Responses to claims about Clean Energy Initiative 937
Claim: I-937 suffered from lack of proper review and did not benefit from the legislative review process, leaving several issues unresolved.
Response: I-937 addressed many concerns raised by legislators and other stakeholders during previous legislative considerations. The legislature considered similar clean energy standard bills in more than five legislative sessions, and advocates worked with utilities over several years to try to reach agreement on the policy. Despite polls that consistently showed strong, statewide support for clean energy standards, utilities and big businesses used their power to stop them in the legislative process, leaving clean-energy advocates no choice but to take an initiative to the people. A committee of energy policy experts drafted I-937, with careful attention to the concerns raised during legislative sessions. The initiative earned the initial support of the trade association representing public utilities in the state.
Claim: I-937 is all about renewable power.
Response: I-937 established two clean-energy standards. One requires utilities to save money for their customers by achieving all the cost-saving energy conservation in their service territories. The separate renewables standard ensures that an increasing amount of customer power needs will be served with new renewable resources. The standards are structured so the more customers conserve, the fewer renewables the utility ultimately needs to acquire.
Claim: Unlike laws in other states, I-937 doesn’t consider hydropower renewable.
Response: Of course hydropower is renewable, and we must invest in new renewable-energy sources. I-937 explicitly includes “water” in its definition of renewable resources. Hydropower already provides two-thirds of Washington’s electricity today. I-937 seeks to build on our hydropower legacy to assure that our future energy sources are at least as clean as today’s. Thus I-937 focuses on allowing utilities to count efficiency upgrades to existing hydro facilities toward the standards. Other states that have included existing hydropower in their renewable standards rely far less on hydropower to serve their energy needs. And many of those states have higher standards.
Claim: Unless hydropower counts towards meeting I-937’s renewable energy standard, Washington will be sending its cheap hydropower to California — where it will count as renewable.
Response: Most of our hydropower won’t count toward California’s renewables standard. California restricts the kinds of hydropower that can meet its standard, which ramps up to 33% in 2020. Counting all existing hydro toward I-937 would render our renewable standard meaningless since all utilities would already meet it. Using existing resources will not help us meet future needs or clean up our electricity system, and would set us back on reaching our climate goals.
Claim: I-937 unfairly promotes wind power. The initiative favors one single technology by making wind power the utilities’ only option for meeting I-937’s renewables targets.
Response: I-937 does not force utilities to buy wind power over other renewables. It sets an annual renewable energy target and lets the market determine the most cost-effective new renewable resources. To best meet the needs of its customers, each utility can choose from a wide variety of eligible renewable resources, including solar, geothermal, landfill gas, sewer gas, wave and tidal, biomass, biodiesel, certain hydropower efficiency upgrades and wind.
Claim: I-937 will force utilities to sell their low-cost hydropower to buy more expensive wind power.
Response: No utility has to sell off existing resources. I-937 does not force utilities to sell their hydropower or any other resource. A utility may meet the renewable standard through owning eligible renewable resources, contracting for eligible renewable energy or buying renewable energy credits.
Claim: Utilities will have trouble meeting the renewable targets.
Response: Thirteen of the 17 qualifying utilities already have resources and/or contracts in place to meet the first renewable target of 3%/year for 2012-2015. The other four utilities are well on the way to meeting that initial target.
Claim: I-937 will significantly raise consumers’ rates and further burden the most financially vulnerable.
Response: I-937 will protect customers and reduce bills. First, the energy efficiency investments required under the Act’s conservation standard will reduce bills. Second, there is no evidence that I-937’s renewables standard will raise them. Two major Washington utilities say their recent renewable energy purchases were cheaper than any alternatives at the time. And low-income families need the guaranteed, stable rates that come only with renewables, which have no fuel costs and are not subject to price spikes. I-937 further protects consumers by including a reasonable cap on utility costs. The Union of Concerned Scientists conducted an economic analysis of I-937 in 2006, concluding that it should save customers $1.1 billion on electric bills by 2025.
Claim: I-937 does not account for stagnant or decreasing energy demand during a recession.
Response: I-937 includes protections in case of economic downturn. The law currently includes a lower cost cap for any utility that experiences flat or declining energy demand from its customers for three or more years. In fact, if a utility flattens its customer demand through energy conservation, it can also benefit from this lower standard.
Claim: Senate amendments would increase renewables. The version of ESSB 5840 passed by the Senate increases the renewable energy targets beyond those set by I-937, and includes a 20% target for 2025.
Response: Other amendments in the bill render those increases meaningless. The load-growth cap included in the Senate bill allows utilities to meet the lesser of I-937’s annual percentage targets or the growth in customer demand. When combined with amendments to grandfather in existing resources, the Senate version reduces the renewable standard 62-76% in 2020 alone, and 19-61% in 2025 alone.
Claim: Changes to I-937 will enhance flexibility for utilities without negatively affecting the renewable standard.
Response: Multiple substantive changes to I-937 in the name of enhancing flexibility will undermine the renewable standard. The primary goals of I-937 are to diversify our electricity resources, to reduce our climate-changing emissions by moving us away from fossil fuels and to stimulate local economic development. Grandfathering existing resources does none of the above. Including more hydropower does not diversify our resources. And expanding the geography for acquiring renewable resources does not promote local economic development. Taken together, the changes proposed to increase flexibility stop us from achieving the initiative’s goals.
Claim: Allowing utilities to get their renewable energy from outside the Pacific Northwest will make the statewide shift away from fossil fuels less costly for ratepayers.
Response: Expanding the geography for renewables will reduce local economic development. I-937 promotes local economic development by requiring utilities to meet the renewable standard with resources built in the Pacific Northwest. Homegrown resources provide multiple benefits, including jobs, additional property tax revenues for local governments, and supplemental income for farmers and ranchers who host wind turbines on their lands. And if Washington’s existing tax credit for in-state renewable energy development is not extended this year, that sends a clear message to developers to build their renewable projects in other states.
Claim: Proposed changes to I-937 would have no effect on greenhouse-gas emissions.
Response: Weakening I-937’s renewables standard sets us back on climate change. Gov. Gregoire’s Climate Action Team said I-937 does more than all other state policies combined to achieve the state’s climate emissions reduction targets. Cutting acquisition of new eligible renewable resources will lessen I-937’s greenhouse gas-reduction benefits and could shift emissions-reduction responsibilities to other sectors.
Claim: The wind industry bankrolled I-937.
Response: Grassroots supporters provided most of the financing for I-937. 1,405 individuals and businesses donated to the Yes on I-937 campaign, raising a total of $1,834,696 in cash; 88% of donations were less than $500. The No on I-937 campaign raised nearly a half-million dollars. Utilities and utility associations contributed more than $114,000 combined. Pulp and paper businesses contributed $230,000.
April 10, 2009