The Cowlitz PUD is throwing its weight against a citizens’ initiative that would tax carbon emissions to combat climate change.
PUD commissioners Tuesday unanimously voted to oppose I-732. The initiative would introduce major tax reform in an effort to reduce carbon dioxide emissions.
Commissioners feared the measure would increase the cost of electricity and hit local industries.
“These are tough times. What does that do for economic development? What does that do for jobs?” Commissioner Dena Diamond-Ott asked.
The utility’s vote has no a legal bearing on whether or not the initiative is passed. But taking an official position allows the utility to hand out fact sheets and other information to ratepayers, Diamond-Ott said.
I-732 would introduce a $15 per ton tax on carbon emissions from fossil fuels in the first year. The tax would jump to $25 per a ton in the second year. Thereafter, the tax would rise annually by 3.5 percent, plus inflation, and eventually top out at $100 a ton. It would affect virtually all consumers through higher gas prices and higher product costs.
It also would immediately cut the state Business & Occupation tax for manufacturers to essentially zero. The sales tax would fall by one percentage point for everyone in the first two years of the initiative. Eligible low-income families would also get a tax rebate up of to $1,500 annually.
Cowlitz PUD relies mostly on carbon-free hydropower, but it does buy a small percentage of electricity from fossil fuel sources, such as coal or natural gas. The utility estimates the carbon tax could increase its costs by about $5 to 9 million a year in the first year its implementation.
I-732 could also indirectly boost demand for wind energy, which may help the PUD recover some of the losses its had from the Central Washington wind farms.
But Steve Kern, general manager of PUD, said it would take years before the utility might see any benefit from selling wind energy at a higher price. In the nearer term, the price of the measure simply is too high for the utility.
“This represents an increased exposure to our customers and a somewhat unmanageable exposure,” Kern said.
Several people spoke against the initiative at Tuesday’s meeting, and a handful asked questions about the measure.
“I do strongly support caps on carbon emission. However, I don’t believe this initiative will produce the desired results,” said Diane Dick of Longview.
Peter Bennett of Longview worried that the rebate the initiative offers for low-income people wouldn’t outweigh the increased burden those populations would experience from rising energy costs.
“There’s a large rental population who don’t have a say on the insulation of their housing,” he said.
Proponents of I-732 defended their position Tuesday night.
“We believe that the citizens of the state, by getting all the signature to put I-732 on the ballot, have demonstrated we have moral obligation to take action on climate change,” Yoram Bauman, economist and CEO of Carbon WA, the citizen’s group behind I-732, said in a phone interview.
He suggested that PUD commissioners and other opponents put forward a better alternative.
“It’s not enough to just say ‘no’ … The people of the state have shown that they want something to say ‘yes’ to taking action on climate change,” Bauman said.
While there have been talks about modifying the measure into an “I-732B”, so far an alternative bill hasn’t been introduced in the Legislature, which is scheduled to adjourn March 10.
The Daily News, Longview, Wash.
Get local news delivered to your inbox!
Subscribe to our Daily Headlines newsletter.