City administrator urges caution on Climate Commitment Act compliance for gas utility; no policy change

City Administrator Chris Searcy briefed the council on CCA compliance for a municipal natural gas utility and recommended the council not take immediate policy action while monitoring market linkage and state rulemaking.

Searcy compared Washington’s early program data to California’s longer-running market, saying California’s auction prices and demand dynamics were different and noting recent Washington auction settlement prices near $65 per metric ton compared with California’s most-recent auction under $30. “The last one was about $65 a metric ton,” Searcy said, and later added that California’s auction price "was under $30." He said the charts he presented show compliance costs increase exponentially over time under some scenarios and that the city currently sits near the lower-cost curve but could rise if linkage and demand dynamics change.

Searcy also explained components that could moderate costs, including the state’s allowance price containment reserve and ongoing rulemaking to make allowances available earlier; he said the reserve originally totaled 18,600,000 allowances for the compliance periods and that roughly 600,000 remain. On customer impacts, Searcy presented illustrative charge estimates and said newer connections face larger CCA-related charges (about 33¢ per CCF) while older connections currently incur roughly 6–7¢. He told council there was no immediate policy guidance he was seeking and recommended observing how linkage, auction dynamics and Ecology’s rulemaking evolve before proposing a local programmatic response. He also noted the council would go into executive session to discuss bid strategy related to the CCA.