle Energy Code Ch. 5](https://www.seattle.gov/documents/Departments/SDCI/Codes/SeattleEnergyCode/2021SECChapter5.pdf)
10. [SDCI furnace permit FAQ](https://www.seattle.gov/documents/Departments/SDCI/Permits/FurnacePermitInfographic.pdf)
11. [Seattle BEPS overview](https://seattle.gov/environment/climate-change/buildings-and-energy/building-emissions-performance-standard)
12. [King County Building Decarbonization Strategy (2025)](https://cdn.kingcounty.gov/-/media/king-county/depts/dnrp/building-property/sustainable-building/building-decarbonization/2025-kc-building-decarb-strategy-compressed.pdf)
13. [Statista / ACS residential heating fuel WA 2023](https://www.statista.com/statistics/1231931/residential-heating-fuel-distribution-in-washington/)
14. [UTC PSE Jan 2026 rate orders](https://www.utc.wa.gov/news/2025/state-regulators-approve-multiple-orders-impacting-puget-sound-energy-rates)
15. [PSE 2026 General Rate Case](https://www.pse.com/en/pages/rates/pending-utc-filings/2026-general-rate-case)
16. [UTC dockets UE-260005 / UG-260006](https://www.utc.wa.gov/puget-sound-energy-grc-ue-260005-and-ug-260006-consolidated)
17. [PSE electric price summary (May 2026)](https://www.pse.com/-/media/Project/PSE/Portal/Rate-documents/summ_elec_prices_2026_05_01.pdf)
18. [PSE Residential Energy Cost Guide](https://www.pse.com/en/rebates/energy-cost-guide)
19. [PSE Facts about HB 1589](https://www.pse.com/en/press-release/details/Facts-about-HB-1589)
20. [ESHB 1589 session law](https://lawfilesext.leg.wa.gov/biennium/2023-24/Pdf/Bills/Session%20Laws/House/1589-S.SL.pdf)
21. [UTC CETA overview](https://www.utc.wa.gov/regulated-industries/utilities/energy/conservation-and-renewable-energy-overview/clean-energy-transformation-act-ceta)
22. [SCL 2026 rates explainer](https://powerlines.seattle.gov/2026citylightrates/)
23. [Snohomish PUD Electric Rates 2026](https://www.snopud.com/wp-content/uploads/2025/10/ElectricRates_2026.pdf)
24. [WA Commerce 2023 Electric Utility Fuel Mix Disclosure](https://popud.org/assets/PDFs/Newsletters-Publications/CY2023-Energy-Washington-State-Electric-Utility-Fuel-Mix-Disclosure-Report-with-Utility-Fuel-Mix-Market-Summary.pdf)
25. [PSE 2023 EPR Ch. 6 Demand](https://www.pse.com/-/media/PDFs/IRP/2023/electric/chapters/06_EPR23_Ch6_Final.pdf)
26. [PSE 2023 EPR Ch. 7 Resource Adequacy](https://www.pse.com/-/media/PDFs/IRP/2023/electric/chapters/07_EPR23_Ch7_Final.pdf)
27. [NWPCC Ninth Power Plan](https://www.nwcouncil.org/energy/ninthpowerplan/)
28. [NWPCC draft Ninth Plan announcement (Aug 13, 2026)](https://www.nwcouncil.org/news/2026/08/13/draft-ninth-plan/)
29. [WA Commerce HEAR](https://www.commerce.wa.gov/energy-incentives/hear/)
30. [PSE income-qualified fuel-switching HP rebate](https://www.pse.com/-/media/PDFs/REBATES/8614_IncomeQualifiedFuelSwitchingHeatPumpRebate.pdf)
31. [FRED / Census King County building permits](https://fred.stlouisfed.org/series/BPPRIV053033)
32. [Snohomish County utilities page](https://www.snohomishcountywa.gov/5307/Utilities)

---

*Compiled for research use. Confirm the authority having jurisdiction (AHJ) and current rebate schedules before making project or legal decisions.*