The Utilities and Transportation Commission has green-lighted an all-party settlement of Puget Sound Energy’s request to increase rates for its customers, on the condition that PSE returns $34.6 million in over-collected taxes to customers.

According to the UTC, its three-member commission approved a settlement that allows for a 2.9 percent, or $21.5 million, increase to the company’s natural gas revenues effective March 1, but no increase to the company’s electric revenues.

Under the approved settlement, the typical residential natural gas customer using 64 therms a month would see a monthly increase of $1.58, resulting in a bill of $60.61.

The commission approved the settlement on the condition that PSE returns to customers certain tax savings due to the 2017 Tax Cuts and Jobs Act, a move that’s consistent with the commission’s 2018 direction to companies to pass tax-related savings on to customers.

Under the commission’s condition, PSE’s electric customers would see the return of approximately $24.1 million and gas customers would see the return of $10.5 million over a one-year period. The commission directed these amounts to be returned to customers starting on May 1, at the same time as and off-setting potential increases resulting from the company’s decoupling filings, the UTC stated.

Decoupling is a mechanism under which utility profits are “decoupled” from sales, so the utility’s recovery of fixed costs will not depend on the volume of its sales. Instead, revenue is determined on a per-customer basis, thereby removing the company’s financial disincentive to invest in conservation and energy efficiency.

The settlement also provides approximately $130,000 in additional funds for the natural gas Home Energy Lifeline Program, or HELP, which offers bill-assistance to eligible PSE customers.

Bellevue-based PSE provides electricity service to more than 1.1 million electric customers in eight Washington counties: Island, King, Kitsap, Kittitas, Pierce, Skagit, Thurston, and Whatcom. PSE provides natural gas service to more than 800,000 customers in six Washington counties: King, Kittitas, Lewis, Pierce, Snohomish, and Thurston.