OLYMPIA — Nearly 700,000 Washingtonians got $200 back from their utility this month.
Those rebate checks sent to low- and moderate-income customers, proponents say, show the state’s new carbon market is raising funds that are helping Washingtonians. But opponents are slamming the timing of the checks and state officials, for what they say is a ploy to gain support for the cap-and-trade program as it faces a potential repeal.
Let’s Go Washington, the group behind the repeal effort on the November ballot, filed a complaint last week with the state’s Public Disclosure Commission, alleging a state Department of Commerce employee violated state law by saying rebates must be sent out by mid-September before the vote on Initiative 2117 could repeal the Climate Commitment Act, which funds the rebates.
“Gov. Inslee, his administration and the majority party in Olympia are using money taken from taxpayers to try to influence voters,” said Brian Heywood, the Redmond hedge fund manager who has bankrolled the initiatives. “This is a clear attempt to bribe voters into protecting his hidden gas tax and it’s time Gov. Inslee adhered to the law instead of acting like he’s above it.”
The complaint is the latest in a string of accusations and finger-pointing brought before the PDC, which enforces campaign finance and disclosure laws. Heywood has also been accused of trying to sway voters with discount gas and food, and this week Let’s Go Washington faces a hearing on allegations it did not follow campaign disclosure requirements.
Lawmakers passed the rebate as part of the state budget in March, in a session where the slate of Heywood- and GOP-backed initiatives loomed large. Initiative backers had been hammering on gas prices, arguing that the Climate Commitment Act had driven up costs.
Let’s Go Washington points to an April email sent by Cheryl Chan Hardee, deputy assistant director of Commerce’s energy division, which was first reported by The Spokesman-Review, as evidence that the state orchestrated the timing of the checks to sway public opinion.
The group’s lawyer, Dan Brady, wrote in a letter to the commission that Hardee was “attempting to influence the administration” of the rebate program to affect the outcome of Initiative 2117 when she emailed an unidentified recipient that the funds must be spent “before the state votes on the initiative.”
The commission, however, rejected the complaint for lack of jurisdiction because the law Let’s Go Washington alleges was violated doesn’t apply to state employees.
The full email exchange, obtained by The Seattle Times, shows Hardee was responding to an inquiry from a small utility seeking clarity from the department.
In early April, a month after the Legislature had included $150 million in the state budget for the $200 rebates, Kelly Haugh, manager of community relations for the Big Bend Electrical Cooperative, which serves about 8,700 customers in Adams and Franklin counties, wrote to Austin Scharff, a senior energy policy specialist at Commerce, with two questions: Are the rebates mandatory? And if the Climate Commitment Act were repealed, would utilities have to pay the state back?
“My understanding is that these funds are going to be spent by Sept. 15 before the state votes on the initiative,” he wrote in a response, in which he included Hardee. “I don’t see anything in the proviso that says the funds would ever be returned back to the state.”
Hardee then replied, adding that the Legislature required all utilities to participate in the program, meant to help low- to moderate-income Washingtonians and “vulnerable populations living in overburdened communities.” Even though the rebate was mandatory, utilities could put the funding toward designated local agencies that assist Washingtonians in applying for help with utility bills.
She added: “the funds must be spent by Sept. 15, meaning that funds must be deposited into eligible customers accounts on or before the Sept. 15th, before the state votes on the initiative.”
All residential utility providers in Washington were eligible for the funds, and the amount each received was determined by the number of households the utility served and several criteria accounting for health disparities, poverty data and the proportion of the population in a utility’s service area that are cost-burdened, according to Commerce.
Ninety percent of the credits, the department said, went to households earning less than 80% of the area median income. The budget legislation specified the payments must be made by Sept. 15.
The department said last week that it was able to “repurpose” more than $3 million that had been set aside for administrative costs to offer more rebates to 15,000 more customers than expected, altogether representing nearly 23% of the state’s utility customers.
“The timeline just doesn’t add up”
Hallie Balch, a spokesperson for Let’s Go Washington, contrasted the letters identifying the source of the rebate funds as the Climate Commitment Act with the Attorney General Office’s opposition to Puget Sound Energy itemizing the cost of the act on customer bills.
She also said that Let’s Go Washington was “not against people getting extra money” and said they urged their network to apply for the rebate.
The initiative would take effect 30 days after the election, according to the Secretary of State’s Office. Balch maintained funds would be available even if the initiative passes. “They would have had at least a month, even,” Balch said, to spend the money after Nov. 5.
Instead, customers are receiving letters in the mail about their rebates just a few weeks before ballots will be mailed Oct. 18, she said.
“The timeline just doesn’t add up for us,” she said.
Asked at a news conference in late July about the criticism of the rebates as “bribes” to entice people to support the cap and trade program, Gov. Jay Inslee said there was no guarantee that Initiative 2117 would reduce energy prices. He said the Climate Commitment Act would assist people with energy bills.
“This is an effort to help families reduce and guarantee they’re going to have reduction of energy costs,” Inslee said of the rebate program.
And it wasn’t the only way the state was helping people with the costs of energy, he argued: The Climate Commitment Act was funding more insulation, heat pumps, solar panels and free bus rides. (Kids ride on public transit for free via funding from the act.)
“We’re reducing energy prices in a way you can actually count on,” he said. “That initiative doesn’t guarantee anything but more health disadvantages because of pollution.”
Although the PDC won’t take up Let’s Go Washington’s complaint, a hearing is slated for Thursday on administrative charges filed by the commission earlier this month against Let’s Go Washington.
Commission staff allege the political action committee failed to report spending associated with each of the six initiatives it was backing accurately and on time, instead initially reporting spending on the initiatives as a single group. They also allege Let’s Go Washington failed to report spending on sub-vendors and failed to maintain books substantiating that spending. Let’s Go Washington has also been accused of not providing those books in a timely manner when asked. The PDC subpoenaed Let’s Go Washington’s records in late July.
In a statement, Heywood said Let’s Go Washington “has been transparent in all of its campaign reports.”
“The PDC does not dispute that we have reported every penny we have received and spent advocating for the people’s initiatives,” he said. “This issue concerns only technical details of how we reported that information.”
