Both the Benton and Franklin PUD commissions are opposing an initiative on the November ballot that would charge a fee on carbon pollution.
It would raise electric rates for their customers even though the Benton PUD already has a 92 percent carbon-free fuel mix for the electricity it distributes and the Franklin PUD has a 93 percent carbon-free fuel mix, the PUDs said. Much of their electricity comes from hydropower.
The Benton Public Utility District Commission, which approved a resolution opposing Initiative 1631 on Tuesday, heard from staff that costs would increase between $1 million and $2.1 million in 2020. Consumers would see that reflected in their electric rates.
The Franklin PUD Commission passed a resolution in late August opposing the initiative. Its staff estimated that the immediate impact would be $700,000 to $1 million a year initially, or about a 1 percent rate increase.
The electric rate increases would be in addition to fees charged on gasoline. The fee is estimated to increase the cost of a gallon of gas 14 cents during the first year.
Initiative 1631 proposes to impose a $15 fee per metric ton on carbon emissions on the state’s largest carbon emitters starting in 2020, with an incremental increase of $2 per metric ton plus inflation each year.
The fee owed by a large emitter may be passed through to a utility when it purchases electricity.
PUDs expect to be hit with increased costs for carbon emissions for electricity generated by fossil fuels. They also could pay for fees on electricity that the PUDs buy on the open market from unknown sources that may or may not be generated from fossil fuels.
The Yes on 1631 campaign says the initiative is a practical first step to ensure clean air and clean water for everyone in Washington and to pass on a healthier state to the next generation.
Fees collected would be invested in projects such as solar and wind energy projects, public transit, healthy forests, cleanup of water pollution and preparing for future challenges caused by changing climate.
At least 35 percent of investments would benefit communities hardest hit by pollution and poverty.
The PUDs may apply for credits for up to 100 percent of the fees for which it is liable, but there is no guarantee of credits.
The Franklin PUD called the requirements to claim credits “extremely onerous.”
Each PUD must provide a clean energy investment plan that meets specific requirements after developing the plan in consultation with three advisory panels made up of members appointed by the governor.
The panels cover clean air and energy, clean water and healthy forests, and economic and environmental justice. Many of the panel members would represent interests such as the tribes, labor, business and health.
There is no requirement that any member represent utilities, according to information presented at the Benton PUD Commission meeting Tuesday.
The PUD’s plan then requires approval by the Washington state Department of Commerce.
The Benton PUD said the Department of Commerce may not represent the values and interests of local residents, and that the requirements clearly erode local control by public power utilities.
Read more about the initiative at http://bit.ly/AP1631.