Inslee vows to assist families with energy costs, prevent gouging by oil firms

SEATTLE – Looking to cement his climate policy legacy, Gov. Jay Inslee on Monday said he will seek new laws during his final legislative session in office to assure a smooth merging of Washington’s carbon market with California’s and to require oil companies to reveal more about their gasoline prices and profits.

He also said he would use a windfall of state cap-and-trade revenue to give thousands of low- and moderate-income families a one-time $200 credit on their home electricity bills and to help school districts install new ventilation systems and replace diesel buses with electric models.

His legislative and spending proposals comprise an aggressive agenda for the upcoming 60-day session that will be his last opportunity to shape how Washington families and businesses end their reliance on fossil fuels in favor of clean energy.

“We are not done yet. There is more to do. We are not going to surrender this beautiful, magnificent state to climate change. Never, never, never,” Inslee proclaimed at a news conference conducted in front of supporters and Democratic legislators inside the gymnasium at Miller Community Center in Seattle. 

‘Ridiculous gas prices’

When gas prices hovered at the $5 a gallon mark in the summer, Inslee and a cadre of Democratic lawmakers revved up their calls for imposing new transparency and accountability rules on the oil industry. 

They blamed price volatility on companies pursuing profits. Cap-and-trade critics countered that the companies were responding to the state’s climate policies. 

Inslee’s proposal, to be filed before the session begins Jan. 8, will “try to unpack the black box of how oil companies set their prices,” explained Becky Kelley, senior policy advisor on climate to the governor.

The bill, modeled on an approach in California, would require oil companies to report data on pricing, profit, and transactions to the Washington Utilities and Transportation Commission. It also would empower a new division in the commission to oversee oil industry pricing, and investigate allegations of market manipulation and price-gouging. Potential violations would be referred to the Attorney General’s office.

“They have been whipsawing us with these ridiculous gas prices,” Inslee said. “We are going to pass a transparency law so we are no longer victimized by the big oil companies.”

Inslee distanced himself Monday from a provision in the Climate Commitment Act giving free pollution allowances to petroleum refiners and chemical manufacturers collectively worth tens of millions of dollars.

The Legislature, he said, designed the law to ameliorate challenges some industries face in decarbonizing. “I think they were mature in recognizing that we’re not bringing down a curtain tomorrow on fossil fuel,” he added.

Cashing in on carbon

In 2021, Inslee teamed with Democratic majorities in the House and Senate to pass the Climate Commitment Act, arguably the state’s most ambitious policy for curbing greenhouse gas emissions by putting a price on pollution.

The state imposes annual limits on emissions for major emitters and requires them to buy allowances at auctions for each metric ton of pollution. Over time the state lowers the limit, or cap, for them. Washington has a goal of erasing fossil fuel emissions statewide by mid-century.

The current two-year state budget is the first in which the governor and lawmakers are spending auction proceeds. 

They spread $2.1 billion among the operating, capital and transportation budgets. That money will go toward electrifying ferries and ports, lowering costs for heat pumps, investing in transit, and assisting tribal communities dealing with disproportionate fallout from climate change.

With allowances selling at higher-than-expected prices, the state is now forecasting the program will bring in $1.1 billion more than what’s in the budgets.

Inslee said his supplemental budget plan coming out Wednesday contains $941 million in new climate-related expenditures with $900 million coming from the cap-and-trade program and $41 million from the state general fund, bonds and other sources.

About $150 million will cover a one-time $200 credit on residential electricity bills to an estimated 750,000 low- and moderate-income Washington families, Inslee administration officials said. Families will not need to fill out paperwork as the state will team with utilities to ensure  eligible households receive the credit.

Inslee also wants to put money into converting a third state ferry from diesel to hybrid electric, adding rapid electric vehicle charging stations along state highways, and helping school districts buy electric buses.

Theo White, a bus driver for the Highline School District, said he drives an electric bus every day and it’s “phenomenal” compared to diesel.

“Students love it,” he said, adding that because it’s much quieter “they realize they don’t have to talk so loud. Their behavior has changed.”

Linking with California

Director of Ecology Laura Watson announced in early November the state would pursue a union of Washington’s carbon market with California and Quebec.

Harmonizing the three programs will require revising some rules in each place. It may take until late 2025 or early 2026 before an agreement might be completed, said Kelley, Inslee’s climate policy advisor.

Inslee said combining markets, or “linkage,” would ensure a durable carbon market that will allow the state to attain its emission reduction targets and stabilize energy costs for consumers.

Inslee is requesting a bill crafted by the state Department of Ecology that would amend several sections of the Climate Commitment Act to facilitate linking the programs. An updated version released Monday adds language empowering Ecology to not enforce provisions that “present an obstacle to Washington entering into a linkage agreement” with another jurisdiction.

A ballot measure to repeal the Climate Commitment Act could add a wrinkle. Backers of Initiative 2117 turned in 420,000 signatures last month and are waiting for the Secretary of State to determine if it will qualify for the November 2024 ballot.

If revisions sought by Inslee are construed as creating an alternative to the repeal measure, the legislation might have to appear alongside the initiative next November. Case law and a 1971 Washington attorney general opinion seem to indicate that is what must occur.

Democratic legislators and top Inslee Administration officials have been discussing the situation for weeks but Inslee said he was unaware.

“I have not heard that argument,” he said.