Court Opinion

ID: 4713544
Source: CourtListenerOpinion
Date Created: 2021-08-12 00:39:28.434524+00
Date Added: 2024-06-11T08:07:18.176370
License: Public Domain

¶32 (dissenting) — The majority holds that Seattle City Light’s (City Light) offset program serves a general government purpose (prevention of global warming) and not a proprietary utility purpose. I respectfully dissent. I would hold that City Light’s greenhouse gas (GHG) offset program serves a proprietary function and provides special benefits to City Light and its ratepayers in addition to the common benefits that reductions in GHGs have for the general public. Accordingly, I would affirm the trial court.
Owens, J.
¶33 City Light is a municipal corporation and possesses “only those powers conferred on [it] by the constitution, statutes, and [its] charter [ ].” City of Tacoma v. Taxpayers of City of Tacoma, 108 Wn.2d 679, 685-86, 743 P.2d 793 (1987) (citing 2 Eugene McQuillin, The Law of Municipal Corporations § 10.09 (3d ed. 1979)). Thus, City Light’s authority to purchase offset credits “must derive from either an express grant or by necessary or fair implication from such a grant.” Id. at 686. The statute giving City Light its authority does not expressly authorize City Light to purchase GHG offset credits. RCW 35.92.050. However, City Light argues, and I would hold, that its program is *455impliedly authorized as consistent with the express grant to “regulate and control the use, distribution, and price” of electricity. Id. A public utility acts within its implied powers if the act “bears ‘a sufficiently close nexus to the purpose and object the Legislature intended to serve in granting the power to operate an electric utility,’ which is the supply of electricity to the municipality and its inhabitants.” Okeson v. City of Seattle, 130 Wn. App. 814, 822, 125 P.3d 172 (2005) (Okeson II) (quoting Taxpayers, 108 Wn.2d at 696). I would hold that there is a more than sufficient nexus between electricity generation and mitigation of the electricity-generated pollution to justify City Light’s offset program.
¶34 The ratepayers concede that it is within City Light’s authority to mitigate GHG emissions at its own facilities. Appellants’ Br. at 17; see also majority at 444 (“The appellant ratepayers submitted a brief conceding that City Light has statutory authority to reduce greenhouse gas emissions from its own facilities.”). The ratepayers challenge only the use of offsets to achieve the mitigation. Appellants’ Br. at 3; majority at 444. The trial court found that there was no reason to distinguish between an offset program and reduction of City Light’s own emissions because GHGs are immediately mixed in the upper atmosphere upon release and distributed globally. Verbatim Report of Proceedings at 32-33. Academic literature supports this conclusion. See, e.g., Andrew E. Dessler & Edward A. Parson, The Science and Politics of Global Climate Change: A Guide to the Debate 112-13 (2006); Peter Rafaj et al., Flexible Carbon Mitigation Policies: Analysis with a Global Multi-Regional Markal Model, in The Coupling of Climate and Economic Dynamics: Essays on Integrated Assessment 261-63 (Alain Haurie & Laurent Viguier eds., 2005). Nonetheless, the majority holds generally that “combating global warming is a general government purpose, albeit a meritorious one, and not a proprietary utility purpose.”7 Majority at 439.
*456¶35 The majority’s analysis is flawed. Relying on Okeson v. City of Seattle, 150 Wn.2d 540, 78 P.3d 1279 (2003) (Okeson I), the majority holds that City Light’s offset program for GHG mitigation is beyond the authority of City Light because the battle to combat anthropogenic climate change (a.k.a. global warming) is a general governmental function and not a proprietary function. Majority at 439. In Okeson I, we considered whether the operation of streetlights was within City Light’s authority. Id. at 550-51. The Okeson I court noted that “[t]he principal test in distinguishing governmental functions from proprietary functions is whether the act performed is for the common good of all, or whether it is for the special benefit or profit of the corporate entity.” Id. at 550 (citing Lakoduk v. Cruger, 47 Wn.2d 286, 288-89, 287 P.2d 338 (1955)). We held that “ [providing streetlights ... is a governmental function because they operate for the benefit of the general public, and not for the ‘comfort and use’ of individual customers.” Id.
¶36 Unlike the streetlights at issue in Okeson I, City Light’s offset program provides special benefits to City Light and its ratepayers in addition to the common benefits that reductions in GHGs has for everyone. The ratepayers benefit specially from knowing the electricity they consume is not contributing to anthropogenic climate change. Moreover, City Light and the ratepayers both benefit because the offset program allows City Light to operate more efficiently. Generally, GHGs and anthropogenic climate change are externalities of electricity generation — they are costs borne from the activity which are not reflected in electricity rates. See, e.g., Cong. Budget Off., The Economics of Climate Change: A Primer ch. 3, at 23-34 (Apr. 2003); see also Garrett Hardin, The Tragedy of the Commons, Science, Dec. 13, 1968, at 1243-48. However, the Seattle City Council’s required mitigation of the GHGs obliged City Light to internalize these costs. City Light could internalize the costs of *457GHG mitigation either by reduction of GHGs at its own facilities or by purchasing offset credits from other facilities. Because City Light primarily uses hydroelectric power for generation, which does not result in GHG emissions, it is very expensive for City Light to reduce GHGs at its own facilities. The less expensive and more efficient internalization method is for City Light to find less efficient sources of GHGs and pay to have those sources reduced or eliminated. Thus, the offset program actually saves the ratepayers money in comparison with a mitigation program limited to City Light’s own facilities and is the most efficient way to achieve mitigation. This relationship also illustrates the strong nexus between the offset program and City Light’s express purpose of providing electricity. Because the ratepayers benefit from using the electricity generated by City Light, the ratepayers should pay the costs associated with such power generation.
¶37 This court has already determined that promoting efficiency in energy generation is a proprietary purpose. Taxpayers, 108 Wn.2d at 694-95, 696 (“We have viewed the Legislature as implicitly authorizing a municipality to make all contracts, and to engage in any undertaking necessary to make its municipal electric utility system efficient and beneficial to the public.”); Hite v. Pub. Util. Dist. No. 2 of Grant County, 112 Wn.2d 456, 460, 772 P.2d 481 (1989); Okeson II, 130 Wn. App. at 822. Internalizing the costs of GHG emissions via an offset program promotes long-term efficiency and is therefore proprietary in nature and within City Light’s implied authority. While the court may not agree with the policy decision to purchase such offsets, it is not this court’s place to dictate the policies adopted by municipal corporations, so long as those policies are constitutional and not arbitrary or capricious. Taxpayers, 108 Wn.2d at 695 (“[I]f municipal utility actions come within the purpose and object of the enabling statute and no express limitations apply, this court leaves the choice of means used in operating the utility to the discretion of municipal authorities.”); Hite, 112 Wn.2d at 463 (“[W]e *458have traditionally allowed municipal corporations discretion in exercising their proprietary powers so long as their actions are not arbitrary, capricious or unreasonable.”).
f 38 The majority’s holding also illustrates its misunderstanding of the way in which the offset program is funded. The majority concedes that “the [offset] program may be viewed as a legitimate part of the utility’s production of electricity because its purpose is to prevent City Light’s production from causing a net increase in global greenhouse gas emissions.” Majority at 449. However, it holds that the program is not a proprietary function because “the offset contracts are charged to City Light customers regardless of how much electricity they use.” Id. at 449. The majority claims that “[u]nder Okeson I, there must... be a connection between the amount paid and the benefit received by the ratepayer.” Id. at 449. Okeson I does not support this proposition. 150 Wn.2d at 552 (querying whether there was a connection between the amount charged and the benefit received in order to determine if an ordinance imposed a fee or a tax, not in order to determine if such a tax was authorized). Even if that were the test, it is nonetheless satisfied in the present case. The ratepayers are assessed fees based on the amount of energy they consume. A portion of these fees is used for City Light’s GHG mitigation program. Thus, the more energy a ratepayer uses (and the more GHGs a ratepayer is responsible for producing), the more the ratepayer must contribute to the mitigation program.
¶39 Mitigation of GHGs emitted as a result of the ratepayers’ consumption of electricity provides a special comfort to City Light’s ratepayers and benefits City Light. The offset program internalizes the externalities associated with electricity generation in the most efficient manner, thus benefiting the ratepayers. Such is necessary for the power market in Seattle to operate with long-term efficiency. We have already determined that promoting efficiency is a proprietary function. Moreover, such a mitigation program is closely connected to City Light’s express *459purpose — providing electricity. I would defer to City Light’s policy decision to purchase offset credits and find the GHG offset program impliedly authorized in City Light’s express grant of authority. Accordingly, I respectfully dissent.
Madsen, Bridge, and Chambers, JJ., concur with Owens, J.
Reconsideration denied July 12, 2007.

 The parties did not raise the issue of whether combating global warming generally is a governmental or proprietary function. Thus, this court should not address the issue. See RAP 12.1(a) (“[T]he appellate court will decide a case only *456on the basis of issues set forth by the parties in their briefs.”). Further, the majority’s analysis misconstrues the issue. The only issue before the court is whether City Light’s chosen method of reducing emissions is a valid exercise of its express or implied authority.