A bill to help some smokestack industries compete with foreign competitors and another to impose a fee on banks investing in fossil fuels were among the biggest losers in the recent Washington state legislative session.
But in many ways, the session that ended March 11 was successful for climate change legislation.
Sen. Reuven Carlyle (D), chairman of the Senate Energy and Environment Committee, told NetZero Insider that the 2022 session built upon laws passed in 2021, and the two years must be viewed as one biennium of work on climate change. Last year’s session saw the passage of some major climate change bills, including the nation’s second cap-and-trade law. (See Wash. Becomes 2nd State to Adopt Cap-and-trade.)
Rep. Joe Fitzgibbon (D), chairman of the House Environment and Energy Committee, said the just-finished 60-day session was crammed with competing bills from other high-priority issues, such as police reform, homelessness and regulating Gov. Jay Inslee’s powers in the wake of his COVID mandates
Consequently, there was no time to tackle everything, and the number of bills identified for passage had to be whittled down, Fitzgibbon said.
Here is a rundown of what passed and failed in the 2022 session.
Failed: HB 1682
House Bill 1682 was intended to cushion trade-exposed Washington manufacturers from the economic impact of the state’s cap-and-trade program passed in 2021. (See Wash. Bill Buffers Some Industries Subject to Cap-and-trade.)
Fitzgibbon introduced the bill to provide some industries delayed enforcement of the cap-and-trade law.
Referred to as “energy-intensive, trade-exposed” (EITE), those industries are responsible for roughly 10% of the state’s carbon emissions.
EITE industries in Washington include manufacturers in the metals, paper, aerospace, wood products, chemicals, computer and electronics sectors, as well as food processors, cement producers and petroleum refiners.
With passage of the 2021 law, the state government is working this year to implement the nation’s second cap-and-trade system, which is due to begin operating next year.
The HB 1682 program would have tackled facilities that emit 25,000 metric tons or more of CO2 annually. There are at least 100 such facilities in the state.
Pushback came in February from several EITE industry lobbyists, who argued that much of the technology needed to curb emissions does not currently exist.
Fitzgibbon said the bill will be revived, noting that it included language that would not go into effect until the 2030s, providing a huge time cushion.
Failed: SB 5967
Senate Bill 5967 by Carlyle called for any financial institution in Washington that invests in fossil fuels to be charged an annual fee. Carlyle was inspired by discussions at the global climate change summit in Glasgow, Scotland, last November.
The bill would have required a financial institution with a presence in Washington and earning a net income of $1 billion to pay a surcharge on the institution’s business and occupation tax, the state’s tax on a firm’s gross income. (See Fossil Fuel Funders Face Fee Under New Wash. Bill.)
The bill proposed that any financial institution that spends more than 4% its investment on fossil-fuel-related businesses would pay a 0.5% surcharge to the state. The surcharge would fall to 0.375% for an institution that spends 2.5-4% of its investments on fossil fuels and to 0.25% for fossil fuel investment rates of less than 2.5%.
The legislation died in the Senate’s Ways and Means Committee.
Carlyle is retiring and won’t be around in 2023 to revive the bill. He said he believes in the concept, but it might take a couple years to gain traction, which is normal for major ideas.
He plans to talk with other Washington legislators about reviving the bill and to talk with Oregon and California legislators about pursuing the same concept.
However, Rep. Fitzgibbon does not think the concept will move ahead, telling NetZero Insider there are a number of technical details that need to be addressed. For example, Fitzgibbon said, the bill could interfere with interstate commerce protected by the U.S. Constitution, as well as international commerce.
Failed: HB 1099
House Bill 1099 would have added climate considerations to city and county land-use planning.
The bill by Rep. Davina Duerr (D) would have made this change to Washington’s Growth Management Act, which regulates long-range land-use planning for Washington’s city and county governments. It would have required local governments to review and, if needed, revise their comprehensive plans and development regulations every eight years.
Duerr’s bill would have required climate change to be considered in land-use and shoreline planning for the 10 largest of Washington’s 39 counties and in cities of 6,000 people or larger. The 10 largest counties cover Puget Sound, Spokane, the Yakima River Valley and the Washington-side suburbs of Portland.
Republicans in the Senate and House killed the bill on the final day of the session. (See Climate-related Land-use Bill Stalls Again as Wash. Session Ends.)
They mounted a parliamentary procedural challenge to the bill, which failed, but it also gobbled a few hours before the matter could be researched and resolved. Then House Republicans threatened to have all 41 of their members speak against the bill on the House floor late in the evening, which would take time away from other Democratic bills facing a midnight deadline for passage.
The Democrats decided to sacrifice House Bill 1099 to have time to pass two major budget bills.
Failed: HB 1766
House Bill 1766 by Rep. Alex Ramel (D) called for natural gas utilities to submit plans to the Washington Utilities and Transportation Commission by Jan.1, 2024, on how they plan to gradually decrease their greenhouse gas emissions through 2050.
These plans would have had to be updated every four years. The bill also called for some limits on the ability of gas companies to provide new gas service and to install new gas equipment to meet energy conservation targets. And it would allow gas companies to begin providing hydrogen to customers.
The bill died in the House Environment and Energy Committee following intense lobbying by the gas industry, Fitzgibbon said.
Failed: HB 1792
House Bill 1792 by Rep. Ramel would have expanded the types of hydrogen that municipal and rural utilities can provide to customers.
The bill would have provided tax credits for “green electrolytic hydrogen” produced, sold or distributed by municipalities and public utility districts.
Electrolytic hydrogen is hydrogen produced through electrolysis and does not include hydrogen manufactured by steam reforming or by any technologies using fossil fuels.
Despite strong bipartisan support, the bill did not reach a House floor vote prior to a late February cut-off deadline.
Failed: SB 5908
Senate Bill 5908 by Sen. Marko Liias (D) would have created a new interagency council to coordinate Washington’s phasing in of electric vehicles during the next few decades.
The proposed council’s duties would include developing a strategy to ensure that the state is ready for all new car sales in 2035 to be zero-emission vehicles. The body would have gathered and disseminated information about EV programs, policies and funding. It would coordinate grant funding on EVs throughout the state.
Despite Liias being chairman of the Senate Transportation Committee, where the bill was sent, no vote was taken to move it out of committee.
Passed: SB 5714
Senate Bill 5714 by Carlyle will provide tax breaks on the construction of solar panel canopies over parking lots. (See Builders Oppose Labor Provision in Wash. Solar Canopy Bill.)
The canopies will likely be built over large lots at shopping centers, Carlyle said.
The breaks will come in the form of repayments of sales and use taxes accumulated during construction, which must be completed in two years to receive all requested breaks.
Under the bill, a solar canopy installer will receive a 50% refund or deferral of its taxes if it is an organization owned by women, minorities, or veterans, or an entity with a history of complying with federal and state wage and hour laws and using apprenticeships — or hires workers living in the project construction area.
Refunds or deferrals of 75% would go to one of these organizations if workers on a project were compensated at prevailing wages determined by collective bargaining agreements.
A 100% refund would go to a contractor operating under a project labor agreement (PLA), a special collective bargaining agreement tailored to a specific project that supersedes existing agreements. A typical PLA requires that workers are hired through union halls and that nonunion workers are paid union wages for the length of the project.
Passed: SB 5910
Sen. Carlyle’s Senate Bill 5910 will create a new state office to support development of electrolytic hydrogen and other alternative fuels. (See Green Hydrogen Bill Passes Wash. Legislature.)
The bill is supposed to boost Washington’s prospects to receive money from the federal Infrastructure Investment and Jobs Act to create one of four regional hydrogen hubs in the nation.
The federal law allocates $8 billion for the creation of at least four hydrogen hubs across the country, as well as $1 billion for the domestic manufacture of the electrolyzers needed to convert water to green hydrogen. The U.S. Department of Energy will solicit proposals for the hubs until May 15 and select the four sites a year later.
“It would be political malpractice not to get one of those grants from the federal government,” Carlyle said.
The proposed Office of Renewable Fuels in the Washington Department of Commerce would collaborate with other state agencies to accelerate market development of renewable fuel and hydrogen projects along their full life cycle, in part by supporting research and development around production, distribution and end uses. It would also identify ways to best deploy the fuels to support the state’s climate change mitigation and adaptation efforts.
Passed: SB 5722
Senate Bill 5722 by Sen. Joe Nguyen (D) will trim the carbon footprints of roughly 50,000 buildings in the state. (See Lawmakers Pass Wash. Building Emissions Bill.)
Nguyen’s bill calls for the state’s Department of Commerce to set draft standards to trim carbon by Dec. 1, 2023, for buildings ranging from 20,000 to 50,000 square feet. A 2019 law addresses the carbon footprints of buildings that are greater than 50,000 square feet, which number about 10,000 in the state. The state must inform the affected building owners by July 1, 2025.
The Commerce Department would fine-tune the standards and submit a report to the legislature in 2029. It would have to adopt the standards by Dec. 31, 2030, and the new rules would go into effect in 2031.
Twenty-seven percent of Washington’s carbon emissions come from buildings, the second largest emitter behind vehicles at 45%.
Passed: HB 1812
House Bill 1812 by Rep. Fitzgibbon will take Washington’s Energy Facilities Site Evaluation Council (EFSEC) outside the umbrella of its parent, the Washington Utilities and Transportation Commission, and make it an independent agency. (See Bill to Expand Wash. Siting Council Passes Senate.)
EFSEC, comprising representatives from several state agencies, makes recommendations to the governor for final decisions on the placement of solar farms, wind turbines and other energy resources.
If a wind or solar developer opts to seek state approval instead of obtaining county permits, it can bypass county governments by going through EFSEC. Or a developer can choose to have the appropriate county government handle the permitting, sidestepping EFSEC.
Besides being an option for wind farm and solar farm ventures, the expanded EFSEC will have jurisdiction over clean energy product manufacturing facilities, renewable natural gas facilities and hydrogen production plants. The bill also will require the Washington Department of Commerce to meet with rural stakeholders and to prepare reports on those meetings, including recommendations on how to more equitably disburse costs and benefits of energy projects to rural communities.
The bill directs a joint Senate-House committee to review inequities during the siting of large alternative energy projects with a report due by Dec. 1, 2023.
Passed: HB 1814
House Bill 1814 by Rep. Sharon Shewmake (D) will provide money through the Washington State University’s Extension Energy Program for public and tribal housing authorities to provide solar power to low-income residents.
A grant would be limited to 100% of project’s costs and must be between 12 and 199 kilowatts. An applicant must prove a direct benefit to its residents.
The bill allocates $300,000 for this program in fiscal 2023. Then it would allocate $25 million in each of the four subsequent budget biennia.
Transportation Budget Measures
The transportation budget included money to build two 144-car hybrid electric ferries and to convert a regular ferry to a hybrid electric model.
Washington State Ferries expects to start a multiyear contract to convert from solely diesel fuel engines to hybrid fuel-battery propulsion in October. The state ferry system — the largest in the U.S. — has 21 vessels that crisscross Puget Sound, serving 20 terminals on 10 routes.
The state’s ferries consume 19 million gallons of fuel annually. State officials believe that this move will dramatically trim that figure. When a ferry is docked to load and unload vehicles, the batteries will be hooked up to a shoreline charging station, which will replenish battery power in 18 minutes. However, the construction of the dockside charging stations is not expected to be complete until 2025.
The transportation budget also includes money to help restart the dormant Italco aluminum smelter in Whatcom County in northwestern Washington.
The proposed restart would come with equipment that would trim carbon emissions below August 2020 levels, when Alcoa shut down the plant, leading to the loss of 700 jobs. Two unidentified companies have expressed interest in buying and reviving the plant.
The transportation budget additionally includes money to help build a solar panel manufacturing plant in Grant County in Central Washington.
