Washington’s state’s CO2 tax is increasing the cost of heating homes. And now, Puget Sound Energy customers can see exactly how much it costs thanks to an important policy change from state utilities commissioners.
Previously, utilities commissioners had prohibited Puget Sound Energy from showing the cost of the CO2 tax on the bills of its natural gas customers – a move we exposed and (rightly) called “brazenly dishonest.” That rule has now been overturned in response to a letter we submitted in conjunction with the Citizen Action Defense Fund to the members of the Utilities and Transportation Commission (UTC).
It is a victory for transparency, and it allows Washington residents to see the direct cost of the state’s climate policy.
The decision is an important reversal of a policy adopted just a few years ago.
On August 3, 2023 the three members of the UTC approved a request by Puget Sound Energy to cover increased natural gas costs caused by the state’s new tax on CO2 emissions, known as the Climate Commitment Act (CCA). The commissioners noted that the increase of just over three percent on customer bills will cover the “costs of allowances PSE needs to comply with” the CCA. In that same ruling, they said they agreed with the Attorney General’s Office “that PSE should not include the proposed ‘carbon reduction charge’ as a line item on customer bills.” Why? Because it would be “confusing” to utility customers.
The commissioners themselves revealed the dishonest nature of that logic by going on to require that credits, paid for using CCA revenue, be itemized on the bill. Apparently, that wasn’t confusing.
On November 10 of last year, we asked the Washington Utilities and Transportation Commission to repeal their previous rule, citing the incoherent logic, noting that the ruling contradicted the state constitution and the fact that even state agencies were complaining about the restriction.
Our letter made three key points.
First, we noted that Attorney General Brown had recently created a new Public Records and Open Government Unit in his office. As we noted in the letter, the creation of that office is consistent with Washington state law noting that, “the people of this state do not yield their sovereignty to the agencies that serve them. The people, in delegating authority, do not give their public servants the right to decide what is good for the people to know and what is not good for them to know." Intentionally hiding the cost of state policy violates this very basic tenet of democratic governance.
Second, our letter highlighted a budget request from Washington’s community and technical colleges. They requested an additional $14.9 million to cover increased utility costs due, in part, to the cost of complying with the CCA. In their letter accompanying the request, they specifically mentioned the decision by utilities commissioners, and the support from the AG’s office, to hide the costs, implying it made budgeting more difficult. They wrote, “Utilities are also now allowed to transfer the costs associated with the Climate Commitment Act to their customers, but no more than that cost. PSE was advised by the AG’s office not to show those costs as a line-item, Avista is showing those line-item costs.” The commission’s prohibition made it difficult for the community and technical colleges to accurately estimate those costs as part of their budget request.
Finally, we noted that a recent federal district court ruling indicated that prohibitions like the one previously adopted by utilities commissioners are a violation of the U.S. Constitution. Legislators in Maryland had adopted a tax on internet advertising and prohibited companies from showing the cost of that tax. Writing for a unanimous three-judge panel, Judge Richardson ruled the state’s gag order violates the First Amendment. He wrote, “As much today as 250 years ago, criticizing the government—for taxes or anything else—is important discourse in a democratic society. The First Amendment forbids Maryland to suppress it.” Like Maryland’s gag order, prohibiting utilities from showing the cost of the tax violates the U.S. Constitution and the spirit of transparency that is at the heart of the American ideal of open government.
You can read our whole letter to the utilities commissioners here.
We are very thankful that the commissioners made this decision. It sets a precedent that people have a right to know the impact of public policy on their life. Some may decide that the cost is worth it to address the risk from climate change. Others will wonder if the cost makes sens given how poorly the state has been spending the revenue from the CO2 tax.
Either way, utility customers have the right to know how public policy impacts them and the effort to hide those costs is unethical.
I hope that this will also prevent other efforts to hide the cost of public policy. For example, House Bill 2421, which would ban a chemical in tires that is extremely toxic to coho salmon, would charge a fee but would prohibit retailers from passing along the cost or mentioning it. That is absurd and dishonest. Legislators have no right to hide the costs from the public.
This win for transparency is just one step in the right direction, but it is the emblematic of the type of decision that will help put Washington state on a better path where people, not politicians and bureaucracies, make the key decisions about their lives.