State overestimated impact a carbon tax would have on electricity prices

The State Department of Commerce overstated by about fourfold the impact that a carbon tax ballot measure would have on the price of electricity in 2020, according to a state official who says that the mistake has now been corrected.

The measure imposes an escalating tax on fossil fuels, including coal and natural gas used to generate electricity, and also includes reductions in the state sales tax and business and occupation tax as well as an up to $1,500 tax credit for some 460,000 low-income families.

An earlier state Department of Commerce model forecast that Initiative 732 would result in a 20 percent increase in the average electricity prices in in the state by 2020. That number was picked up by opponents of the measure and restated on their website and in an informational graphic developed by the no campaign.

But the actual impact of the ballot measure would be a 5.3 percent increase in electricity prices for 2020, according to Greg Nothstein, a state Commerce Department official.

Nothstein said the error was pointed out by Yoram Bauman, a Seattle economist who is the founder of the Carbon Washington ballot initiative. It was corrected earlier last month.

After learning of the state error, opponents of the initiative asked a research firm to update an analysis of the measure’s impact with the corrected figure, according to Brandon Houskeeper, of the Association of Washington Business.

Currently, the website and graphic have been corrected, Houskeeper said.