July 2016

Over the past several weeks, we have received a lot of questions and complaints about various Public Utility Districts (PUDs) that have been distributing printed and online material regarding their opposition to Initiative 732. While it seems strange to many of you that a public utility can use ratepayer money to try to influence a political campaign, our state law, RCW 42.17A.555, does allow for this practice. A public utility commission can voice its opposition to an initiative, so long as they pass a public resolution and provide equal opportunity for the expression of both viewpoints.

RCW 42.20.040 does prohibit public officials from knowingly distributing a false report — so do keep sending us copies of any mailers or postings you receive, especially if you think there is purposefully misleading information. While utilities are allowed to distribute information about the policy, as well as their opinion, many of their statements do not seem to offer a balanced or complete description of the policy in I-732. We believe the intent of the law is to allow the utility to distribute balanced information and an opinion — not one-sided and partial descriptions of a policy proposal.

Some particular concerns include:

• It is one-sided to specifically talk about the carbon tax increase on utility customers while making no mention of the corresponding reductions in sales tax, B&O tax, and the Working Family Tax Rebate that I-732 will create.
• The cost to utility customers should be presented by quoting the rate impact (Cents/KWh) not aggregate dollars. Customers can relate to rate changes far easier than aggregate dollar figures, which appear to be utilized for shock value rather than informational purposes.
• If aggregate tax figures are presented, then the message should also include the aggregate sales tax savings customers within their territory can expect from the passage of I-732.
• Many utilities are quoting costs based on an analysis completed by the Washington PUD association. It assumes a rule-making process will increase the emission factor of non-declared electricity from the 1 metric ton of carbon per MWh (defined in section 7 of the legal language of I-732) to a value 18% higher to match other existing laws. If a public utility is distributing a cost estimate to its customers, it should be based on the legal language of the policy, not a hypothetical future change to the policy. This will avoid distributing incorrect information.
• Information distributed using public funds should be based on the state’s description of the policy, I-732’s legal language, official data sources, and the public meeting. They should not include campaign slogans or canned messages distributed by opposition organizations seeking to expand their reach using Public Utility Districts as free megaphones.
• Many utilities are quoting an outdated fiscal analysis indicating the passage of I-732 will decrease state revenue by $914M over 4 years. If a description of the state revenue analysis is included the most current OFM estimate of $797M over 6 years should be quoted. It should also cite the I-732 campaign’s official disagreement with the OFM assumptions. Including that one third of this projected tax decrease is based on the assumption that all non-declared electricity will be declared on the first day of implementation; something many PUD’s disagree with in the very same public statement.
• Some utilities are making statements that a carbon tax would not reduce carbon pollution. This is false, as there is clear empirical evidence from numerous studies that a similar price on carbon has created significant reductions in CO2 since implemented in British Columbia. Additionally both Regional Economic Models, INC (REMI) and the Northwest Power and Conservation Council modeled similar carbon taxes and determined it would create significant reductions in carbon emissions in Washington — including reductions in the electric sector.
• No utilities have contacted CarbonWA in advance of holding a public meeting, which we believe would be an appropriate good faith effort to achieve equal representation of the issue.

To our concerned supporters, we urge you to not lash out at your utilities because of their position. Just inform us if you think they are distributing false information. If you wish to provide a critique, please do so in a constructive and professional manner — everyone is entitled to their opinion.

We are all disappointed that many of our cleanest utilities, who will pay the least carbon tax of any energy providers in our state, have failed to recognize the competitive advantage I-732 creates for them. Instead, many have joined the predictable position of other energy providers opposing any tax on the product they sell. We hope PUDs will do a better job in the future to avoid promoting the misconception that their customers will have less money in their pocket because of I-732, when in reality most PUD customers likely come out financially ahead, not behind, due to this tax swap.

Rather than lashing out, a more constructive message to send your utility might be: Please reconsider your opposition to I-732. As your customer I am happy to pay more for electricity while paying less for everything else that is exposed to the state sales tax. More importantly, I believe it is essential that we pass an economy-wide price on carbon so the dirtiest polluters in our state are motivated to change their behavior and stop damaging the health and well-being of our children and future generations.

The cost of climate change is expected to reach $3.8 billion per year in Washington by 2020. These include cost that will directly affect utilities including: $150M in reduced hydropower generation, and $44M in increased transmission costs due to higher temperatures. The cost of inaction that your commission and other energy companies are promoting will create massive damage to our society, damage that can be reduced in a cost-effective manner by passing Initiative 732. I would appreciate your including the cost of inaction in any future information you distribute on this topic and hope you re-consider your position on I-732.