A Thurston County Superior Court judge last week reversed a decision approving Puget Sound Energy’s multi-year energy rate plan following an appeal by the Attorney General’s Public Counsel, which could roll back rate increases for the utility company’s customers.

The Industrial Customers of Northwest Utilities joined the Public Counsel in arguing rates should be $10 million lower annually, based on declining costs in the capital market, PSE’s reduced financial risk based on its rate plan and a unduly high rate of return. The Washington Utilities and Transportation Commission, which approved PSE’s rate plan last year, will now have to work with PSE to determine new rates.

“This is an important win for PSE’s ratepayers,” said Attorney General Bob Ferguson in a statement. “The court’s ruling will ensure that customers’ rates under the multiyear plan will be fairly calculated. Our Public Counsel believes this ruling could potentially save residential and industrial customers as much as $10 million per year.”

The plan rejected by Thurston County Superior Court Judge Carol Murphy included automatic rate increases for PSE customers starting in 2013 and giving PSE the option to continue those increases up to 2017. The court did not entertain another challenge from Public Counsel regarding automatic annual increases over several years.