The Washington Utilities and Transportation Commission (WUTC) recently approved a request to recover costs associated with the state-mandated Cap and Invest Program and associated new rules adopted by the Washington Department of Ecology. New costs to customer monthly bills started January 1, 2024 as a result of this program. Read a letter from the CEO of NW Natural, with helpful FAQs.
What is the Cap and Invest Program?
The Washington Cap and Invest Program stems from the 2021 Climate Commitment Act (CCA) passed by the Washington Legislature. This establishes a market-based program to reduce greenhouse gas (GHG) emissions and achieve state-set greenhouse gas (GHG) limits. It impacts every energy user in Washington. Learn more at the Washington Department of Ecology’s website.
How does it work?
Under the CCA, natural gas distributors, including NW Natural, transportation (vehicle) fuel suppliers and large stationary sources are required to reduce GHG emissions in line with limits set by the state that decrease aggressively over time. In Washington, impacted entities must purchase allowances equal to their covered GHG emissions, either through quarterly auctions hosted by the Washington Department of Ecology or on the secondary market.
How will customers’ bills change as a result of the CCA?
New costs to customer monthly bills started January 1, 2024. The recovery of these costs through our rates was approved by the Washington Utilities and Transportation Commission (WUTC). This rate adjustment has two components that follow the state’s rules. One is the Climate Act Fee – NW Natural’s costs to comply with the state-mandated Cap and Invest Program – and the other is a Climate Act Credit, which is revenue from GHG emissions sold at auction. This credit is reserved for customers connected to NW Natural’s system prior to July 26, 2021, and Identified Low-Income Customers. The charges per therm will remain the same through 2024, although a customer’s usage can change month to month.
How the Cap and Invest Program appears on an example
of a residential customer bill.
April 2024 customer bill example
The rate adjustment has two components that follow Washington’s rules: The Climate Act Fee and Climate Act Credit.
- The Climate Act Fee is NW Natural's cost to comply with the Washington state-mandated Cap and Invest Program. 100% of the CCA fees collected by NW Natural go to the state.
- The Climate Act Credit is revenue from greenhouse gas (GHG) emissions sold at auction. This credit is reserved for customers connected to NW Natural’s system prior to July 26, 2021, and Identified Low-Income Customers. Customers were credited a higher amount during the colder weather months of January through March 2024, to help offset higher winter usage and costs.
- For billing periods between April and October, customers will be credited a new, lower credit amount because gas use is typically less. (The April billing cycle may overlap with March, so customers may see two credit amounts on their April bill, which will revert to one credit in May.)
More information about the Washington Climate Commitment Act
A letter from the CEO of NW Natural, with helpful FAQs