The Climate Legislative and Executive Workgroup — CLEW for short — holds a meeting Sept. 11.
OLYMPIA, Sept. 23.—In a move that reflects frustration with the Inslee Administration’s climate-change workgroup, Republican lawmakers and Eastern Washington chambers of commerce are asking the state auditor’s office to launch a performance audit of the state’s controversial renewable-energy law.
They say they want the state auditor to ask the tough questions about I-937, the measure that requires utilities to purchase costly windpower even though they don’t need it, and requires consumers to pick up the tab. Questions like — how much does it cost? And is it making the air any cleaner?
They are basic questions, to be sure. The thing is, nobody has gotten around to asking them. They were supposed to be answered by Gov. Jay Inslee’s newly created climate-change workgroup, sometime before the start of the next legislative session, but there appears to be plenty of doubt right now about how deep its analysis will go. And given the unflinching support for I-937 from the Inslee Administration and from many on the Democratic side of the aisle, it may be that such questions are too politically hot to handle. A rather vague report from consultants presented at the last meeting of the climate task force Sept. 11 appeared to duck the central issue – what effect has 937 had? And it left skeptics wondering if any sort of rigorous cost-benefit analysis is going to be produced by the time a final report is issued in December.
Queried on the subject at an Association of Washington Business meeting last week, Inslee said he thinks the workgroup is on the right track. “We can’t get sidetracked into a discussion of whether the state is going to wave the white flag on climate change and ocean acidification, because we made a decision that we are not going to wave the white flag against this foe. We are going to defeat it.”
But Republicans and a growing number of critics are convinced that if anyone is willing to pose the hard questions, they will learn that the state’s renewable-energy policy is a costly boondoggle that benefits mainly windfarm developers at the expense of anyone who pays an electric bill. Getting those questions answered, with dollar figures attached, is a bit problematic because of the politics involved. Inslee vetoed a legislative study of I-937 this year, arguing that the climate-change workgroup would do the same job. And maybe it will, says Senate Energy Chairman Doug Ericksen, R-Ferndale. He says it better. Ericksen notes that when he sold the largely Republican Senate majority coalition on the climate bill last session, it was with the promise that it would perform a cost-benefit analysis on all the state’s policies aimed at reducing greenhouse-gas emissions.
“I’m sticking to that, and I would imagine that no recommendations will come out of this group if it fails to look at all sections of the bill that was passed by the Legislature,” he says. “I think it is crucial that we take a look at what is in the best economic and environmental interest of Washington state. And to do that, we have to understand the cost of what we are trying to do.”
Policy Raises Questions
At the Association of Washington Business Policy Summit in Suncadia last week, state Rep. Richard DeBolt, R-Centralia, asks Inslee if the climate workgroup is backing away from promises to do a cost-benefit analysis of environmental policies.
Back when environmental groups convinced Washington voters to support I-937 in 2006, they promised cleaner air and cheaper electricity – a rather difficult thing to accomplish in a state where 70 percent of electricity already comes from cheap and clean hydropower. The measure aimed to jumpstart an alternative-energy industry by requiring utilities with more than 25,000 customers to purchase a steadily growing share of their power from “renewable” sources. By definition, that means wind, with some solar power. Right now 3 percent of their electricity has to come from renewables, but the real trouble comes when the next round of requirements kicks in. In 2016 the requirement rises to nine percent; in 2020, it hits 15 percent. The trouble is that no one was counting on the recession. Demand fell flat; most utilities say they will need no additional power until demand begins to catch up with supply in about 2020. But they still have to buy the electricity, and consumers still have to pay for it.
The cost is immense: The average homeowner already is paying $50 a year for I-937 in the form of higher electric bills, said Steve Simmons, chairman of Citizens for POWER, short for Protecting Our Washington Energy Rates, at a hearing of Ericksen’s committee in the Tri-Cities last week. “Utilities cannot predict the rates in 2020 when I-937 is fully implemented,” he said. “We can only be sure that rising electric rates will begin to severely hamper business activity and lead to the loss of Washington jobs.”
While some public utilities seek changes to the rules that might ease the burden – including excusing them from buying power until they need it – the law is vigorously defended by environmental groups and by privately-owned Puget Sound Energy and Avista, which have bet heavily on windfarm development. The big problem is that so far no one can offer an authoritative answer as to whether the policy produces a benefit that makes economic sense.
Call for Performance Audit
State Auditor Troy Kelley.
One person who might be able to ask that question is state auditor Troy Kelley, who has the power to conduct freewheeling performance audits of state programs. Taking the lead in seeking a performance audit is the Washington Policy Center, a free-market think tank. It convinced 16 Republican lawmakers to sign a letter to Kelley, including Ericksen and Senate Republican Leader Mark Schoesler, R-Ritzville. Also signing were chambers of commerce in Lake Chelan, Moses Lake, Pasco, Spokane, the Tri-Cities and Yakima, along with the Washington State Farm Bureau. Among the Policy Center’s questions:
—Is the implementation of I-937 saving businesses and consumers money as promised?
— Has it reduced the consumption of fossil fuels?
— Has the policy simply displaced cheap non-polluting hydropower, causing it to be sold to other states, to make room for more expensive windpower?
They might seem like obvious questions, but no one can answer them, says the Policy Center’s Todd Myers. At last week’s hearing, he said, “We are spending huge amounts of money to get tiny amounts of renewable energy. Unfortunately, if you don’t have the auditor’s analysis, it is very difficult to find out the cost that we are paying.”
The stats are on file at the Utilities and Transportation Commission, which sets electricity rates, but that information is considered proprietary and is not subject to public disclosure, Myers said. “The only option is to have the auditor or some other person go in, look at it and assess for themselves, without revealing it to the public, what the actual costs are of the renewable energy.
“The other question that we ask is has 937 reduced Washington’s carbon intensity? That was one of the main goals that the environmental community had with 937, and as we’ve heard several times tonight, what we are doing at this point in many cases is simply replacing carbon-free hydro with carbon-free wind. Washington state, according to the Energy Information Administration, has one of the lowest carbon intensity footprints in the United States, so if you’re trying to reduce carbon emissions for Washington state by going to electricity, you’re really trying to squeeze blood from a turnip.”
Kelley hasn’t responded. His staff says he is considering the request. Worth noting is that during the campaign, Kelley promised a performance audit of I-937. Said one campaign position paper, “I would look at the implementation of this initiative and compare it to best practices from around the nation to find out how we can implement this more efficiently and effectively.”
What About the Workgroup?
For a big segment of the statehouse crowd, the climate-change workgroup has been the most-closely-watched panel in all of state government since the legislative session ended in June. Created at Inslee’s request, the panel is supposed to recommend policies to bring the state’s carbon output down to 1990 levels. To the uninitiated, its meetings so far seem like long walks in the weeds.
Yet there was a bit of a ruckus at the last meeting — Republican members expressed dismay when consulting group SAIC produced the first phase of its report, about existing state policies. The consultants cited reports and projections from the Department of Ecology that hadn’t been updated since the recession, and they couldn’t quantify the results state policies already have achieved. “You’re asking us to make decisions on policies you want us to go forward with, without having, pretty candidly, necessary information up front,” complained state Rep. Shelley Short, R-Addy.
The purview of the workgroup is broader than I-937, to be sure. It is supposed to identify the most cost-effective policies to reduce carbon emissions. But Ericksen says that unless you can measure progress the state has already made, you can’t determine how much further the state has to go – and the workgroup can’t determine cost-effectiveness unless it asks the tough questions about I-937. At this point it is not clear how deep the final report will go — Inslee himself told the consultants to come back with better figures.
Ericksen says the request for a performance audit can be seen as an expression of frustration with the process and also with the governor’s decision to veto the independent study by the Joint Legislative Audit and Review Committee. Someone has to ask the hard questions, Ericksen says. “I-937 is not working for the people and we need to have an examination to determine how much it is actually costing us. I think there are many people out there who believe that it is driving up the cost of electricity unnecessarily, and I think that having the state auditor or even better, JLARC, take a review of it would be beneficial to all of us.”
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