Legislation Authorizes Washington’s Public Utilities to Buy Carbon Offsets

Date: 18 Jun 2007 | posted in: Energy, Energy Self Reliant States | 0 Facebooktwitterredditmail

On May 7th, Washington’s Governor signed a new law that effectively reverses a January 2007 Washington Supreme Court decision. The State Supreme Court ruled 5-4 that the Seattle municipal utility could not purchase carbon offsets with ratepayer money. This case originated from ratepayers that were protesting Seattle City Light’s purchases of carbon offsets to counter the utility’s greenhouse gas emissions.

This legislation, said to be the first of its kind, “authorizes [public utility districts] to engage in environmental mitigation efforts,” specifically allowing public utilities districts (PUDs) to spend funds acquired from ratepayers on reducing their environmental impact. This gives PUDs the discretion to purchase the services of an “independent, qualified organization with proven experience in emission mitigation activities.” More importantly, this includes the “purchase, trade, or banking of greenhouse gases offsets or credits.”

Last year, Seattle City Light (SCL) became the first utility to claim that they had reached carbon neutrality. To meet the target of zero net greenhouse gas emissions, SCL purchased 350,000 tons of carbon offsets (covers more than one year’s worth of needed offsets). These included both local and national sources of carbon offsets. The list included:

  • Biodiesel substitution, used to power several local vehicle fleets
  • Fuel switching, Princess Cruise Ships switching from diesel engines to electricity by plugging in while docked in Seattle’s port
  • Cement substitutes, using landfill-bound substitutes fly ash and steel slag
  • Fluorchemical capture, Du Pont has a method for eliminating this gas when creating the refrigerant Freon

The biodiesel, fuel switching and cement substitutes were acquired locally accounting for 50,000 metric tons of offsets. The remaining 300,000 metric tons of offsets were from a Kentucky-based Du Pont plant.

Last year, a lawsuit (Okeson v. City of Seattle) was filed that eventually reached the Washington Supreme Court. Plaintiffs argued that SCL could not use ratepayer money to purchase carbon offsets. The Court agreed, finding that mitigating GHG emissions to combat global warming is a public benefit that should be borne by taxpayers, not ratepayers. The newly enacted legislation provides the legal framework that will now allow the carbon offset purchases to be legal.

Democratic Energy supports offsets that are done within the respective community or state’s jurisdiction. Local carbon offsets, especially energy conservation and renewable energy, can provide ancillary economic benefits that should stay with the local community. We view long distance offsets being essentially the same as sending your money away to pay for other forms of imported energy supplies. The legislation would have been stronger had it contained a provision that the offsets had to be purchased within the state of Washington.


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John Farrell

John Farrell directs the Energy Democracy initiative at the Institute for Local Self-Reliance and he develops tools that allow communities to take charge of their energy future, and pursue the maximum economic benefits of the transition to 100% renewable power.