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City administrator urges caution on Climate Commitment Act costs; staff to monitor auction linkage and allowance prices
Summary
City Administrator Chris Searcy told the council the city should "sit back and watch" developments in Washington's Climate Commitment Act market; he cited high auction prices (about $65/metric ton) versus California, warned of uncertainty about market linkage, and said staff has no immediate policy to propose for natural gas utility compliance.
City Administrator Chris Searcy told the Uniontown City Council on May 11 that the city will monitor Washington's Climate Commitment Act (CCA) market and related Ecology rulemaking before seeking policy changes for the municipal natural gas utility.
Searcy reviewed comparative data from California's older cap-and-trade program and Washington's CCA, noting Washington's recent auction prices around $65 per metric ton versus California prices "under $30." He said the district is currently in the first four-year compliance period and that linkage with California and Quebec markets could affect allowance prices. "With the uncertainty being, will the linkage happen and when?" he asked, and cautioned that higher auction prices could raise customer charges.
Searcy presented modeled customer impacts and said current CCA surcharges are modest for many existing customers: "If our rates right now for natural gas are around ... $1.30, and the CCA charge for the newer connections is about 33 cents, and for the older connections about 6 or 7 cents, we're not incurring a huge percentage of increase due to the CCA now." He warned that under a scenario in which Washington's floor prices rise as scheduled, costs could grow more quickly.
On emissions outcomes, Searcy said California utilities did not show a clear, sustained decarbonization impact after the first few years: he described an early decline followed by a long plateau in utility emissions and concluded that the utilities' experience does not provide clear urgency for immediate local policy action. He recommended that the city "sit back and watch" pending Ecology decisions on program scope and the market's allowance-price containment reserve, which the state has already drawn on to dampen auction-price spikes.
Searcy said staff has no immediate policy proposals to present but may develop voluntary customer incentives (for example, guidance or incentives for heat-pump adoption) if council wants the city to support customers who choose to reduce natural-gas use. He also noted an executive session would follow to discuss CCA auction bidding strategy.
Provenance: Presentation and discussion on the Climate Commitment Act and potential utility impacts appear in the meeting transcript in the Unfinished Business segment.
