FILE - This April 2, 2010 file photo shows a Tesoro Corp. refinery, including a gas flare flame that is part of normal plant operations, in Anacortes, Wash. In the 2016 election, voters in Washington state rejected an initiative that would have taxed carbon emissions from fossil fuels such as coal and gasoline.
As Washington voters decide whether to adopt a statewide fee on carbon emissions, a pair of Lewis County institutions are saying the consumer effects of the measure will be a hardship to local residents.
Initiative 1631 is a ballot measure that would impose a $15 fee for each metric ton of carbon emitted, with an additional $2 added each year until the state’s 2035 emissions goals are met and its 2050 ambitions are on track to be met. The money collected from the fee would be put into projects designed to reduce pollution.
According the the Lewis County Public Utility District, that shift would have a huge impact on consumers.
“Preliminary cost estimates are a 1.5 to 2 percent rate impact in year one, and then an additional compounding one-quarter to three-quarters percent rate increase each year thereafter,” said Matt Samuelson, the PUD’s interim manager. “This is in addition to all the other upward cost pressures the district is facing.”
Samuelson and the PUD’s staff officially have no position on the measure, but put together an analysis that the PUD board used in voting to register its official opposition to the initiative. The unanimous vote Tuesday was paired with a companion resolution urging voters to be informed about the impact to rates when they make a decision on the 1631.
According the Samuelson, if the initiative passes, rates are bound to keep increasing for some time. The PUD gets about 94 percent of its electricity from carbon-free sources, such as hydropower, but would have to pay the fee on any power it buys from the market.
PUD figures estimate the initiative would cost the district about $600,000 in 2020, the first year fees would be collected, a number that would balloon to $1 million within five years — and climbing from there.
“Since it’s unknown when the state will meet its goals, we don’t know how long that will take,” Samuelson said. “It could take 15 years, it could take 20 years. … It will have a significant impact on the cost of the district in providing service.”
An estimate created by the state Office of Financial Management puts the Lewis County PUD’s costs a little lower in year one, at about $487,000. That figure doesn’t include the $14,000 in extra fuel costs the district will be paying due to higher gas prices, and it uses different estimates for the power the district will be providing to and buying from the market.
“I don’t agree with the state’s assessment at all,” Samuelson said. “They’re introducing too many assumptions about market pricing and how a carbon fee would affect the market.”
The Lewis County Farm Bureau is opposing 1631 as well, contributing $1,000 to the No on 1631 political action committee.
“Huge costs are predominantly going to be paid for by farmers and small businessmen,” said Farm Bureau board member Ron Averill. “It gets more and more expensive as you go along.”
Averill pointed out some “big guys” like Boeing have been exempted, and that much of the burden will be borne by local areas. Gas prices are estimated to go up by about 14 cents once the measure takes effect, rising to 40 cents after 10 years, according to Todd Myers, director of the Center for the Environment at the Washington Policy Center. Fuels used for agriculture exempted, but Averill said farmers will still feel an impact.
“(Farm fuels) are not how we get our products to market,” he said. “It doesn’t do any good on the farm. You’ve still got to transport it to market.
Meanwhile, the area’s biggest polluter would be exempt from the fee. TransAlta’s coal-fired plant in Centralia will not be subject to the carbon costs. That’s a recognition of the company’s previous agreement with the state to shut the plant down by 2025, an attempt not to punish the company further after a good-faith agreement was brokered in 2011 to close the facility that was responsible for about 10 percent of the state’s emissions.
Myers, who wrote a policy brief on 1631 looking at the possible effects of the initiative, said the fee will hit consumers at about $240 per year per household, rising to about $750 within a decade.
“About half of the impact is on gasoline,” he said. “About a third of it is home heating. The smallest portion is from electricity ... Any industry that relies on transportation. Anything from shipping goods to traveling salesmen is going see that cost go up.”
According to Myers, residents of Lewis County will face similar effects to the state as a whole. He did not that people in the most rural areas will face the steepest costs.
“Rural areas are harder hit, because they drive more and there are fewer alternatives to that,” he said. “They can’t just get on a bus. People in rural areas use more gas.”
Proponents of the measure argue that cost of inaction will be higher than any consumer effects.
“If we don’t act now, the threat of pollution will only get worse and cause more harm to our communities and our kids’ health,” the Yes on 1631 campaign writes on its website. “I-1631 is a practical first step to ensure clean air and clean water for everyone in Washington and gives us the chance to pass on a healthier state to the next generation.”
