An Eastern Washington senator has accused the Department of Ecology of violating the state’s cap-and-trade law by withholding how many carbon allowances are held by individual companies and investors.

Sen. Perry Dozier, R-Waitsburg, said the Legislature intended for Ecology to disclose names. Ecology recently issued a report identifying accounts by numbers 1 through 67, but included no other identification.

Dozier called the report “useless.” Since the market for allowances affects fuel prices, the public should be able to follow it, he said. Instead, Ecology treats the information like “Swiss bank accounts,” he said.

“When a new line of business becomes that lucrative so quickly, it’s even more important to see the details so the public can keep a close eye on who is doing what,” Dozier said in a statement.

Ecology names companies and investment firms that register to bid for allowances at state-held auctions, but does not identify who acquired allowances or how many.

Ecology spokesman Jeff Zenk said in an email that the department is complying with the law, including provisions that keep financial information confidential and prevent collusion and market manipulation.

“Ecology is committed to operating the cap-and-invest program in a transparent manner, while meeting the confidentiality requirements set in state law that are designed to protect the integrity of the market and the businesses that participate in it,” he said.

Oil companies, natural gas distributors and some other utilities must buy allowances to offset emissions or face heavy penalties. Cap-and-trade auctions are open to investors, who bought 14.5% of the allowances sold at the last auction, anticipating that companies that must have allowances will pay more for them later.

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Ecology is seeking $50,000 a year from budget-writers to subscribe to information services that monitor these emerging secondary markets where allowances are exchanged between private parties.

Before passing cap-and-trade in 2021, the Senate amended the bill to require Ecology to post information about who buys allowances, “including but not limited to the number of allowances in the account.”

Transparency endorsed

The amendment’s sponsor, Sen. Jeff Wilson, R-Longview, called it a “Wall Street-style transparency amendment.”

Cap-and-trade architect Sen. Reuven Carlyle, D-Seattle, endorsed the amendment, which passed without anyone speaking against it. Efforts to reach Carlyle, who has retired from the Senate, were unsuccessful.

Rules written by Ecology to carry out the cap-and-trade bill called for the publicly released accounts to have “anonymized information.”

The Legislature clearly wanted Ecology to name who holds allowances, Wilson said.

“The spirit of the legislation was fairly obvious,” he said. “It’s almost disrespectful to insinuate that we didn’t want everyone in the state to know about and understand this whole new thing.”

Four cap-and-trade auctions have raised $1.46 billion for the state. Ecology will hold at least two more auctions this year, including a special auction triggered by high allowance prices.

Based on the most recent auction results, cap-and-trade may be adding 50 cents to a gallon of gasoline and 63 cents to a gallon of diesel, according to a commonly used formula.

Washington had the second most expensive gasoline in the U.S. on Friday, behind only California, according to the AAA auto club.