By Carolyn Logue, NWHPBA Lobbyist
2024 LEGISLATIVE SESSIONS WINDING DOWN
Legislative Sessions across the NWHPBA are wrapping up. Montana was the quietest state because they didn’t have a legislative session. Idaho wrapped up with very little change for small businesses and no activity on energy issues. Alaska’s Legislature ends on May 15th, but so far the only bill popping up on the tracking list is HB 368 which creates a clean energy transferable tax credit for energy production.
And then there is Washington State….
Once again, Washington’s Legislature and the current Governor’s penchant for climate change led to significant challenges for NWHPBA. Washington’s session wrapped up on March 7th and the Governor finished all of his actions in early April. NWHPBA had some victories but lost a hard fought battle to stop a bill that over time will result in natural gas bans in Puget Sound Energy territory unless its implementation can be stopped.
Victories!
HB 1893 which would have provided four weeks of unemployment insurance benefits to striking workers, ultimately died in the Senate. This bill would have not only required employers, who pay UI taxes, to pay for their striking workers, but also could have increased all other employer UI taxes due to impacts to the UI trust fund. NWHPBA joined a strong coalition of business associations to defeat this bill.
SB 5059 attempted to establish pre-judgment interest on tort judgments, running interest from the date a cause of action accrues rather than when a judgment is entered. This would have significantly impacted any business involved in a lawsuit, and by default would have increased malpractice and other liability insurance rates. Once again, NWHPBA was part of a business coalition that defeated this bill.
SB 6291 made changes to HOW the state building code council does its work after years of frustration regarding process. NWHPBA worked with BIAW and other groups that follow the codes help Senator Linda Wilson get these first steps toward change over the finish line. The bill, as passed, requires that substantive amendments to the codes may only be made once in the code’s three-year cycle unless the amendment is necessary for implementation or an emergency. It also requires mechanisms for determining Council quorums and voting threshold as well as selecting and removing Council members. In addition. the bill establishes qualifications for the Council’s Technical Advisory Group membership and provides that the Energy Code is the minimum energy code for both renovated as well as new non-residential buildings.
NWHPBA scored a victory in the Capital budget with preservation of last year’s language in regarding woodstove changeouts – both the dollar amount of over $4 million and the language allowing some dollars to be used for wood to wood changeouts remained.
We also had a regulatory victory during the session when the Washington State Building Code Council (SBCC) voted not adopt an International Fire Code (IFC) amendment to the 2021 codes that would have banned propane and gas firepits and barbecues within 10 feet of high rise and multi-family buildings. This would have been detrimental to our dealers who work with contractors and customers in this arena. NWHPBA lobbyist Carolyn Logue connected with the SBCC after finding out that this amendment had been adopted (the recommendation from the Technical Advisory Group had been not to adopt that particular IFC amendment). The SBCC revisited that amendment and voted NOT to adopt it. The only piece of the code that remained in place was language that requires gas firepits to have a cover that reduces access to the flame. Thank you to Troy Olsen for helping to identify this mistake by the SBCC and for attending the meeting to ensure the change happened. It helps when everyone works together to make sure we are on top of all issues impacting the industry!
Loss and CHALLENGE AHEAD!
One of the more controversial bills of the session for the NWHPBA was HB 1589, a bill proposed by Puget Sound Energy (PSE) to give them more flexibility to make changes regarding service in light of their obligations to reduce greenhouse gas emissions as a utility. PSE is one of only two “combination utilities” in the state that has both gas and electricity generation and service in its portfolio (Avista in Spokane is the second).
Originally, as introduced in 2023, HB 1589 not only prohibited new natural gas connections in PSE territory, it also changed PSE’s obligation to serve its customers, allowing it the ability to cease gas service as needed to force homeowners and business to move to electrification. These changes would have been costly, if not devastating, for businesses and homeowners who rely on natural gas currently. Estimated costs for conversion for homeowners is at $40-60,000 – which would be out of reach for many homeowners, even with the proposed “subsidies” designed for low income individuals. Many businesses need natural gas to create the products they sell -- making 1589 devastating for their business. For NWHPBA, the bill is particularly devastating to business!
A strong business coalition, including NWHPBA defeated this bill in the 2023 session but it came back in 2024 and passed the House on a very narrow vote. The Senate battle continued through much of the remainder of the 2024 session, but the bill squeaked out of the Senate on a party line 27-22 vote after the most blatant bans on natural gas were removed. Constitutional drafting issues brought up by the Senate Republicans and upheld by the Lt. Governor’s ruling forced a redrafting of the bill, but these problems were not fully addressed in the redraft.
As the bill went back to the House for concurrence, it came to light that although blatant gas bans were removed, language would still create “effective” gas bans through significant rate increase to customers. In addition, electric only customers are at risk because it allows PSE to combine their charging rather than keeping it separate. This allows them to offset higher gas distribution costs by increasing rates for their electrical customers – creating a significant negative impact for electricity dependent businesses. The Constitutional drafting problems also still existed. This held up the House vote until the Governor could twist enough arms in the majority Democratic causes to change the votes necessary to get to the most narrow passage possible – 50 yes votes.
As passed, HB 1589 does the following:
- Allows for accelerated depreciation of natural gas assets by 2050 – meaning they will
factor in a quicker expiration of value and useful life of their pipelines for maintenance,
rates, and expansion. This allows PSE to charge consumers more over a shorter period to
pay for electrification.
- Combines natural gas and electricity rates. Currently, electric and natural gas rates are
calculated separately so gas customers pay for gas and gas related infrastructure
maintenance only and electricity customers pay for electricity and electricity related
infrastructure maintenance. Now customers that receive one or the other may be required
to pay for the delivery and infrastructure maintenance for both. This will push current
natural gas AND electricity customers rates higher.
- Obtain pre-approval for energy projects and incorporate those costs BEFORE the project
is approved by the Utilities & Transportation Commission (UTC) and even if the project is
ultimately disapproved PSE can incorporate all those costs into utility rates.
At this point no one is required to make any changes. PSE will be continuing gas service at least until dates set in their targeted electrification plan, which is due to the UTC in 2025. Natural gas connections can still be done as allowed under state building codes.
THE BATTLE IS NOT OVER! NWHPBA is strategizing with other impacted business groups on how to stop this bill and other proposals to ban natural gas or propane.
ALASKA TO FACE MINIMUM WAGE INITIATIVE ON NOVEMBER BALLOT
Supporters of a ballot initiative that would increase the minimum wage increase, mandate paid sick leave and provide other worker protections submitted more than 40,000 petition signatures to the Alaska Division of Elections on Tuesday, bringing their cause one step closer to a decision by voters.
The group, called Better Jobs for Alaska, brought boxes of signed petitions to a Division of Elections office in East Anchorage.
The initiative proposes to hike the state’s minimum wage, currently at $11.73 an hour, to $13 an hour next year, $14 an hour in 2026 and $15 an hour in 2027. Thereafter, the minimum wage would increase with inflation, according to the initiative.
AFTER TWO YEARS WITH NO BALLOT INITIATIVES, SEVERAL WILL BE BEFORE WASHINGTON VOTERS THIS YEAR
Six Republican-backed citizen initiatives to the Legislature were certified to the 2024 Legislature: I-2081, a parental rights in public education proposal; I-2109, repealing the state's tax on capital gains; I-2111, prohibiting state and local governments from adopting an income tax; I-2113, regarding standards for police pursuit of suspects; I-2117, repealing the state's Climate Commitment Act (CCA); and I-2124, allowing opt-out of the state's long term care insurance program. Democratic leaders decided not to hear I-2109, I-2117, and I-2124, citing their fiscal impact on existing programs, and sent them directly to the voters this fall. Lawmakers ultimately passed the remaining three initiatives on police pursuits, income taxes, and parental rights into law by relatively large margins. As approved initiatives, they become law without action from the Governor.
We are now watching to see what additional initiatives will be out collecting signatures to go directly to the public (rather than through the Legislature first) this November. More to come on this…..
