New state rules shift costs and credits for Spokane's waste‑to‑energy facility; city staff outline possible multimillion‑dollar impacts
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Summary
Staff briefed council on House Bill 2416 linking the waste‑to‑energy facility to the Climate Commitment Act: the facility emits ~100,000 metric tons CO2/year and faces declining no‑cost allowances through 2030; staff estimated near‑term city compliance purchases of roughly $2.8M–$4M annually and warned of a possible $7M/year exposure if emissions are not reduced.
City staff outlined how recently adopted state legislation (referenced in the meeting as House Bill 2416) alters Spokane's obligations under the Climate Commitment Act (CCA) for emissions from the municipal waste‑to‑energy facility.
Chris Avery told council the facility's non‑biogenic emissions are roughly 100,000 metric tons of CO2 per year (driven largely by combustion of plastics in solid waste). Under the adopted bill the city receives a 100% allocation of no‑cost allowances for 2027–28 (split 40% consigned to auction for local project funding and 60% provided for rate relief), with the proportion of free allowances declining in subsequent years through 2030.
Avery presented a working projection based on recent auction results (about $71/metric ton at the most recent auction): if allowance prices remain at that level, staff estimated a city purchase obligation of roughly $2.8 million for the consigned 40% in the near term and projected that by the 2029–2030 period the city could face a net market purchase obligation in the $3.3M–$3.8M range, and a possible $7M/year exposure if emissions are not reduced further.
Staff emphasized that the 40% consignment proceeds are intended to be made available for greenhouse‑gas reduction projects at the waste‑to‑energy facility, but those projects require separate approval from state agencies (Ecology and Commerce). Council members pressed staff for clarity about how rate impacts will be modeled and distributed among ratepayers, noting that "avoided costs" phrasing can obscure the net cost to local customers. Staff said a solid‑waste modeling effort is underway to test scenarios for distributing costs by tonnage delivered, by customer class or other approaches; those analyses will be part of the regular rate‑setting process.
Council discussion underscored uncertainty around future auction prices and market linkages that could lower or raise allowance costs; staff said various purchasing and hedging strategies will need to be considered to minimize ratepayer impacts while meeting compliance obligations. No formal action was taken; staff said they will include modeled rate impacts as part of ongoing rate work for 2027–28.
