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As Wash. carbon tax bill moves ahead, 2 neighboring states object

Washington Gov. Jay Inslee's proposed carbon tax cleared another hurdle Feb. 22, getting the backing of a second Senate committee.

The Senate Ways and Means Committee passed Senate Bill 6203, which now calls for a $12/tonne on carbon emissions starting July 1, 2019. Starting July 1, 2021, the tax increases $1.80/tonne a year until hitting a cap of $30/tonne.

In discussing the bill, committee members gave a hint of what a full Senate debate might look like. Sen. Reuven Carlyle, a Democrat from Seattle and one of the bill's sponsors, said putting a "modest" price on carbon will achieve a "meaningful" carbon reduction while also investing in clean energy, rural areas and infrastructure.

But Republican Whip Sen. Barbara Bailey said the bill could make it difficult for those living in rural areas and with modest incomes to pay their power bills. "We need to rethink this," she said. "This is the wrong thing to do."

Money from the tax would go toward efforts to reduce greenhouse gas emissions, aid vulnerable communities and increase the resilience of Washington's natural resources to the effects of climate change.

Meanwhile, Montana Attorney General Tim Fox and Wyoming Attorney General Peter Michael are questioning the legality of the tax.

In a letter to Inslee, the attorneys general said Washington has no right to regulate environmental issues outside its borders. However, Fox and Michael said the "clear intent" of the proposed tax is to force power generation facilities outside of Washington to comply with the state's air quality regulations.

"As applied to electricity generation, the tax is paid by consumers, and is clearly intended to pressure the utilities and other consumers importing electricity into Washington to abandon use of targeted facilities located in other states," the letter, sent Feb. 20, said.

Fox and Michael said taxing emissions tied to electricity sold in Washington but generated outside the state would adversely impact the economies, and therefore tax revenues, of states that host those power plants. The tax would also negatively impact retail prices for consumers outside of Washington served by utilities that get electricity from power plants affected by the fee, the attorneys general said.

Fox, in a news release, specifically pointed to the coal-fired Colstrip power plant in eastern Montana. The 2,094-MW plant has six owners, including Avista Corp., PacifiCorp and Puget Sound Energy Inc., which all each serve customers in Washington.

In their letter, Fox and Michael said the proposed tax conflicts with the federal Clean Air Act, Federal Energy Regulatory Commission rules and the U.S. Constitution, and encouraged Inslee not to sign legislation to put the tax in place.

The Legislature's 60-day session ends March 8.