Potential Inslee Veto Looms Over Green Energy Bill

Potential Inslee Veto Looms Over Green Energy Bill
Last year, Governor Jay Inslee vetoed a bill that would include electricity created by biomass as a renewable source under the state's Energy Independence Act. Lawmakers have now passed a similar bill, SB 5128 that limits the number of qualified projects. However, industry leaders are still concerned Inslee will once more veto it. Photo: nationofchange.org

Washington industry leaders are calling on Governor Jay Inslee to sign a bipartisan bill overwhelmingly approved by the state House and Senate, which they say will benefit forest-based industry as well as utility companies and their customers. SB 5128 would allow businesses to count electricity created by biomass as renewable energy under the state’s Energy Independence Act (EIA). Proponents say it would allow these companies to recuperate project costs while allowing utility providers to keep rates down.

Veto Fears, Despite Bipartisan Backing

Although a spokesperson from Inslee’s office told Lens they’re still reviewing the legislation, statehouse observers are worried the governor may reject it as he did SB 6166, a similar bill passed last year. SB 5128 was tailored to address concerns raised by Inslee in his veto letter.

Prime sponsor of SB 5128 is State Sen. Dean Takko (D-19), who met with Inslee Thursday to discuss the bill in the hopes he will sign on this time.

Although the bill helps local industry, Takko told Lens prior to the meeting that SB 5128 was crafted in collaboration with environmental community stakeholders.

“They (environmentalists) all crunched the numbers with us on a white board and said, ‘Yeah we can deal with that,'” he said. “Hopefully he’ll (Inslee) see that we really worked on this and it just isn’t giving away something on I-937.”

A second veto would be a stark contrast to the broad support the legislation has received from state lawmakers. It was approved unanimously by the Senate on March 1 and later by the House on April 10 in a 91-7 vote. Inslee has 20 days to either sign or veto the legislation.

Qualifying “Renewable” Energy

In 2006, Washington voters approved the EIA via Initiative 937. It requires utility companies with 25,000 customers or more to meet certain goalposts for the renewable energy percentage of the total electricity provided to ratepayers. It is currently nine percent, but in 2020 it will increase to 15 percent.

Under current law, the electricity produced by pulp and paper industry biomass as the result of plant upgrades do not qualify as renewable, though Takko observed that “if it was a new plant, it would have (counted).”

SB 5128 would change that by including electricity produced from projects created after January 1, 2010 as renewable energy; in SB 6166, the cutoff date for projects was March 31, 1999.

“Personally, I think the other bill was better at capturing what we’re trying to do, but legislation is about compromise,” Takko said.

State Rep Jim Walsh (R-19) is the primary sponsor of SB 5128’s companion bill, HB 1519. Prior to the April 10 vote on SB 5128, he told colleagues on the House floor that the bill “corrects a flaw that was in I-937 and recognizes the older bio mass made new with private capital investment as a renewable energy source.”

“Biomass is an important alternative in our renewable energy portfolio,” he added. “This bill encourages its development, and it’s good for the state.”

In agreement is Mark Doumit, Executive Director of the Washington Forest Protection Association. “It really makes perfect sense to incentivize companies to become more efficient, while using renewable resources like carbon-neutral biomass,” he said in a statement.

Cost Savings For Utility Customers

The bill would enable companies such as KapStone Paper and Packaging in Longview to recuperate some of the millions they’ve invested in biomass energy projects by selling energy produced to entities such as the Cowlitz Public Utility District. According to a 2015 sustainability report, more than 70 percent of the energy consumed by KapStone mills is renewable.

Chris McCabe is the executive director of Northwest Pulp and Paper. He told Lens that the bill “just gives utilities another way to comply with I-937. This ultimately will help utilities and the ratepayers.”

Mike Roberts is the energy manager for Kapstone’s Longview location. He said in a statement that “when you step back and take a look at this (SB 5128), everyone benefits from renewable energy — our mill, utilities, their customers and the greater community.”

He added, “The governor would be giving a nice environmental and economic boost to rural Washington by signing this bill, especially here in Cowlitz County which is so heavily invested in natural resources.”

The bill is similar to SB 5232, a bill introduced this session that would have included electricity produced by the Snake River dams among EIA’s renewable energy sources. However, it has not progressed since a March 21 public hearing of the House Technology and Economic Development Committee.

Expanding Green Energy Options

Despite changes to SB 5128 limiting the number of qualifying projects and the energy produced, some stakeholders fear Inslee may still veto the legislation out of a desire to encourage other types of carbon-neutral energy, such as wind and solar. In his April 2016 veto letter, Inslee wrote “I remain open to changes in our renewable energy standards that encourage new investments and new technologies, without displacing current investments.”

This sentiment was referenced on April 10 by State Rep. Jim Morris (D-40) while addressing colleagues on the House floor. Although he voted for the bill, he added that “there’s some concern, I think, with adding to…a glut of renewable energy credits on the West Coast. This will add more to that pool…and potentially suppress prices more.”

However, McCabe said in a statement that right now the state needs to expand, not restrict, renewable energy options under EIA. “This is particularly important at a time when our sector faces mounting environmental regulatory challenges, including EPA’s unattainable water quality standards, and ongoing carbon tax proposals.”

Takko said, “There’s a lot of talk around here (in Olympia) about doing things for rural Washington, and this is something for rural Washington.”

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