The Washington Department of Ecology prohibited two companies from bidding for carbon allowances, decisions cloaked in secrecy by the cap-and-trade law’s extensive exemptions from the public records law.

Elbow River Marketing and Oregon Carbon Holdings have separately appealed Ecology’s denials to the Pollution Control Hearings Board, a quasi-judicial panel that hears challenges to Ecology decisions.

The board’s staff released heavily redacted copies of the appeals filed by Elbow River and Oregon Carbon, blacking out the grounds for the appeals and even the names of the companies.

Dominga Soliz, director of the Environmental and Land Use Office, said Friday she redacted the documents based on the cap-and-trade law’s prohibitions on releasing information about cap-and-trade auctions.

“This is definitely not where we want to be,” she said. “Appellate processes are particularly important to be as open as possible.

“We absolutely welcome direction on how to do this,” Soliz said.

Washington state calls its cap-and-trade program “cap-and-invest.”

Under the law, energy suppliers, such as oil companies and natural gas companies, must bid for a limited pool of allowances. The auctions are open to investment firms to make the bidding more competitive.

Ecology identifies companies and investors that register for auctions, but does not announce which of them acquired allowances. Ecology says withholding the information prevents bidder collusion and market manipulation.

Ecology has broad discretion to ban auction participants for giving any public indication of whether they plan to bid.

It’s unknown why Elbow Marketing, a Canadian fuel transporter, and Oregon Holdings, incorporated in Delaware last year, were barred from at least one auction.

Ecology spokesman Jeff Zenk said in an email the department is committed to providing the public with as much information as possible. 

“This instance is an exception, where confidentiality serves a vital interest in protecting market integrity,” he said. 

According to un-redacted fragments of Oregon Holdings’ appeal, the company complains it received no “meaningful rationale” from Ecology and that its constitutional right to due process was violated.

The company tried to get an explanation by emails and telephone calls “placed repeatedly to responsible Ecology officials,” the appeal states. “In every case, Ecology has refused to provide any additional information to (redacted).”

Elbow Marketing claims Ecology’s decision was “unjust and in error.” The decision should be reversed, the appeal states, “because appellant neither attempted to nor did it actually: (redacted).”

Efforts to obtain comment Friday from Elbow Marketing or Oregon Holdings were unsuccessful.

Recently, state Sen. Perry Dozier, R-Waitsburg, accused Ecology of ignoring legislative intent by not naming companies and investors who have acquired allowances and how many each holds.

In a written response to Dozier, Ecology Director Laura Watson cited the cap-and-trade provisions exempting disclosure of an individual bidder’s information.

Withholding names was necessary for a well-functioning market and “ensuring that Washington’s residents see the full benefits of the program,” she said.

Dozier said Friday he remains concerned that not enough information is being disclosed about a program that is raising the cost of fuel and other goods. “I really feel, again, there shouldn’t be confidentiality in who is purchasing credits,” he said.

Cap-and-trade auctions have raised $1.46 billion so far this year for state government. The auctions set a fee on fossil fuel use, so motorists and consumers can expect to pay more for fuel and transported goods.

Cap-and-trade relies on market forces to set the price of allowances, Zenk said. Details of an entity’s participation could jeopardize the integrity of the market and the effectiveness of the program, he said.