This month, natural gas customers saw the cost of Washington’s climate efforts reflected in their monthly bills.
NW Natural, a gas provider for more than 2.5 million people in the Pacific Northwest, added new fees to its Washington customers’ bills to reflect costs associated with the state’s Climate Commitment Act. A chart showing rate effects can be found at www.nwnatural.com/about-us/rates-and-regulations/cca.
A typical residential customer will see a $8.78 increase per month, or 11.9 percent. Customers who connected to NW Natural’s system after July 26, 2021, will see a $28.14 increase per month, or 38.2 percent.
Washington’s Climate Commitment Act sets limits on a company’s carbon emissions — a threshold that shrinks over time — and requires high-emitting companies to buy credits for exceeding these limits. Large polluters, like refiners and utilities, buy allowances (basically permission to pollute) at quarterly auctions for each ton of carbon they create.
Charges per therm will remain the same through 2024, although bills may vary depending on a customer’s monthly usage, said Stefanie Week, NW Natural spokesperson.
The Washington Utilities and Transportation Commission, a regulatory authority, approved NW Natural’s request to recover costs linked to the cap-and-invest program.
Rate modifications have two main components.
The first is a state carbon-reduction charge, a projection of NW Natural’s costs to comply with the Climate Commitment Act. The other is a carbon-reduction credit, an estimate of revenue from allowances sold at auction, which are reserved for low-income customers and those who tapped into the company’s system before July 26, 2021.
Last year — the cap-and-invest program’s first — the auction collected $1.8 billion for the state. Revenue is funneled into a pot for environmental and clean energy projects statewide. Officials estimate that if all goes to plan, the market tool will help eliminate 95 percent of Washington’s carbon emissions by 2050.
Washington may link its carbon market with California and Quebec, which would enable the state to reach emissions-reduction targets and stabilize consumers’ energy costs.
Although the state’s push to decarbonize is lauded by environmental groups and some lawmakers and residents, others say the expenses required to make the shift are too costly. An effort to repeal the Climate Commitment Act, Initiative 2117, will appear on voters’ November ballot.
Those behind the ballot measure argue that the onus of the cap-and-invest program is passed on to consumers.
To illustrate this, Clark Public Utilities Commissioner Nancy Barnes pointed to the utility’s recent decision to raise electricity rates, something that hadn’t happened since 2011.
“All this green legislation is a good thing, but it’s not a free thing,” she told The Columbian.
Multiple factors contributed to the electricity rate increase: high energy demand during extreme weather events; lessened hydroelectric generation; infrastructure costs; inflation; and supply chain issues.
Washington’s clean energy mandates add pressure. Clark Public Utilities is required to reduce its dependence on the River Road Generating Plant under the state’s Clean Energy Transformation Act, passed in 2019. The River Road plant uses natural gas to generate electricity. Utilities must fully transition to clean, renewable and non-emitting resources by 2045, according to the law.
Decarbonization mandates began before the Clean Energy Transformation Act, such as with 2012’s Energy Independence Act, which required electric utilities to use renewable energy and increase energy conservation. Barnes said the utility has “played catch up” since.
Winter isn’t over and demand remains high, Barnes said. Should there be a heat dome this summer, the utility will face further strain.
“I’m not pessimistic or optimistic about the situation, rather pragmatic,” she said. “It’s reality.”
Editor’s note: This story and headline have been updated to reflect the correct average amount a customer will see gas bills from NW Natural increase.
