Initiative 1631 would increase Grant PUD costs by millions

Initiative 1631, which will appear on the state’s November ballot, would impose a fee on carbon emissions that could result in a 5 percent — $16 million — increase in average annual costs for Grant PUD. …

As the county’s demand for electricity grows, Grant PUD would need to purchase more electricity on the West Coast energy market. This power comes from a variety of generation sources, including coal and natural gas, which both produce carbon that would be subject to the proposed fee.

It would be possible to purchase carbon-free electricity — hydropower, solar and wind — on the wholesale market, but the cost of this energy would be higher because of the added value of its carbon-free attributes. Grant PUD’s estimate takes this into account, Nolan said.

How Grant PUD would absorb this cost increase is a decision for PUD commissioners and executive managers. Cost cutting and electric-rate increases could be part of the mix.

Grant PUD has not taken a position on I-1631, but wants to get the word out about its expected impacts.

Franklin PUD commissioners voted Aug. 28 to oppose I-1631, citing an impact of $700,000 to $1 million, onerous requirements to qualify for credits and erosion of local control (see their commission packet, page 21). Benton PUD has also voted to oppose, citing an impact of $1 million to $2.1 million in 2020. …

In 2016, 59.25 percent of Washington voters rejected a carbon tax initiative – Initiative 732. If Initiative 1631 passes this November, Washington would become the first state to have a carbon fee.

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