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Thursday, February 29, 2024
Feb. 29, 2024

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Federal judge dismisses lawsuit against WA’s carbon-pricing law

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SEATTLE — The private operator of a natural gas power plant in Grays Harbor County must continue to buy pollution allowances, a federal judge ruled, further protecting Washington’s Climate Commitment Act against those looking to overturn the legislation.

The plant’s owner, Chicago-based Invenergy sued Laura Watson, head of Washington’s Department of Ecology, late last year, challenging the constitutionality of the act and its carbon-pricing program.

The landmark climate legislation — enacted in 2021 — requires the state’s top polluters to pay for greenhouse gas emissions by buying allowances at quarterly auctions. Public utilities receive allowances free.

Invenergy’s lawsuit, filed in U.S. District Court in Tacoma, claimed the law discriminated against privately operated natural gas plants and unfairly treated it as an out-of-state business.

U.S. District Court Judge Benjamin Settle shot down both of Invenergy’s arguments in his Nov. 3 ruling, in which he dismissed the case.

Settle noted that the Chicago company does not directly own the plant, rather, Washington-based Grays Harbor Energy does, which is a subsidiary of one of Invenergy’s subsidiaries. So, claims that the Climate Commitment Act discriminates against out-of-state businesses are incorrect, Settle wrote.

Then, the Grays Harbor plant shouldn’t receive allowances for free because it is not a publicly regulated utility, Settle wrote.

The company operates the Grays Harbor plant west of Olympia only when power prices make the enterprise profitable.

“Simply put, the CCA treats all owners of electric utilities the same, regardless of whether those owners are in-state entities or out-of-state entities,” Settle wrote. “It also treats all owners of electricity generating facilities the same, again regardless of an owner’s location. This plainly does not discriminate against out-of-state economic interests.”

Former state Sen. Reuven Carlyle, one of the chief architects of the Climate Commitment Act, celebrated the ruling and said state officials worked diligently when writing the legislation to safeguard it against such lawsuits.

“It was disheartening when the company — — the largest renewable energy producer in the United States — sued to overturn the nation’s most comprehensive state-level climate bill simply in order to protect the profit margins of their natural gas power plant,” Carlyle said.

Settle’s ruling dismissed Invenergy’s case both because it lacked standing and because the company’s arguments didn’t hold up, Carlyle said.

Andrew Wineke, a spokesperson for Washington’s Department of Ecology, also noted that the ruling recognizes the distinction between electric utilities and electric generation facilities.

“The Climate Commitment Act awards utilities no-cost allowances in order to minimize potential impacts on consumers,” Wineke said. “Under Washington’s Clean Energy Transformation Act, these utilities are already working to decarbonize their electricity production, whereas a stand-alone electric generating facility such as the one at the heart of this case does not face the same requirement.”

Martin Grego, a spokesperson for Invenergy, said the company disagrees with Settle’s ruling but does support Washington’s efforts to combat climate change.

“As we further review the Court’s latest order to determine our next steps, we will continue our work to make real clean energy progress a reality in the State,” Grego said in an email.

Carlyle added that Invenergy’s lawsuit was both a waste of time and resources.

“If they spent half the time working on decarbonization that they spent fighting the state’s climate policy we’d all be closer to the Paris Agreement,” Carlyle said.

The ruling this month further buttresses Washington’s Climate Commitment Act against future legal challenges, Carlyle said.

The legislation still faces at least one challenge outside of the courtroom. Right wing organizations are collecting signatures to earn a spot on the November 2024 ballot for a measure seeking to repeal the Climate Commitment Act.

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