Thurston County Superior Court Judge Carol Murphy reversed a “key portion of a decision approving Puget Sound Energy’s multi-year energy rate plan, which could roll back automatic rate increases for [Puget Sound Energy] customers,” according to the Washington State Attorney General’s Office.

The Attorney General’s Public Counsel Unit appealed a rate plan that was approved by the Washington Utilities and Transportation Commission last year. That plan included automatic rate increases for customers beginning last year and continuing until 2016 or 2017 — at the utility company’s option.

The Public Counsel Unit was joined by the Industrial Customers of Northwest Utilities in the appeal, arguing that “the rates approved in the plan were too high because they included an unduly high rate of return for Puget Sound Energy.”

Attorney General Bob Ferguson characterized Murphy’s decision as an “important win” for Puget Sound Energy’s ratepayers.

“The court’s ruling will ensure that customers’ rates under the multi-year plan will be fairly calculated,” Ferguson said. “Our Public Counsel believes this ruling could potentially save residential and industrial customers as much as $10 million per year.”

The Public Counsel Unit, along with Industrial Customers of Northwest Utilities, “presented evidence that given declining costs in the capital markets, and the reduced financial risk for PSE resulting from the plan, rates should be approximately $10 million lower annually.” The rates the Utilities and Transportation Commission approved last year were “based on the rate of return approved for Puget Sound Energy in its last rate case in 2011.”

In her ruling, Murphy indicated the case would be returned to the commission “for further legal proceedings to determine the rate.”

The Attorney General’s Office notes that the Public Counsel Unit “also challenged the rate plan’s automatic annual increases over several years, but the court denied that portion of the appeal.”