House Bill 1589 — Selling out Washington families for corporate interests
The natural gas ban – HB 1589 – is clearly unconstitutional. House Democrats could have stopped it after finding out it was unconstitutional. They passed. Attorney General Ferguson could have stopped it by telling House Democrats it was unconstitutional. He bowed to politics and refused to advise them it was unconstitutional. Governor Inslee should have known this bill was CLEARLY UNCONSTITUTIONAL, but he signed it.
Why is HB 1589 unconstitutional?
According to the state constitution, new legislation is required to identify existing laws that it will affect should it be enacted. The drafters of HB 1589 did not do this in the original bill. During floor debate on the bill, we challenged it on those grounds and the Lt. Governor ruled in our favor, calling the bill a “hot mess.” Democrats “fixed” the bill and brought it back to the floor, where it passed. However, they did not fix everything and the bill remains unconstitutional. Both Senate and House Republicans fought the bill on this issue, among others.
This bill creates the roadmap and tools for our state’s largest utility to get out of the fossil fuel business…
Background
House Bill 1589, requested by Puget Sound Energy, insulates the state’s largest monopoly utility company from paying the price for impractical state-mandated carbon-reduction goals by cutting off gas service to their customers.
Homeowners and businesses would bear the cost of converting from gas to electricity. The Building Industry Association of Washington estimates costs to residential customers to average $39,767. According to PSE, that number could be as high as $74,400 ($7.3 billion to $20 billion total). The impact on business also would be enormous, and energy costs would soar.
HB 1589 reverses the concept behind state utility regulation. Until now, the idea has been to promote efficiency while protecting customers from excessive costs. This bill imposes enormous costs on customers in the name of protecting one company from the financial consequences of bad energy policy.
Op-Ed
Gov. Inslee should have vetoed natural gas bill
The update of the state government’s operating budget required no new taxes. Speaking of taxes, Republicans also killed a bill by the Democrats that would have allowed local governments to triple the annual allowable growth rate of property taxes without first obtaining voter approval.
It wasn’t all good, though. The worst bill by far to pass this year paves the way to a ban on natural gas in our state. It is a product of the cap-and-trade law approved by majority Democrats that took full effect a year ago — a policy more accurately called “cap-and-tax.”
House Bill 1589 doesn’t ban natural gas outright. It’s sneakier than that. Originally drafted by attorneys for Puget Sound Energy, a foreign-owned monopoly that claims to supply natural gas to around 900,000 customers here in Washington, its intent is to exclusively enable PSE to avoid certain regulations and submit plans to discontinue providing natural gas service.
Ironically, PSE’s attorneys made critical errors in drafting the bill, forcing majority Democrats to fix it after the lieutenant governor — in his role as president of the Senate — called it a “hot mess” during the initial Senate floor debate.
The bill still contains an error that makes it unconstitutional. Even so, the majority forced it through after significant late-night arm-twisting in the House of Representatives.
Whatever plans PSE creates will be submitted for approval by the state Utilities and Transportation Commission. Considering the UTC’s three members are appointed by the governor — the same governor who openly favors banning what he insists on calling “dirty gas” — we can guess what the commission will decide.
Worse yet, the bill is a full frontal attack on PSE’s middle-income natural gas customers.
The bill burdens them with the expense of converting to electricity, estimated to cost up to $70,000 per home over time. On top of that, PSE is predicting residential electricity rates would increase 37% under this bill, while rates for residential natural gas — while it’s still available — would increase by 151%.
Although the bill offers some financial assistance to lower-income homeowners, the money can’t go toward replacing gas appliances or making related modifications, such as replacing countertops.
There’s nothing for middle-income families, or for renters to handle the conversion expenses passed through to them.
It’s disappointing that PSE pursued this self-centered approach. While its customers get stuck for tens of thousands of dollars in conversion costs, PSE gets to watch hundreds of thousands of homes move to the electricity side of its monopoly, from the natural gas side.
The real culprits here, however, are Gov. Jay Inslee and the majority Democrats who have joined his climate crusade. First, their cap-and-trade policy drove gasoline prices up across our state, then it caused natural gas bills to climb; now it’s creating a path to the shutoff of natural gas service, area by area.
The bottom line is simple: No cap-and-trade, no HB 1589. You wonder what other financial harm is in store for Washington families and employers as long as the Climate Commitment Act is in place.
The determination of Democratic legislative leaders to pass the PSE bill this year also sheds more light on why they would not let the Senate and House of Representatives vote on Initiative 2117, to repeal the cap-and-trade law.
Similarly, the sponsors included the so-called “emergency clause” in the PSE bill. They know this prevents Washington voters from rejecting HB 1589, using their constitutional power of referendum.
Then there’s our electrical grid. Can it bear the burden of hundreds of thousands of customers switching entirely to electric power?
The answer is no.
The governor should have vetoed the PSE bill. Unfortunately, it will likely have to be fought another way, at another time. The people of Washington deserve better.
John Braun serves Washington’s 20th Legislative District, which comprises parts of Thurston, Lewis, Cowlitz and Clark counties. He is leader of the Senate Republican Caucus.
Rely on natural gas? WA lawmakers don’t care. The state’s ‘phaseout’ will cost you
The following op-ed was published in the The (Tacoma) News Tribune April 5, 2024.
Opinion By Sen. Chris Gildon
Did the Washington Legislature just pass a ban on natural gas that will force about 900,000 Puget Sound area customers to convert from gas to electric? That is the topic of much debate these days, and the facts should be known.
Proponents of House Bill 1589, particularly Puget Sound Energy, claim the conversation is loaded with misinformation. They say the new law does not include a ban on natural gas, suggesting instead that the legislation is simply designed to help them “thoughtfully plan for the electric and natural gas choices of our customers.”
Are they correct? Somewhat.
The 38-page law requires PSE to submit a plan to the Utilities and Transportation Commission (UTC) by 2027 for combining its gas and electric businesses. PSE’s customers would see increased rates to pay for the additional infrastructure required to expand the current electrical grid while PSE simultaneously discontinues natural gas service. Of course, the plan would have to be approved by the UTC. That should not be a problem, however, as every member of the UTC is appointed by the bill’s biggest cheerleader — Gov. Jay Inslee.
So is it a ban, or is it a legislative directive to develop and implement a plan to discontinue usage of natural gas?
Semantics don’t matter. However the law is described, natural gas is going away.
What’s important is the impact the bill will have on people all across the Puget Sound region. PSE estimates the cost of electricity will increase 37% and natural gas will increase as much as 151% until it is phased out, one community at a time. Additionally, PSE’s gas customers will face enormous costs to convert to electricity. About 800,000 PSE customers are residential. They will all need to replace furnaces, water heaters and gas stoves. They’ll also be faced with upgrading electrical panels and fully re-wiring older homes with knobs and tubes.
The Building Industry Association of Washington estimates this will cost about $40,000 per home. All these costs will be borne not only by homeowners, but also by renters, because housing providers must recoup their costs. In the form of higher rates or exorbitant conversion costs, this will undoubtedly increase the cost of housing in our area. As an aside, I encourage everyone to research which legislators voted for this bill yet simultaneously claims to support affordable housing. You can pick one or the other, not both. Intellectual honesty should count for something in politics.
The effect on business will be just as harsh. In addition to higher monthly energy rates, the cost of adding the additional electrical lines required can be around $90,000 per business. Restaurants will be particularly hard hit. Many require natural gas. It doesn’t stop there. Think about the increased operating costs for schools and public buildings in the form of higher monthly rates alone. Will additional taxes be levied to pay for these increased operating costs? Time will tell.
The final question is whether our electric grid can handle the increased demand once clean natural gas is gone. The answer is unknown. I can say, however, that Senate Republicans offered an amendment during debate on this bill that would have required the electric grid be sufficient to prevent brownouts before shutting off the gas. That amendment was not adopted.
If clean energy were a sport, Washington state would already be a champion — and that is something to be proud of. Our state produces two-tenths of one percent of world carbon. This bill reduces that by a minuscule amount while increasing costs greatly.
Supporters of this bill seem to be saying there is no cost too great and no benefit too small while trying to confuse the public with a semantic debate about bans.
Washington’s new — supposedly designed to lead the state to its “clean, affordable and reliable energy future — leaves many questions unanswered. It will be a cause for uncertainty in the marketplace for quite some time.
The Legislature should address those concerns in the next legislative session.
Sen. Chris Gildon, R-Puyallup, represents the 25th Legislative District and serves as deputy leader of the Senate Republican Caucus.
Print/Audio News Release
Consumers will pay billions under law to phase out natural gas, Gildon says
AUDIO: Get ready for higher home heating costs as Washington State Democrats push through legislation to phase-out natural gas. Tracy Ellis explains.
Details
How it Works
- The bill applies only to Puget Sound Energy, which serves 1.1 million electricity customers and 900,000 gas customers, primarily in the Puget Sound region of Western Washington — but also some in Eastern Washington as well. About 800,000 of these gas customers are residential.
- PSE, like other utilities, faces tough state requirements for carbon reduction under a series of energy bills passed by majority Democrats over the last six years. By 2030, greenhouse gas emissions are supposed to be 45% below 1990 levels.
- PSE proposes to get there by treating gas and electricity as a single business, combining them in a single Integrated “System Plan” to be reviewed by the Utilities and Transportation Commission (UTC) – and cutting people off from gas service, one community at a time. (The UTC consists of three individuals appointed by the governor.)
- The bill would permit PSE to propose the merger of gas and electric rate bases. Thus PSE’s gas customers could be obligated to pay for current electrical infrastructure, new generating plants and transmission lines.
- The new planning process would begin by 2025, when new UTC rules are in place. Area-by-area shutoffs of gas service would be permitted once the UTC approves the new plan.
Average Cost to Convert
Source: Building Industry Association of Washington
What it Impacts
- Homeowners, landlords and renters face a double whammy under HB 1589. Energy costs would skyrocket and retrofit costs would be enormous. Whether you own or rent, you would be hit. These costs would be punitive for most and unaffordable for many.
- Electrifying one home will cost an average of $39,767. The cost depends on what needs to be replaced, ranging from furnaces and water heaters to wiring and more. The older the home, the higher the cost. (Source: Building Industry Association of Washington)
- The vast majority would not qualify for financial assistance. Under HB 1589, limited financial assistance would be available only for the lowest-income homeowners. And assistance would be forbidden for the installation of new gas appliances, even if they would be energy efficient for customers.
- Washington already is facing a long-term shortage of affordable housing, and this would make it worse. HB 1589 would increase the cost of homeownership and rentals.
- Energy bills would dramatically increase. Under HB 1589, ignoring all other cost factors (inflation, cap and trade), PSE predicts residential electricity rates would increase 37 percent by 2045 and residential natural gas rates would increase by 151 percent.
- Already 35 to 40 percent of PSE customers are “energy burdened,” meaning they struggle to pay bills and sometimes must make stark choices between eating and heating their homes. (PSE testimony, House Environment & Energy Committee, 2/6/24)
- HB 1589 would eliminate an affordable energy option for Washington residents. Natural gas costs about 33% less than electricity.
- These increased costs would be a regressive tax on those who can least afford it. The disadvantaged would pay a disproportionate share of their incomes for energy.
- Increased business costs would provide another drag on Washington’s economy. The burden would vary widely depending on business and industry.
- Going all-electric increased refrigeration and equipment costs $1 million at a new Seattle grocery. (Washington Food Industry Association testimony, Senate Environment, Energy and Technology Committee, 1/31/24)
- Impact would be severe on some industries because they have no effective alternatives for natural gas in their industrial processes. (Association of Washington Business testimony, Senate EET Committee, 1/31/24)
- Restaurants are another sector that cannot survive without access to natural gas, and this includes cultural cuisine that is important to immigrant communities.
- The bill may help PSE absorb the shock of arbitrary state goals, but it will do little to help the world climate. PSE’s own “decarbonization” study concludes emissions would increase until new green energy comes online. It also concludes the cost outweighs the benefit to society. Washington produces just 2/10 of 1% of world emissions, and any benefit would be negligible.