If you’re an Enumclaw natural gas customer, you probably received a nasty surprise in the mail last week — a letter saying your bill could increase by as much as 23% come November.
Letters announcing the eye poppingly-high increase were sent out on Aug. 1, with an explanation that it’s not the city’s fault natural gas will suddenly become so expensive, but a consequence of the Climate Commitment Act passed by the state legislature in 2021.
Before getting into the CCA, here’s how your wallet may be affected come the fall, plus how additional increases in following years will continue to raise the price of natural gas.
Normal residential customers, who used an average of 634 therms (one therm is 100 cubic feet, or 1 CCF) in natural gas a year, could see their annual bill jump from $595 to $726, a $131 increase, after Nov. 1. Annual are expected to continue increasing between 0.88% and 0.9% for the next seven years, resulting in an estimated $338 increase to bills in 2030.
Low-income and senior bills will also increase. Since they use more natural gas on average — 654 therms a year — their bills could jump by as much as $135 after Nov. 1 (from $429 to $564) and will continue to rise by the same 0.88% to 0.9% for following years.
Commercial, municipal, and school district customers are in the same boat. By 2030, the average commercial customer’s bill could jump by $1,500; municipal buildings, $2,700; and school buildings, $7,000.
The estimated bill increase is based on a model given to Enumclaw by Ecology, so bills could be higher or lower when the fall comes.
At the same time, this could all be much ado about nothing; rules for the CCA program are being finalized Oct. 1, and state lawmakers may decide at the last minute to exclude Enumclaw from the program, at least for a few years.
“We haven’t received anything in writing yet from Ecology — it’s just been verbal,” said city Public Works Director Ed Hawthone in a recent interview.
Still, Enumclaw has to prepare like it’s being enrolled into the CCA program so that the natural gas utility has enough cash on hand to buy what are called emission “allowances”, explained below.
“Since we’re a public utility, we don’t have thousands of dollars sitting aside just waiting for something to happen. We’re limited on what we can keep it reserve,” Hawthorne said. “So we need to increase our rates in November so we can have cash available to go out and buy those allowances.”
WHAT IS THE CLIMATE COMMITMENT ACT?
Passed in 2021, the CCA “directs [the Department of] Ecology to develop and implement a statewide cap-and-invest program to cut carbon pollution.”
“Cap-and-invest” means capping carbons emissions and reducing the limit utilities and businesses can emit over time; these CO2 limits, or allowances, are auctioned quarterly by the DOE, and the revenue generated by the auctions will be invested in greener energy programs, like various grants aimed at reducing transportation emissions, supporting renewable energy tech and infrastructure, and funding the working families tax credit, which is eligible for families with children that meet certain income levels.
The CCA is requiring Washington to reduce its carbon emissions overall by 45% by 2030, 70% by 2040, 95% by 2050, and finally, “fully carbon-neutral” by 2060. That means Ecology “will issue fewer and fewer emissions allowances,” and “as allowances become more scarce, they will become more valuable,” a DOE’s webpage reads. “Businesses that do not sufficiently reduce their emissions will be faced with increasing compliance costs and, potentially, the inability to obtain enough allowances to cover their emissions. If a business doesn’t obtain enough allowances, or otherwise fails to comply with the law, it can face stiff penalties.”
Penalties can be anywhere from $10,000 to $50,000 per violation, per day, Ecology Communications Specialist Claire Boyte-White said in an email interview.
In short, the CCA program will require Enumclaw to buy the ability to emit Co2 while giving natural gas to its customers, and the amount of CO2 emissions it can release will decrease over the years. At the same time, it will become more expensive for the city to purchase the ability to emit C02 (and, as a result, more expensive for customers, as the utility is required to be self-sustaining).
Not all natural gas utilities and businesses are affected — only those that emit more than 25,000 metric tons of CO2 or an equivalent annually (though there are exceptions being made, according to the Seattle Times) are included in the CCA program.
However, according to Enumclaw, it should not be rolled into the CCA program during this first compliance period and should be able to wait a few years to prepare for the eventual price increase.
WHY IS ENUMCLAW AFFECTED?
According to Hawthorne, the city of Enumclaw exceeded emitting 25,000 metric tons carbon in 2021.
However, Hawthorne says the CCA bill states the program will only include emitters if they exceeded that limit in 2015 through 2019.
“[Ecology] told me in a phone call conversation that they felt like we were going to be a covered entity based on what they were seeing. I said, OK, can you please point to us in the law where we are being brought in as a covered entity?” Hawthorne said. “They said, ‘under the general language of the law’… that’s not very clear, that’s not giving us specifics. So we don’t know — they have not shown us exactly where we are covered. We don’t understand.”
The Courier-Herald has contacted the DOE to confirm, but the relevant expert was not available at this time. Boyte-White wrote in an earlier email that “the Enumclaw utility has submitted formal comment on our current rulemaking. We are reviewing and discussing their input and will provide a detailed response to their comments when we adopt our final rule language in the fall.”
At the same time, the Seattle Times has reported “generous exemptions” are being made for 41 “of the state’s biggest polluters”.
The article did not name those emitters, but reported that they include petroleum refineries, pulp and paper mills, and various chemical, mineral, and metal manufacturers, “all of which collectively account for 10 percent of the statewide emissions covered by the program.”
The article added that these companies “would be allowed to pollute at little to no cost for at least the next 12 years” because the state Legislature designated them “particularly susceptible to the fluctuations of regional markets and global trade” — or, in short, the state wants them to stay competitive in various markets.
Critics say allowing these companies to have these sort of exemptions will mean Washington will not meet its goals in reducing carbon emissions by its various markers.
However, it appears Enumclaw will receive some of the same privileges as these 41 “emissions-intensive, trade-exposed entities” (EITEs).
“The CCA designates natural gas utilities as one of the three categories of entity that will receive some allowances at no cost,” Boyte-White wrote. “This means that Enumclaw will receive some allowances at no cost, just like the 41 EITEs mentioned in the article.”
Still, Hawthorne said it’s unfair for Enumclaw to be lumped in with far larger utility companies.
“I don’t think when they wrote the rules(s) they considered the fact they have two publicly-owned natural gas utilities in the state. I believe in publicly-owned utilities, I believe we provide a really good service to the community — we keep our rates really low,” he said, mentioning Ellensburg as the other city. “Unfortunately… we’re being treated just like PSE, just like a large LDC (local distribution company) that has more capital available to them, more opportunity to go out and buy renewable natural gas.”
Ecology is doing the rule-making;