Electric and gas utility systems in the US have historically been regulated separately. However, in response to winter storm events and interests in affordability, reliability, and decarbonization, states are increasingly looking to coordinate these systems. The state of Washington has recently become a national leader in this space.
In September 2025, in Docket U-240281, the Washington Utilities and Transportation Commission implemented rules that require large combination (electric and gas) utilities to identify the lowest-cost pathways to meet clean energy goals by optimizing both systems together. (Order Adopting Rules Permanently ¶ 104 (Sept. 26, 2025), hereinafter “order.”) This comports with the state’s 2024 Decarbonization Act, which requires integrated system planning to “develop specific actions supporting gas system decarbonization and electrification, and reduction in the gas rate base.”
While the Decarbonization Act and the new rules include many compelling aspects, this article explores a particular aspect that gets to the heart of a structural misalignment in many coordinated planning requirements: A combination utility has little incentive to pursue electrification—and even a disincentive through the potential loss of customers—in any gas-only service territories.
Key things to know about Washington’s new integrated utility planning requirements
- Washington now requires large combination utilities to plan gas and electric systems together through integrated system planning, replacing siloed processes with a system-wide, least-cost framework for meeting clean energy goals.
- The commission’s rules use traditional anti-discrimination authority to require impartial treatment of customers across combined and gas-only service territories, closing a structural gap that most states have not yet directly confronted.
- While ongoing litigation over ballot initiative I-2066 could strip out key provisions, the commission’s approach offers an adaptable model for other states.
Addressing the Misalignment: The Impartial Treatment Requirement
The requirement at issue is the Washington Utilities and Transportation Commission’s impartial treatment standard. Understanding it requires tracing how the commission translated a statutory directive into a concrete regulatory obligation. That translation is what makes Washington’s approach notable.
The 2024 Decarbonization Act established the statutory baseline, directing that utilities must “achieve all cost-effective electrification of end uses currently served by natural gas” by assessing alternatives to gas infrastructure projects, including non-pipeline alternatives, rebates and incentives, and geographically targeted electrification. But the statute alone did not resolve the structural misalignment: a combination utility operating in both gas-and-electric and gas-only territories still had little regulatory reason to offer electrification options to customers it serves only with gas.
The commission’s answer was to interpret the Decarbonization Act’s cost-effective electrification mandate alongside its traditional authority to prohibit anti-discriminatory treatment of similarly situated customers, and to use that pairing to close the gap. The resulting rules require utilities to demonstrate “impartial treatment” between customers in combined electric-and-gas territories and those in gas-only territories when proposing geographically targeted electrification (Order ¶¶ 127-128, 139-140; WAC 480-96-060(4)(d)). In doing so, the commission extended an existing legal principle into new terrain, applying a familiar consumer protection tool to a structural planning problem that most states have not yet confronted directly.
While the rules establish the impartial treatment requirement, the order provides guidance on how utilities may satisfy this burden: by comparing costs and benefits across service territories and explaining any disparities, or by proposing electrification of similar magnitude in both areas (Order ¶ 144). To support rigorous evaluation, the rules also require qualifying utilities to provide modeling data in native formats and grant software licenses to intervenors when using proprietary modeling software, with license costs recoverable through rates (WAC 480-96-080(3)(d); Order ¶¶ 96 & 98).
Together, these requirements seek to ensure that electrification offerings available to combined-service customers are also available to gas-only customers by using existing regulatory authority.
Comparison to other state utility frameworks
Washington’s approach is notably more prescriptive than in most states that typically rely on high-level cross-utility coordination directives rather than detailed procedural mandates. The commission’s coordination framework builds on emerging state practice and technical assistance from the national laboratories, including a literature review on integrated gas and electric planning that synthesized best practices.
The table below illustrates how Washington’s requirements compare to those in other leading jurisdictions:
|
State |
Regulatory mechanism |
Cross-utility coordination requirements |
| Washington | Geographically targeted electrification in integrated system plans | Utilities must “include a process for outreach” to consumer-owned utilities with overlapping electric service territories and “provide gas delivery data of sufficient granularity” for the electric company to assess capacity for “additional load from electrification at the circuit level” with sufficient time to upgrade the system to preserve reliability (WAC 480-96-060(4)(d)). |
| Massachusetts | Targeted electrification pilots | Gas utilities must “work with” the overlapping electric utility to study the feasibility of decommissioning targeted gas system segments (Mass. DPU 20-80-B, Order, p. 87–88 (Dec. 6, 2023)). |
| California | Voluntary neighborhood decarbonization pilots | Gas corporations must “coordinate and collaborate” with affected electric entities (Cal. Pub. Util. Code Section 663(b)(7)). |
| Colorado | Gas infrastructure and clean heat plans | Gas utilities must identify overlapping electric utilities and “consider” their electrification forecasts in planning (4 CCR 723-4:4553(c)(I)(J)(iv); 4 CCR 723-4-4731(a)(I)(E)(iii); & 4 CCR 723-4:4553(c)(P)(i)(1)). |
| Minnesota | Gas integrated resource plans | Gas utilities must “work with electric utilities in their service territories to understand, to the extent possible, the electric system impacts on resource options in natural gas IRPs.” (Docket No. 23-117, Comprehensive Gas IRP Requirements ¶ 30 (Oct. 28, 2024)). |
While requiring more concrete coordination could lead to impartial treatment, the success of Washington’s rules will depend on two critical factors:
- Utilities must share sufficiently detailed data within current confidentiality restrictions, as the viability of targeted electrification projects in overlapping service territories hinges on electric utilities receiving actionable information about gas delivery patterns and planned phase-outs.
- The impartial treatment requirement will depend on rigorous commission oversight, since the rules require utilities to demonstrate fairness rather than mandate specific outcomes in gas-only territories.
However, the effectiveness of the rules will ultimately depend on implementation. Importantly, the framework creates opportunities for accountability at two stages: stakeholders can scrutinize the modeling assumptions utilities bring to integrated system planning stakeholder meetings, and the commission can review those assumptions in the first plan approval proceeding, which is required to be filed by April 1, 2027.
Ongoing litigation
The biggest uncertainty hanging over these rules is ongoing litigation over ballot initiative I-2066. Approved by voters in November 2024 after the commission had already begun this rulemaking, the initiative would have stripped out key Decarbonization Act provisions that these rules hinge on. They include requirements for combination utilities to offer cost-effective electrification, geographically targeted electrification, and non-pipeline alternatives.
In May 2025, the King County Superior Court ruled I-2066 violated the state constitution’s single-subject rule (“no bill shall embrace more than one subject”) and prohibition on silently amending existing statutes (“the initiative cannot silently amend state laws without warning the voter”). That decision is now on appeal to the Washington Supreme Court (Case #104240-0; Oral Argument held Jan. 22, 2026).
Because no stay was issued, the commission adopted rules consistent with the original statute, included a severability clause, and published alternative draft rules. These alternative rules remove the challenged provisions, giving stakeholders advance notice of how the framework could change if the initiative is ultimately upheld (Order ¶¶ 117–121).
Implications for other states
Washington’s integrated planning rules demonstrate how state utility regulators can use traditional anti-discrimination authority to advance fair treatment across service territories. In addition, with time and pending the ongoing litigation mentioned above, these rules may provide a novel approach to cross-utility coordination.
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