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Intended audience: light and power businesses and gas distribution businesses.
Note: This credit is repealed effective Jan. 1, 2026. The credit is calculated based on the entire 2026 fiscal year. However, credits cannot be claimed after Dec. 31, 2025.
This is our annual update on the Low Income Home Energy Assistance Program (LIHEAP) including the Public Utility Tax Credit Application for July 1, 2025 to June 30, 2026.
Program information
The Department of Commerce (COM) administers LIHEAP in cooperation with light and power businesses and gas distribution businesses. Under this program, COM administers funds from various sources to reduce energy costs for low income persons. These funds are distributed to light and power businesses and gas distribution businesses in the form of grants based on need. Many light and power businesses and gas distribution businesses also provide billing discounts for low income customers.
Through Dec. 31, 2025, RCW 82.16.0497 allows a limited credit against the public utility tax for billing discounts and qualifying contributions made by light and power businesses or gas distribution businesses.
Eligibility
Businesses may take a credit in the first year billing discounts or contributions are given and each year thereafter when the dollar amount of qualifying contributions given were 125% more than those given in either:
- Fiscal year 2000 (Jul. 1, 1999 – Jun. 30, 2000).
- The first year billing discounts or contributions were given if none were given in fiscal year 2000.
Amount of credit
The maximum amount of credit is the lesser of:
- 50% of the light and power or gas distribution business’s total billing discounts and qualifying contributions.
- The business’s base credit.
A business’s base credit is its proportional share of all grants given through the COM and/or qualifying organizations in the prior fiscal year multiplied by $2.5 million (statewide credit cap). The base credit amounts for state fiscal year 2025 are linked below.
Credit application
Eligible businesses must apply for the credit. You are asked to include the amount of billing discounts or qualifying contributions that the business will make in the next fiscal year. If the total amount of credits to be taken by businesses in the upcoming fiscal year is less than the $2.5 million statewide cap, the Department of Revenue will proportionately increase the base credit for each business that submitted an application. Businesses will be notified of the increased amount of credit that they may take.
The Public Utility Tax Credit Application must be mailed to the department and postmarked by July 1, 2025.
Definitions
Billing discounts are actual reductions in the amount charged for providing service to qualifying persons in Washington.
Billing discounts do not include service charge reductions made using grants received from the LIHEAP, either from COM or an organization that contracts with COM, to administer LIHEAP funds.
Qualifying contributions are amounts given by light and power businesses or gas distribution businesses to an organization that contracts with COM to administer LIHEAP funds.
Qualifying contributions do not include amounts received in the prior fiscal year from the business’s customers for the purpose of assisting other customers.
Qualifying person means a Washington resident who applies and qualifies for LIHEAP assistance regardless if that person actually receives assistance.
Credit expiring
Senate Bill 5794, which was passed and signed by the Governor during the 2025 to 2026 legislative session, repealed the Low Income Home Energy Assistance Program Credit effective December 31, 2025. Any unused credits after the effective date will no longer be available.
More information
RCW 82.16.0497 Credit—Light and power business, gas distribution business.
ESSB 5794 Chapter 423, Laws of 2025, Sec. 105.
Questions?
If you have any questions, please call 360-705-6218.
