Todd Myers: New $200 utility rebates come at a price higher than $200
By Todd Myers
It is election year and politicians are pulling out all the stops to make themselves and their policies look good. With Washington’s new tax on CO2 emissions, called the Climate Commitment Act, up for a vote in November, the Inslee administration is doing its best to hide the costs of that policy and use government to influence voters.
In a recent news release, Gov. Jay Inslee declared, “We are committed to ensuring that the benefits of the state’s clean energy transition reach everyone, especially those most burdened by energy costs.” The same release lamented the burden high energy costs inflict on Washington families but assured the CCA would be coming to the rescue, providing a one-time $200 credit on their utility payment thanks to the power of the CCA.
It is worth noting that the Inslee administration forced utilities delivering those checks to include the logo for the CCA (yes, a state program has a taxpayer-funded logo) on the letters received by customers.
Left unsaid by the governor was the fact that the CCA’s taxes increased the average household energy costs by vastly more than $200 and that the CCA is a significant contributor to higher energy costs and, unlike the utility credits, those costs will repeat year after year.
Who says so? Washington state’s own utility commissioners, appointed by Inslee. Last year they approved utility rate increases, specifically saying the CO2 tax that is the center of the CCA was responsible for the increase.
Further the “commitment” to aiding families with energy costs did not exist until this year, when voters will decide whether to repeal the governor’s CO2 tax.
That tax has significantly increased costs for Washington families. The average Washington household with two cars paid about $631 more for gasoline and natural gas heating in 2023 because of the CCA.
The election-year $200 rebate doesn’t come close to covering the increased costs of the CCA for average or even low-income households with one car.
According to the U.S. Department of Transportation, the average vehicle in Washington state drives 10,424 miles per year and the EPA estimates real-world fuel economy is 26 miles per gallon.
For a two-car home, that amounts to about 800 gallons per year and $448 in increased taxes.
For natural gas, the U.S. Energy Information Administration reports that the average home in Washington uses about 617 therms annually. The CO2 tax added about $183 in 2023.
As a result, the average, two-car family, paid about $631 more in 2023 alone due to the CO2 tax.
Even for low-income households, the rebate is unlikely to cover the increased cost of the tax.
A one-car family using much less natural gas than average still saw an increase in energy costs of about $334 in 2023. The one-time rebate would only cover about two-thirds of their increased costs and only for one year.
Those calculations don’t include higher electricity costs, which are increasing for a variety of reasons, including the CO2 tax.
Nor do they include the inflation of goods caused by increased energy costs for transportation and other inputs.
Even if we only focus on direct costs for gasoline and home heating, the $200 checks being offered in an election-year effort to reduce the impact on low-income families are likely to be well below the costs paid in 2023 alone
Spokane families could use the relief – 12% are considered to be living in poverty.
But the real relief doesn’t come from the $200 utility credit. It comes from putting an end to programs like the CCA which inflate fuel and energy prices directly and indirectly.
The election-year dangling of one-time energy credits is not a serious approach to addressing the need for greater affordability in Washington nor is the CCA a responsible approach to environmental policy. We need both in Washington. Spokane residents deserve it, and so does the rest of the state.
Todd Myers is vice president for research at the Washington Policy Center. He’s based in Cle Elum, Washington. Members of the Cowles family, owners of The Spokesman-Review, have previously hosted fundraisers for the Washington Policy Center and sit on the organization’s board.