With Optimism and a Few Gulps, Lawmakers Launch a New Effort to Rewrite the State's Troubled Green-Energy Initiative

Legislative Plan Takes Aim at I-937’s Biggest Problem – Utilities Wouldn’t Have to Buy Power They Don’t Need


If everybody seems to hate the proposal equally, says Senate Energy Chairman Kevin Ranker, you know it must be good.

By Erik Smith
Staff writer/ Washington State Wire

OLYMPIA, Jan. 24.—Lawmakers are launching what seems like the umpteenth attempt to rewrite the troubled green-energy initiative approved by voters in 2006, but at least the latest try doesn’t dance around the big problem with Initiative 937.
    After months of talk with every interest group involved in the state’s energy picture, committee chairmen in the House and Senate are offering up a joint proposal that says, among other things, that utilities don’t have to buy power they don’t need.
    It is a simple idea that would save hundreds of millions and perhaps even billions of dollars for every Washingtonian who pays an electric bill, but it is going to run a gauntlet of opposition from environmental groups, wind and solar-energy developers, utilities that have bet heavily on costly wind-farms, and everyone else who expects to make big money as a result of I-937. And it is only part of a complicated legislative proposal that will face attack from every other interest in Washington’s energy business.
    Joked Senate Energy Chairman Kevin Ranker during the first hearing on the plan, “We succeeded in making nobody happy, which means it might be a decent proposal.” A House hearing is set for today.
    The plan, introduced in the Senate as SB 6396 and the House as HB 2654, follows months of work by Ranker, D-Orcas Island, and House Environment Committee Dave Upthegrove, D-Des Moines. Unlike a proposal offered briefly by Gov. Christine Gregoire last month and then withdrawn, this one doesn’t tiptoe into what many lawmakers consider a minefield. Instead it takes a flying leap smack-dab into the middle. It would defer the hard-and-fast requirement that utilities buy a steadily increasing amount of “green energy” regardless of whether they need it – some 15 percent of their supply by 2020.
    Instead, the proposal would allow utilities to satisfy purchasing requirements once the economy recovers and when there is actual demand for additional power. As a trade-off aimed to satisfy environmental groups, the bills say that eventually utilities would be expected to buy 20 percent of their power from wind, solar, and other forms of new “renewable energy.”
    The central effect is this – big new spending on green energy would occur only when there is demand, delaying things by perhaps a decade. That’s good news, perhaps, for most utilities, consumers and businesses – the way things stand right now, they have to pay millions for power that goes unused. But it is bad news for anyone who has been depending on the artificial forced spending that the initiative requires. And given the powerful interests lined up in support of I-937, experienced lawmakers flash knowing smiles about the fight that lies ahead. Senate Majority Leader Lisa Brown, D-Spokane, got a big laugh as the new proposal got its first hearing in the Senate Monday.
    Brown said, “To all of my friends from the 937 debates of the past, I am really looking forward to the next chapter in this story.”

    Yet Another Try

    It is the kind of issue that might seem ill-suited to a 60-day legislative session in which lawmakers must deal with a $1.5 billion budget shortfall and what is likely to be a showstopping debate on gay marriage. But it’s not as if compromise would be any more likely if lawmakers had more time. They’ve been dealing with this one for years and nothing ever seems to work.
    Environmental groups pushed the idea in the Legislature five years before they gave up and ran it as an initiative, part of a national movement to kick-start an alternative-energy industry. Some 30 states have imposed similar rules, either through legislation or initiatives. I-937 won narrow approval at the polls at a time when the Washington economy was booming and it seemed as if electricity demand would keep rising year after year. Now demand is stagnant and utilities say it will be years before they need power. So competing interest groups have spent years trying to hammer out a compromise that might make the rules more workable, sometimes peaceably, sometimes violently – as in 2009, when the debate shut down the Legislature for a day before lawmakers finally threw up their hands.
    The big problem is that some interests have a big stake in making sure that the rules remain in place. Washington environmental groups, through their “Environmental Priorities Coalition,” have made defense of I-937 one of their three top priorities for the year. Windpower developers and associated manufacturers are lobbying hard to keep the rules intact, and some utilities, particularly Puget Sound Energy, have spent vast amounts on their own wind farms in hopes of becoming sellers of green power.
     Upthegrove entered the picture for the first time last year -- until now the debate has been the province of the Legislature's energy committees. He began with high hopes, but said last month he now understands why it took an initiative to impose the rules in the first place. In a political body like the Legislature, which prizes negotiation and agreement, there just isn’t a lot of common ground. These days lobbyists say they are familiar enough with the debate that they could argue the opposing positions just as well as their own. Kathleen Collins, lobbyist for Pacific Power, compared it to the movie “Groundhog Day,” in which Bill Murray lives through the same day, over and over. “It changes a little from conversation to conversation,” she said, but nothing big ever seems to happen.

     ‘Robin Hood in Reverse’

     If anything is different this year, it is that the enormous costs imposed by I-937 are just about to hit, and a growing number of lawmakers are starting to see the measure as an unnatural subsidy for an alternative-energy industry at a time when the state economy is ailing. At Monday’s hearing, environmental advocates and windpower-industry boosters gushed about the big $7.5 billion alternative-energy investment that the initiative has forced in this state, and the attendant jobs it has created. But state Sen. Jim Hargrove, D-Hoquiam, pointed out that the money ultimately has to come from somewhere, in the form of higher electric bills. And that means jobs aren’t created in other sectors of the economy.
    “I guess I can appreciate the investment, but basically what we have is a little bit of Robin Hood in reverse,” he said. “We’re taking money from the ratepayers and investing it in your companies to build a particular type of technology that qualifies as green energy, so I can see where you are very excited about that. But we need to balance it with all of the concerns of the citizens. I think the primary reason it passed was because of the desire to get green energy and get off the fossil fuels. Your jobs argument is not the best argument for me, because the money is coming from someplace else to create your jobs.
    “So we want to make sure that we don’t, at least from my perspective, unfairly undermine what you have already done, because we don’t want to change the rules in the middle of the game. That hurts you. But as far as guaranteeing your profitability in the future, that is not a big concern of mine, because the money is coming from the ratepayers.”

     A Complicated Proposal

     There’s plenty of detail to the proposal that is embodied in the House and Senate bills, and it is complicated enough to give every energy-industry lobbyist employment for the next couple of months. One major point is the recognition of older investments in biomass technology as a way of meeting the renewable energy requirements. It is a big issue for the timber industry, which began big investments in biomass back in the ‘90s, but can’t count projects launched before 1999. Also a major issue is the way hydropower is considered in the calculation – assuredly the most “renewable” resource around, and one which already provides 70 percent of the state’s energy. I-937 essentially disregards old investments in dams, and at question is the treatment for more recent improvements.
      But the two biggest questions are whether utilities are permitted to meet the requirements with eventual “load growth” rather than using hard and fast deadlines, and whether additional requirements for renewable energy might be imposed after 2020. Many utilities and industrial users say they oppose a stiffer standard. A coalition of public utilities is pushing a competing and simpler proposal – that one simply allows them to meet the existing standards with load growth, and is silent on the question of higher standards. Meanwhile, environmental groups and windpower boosters say they love the idea of stiffer standards. It’s the other part they can’t abide.
      Lead environmental lobbyist Clifford Traisman, representing the Washington Environmental Council and the Washington Conservation Voters, said the wind and solar industry needs careful nurturing. “We have had $7.5 billion in investment in Washington state in the renewables industry, much of it due to Initiative 937, so we have to be careful that as we make changes we don’t in any way encourage disinvestments in this fragile industry,” he said.

Back to top