City administrator urges caution on Climate Commitment Act compliance steps for natural-gas utility

City Administrator Chris Searcy briefed the council on the Climate Commitment Act (CCA) and potential cost impacts for the city’s natural-gas utility. Using California’s decade-long experience as a point of comparison, Searcy displayed charts showing that California’s utilities saw an initial decline in emissions but then largely flattened, and he noted differences in market dynamics: the recent Washington auction price was about $65 per metric ton versus under $30 in recent California auctions.

Searcy showed modeled customer impacts (CCA charges per CCF/therm) and described a range of scenarios. He said current CCA-related charges for newer connections are higher than those for older customers, and while near-term impacts in 2026 appear modest (examples cited: roughly 33¢ per CCF for newer connections versus 6–7¢ for older ones in the staff model), cost trajectories could rise sharply depending on price-path assumptions and linkage to other jurisdictions.

Searcy argued that uncertainties—whether Washington successfully links with California/Quebec markets, whether Ecology will add covered sources such as incinerators, and depletion of the state's allowance price containment reserve—counsel a watchful approach. He recommended that the city not take immediate aggressive policy actions until market outcomes and Ecology rulemakings become clearer but suggested staff could later bring voluntary customer-incentive options (e.g., heat-pump incentives) if desired. He additionally said the council would move to executive session to discuss bidding strategy for the CCA auction under RCW 42.30.11.