Traditional Ratemaking Holds the Line: Washington Upholds NW Natural Gas Company’s Line Extension Allowances

As decarbonization policy continues to evolve, the Washington Utilities and Transportation Commission (Commission) has issued a decision that reaffirms the durability of long-standing ratemaking principles. In its July 2026 final order, the Commission rejected proposals to eliminate or phase out by 2028 Northwest Natural Gas Company (NW Natural)’s line extension allowances (LEAs), concluding that the Company’s current policy remains fair, just, reasonable, and in the public interest. This decision is significant as the Commission held that natural gas continues to play a meaningful role during the energy transition even as Washington pursues its long-term carbon-reduction objectives.

For utilities, regulators, and stakeholders across North America, the order serves as an example that decarbonization policy can be considered alongside the evidentiary and economic standards that have governed ratemaking for decades. While acknowledging the state’s greenhouse gas reduction goals, the Commission found that the record simply did not demonstrate that NW Natural’s LEAs conflict with those policies, and it recognized the value of gas-electric coordination as the state advances its climate agenda.

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