Reverse natural gas ban law

Whether you call it a ban or a significant deterrent to future natural gas consumption, voter approval of Initiative 2066 in Washington may be only the first giant pothole to fill. The next one in the road ahead may be a hefty tax on natural gas.

In 2019, Berkeley, Calif., became the first city to prohibit natural gas connections in new buildings. San Jose, New York City, San Francisco, Seattle, and others followed. However, last year the Ninth Circuit Court of Appeals delivered a setback by holding that federal law preempts local bans.

“But Berkeley’s climate obsessives are trying to do an end-run with a November voter initiative that would tax owners of larger buildings for consuming gas,” the Wall Street Journal (WSJ) reported.

Now Berkeley city leaders want a “gas stove” excise tax on commercial and multifamily apartment buildings that starts at $2.96 per therm (Q) consumed. That is twice the U.S. average residential retail price for natural gas. It would add up to about $180 a month for typical household’s gas consumption,

“The goal is to coerce building owners to replace gas with electric appliances even though doing so is costly and, in many cases, impractical,” according to WSJ. Housing is already expensive in Berkeley. The average rent is $3,200 a month.

While Berkeley’s ordinance forbids building owners from raising rents to offset the tax, a city report warns that building owners could nonetheless pass along the tax to tenants “either at the time of lease renewal or, for price-controlled units, adjustments during times of vacancy.” state and city buildings are exempt.

Before Washington’s legislature codified the ban/restrictions last spring, Gov. Jay Inslee (D) pushed to bar natural gas connections through the state’s building codes. That did not sit well with business, building owners, contractors, restaurant owners and homeowners. The result is I-2066.

Washington’s ballot measure, which garnered over 431,000 signatures in 49-days, repeals provisions of a new state law meant to hasten Puget Sound Energy’s (PSE) transition away from natural gas. The initiative also bars cities and counties from prohibiting, penalizing, or discouraging “the use of gas for any form of heating, or for uses related to any appliance or equipment, in any building.”

I-2066 would effectively nullify recent changes to Washington’s energy code designed to have more electric heat pumps – instead of gas furnaces – installed in newly built houses, apartments, and commercial buildings.

PSE is the state’s largest private energy utility with 1.2 million electric and 900,000 natural gas customers. Company officials contend the law which I-2066 repeals does not ban natural gas, and it does not change PSE’s obligation to serve natural gas to its customers.

Natural gas is under siege. Puget Sound Energy has canceled expansion of its liquefied natural gas plant in Tacoma and owns and operates natural-gas-fired power plants in our region. In 2022, a quarter of our state’s electricity came from natural gas generation.

Greg Lane, executive vice president of the Building Industry Association of Washington (BIAW), the initiative’s main sponsor says: “It is very simple. If you have natural gas, this protects you to be able to keep natural gas in your home or in your business. And it protects the freedom of every single Washingtonian to have the clean energy of their choice.”

Washington has 1.5 million residential, commercial, and industrial customers who rely upon competitively priced and abundant natural gas. Without natural gas as part of our energy mix, our state cannot survive extreme cold or hot spells nor major generation outages.

Hopefully, passage of I-2066 will bring a dose of reality to our need for dependable, environmentally friendly and plentiful energy and will quell desires to tax or restrict natural gas into oblivion. There is just too much at stake to take that risk.

— Don C. Brunell is a business analyst, writer, and columnist. e can be contacted at [email protected].