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City administrator urges caution on Climate Commitment Act compliance for local gas utility
Summary
City Administrator Chris Searcy presented updated CCA modeling showing potentially rising allowance costs and modest near-term bill impacts but much greater long-term cost uncertainty; staff recommended monitoring market linkages and rule-making before proposing policy changes.
City Administrator Chris Searcy briefed the council on May 11 about how the Climate Commitment Act (CCA) could affect the city’s natural-gas utility and ratepayers.
Searcy reviewed comparative data from California and Washington and said Washington’s auction settlement prices have so far been higher (he cited a recent figure near $65 per metric ton, versus roughly $30 in recent California auctions). "If you follow Washington's program as it was originally designed to go up, by inflation plus 5%, it's going to get much more expensive," Searcy said, noting that price trajectories would drive future compliance costs. He also described a modeled customer-charge impact expressed in cents per CCF (hundred cubic feet), saying the current CCA surcharge for newer connections is roughly 33¢ per CCF while older connections incur roughly 6–7¢ per CCF.
Searcy said California utilities’ greenhouse-gas reporting did not show marked customer-level decarbonization after the program matured and argued that Washington remains uncertain because the state lags in reporting program years and the linkage to California/Quebec markets is not finalized. He noted a state allowance reserve that had moved 18.6 million allowances into the first compliance period and said only about 600,000 remained in that reserve at the time of his briefing.
Given that uncertainty, Searcy recommended the city "sit back and watch" pending market-linkage rules and Ecology decisions that could affect allowance supply and prices. He said staff had no immediate policy proposals to present but was available to explore voluntary customer programs such as incentives for heat-pump adoption.
Council scheduled a short executive session to discuss CCA auction bidding strategy under the state open-meetings exception for confidential procurement strategy.
What happens next: Staff will monitor rule-making, auction prices and linkage developments and return with policy options if conditions warrant.
