Category Archives: Utilities 2022

SB5849

SB5849 – Extends the reduced B&O tax rate for manufacturers of solar systems and components for five years; creates 10 year property tax exemption for new industrial or manufacturing facilities in designated areas.
Prime Sponsor – Senator Warnick (R; 13th District; Moses Lake)
Current status – Referred to House Finance; had a hearing March 7th, and passed out of committee March 8th. Referred to Rules, and passed by the House March 9th.
Next step would be – To the Governor.
Legislative tracking page for the bill.

In the Senate – Passed
Had a hearing in the Senate Committee on Business, Financial Services & Trade January 25th; passed out of committee January 27th, and referred to Ways and Means. Had a hearing in Ways and Means February 17th, and passed out of committee February 24th. Referred to Rules. Amended on the floor to remove the provisions for tax exemptions in designated distressed areas. Passed by the Senate March 4th.

Summary –
Currently the law reduces the B&O tax rate for manufacturing solar energy systems or solar grade silicon to 0.275%. (The normal B&O tax rate for manufacturing is 0.484%.) The bill would extend the expiration date of this exemption from July 1st 2027 to July 1st 2032.

(It would also extend a 10 year sales and use tax exemption for new Industrial or manufacturing facilities of any and all kinds in designated areas.)

SB5872

SB5872 – Would allow any electricity produced with less than the average emissions of new combined-cycle natural gas turbines to keep being sold in spite of the State requirement for carbon-free electricity by 2045.
Prime Sponsor – Senator Brown (R; 8th District; Tri-Cities) (Co-Sponsors Short, Wagoner and Jeff Wilson – Rs)
Current status – Referred to Environment, Energy & Technology. Did not have a hearing by cutoff.
Next step would be – Dead bill.
Legislative tracking page for the bill.

Summary –
The bill would allow electricity from any power plant producing fewer emissions than the 2008 emissions performance standard for baseload electric generation or the average emissions of available new combined-cycle natural gas thermal electric generation turbines to be sold without counting as a violation of the State requirement that utilities have to deliver carbon-free electricity by 2045.

SB5744

SB5744 – Creates a ten year sales and use tax deferral for projects investing at least $2 million in clean technology manufacturing, clean alternative fuels production, generating renewable electricity, or storing it, with options for reducing or eliminating the deferred taxes.
Prime Sponsor – Senator Nguyen (D; 34th District; White Center) (Co-Sponsors Carlyle, Conway, Das, Kuderer, Mullet, Pedersen, Saldaña, Trudeau – Ds) (By request of the Office of Financial Management.)
Current status – Had a hearing in the Senate Committee on Environment, Energy & Technology  January 19th. Replaced by a substitute and passed out of committee February 2nd. Referred to Ways and Means.
Next step would be – Scheduling a hearing.
Legislative tracking page for the bill.
HB1988 is a companion bill in the House.

Summary –

Substitute –
The substitute would expand the deferral for facilities to store energy from renewable sources to include storage for renewable or electrolytic hydrogen and for any electricity. It would leave the current tax exemptions for renewable hydrogen production facilities as part of “electric vehicle infrastructure” in place. It would require Labor and Industries to adopt rules for the minimum labor standards and good faith efforts required to get the bill’s reductions in deferred tax obligations.

Original bill –
The bill would defer state and local sales and use taxes on materials and equipment, labor, or services for projects investing at least $2 million in buildings, or machinery and equipment, or both, for any new, renovated, or expanded clean technology manufacturing operation; facility to produce clean fuels or renewable or electrolytic hydrogen; or facility to generate or store electricity from renewable resources. The manufacturing of vehicles with no tailpipe emissions other than water, including motorcycles would be qualified; so would charging and fueling infrastructure for any of those, as well as equipment and facilities for generating renewable and electrolytic hydrogen (including preparing those for distribution); for producing clean fuel with associated greenhouse gas emissions not exceeding 80% of 2017 levels, and for generating electricity from renewable resources or equipment used directly in storing it.

Applications for the deferral could not be submitted after June 30th, 2032. Ten percent of the deferred taxes would become due on December 31st of the second year after completion of the project, and the rest of them would be due in annual payments of 10% at the end of each of the nine following years. (No interest would be charged, except on delinquent payments.)

The State would reduce its part of the taxes to be repaid by half for projects certified by L&I as including procurement from and contracts with women, minority, or veteran-owned businesses; procurement from and contracts with entities that have a history of complying with federal and state wage and hour laws and regulations; apprenticeship utilization; and preferred entry for workers living in the area where the project is being constructed. (If a project was built without one or more of these, the Department would be allowed to certify that it met them if it demonstrated it had made all good faith efforts to do so, but was unable to due to lack of availability of qualified businesses or local hires.) Projects that met these standards and paid workers at prevailing wage rates determined by local collective bargaining would receive a 75% reduction, and those that also were developed under a community workforce or project labor agreement would not have to repay the deferred taxes at all. A person leasing qualified buildings, machinery, and equipment would only receive the tax benefits if the owner agreed to pass them on in writing, and if the lessee agreed in writing with the Department to do the required tax performance reporting.

Construction would have to begin within two years or the taxes would become due. A gradually decreasing percentage of them would be due if the project had not been completed within five years or if it were used for some other purpose that didn’t qualify for the deferment.

The bill would revise a definition so that renewable hydrogen production facilities would no longer be included under the current sales and use tax exemptions as part of “electric vehicle infrastructure.”

HB1921

HB1921 – Creating rules for the tax assessment of wind and solar facilities, and authorizing counties to enter into agreements for their annual payment of fees in place of property taxes.
Prime Sponsor – Representative Ramel (D; 40th District; Whatcom County) (Co-Sponsors Boehnke & Young – Rs; Fitzgibbon, Shewmake, & Kloba – Ds)
Current status – Had a hearing in Finance January 18th; replaced by a substitute from the prime sponsor making a number of changes that are summarized in a staff memo and passed out  of committee February 4th. Referred to Rules February 7th. Replaced on the floor by a striker from the prime sponsor which stripped the bill down to the development of rules for assessment by the Department of Revenue and required county assessors to refer to those in valuing renewable property, though they’d still be allowed to use other methods if they had a compelling reason. Passed by the House 97-1 on February 15th.
Next step would be – To the Senate.
Legislative tracking page for the bill.

Summary –
The bill would require the Department of Revenue to develop rules for the tax assessment of solar and wind facilities of at least one megawatt of AC nameplate capacity that were not yet in service, using a cost-based approach. In doing this, it would have to develop industry specific trending tables for solar and for wind projects, and to develop an appraisal model in cooperation with stakeholders within 90 days of the effective date of the bill. The bill would prohibit revaluing a facility for at least twenty years after it was placed into service.

It would also allow the governing body of a county and the owner of the property for a wind or solar project in the unincorporated area of the county that was not yet in service to enter into an agreement exempting it from the property tax and providing for the payment of an annual fee in its place. The fee could not be more than $4,500/MW of AC nameplate capacity for a solar project and $8,000/MW for wind projects, plus $750/MW for storage associated with projects. Agreements would be limited to a maximum of ten years, but might be renewed by mutual consent. If any portion of the property were within an incorporated city, the county would have to have its consent to an agreement. The payments would be due on April 30th each year, and handled as if they were property tax payments. If the fee weren’t paid, the property would be subject to the regular tax the next year, though it could continue under the agreement by paying the fee plus penalties and interest by October 31st of the year in which it was due.

HB1988

HB1988 – Creates a ten year sales and use tax deferral for projects investing at least $2 million in clean technology manufacturing, clean alternative fuels production, generating renewable electricity, or storing it, with options for reducing or eliminating the deferred taxes.
Prime Sponsor – Representative Shewmake (D; 42nd District; Whatcom County) (Co-Sponsors Berry and Paul – Ds) (By request of the Office of Financial Management.)
Current status – Referred to Senate Ways and Means; had a hearing March 7th and passed out of committee the 9th. Passed by the Senate March 10th.
Next step would be – To the Governor.
Legislative tracking page for the bill.
SB5744 is a companion bill in the Senate.

In the House – Passed
Had a hearing in the House Committee on Finance February 1st; replaced by a substitute and passed out of committee February 17th. Referred to Appropriations. Had a hearing there February 24th; amended to add a JLARC review after five years and passed out of committee the 28th. Referred to Rules; passed by the House March 4th.

Summary –

Substitute –
The substitute adds making compounds (like ammonia) from green or renewable hydrogen for storing or transporting it to the deferments, along with storage for electricity from any source .  It requires the Department of Labor and Industries to adopt rules with minimum requirements, documentation requirements, consultation requirements, and a certification process for the labor standards in the bill. It would no longer remove renewable hydrogen production facilities from the current sales and use tax exemptions for “electric vehicle infrastructure.”

Original bill –
The bill would defer state and local sales and use taxes on materials and equipment, labor, or services for projects investing at least $2 million in buildings, or machinery and equipment, or both, for any new, renovated, or expanded clean technology manufacturing operation; facility to produce clean fuels or renewable or electrolytic hydrogen; or facility to generate or store electricity from renewable resources. The manufacturing of vehicles with no tailpipe emissions other than water, including motorcycles would be qualified; so would charging and fueling infrastructure for any of those, as well as equipment and facilities for generating renewable and electrolytic hydrogen (including preparing those for distribution); for producing clean fuel with associated greenhouse gas emissions not exceeding 80% of 2017 levels, and for generating electricity from renewable resources or equipment used directly in storing it.

Applications for the deferral could not be submitted after June 30th, 2032. Ten percent of the deferred taxes would become due on December 31st of the second year after completion of the project, and the rest of them would be due in annual payments of 10% at the end of each of the nine following years. (No interest would be charged, except on delinquent payments.)

The State would reduce its part of the taxes to be repaid by half for projects certified by L&I as including procurement from and contracts with women, minority, or veteran-owned businesses; procurement from and contracts with entities that have a history of complying with federal and state wage and hour laws and regulations; apprenticeship utilization; and preferred entry for workers living in the area where the project is being constructed. (If a project was built without one or more of these, the Department would be allowed to certify that it met them if it demonstrated it had made all good faith efforts to do so, but was unable to due to lack of availability of qualified businesses or local hires.) Projects that met these standards and paid workers at prevailing wage rates determined by local collective bargaining would receive a 75% reduction, and those that also were developed under a community workforce or project labor agreement would not have to repay the deferred taxes at all. A person leasing qualified buildings, machinery, and equipment would only receive the tax benefits if the owner agreed to pass them on in writing, and if the lessee agreed in writing with the Department to do the required tax performance reporting.

Construction would have to begin within two years or the taxes would become due. A gradually decreasing percentage of them would be due if the project had not been completed within five years or if it were used for some other purpose that didn’t qualify for the deferment.

The bill would revise a definition so that renewable hydrogen production facilities would no longer be included under the current sales and use tax exemptions as part of “electric vehicle infrastructure.”

SB5842

SB5842 – Making adjustments to the Climate Commitment Act, and creating an Executive Office of Climate Policy and Accountability in the Department of Ecology.
Prime Sponsor – Senator Carlyle (D; 11th District; Seattle) (Co-Sponsors Liias, Das, Nguyen, and Nobles – Ds)
Current status – Senate concurred in the House amendments.
Next step would be – To the Governor.
Legislative tracking page for the bill.

Comments –
The provisions about the Office of Climate Policy and Accountability are presumably intended to shape the provision in the cap and invest act which says “The Governor shall establish a governance structure to implement the state’s climate commitment” in accordance with a long list of criteria.

I would have thought that the earlier provision saying the bill preempted the Clean Air Act would have left anything in that which the new bill didn’t cover operable; one of the Senate floor amendments will also repeal it.

In the House – Passed
Had a hearing in the House Committee on Environment and Energy February 18th. Replaced by a striker eliminating the requirement that the rules for smoothing obligations over time match those of linked jurisdictions; requiring that investments from the price ceiling auctions produce at least a metric ton of reductions for each unit allowing a metric ton of emissions; and making some other small changes. Referred to Rules, and passed by the House March 2nd.

In the Senate – Passed
Had a hearing in Environment, Energy & Technology January 26th. Replaced by a substitute from the prime sponsor adding biofuels from wastewater treatment plants to the definition of biomass for the cap and invest bill, and moving a reporting date by six months; passed out of committee February 2nd. Had a hearing in Ways and Means February 4th. Replaced by a 2nd substitute from the prime sponsor and passed out of committee February 7th. (The 2nd substitute would let all covered entities use credits released through the price ceiling mechanisms to meet their compliance obligations. It would allow Ecology to suspend the price floor mechanism if it “might enter into a linkage agreement” with a jurisdiction that doesn’t have one. It specifies that the new Office of Climate Policy and Accountability would only report on the state’s progress in achieving GHG limits, rather than developing a strategic climate work plan; would not represent the State nationally or internationally; and could only implement laws administered by Ecology in accordance with the polices established in the bill and monitor their economic impacts to minimize leakage.) Referred to Rules. Amended on the floor to restrict the use of banked offset credits to those issued in the two years before the bill takes effect (or after that); to direct the Department of Ecology to repeal the Clean Air Act (in addition to saying this bill preempts it); and to drop the provision creating the Office of Climate Policy and Accountability. Passed by the Senate February 11th.

Summary –
Original bill –
Currently, the Climate Commitment Act (aka as the cap and invest program) uses the total state emissions between 2023 and 2025 as the basis for calculating the proportion of an entity’s emissions to total state emissions for entities that begin to be covered by the program during the second compliance period, from 2027 through 2030. The bill would use the total state emissions during 2015 through 2019 instead, which is what it does for entities covered during the first compliance period.

The bill would readopt Section 22 of the original act, about the managing and smoothing of compliance obligations, verbatim, except for the part about the poison pill provisions preventing the Act from taking effect unless an additive transportation package was passed. (The Governor vetoed all those provisions in the bill.) He also vetoed the rest of this section, on the grounds that it primarily provided a convenient summary of compliance obligations that duplicated other passages in the Act, that there weren’t any substantive aspects of the section that Ecology couldn’t adopt and implement through its rulemaking authority, and that it created an internal inconsistency with regard to the expiration date of allowances, because the ability of covered entities to rely on the last seven years of allowances in Section 22(1) conflicted with the unlimited time period for use of allowances in Section 9(2).

The bill would exempt a variety of specified bidding information from public disclosure, as well as information contained in the secure online tracking system, and various submitted financial or proprietary information.

It would narrow the current provision preventing a state agency from adopting or enforcing any other program that regulates greenhouse gas emissions from a stationary source. It would now allow them to adopt and enforce limitations on emissions from stationary sources that are not greenhouse gas pricing or market-based emissions cap and reduce programs, and that are authorized or directed by state statute or required to implement a federal statute, rule, or program.

It would create an Executive Office of Climate Policy and Accountability within the Department of Ecology, reporting to the Director. Its primary purpose would be supporting the state’s commitment to reducing greenhouse gas emissions, providing accountability to achieve the State’s 2050 emissions limits and providing an accurate inventory of emissions. It would be required to aggressively implement laws and policies to achieve those limits, and would represent the State on national and international emissions reduction policies. It would be required to develop a strategic climate work plan with performance milestones and accountability measures, to present that to the Legislature by January 31, 2024, and to submit a legislative report on progress by January 31, 2025, and every two years afterwards.

Section 7 of the bill would change the name of what’s currently called “an auction ceiling price” to “a reserve auction floor price”, which seems like a confusing choice to me. (The reserve auction floor price is a ceiling price, because extra allowances from the reserve are sold at auction to increase supplies and hold the prices down if they rise above the floor for the reserve auction.)

HB1964

HB1964 – Requires property leases for solar or wind projects to include and maintain a decommissioning plan and financial assurance of the project owner’s capacity to implement it.
Prime Sponsor – Representative Corry (R; 14th District; Jefferson and Clallam Counties)
Current status – Scheduled for a hearing in the Senate Committee on Environment, Energy and Technology on Tuesday February 22nd at 10:30 AM.
Next step would be – Action by the committee.
Legislative tracking page for the bill.

In the House – Passed
Had a hearing in the House Committee on Environment and Energy January 27th. Passed out of committee February 3rd and referred to Rules. Replaced by a striker on the floor and passed by the House February 11th. (The striker required the projected cost of demolition to include an offset for the salvage value of the facility and be based on the cost of hiring a third party to do the work. It required the financial assurance to include an additional 20% contingency factor; prohibited local jurisdictions from requiring higher financial assurances; and made some other changes that are summarized by staff at the end of it.

Summary –
The bill would make developers leasing land for a solar or wind project responsible for decommissioning it within 18 months of when it stopped operating, requiring them to make and maintain a plan for decommissioning and financial assurance of their capacity to implement it.

The Department of Ecology would be required to develop a provisional standard form for these within 180 days in consultation with the industry, and then a final form. Unless a property owner and the project owner agreed on other terms in writing a plan would have to provide for removing nonutility-owned equipment, conduits, structures, fencing, and foundations to at least three feet below grade; removing graveled areas and access roads (unless the property owner requested leaving them in writing); restoring the property to a condition reasonably similar to its initial state, including replacing topsoil removed or eroded on previously productive agricultural land; and reseeding cleared areas, unless the property owner made a written request that not be done because of plans for agricultural planting. (The project owner would not be required to remove equipment and materials that a public utility required top remain on-site.)

The financial assurance would have to be equal to the cost of meeting these obligations, as calculated and updated every five years by a third-party professional engineer hired by the project owner from a list made by the department, and equal to at least $10,000/megawatt of the facility’s AC nameplate capacity. (Acceptable methods of assurance would include a bond or escrow account.) At least thirty days before beginning construction a project owner would have to provide the decommissioning plan and proof of financial assurance covering at least 20% of the cost of decommissioning to the county auditor. Each five years after that an updated decommissioning plan and proof of financial assurance increasing the coverage by 20% would be required, so that financial assurance covering 100% of the cost of decommissioning would be required with the updated plan due on or before the 20th anniversary of the beginning of construction.

On or before the 20th anniversary of beginning construction, the updated decommissioning plan would have to include include an estimate of the removed materials (including wind turbines, photovoltaic modules, turbine blades, towers, guy wires, auxiliary equipment, and steel support structures) that would be salvaged, recycled, refurbished, or sent to a landfill. No more than 20% of the mass of a facility, excluding cement support structures, could be landfilled.

The bill would preempt local ordinances and regulations dealing with any aspects of facility agreements, financial assurance, and decommissioning plans associated with wind and solar projects. None of its requirements would apply to the nonutility owner or operator of a net metered distributed 
generation system with a nameplate capacity of below 3,000 kilowatts.
.

HB1931

HB1931 – Eliminates the expiration date for the fees Ecology receives for the costs of hydropower licensing.
Prime Sponsor – Representative Fey (D; 27th District; Tacoma) (By request of the Department of Ecology)
Current status – Had a hearing in Ways and Means February 24th, and passed out of committee the 28th. Referred to Rules, and passed by the Senate March 4th.
Next step would be – To the Governor.
Legislative tracking page for the bill.

In the House – Passed
Had a hearing in Appropriations January 25th; passed out of committee February 1st. Referred to Rules. Amended on the floor by the prime sponsor to extend the current expiration date to 2029, and passed by the House February 15th,

Summary –
The bill would eliminates the expiration date for the fees Ecology receives for the costs of hydropower licensing, which is currently June 30th, 2023.

HB1871

HB1871 – Establishes a moratorium on the Energy Facility Site Evaluation Council’s siting alternative energy facilities, pending a report on the Energy Independence Act and recommendations of a Joint Legislative Committee.
Prime Sponsor – Representative Klicker (R; 16th District; Walla Walla) (Co-Sponsors Dent, Chase, Ybarra, and Sutherland – Rs)
Current status – Scheduled for a hearing in the House Committee on Environment and Energy Friday January 25th at 8:00 AM.
Next step would be – Action by the committee.
Legislative tracking page for the bill.

Comments –
The bill’s findings assert that viewshed, wildlife, and land use patterns in specific counties of the state are being permanently impacted to deliver carbon-free energy benefits to the most populous counties of the state; that voters in those counties opposed the renewable energy mandate in I-937, but have ended up with the projects and transmission lines that required; that they feel these facilities have not brought the promised “green jobs,” meaningful tax revenue, or local environmental benefits “in so far as these local communities were already served with clean, affordable hydroelectric energy”; and that the Legislature should consider providing producer counties with mitigation payments, viewshed impairment payments, or supplemental economic development assistance to improve equity and environmental justice.

Summary –
The bill would establish a moratorium on siting alternative energy facilities through the Energy Facility Site Evaluation Council process, which allows bypassing the local permitting process in certain cases, pending a comprehensive performance report on the effects of the Energy Independence Act and the recommendations of a Joint Legislative Committee.

By December 1, 2022, the Department of Commerce would have to submit a report on alternative energy siting inequity to a Joint Select Committee and the appropriate policy and fiscal committees of the Legislature. The report would have to contain an assessment of the beneficial impact of the energy independence act on Washington’s fuel mix, including:
(a) An assessment of the beneficial impact of the energy independence act on Washington’s fuel mix, including the percentage of that coming from the renewable resources promised and promoted by the Act; and a calculation of the cumulative expenditures between 2006 and 2020 on compliance costs by each electric utility subject to the Act to meet its requirements for using renewable energy resources; purchasing of renewable energy credits; and spending four percent of retail revenues on renewable resources.
(b) An assessment of the capital expenditures in each county in Washington on renewable resources in each of those years;
(c) An assessment of the impacts associated with those capital expenditures on state and local tax revenue, the property tax base in each county, and the sources of revenues dedicated to local school districts, including the impacts, if any, on state and local effort assistance funding;
(d) An identification of the number and type of jobs created in each county as a result of implementing the Act, categorizing them as short-term construction jobs; long-term jobs outlasting facility construction; regulatory or compliance jobs created at state agencies, electric utilities, or local governments; and jobs related to the production or marketing of electricity from a new renewable energy resource;
(e) A calculation of the cumulative incremental cost above the least cost wholesale energy resource of compliance with the Act’s targets – for each utility, and in aggregate for all utilities in Washington;
(f) A calculation of the incremental cost of renewable resources eligible under the Act, including wind and solar, relative to other nongreenhouse gas emitting energy resources, such as electricity derived from nuclear or hydroelectric facilities, based on the average wholesale market price of electricity from those other nongreenhouse gas emitting energy resources during these years, and,
(g) A generalized description and map of the areas of Washington that electric utilities consider to have available resources for potentially economical utility-scale wind or solar energy facility development.

It would require the Department of Commerce to form a utility technical advisory group to consult in preparing the report, inviting the participation of a representative from each utility that currently subject to the Act’s renewable energy and conservation requirements. (Commerce could also ask for input from other utilities.)

The bill would create a Joint Legislative Committee on alternative energy facility siting, consisting of two Senators and two Representatives from each party, and alternates, chosen by the President of the Senate and the Speaker of the House. It would review the report, and review inequities in where large alternative energy projects have been sited in Washington; inequities in where they are expected to be sited, and forms of economic development assistance, mitigation payments, and viewshed impairment payments that counties not hosting their per capita share of alternative energy resources “should provide” to counties that host more than their per capita share. The Committee would report its findings and any
recommendations to the committees of the Legislature with jurisdiction over environment and energy laws by December 1, 2023. Recommendations could be made by a simple majority, and two or more members could report minority findings if the committee didn’t reach majority-supported recommendations.

HB1814

HB1814 – Provides a new one-time credit for start-up costs and virtual net metering for community solar projects with low-income and low income service provider subscribers.
Prime Sponsor – Representative Shewmake (D; 42nd District; Whatcom County) (Co-Sponsor Representative Berry -D)
Current status – Referred to Senate Ways and Means, amended to reduce the maximum size of a community solar system back down to 199 KWs, and to make a couple of small technical changes. Passed out of committee March 9th, and passed by the Senate March 10th. House concurred with the Senate amendments the same day.
Next step would be – To the Governor.
Legislative tracking page for the bill.

In the House – Passed
Had a hearing in the Committee on Environment and Energy January 21st. Replaced by a substitute from the prime sponsor and passed out of committee February 1st. Had a hearing in Finance February 7th; replaced by a second substitute and passed out of committee February 21st. Referred to Rules, and passed by the House February 26th,

Summary –
2nd Substitute –
This would raise the program’s  total cap from @20 million to $100 million; and the biennial cap from $5 million to $25 million. It would increase the eligible system size from 199 kWs to 1,000, and authorize including storage in projects and providing incentives for up to 100% of its cost. This version would have a utility that’s administering a project over 100kWs deliver payments for the power it generates, minus approved administrative costs, to its low income subscribers in some form that provides continuing direct benefits to them, such as rate reductions. If the administrator isn’t a utility, payments for the power would be made to the retail customer where the project was located according to a written agreement with the utility, and then distributed by the administrator to subscribers, minus administrative costs. (Presumably, there also has to be an agreement between the customer that’s hosting the site and the administrator about passing those payments on, though I don’t see that in the bill.)

Substitute –
The substitute eliminates the $500 pre-application fee; it cleans up and clarifies the drafting of the bill in a number of ways, which are summarized by staff at the beginning of it.

Original bill –
The bill would create a low-income community solar incentive program for new projects between twelve kilowatts and 199 kilowatts with at least two subscribers or one low-income service provider subscriber. If the utility providing service in their area chose to participate in the program, community solar projects could submit applications for precertification to the WSU Energy Extension Program from July 1st 2022 through June 30th 2033, demonstrating how the project would deliver continuing direct benefits to low income, low income service provider, public agency or tribal subscribers. Projects could be administered by a utility, a non-profit, a housing authority, or by a tribal housing authority if the project were on tribal land. (These benefits could include the credits for the project’s power or other mechanisms that lower participants’ energy burden. Only the portion of a public or tribal agency subscription that was demonstrated to benefit low-income beneficiaries would count as a subscription qualifying for the incentives.) Projects would have to be on sites that didn’t displace critical habitat or productive farmland, but dual use agrivoltaic projects that ensured ongoing agricultural operations would be eligible.

Administrators would have two years after an application was precertified by the Energy Program to complete the project and actually get certified to receive the incentives, though they could request a 180 day extension if they could demonstrate significant progress. The Energy Program would be required to review each project for reasonable cost and financial structure, with a targeted installed cost of $2/watt DC for systems over 200 kWs and $2.25 per watt DC for systems under 200 kWs, excluding costs associated with storage systems and electrical improvements to permit grid-independent operation, but they might approve projects that were more or less expensive based on a review. (The Energy Program could also review and adjust the cost per watt target for each biennium.)

Within 60 days of certification, participating utilities would provide a one-time low-income community solar incentive payment to the administrator of the project to be used to provide direct benefits to its subscribers. The payment would cover up to $20,000 of the “project’s administrative costs related to the administrative start-up of the project for qualifying subscribers.”  [That seems to contradict the language saying the payment must be used to provide direct benefits, and another section of the bill says that the administrator can collect a reasonable fee to cover costs incurred in organizing and administering the project provided subscribers are notified about that before signing up. I’m not sure how these are supposed to fit together; maybe this is supposed to mean that subscribers have to pay for the work of getting themselves subscribed, but they get paid back if the program gets certified? Perhaps the fee has to come out of the payments for production….] The upfront payment would also include “up to 100% of the proportion of the installed cost of the share of the project that provides direct benefits to subscribers”, taking into account any federal tax credits or other grants or incentives from which the program is benefiting. [This reads as if it could be any amount below 100%, but there’s nothing else  in the bill about how to determine its level, so it may be supposed to mean this should be 100% of that cost, but no more than that – if some of the total cost is providing benefits that aren’t going to qualified providers, but to an agency, for example.] To reimburse utilities for these payments, the bill would create a new credit against their public utility taxes, not to exceed the greater of 1.5% of their year’s taxable power sales or $200,000. The utility would also provide net metering in accordance with the State’s current provisions for projects with a nameplate capacity between 12 kilowatts and 100 kilowatts AC, crediting the metered customer’s bill for production at the retail rate per kilowatt.  (The utility would set the rate at which it paid for the production from any larger projects in an agreement with the project.) The administrator would be required to pass payments for production on to the subscribers, after deducting reasonable administrative costs approved by the Extension Program. [It’s not clear how this approval process is supposed to work with the fee the subscribers were notified about before signing up.] The administrator or the utility would report each year on the energy production for the period, each subscriber’s units, and the date and amount disbursed to each subscriber.

The program would have a total cap of $20 million, a cap of $300,000 for 2023, and a cap of $5 million for any later year. The Energy Program would be required to try to distribute incentive funds equitably throughout the state, by including measures such as reserving or allocating them based on the proportion of public utility taxes collected, the proportion of the State’s low-income customers served by each utility (based on Low-income Home Energy Assistance Program data, and measures to achieve an equitable geographic distribution of community solar installations and a diversity of administrative models for projects. It would be required to use at least $2,000,000 of the funding for the entire program to support nonprofit organizations’ innovative approaches to allocating benefits to subscribers; to defining and valuing benefits to be provided to subscribers; or to other aspects of the subscriber, administrator, system host, and utility relationship. It would be required to ensure that at least $2,000,000 of the funding was available to tribes. It would be required to maintain a website with information about the program, including a monthly report of the number of certifications, and an estimate of the remaining unallocated funding for incentives.

I’ve been told that the first sections of this bill are intended to sunset the most recent State production incentive program with no new funding, while the Code Reviser’s summary says it terminates the application period for that program (which hit its cap early but was still required by the law to accept applications) on June 30, 2020, rather than June 30, 2021,  and that it extends the date by which precertified community solar projects may become certified under the program from June 30, 2021 to June 30, 2022. So far, I can’t make sense of the actual language in those sections. The extension in the bill applies to shared commercial projects as well; I don’t understand whether the projects that were precertified and managed to get certified during those two years would actually be eligible for funding somehow. I don’t know whether projects that got on the waitlist after the program hit its cap were precertified and would now be eligible for certification and incentives.

Details –
The bill would now require the RECs from these community solar projects to be retired, rather than allowing the utility to keep them as part of the contract for a project. Subscribers who moved within the utility’s service area would continue to receive net metering credits on their bills, but if they left the area, the administrator would be authorized to transfer those to another qualified subscriber.

HB1812

HB1812 – Including clean energy projects in the Energy Facilities Site Council’s permitting and monitoring, shifting the UTC’s current responsibilities in that process to the Council, and making administrative changes.
Prime Sponsor – Representative Fitzgibbon (D; 34th District; Vashon Island & Southwest Seattle) (Co-Sponsors Representatives Wylie & Berry – Ds) (By request of the Governor.)
Current status – House concurred in the Senate amendments; the sections of the bill about consulting with rural stakeholders and reviewing inequities in the siting of renewable energy projects were vetoed by the Governor.
Next step would be – Signed into law except for Sections 19-22.
Legislative tracking page for the bill.

In the House – Passed
Had a hearing in Environment and Energy January 25th. Replaced by a substitute and passed out of committee February 3rd. (The substitute would retain hearings in the process rather than converting them to meetings; would allow any facility in the  process to apply for expedited permitting, rather than only energy facilities; broadens the definition of clean energy manufacturing facilities to include any form of transportation without exhaust other than water rather thanto  the original’s specified list; makes storage facilities include ones for electricity from any source; and makes other small changes summarized by staff at the beginning of it. ) Referred to Appropriations, and had a hearing February 7th; amended to make the bill null and void if funding weren’t appropriated for it, and passed out of committee February 7th. Referred to Rules. Replaced by a striker from the prime sponsor on the floor, amended, and passed by the House February 13th. The striker removed the option for tribes to appoint two members to the Council, removed clean fuel from the definition of clean manufacturing facilities, and made a few other small changes that are summarized by staff at the end of it. The amendment would create a joint select committee on alternative energy facility siting, with specified membership, to review inequities in where large alternative energy projects have been and are forecast to be sited, and to review forms of economic development assistance, mitigation payments, and viewshed impairment payments that counties not hosting their per capita share of alternative energy resources should provide to counties that host more than their per capita share. The amendment would require the Department of Ecology  to consult with stakeholders from rural communities, agriculture, and forestry on the benefits and impacts of anticipated changes in the state’s energy system, including the siting of facilities, using the environmental justice community engagement plan, with input from the Environmental Justice Council. It specifies topics to be included in the process, and what’s to be included in a report on rural clean energy and resilience to the committee and other government bodies.

In the Senate – Passed
Had a hearing in the Senate Committee on Environment, Energy & Technology February 17th. Replaced by a striker making a number of minor changes that are summarized at the end of it; passed out of committee February 23rd. Referred to Ways and Means, had a hearing there February 26th, and passed out of committee the 28th. Passed by the Senate March 3rd.

Summary –
Original bill –
The bill would add projects for producing renewable natural gas, renewable and electrolytic hydrogen, biofuel for other uses than transportation, and energy storage facilities to the Energy Facilities Site Council’s permitting process. It would also add manufacturing facilities for clean fuel and vehicles (or their components), for equipment for charging and fueling them, for equipment for the production of alternative energy and for energy storage. It would shift the Utilities and Transportation Commission’s role and responsibilities in the current process to the Council, removing the UTC from the process completely.

The bill would replace a representative of the Department of Natural Resources on the Council with a representative of the Commissioner of Public Lands. It would authorize the governing bodies or executive officials of up to two tribes with ancestral lands in the area where an energy facility is proposed to each appoint a member of the Council , sitting and voting when it considered the proposed site.  It would add ongoing regulatory oversight of energy facilities in accordance with its environmental and ecological guidelines to the Council’s powers. It would allow it to enter into contracts to carry out the other provisions of the Act for siting energy facilities in addition to studies of sites proposed by applicants, and authorize it to conduct some meetings on the proposed location and operational conditions of facilities rather than legal hearings. It clarifies that certification from the Council is required for the reconstruction of facilities over a certain size as well as for their construction. It would allow applicants to chose to apply for certification from the Council for the construction, reconstruction, or modification of electrical transmission facilities with a nominal voltage of at least 115,000 volts that are located in more than one jurisdiction with land use plans or zoning ordinances, even if they are not outside a current corridor. It would require notifying the county and city legislative authorities where the proposed facility would be located and tribal governments
affected by the proposed facility when an application for siting one was received. It would require the Council to work with local governments where a project was proposed and with tribal governments affected by a proposed facility to provide for meaningful participation and input during siting review and compliance monitoring. It would require the chair and designated staff to offer to conduct government-to-government meetings to address tribal issues of concern, and would require the Council’s reporting to the Governor to include a summary of any government-to-government meetings, including the issues and proposed resolutions.

It would remove the current language prohibiting a city, county, or regional planning authority from changing land use plans or zoning ordinances so as to affect the site of a proposed site after a hearing by the Council had determined the project was in compliance with those. It would require the Council’s director to notify an applicant before making a threshold determination that a facility proposed in a site application would have a probable significant, adverse environmental impact and to provide an opportunity to amend the application. It would require someone who wished to testify at the public hearing required before the Council issued its recommendation to the Governor to already have raised their issue in writing with specificity during the application review process before the hearing. If the environmental impact of a proposed facility were not significant or would be mitigated to a nonsignificant level, the bill would allow the Council to limit that hearing to whether any land use plans or zoning ordinances with which the proposed site has been determined to be inconsistent should be preempted. If the Council granted expedited processing to a project it would have to hold a public meeting to take comments on the application before issuing a recommendation to the Governor.

With the exception of transmission projects, the bill would require the Council to review a preapplicant’s draft materials on request and provide comments on additional studies or stakeholder and tribal input that should be included in the formal application.  It would change the provisions allowing the Council to conduct a preliminary study of a site upon request of any potential applicant, making the appointment of  an independent consultant to study the project an option for the Council rather than a requirement, and removing the specifications about what might be included. It would no longer allow such a study to be used in place of the “detailed statement” about projects required for other State agencies and local governments by the State Environmental Policy Act.

The bill would exempt the Director of the Council, the Director’s personal secretary, and two designated staff members from the Civil Service Law.

 

SB5678

SB5678 – Provides for preliminary declarations by the UTC on whether proposed energy projects would comply with a utility’s requirements for reducing greenhouse gas emissions under the Clean Energy Transformation Act.
Prime Sponsor – Senator Short (R; 7th District; Northeast Washington.) (Co-Sponsor Senator Carlyle- D)
Current status – Had a hearing in the House Committee on Environment and Energy February 22nd; referred to Rules; passed by the Senate March 4th.
Next step would be – To the Governor.
Legislative tracking page for the bill.

In the Senate – Passed
Had a hearing in Environment, Energy & Technology January 13th; replaced by a substitute, which limits the option of seeking a declaratory order to investor owned utilities and clarifies a couple of procedural things. Passed out of committee January 27th. Referred to Ways and Means; had a hearing February 4th and passed out of committee the 7th. Referred to Rules, and passed by the Senate February 12th.

Summary –
Original bill –
The bill would allow a private utility or the person proposing an energy transformation project, nonemitting electric generation project, or renewable resource project that might be acquired by the utility to petition the Utilities and Transportation Commission for a declaratory order to determine whether the project would comply with the utility’s need to reduce its greenhouse gas emissions in order to comply with the Clean Energy Transformation Act. Projects that the UTC determined would comply with the requirements could be identified in a utility’s Clean Energy Action Plan and its Clean Energy Implementation Plan. The Commission could reevaluate a resource or a project in considering whether to approve a Clean Energy Implementation Plan or in a rate case, if it deviated substantively from the one described in the application foe a declaratory order.

(In fact, the last section of the bill says that “nothing” in the section of it about the declaratory orders “preempts the authority of the commission from making a determination, independent of the processes under [that] section … on whether a proposed energy transformation project, nonemitting electric generation project, or renewable resource project … meets the planning and portfolio requirements of an investor-owned utility’s Clean Energy Implementation Plan.)

SB5714

SB5714 – Creates sales and use tax deferments for large solar canopies on commercial, industrial & residential parking lots.
Prime Sponsor – Senator Carlyle (D; 36th District; Northwest Seattle.) (Co-Sponsor Senator Liias – D)
Current status – Referred to House Finance; had a hearing and passed out of committee March 8th. (There were four proposed amendments; though the Legislature’s website doesn’t indicate whether they failed, none of them seem to have made it into the current version of the bill.) Referred to Rules, and passed by the House March 9th.
Next step would be – To the Governor.
Legislative tracking page for the bill.

Comments –
The bill’s findings say that the initial capital costs of installing solar generation on parking lot canopies will in most cases be fully amortized over time with the power generated and sold into the electricity system, but that initial capital costs may deter incorporation of installations into new projects.

In the Senate – Passed
Had a hearing in Environment, Energy & Technology January 13th. Replaced by a substitute and passed out of committee January 27th. Referred to Ways and Means. Had a hearing there  February 17th, and passed out of committee the 24th. Referred to Rules. Amended on the floor to add specifications for the development of the labor standards rules, and passed by the Senate March 4th.

Summary –
Substitute –
The substitute reduces the amount of deferred tax owed by 25%, 50%. or 100% if various labor standards are met, and requires complete repayment of the taxes owed in eight years.

Original bill –
The bill would defer the sales and use taxes for solar canopies with at least a megawatt of capacity in parking lots for commercial, industrial and residential buildings. (If I’ve done the arithmetic correctly, this would be roughly 50,000 sq. ft. of panels.) Applications for the deferral would include the location of the project, its estimated or actual costs, time schedules for its completion and operation, anticipated nameplate capacity and use of the electricity, and any other information the Department of Revenue required. They could be filed until June 30th, 2032.

Applicants would have to begin actual construction on a project within a year of receiving a deferral certificate, unless it was delayed due to circumstances beyond the recipient’s control. (Problems with funding would not count.) Recipients would have to pay any taxes incurred if they didn’t begin construction within a year, and would have to notify the Department if a completed project was going to produce less than 85% of the electricity originally assumed. If a project wasn’t completed within two years, or the Department found it wasn’t being used as a qualifying solar canopy at any time within eight years of its completion, a gradually decreasing proportion of the deferred taxes would be due, with interest.

The Joint Legislative Audit and Review Committee would be required to evaluate the program, considering the number of solar canopies receiving the deferral, their average and total electric output, the total beneficiary savings from the tax preference, the estimated reduction in greenhouse gas emissions assuming an equivalent amount of energy would otherwise been generated through the combustion of fossil fuels, and any other metrics the committee finds relevant.

SB5668

SB5668– Modifying the regulation of gas companies to reduce greenhouse gas emissions.
Prime Sponsor – Senator Lovelett (D; 40th District; Anacortes.) (Co-Sponsor Liias -D)
Current status – Referred to the Committee on Environment, Energy and Technology. Still in committee at cutoff.
Next step would be – Dead bill.
HB1766 is a companion bill in the House.

Summary –
The bill would require each non-municipal gas utility to develop a clean heat transition plan for meeting the state’s greenhouse gas limits with respect to the emissions from fossil natural gas combustion; limiting the expansion of the gas system for residential and commercial space and water heating; advancing the use of high-efficiency electric equipment and production and the distribution of clean gas fuels; and ensuring the safe and equitable transition of the system. Plans would have to ensure that the transition achieves benefits for low-income households, overburdened communities, and vulnerable populations; and ensure the equitable distribution of the energy and nonenergy benefits of the utility’s programs and infrastructure to those communities and populations, including the reduction of energy burdens and improvement of indoor and outdoor air quality.

Plans would have to identify specific actions to achieve the company’s share of the State’s greenhouse gas reduction targets; and include an evaluation of the costs and benefits of alternative transition actions, including those for vulnerable populations and overburdened communities, and incorporating the social cost of emissions. They would have to consider recommendations from the latest state energy strategy; identify changes to depreciation schedules or rate design consistent with specific actions in the plan; and prioritize the remaining use of fossil natural gas by residential and commercial customers in consultation with electric utilities. They would have to assess overall current conditions within the company’s service territory, including the state of the economy, public health, and environmental conditions; the energy and nonenergy benefits and burdens associated with the utility’s infrastructure and programs, including those caused by utility actions outside its service area; and the relative impact of alternative emissions reduction strategies on indoor air pollution and the health of customers. Plans would have to support an equitable transition for overburdened communities and low-income customers through no-cost grant programs for low- income residents and low-cost or specially targeted incentive programs for moderate income or fixed income seniors. Companies would have to consult with any electric utility with customers in their service area in developing plans, and those would be subject to review, modification, and approval by the Utilities and Transportation Commission.

Plans would have to be based on a comprehensive evaluation and comparison of multiple emissions reduction strategies to identify the combination that complied with the requirements at lowest reasonable cost.They would be required to consider:
(a) Measures to increase the efficiency of energy use in residential, industrial, and commercial buildings through thermal load reduction strategies such as envelope efficiency improvements, hot water conservation, or process load reductions;
(b) Development of geothermal and industrial waste heat, and other heat sources that don’t involve substantial emissions of greenhouse gases;
(c) Development of district heating systems using waste heat; and
(d) Reduction of the carbon content of delivered gas by incorporating renewable natural gas or renewable hydrogen.
They might also consider expanding voluntary renewable natural gas programs, using dual heating systems to limit the use of fossil gas to periods of peak energy demand during a transition period, converting existing customers to high-efficiency electric equipment; targeted programs to permanently decommission areas of the company’s distribution systems; using offset credits to the extent the cap and invest program allows; and implementing projects to reduce nonhazardous leaks from pipelines.

The bill would exempt gas companies from the requirement that utilities provide new service on request, and prohibit companies from extending service to new customers unless they determined that was compatible with their plan; it would prohibit them from expanding their service area unless the UTC determined that was consistent with their plan and would not result in a net increase in emissions over the expected useful life of the gas plant to be installed in the expanded area. It would require them to charge the full cost of a line extension. (They can currently provide a rebate of up to $4,300 to subsidize an extension to a new customer.) After December 31, 2024, it would prohibit them from including any conservation measure that requires the installation of new gas-fired equipment in their conservation acquisition targets or offering financial incentives to acquire any, unless the commission found the measures were consistent with the company’s plan and didn’t result in a net increase in emissions over the expected useful life of the equipment.

It would expand the renewable natural gas program to allow a utility to propose delivering renewable hydrogen and hydrogen produced by hydrolysis using any energy source as well, provided that it demonstrated that would reduce its greenhouse gas intensity per therm, including life-cycle emissions, and would not reduce the safety or reliability of its service. The bill would require the UTC to establish safety standards for the use of hydrogen before approving a program that includes it, and would allow the retail customer charge for a program to exceed 5% of the charge for natural gas if the Commission determined that was necessary under an approved transition plan.

Once major projects in an approved plan began operating, the bill would allow the utilities to account for and defer all operating and maintenance costs, depreciation, taxes, and cost of capital incurred in connection with them, as well as costs for contracts to purchase renewable natural gas or renewable hydrogen, until the UTC considered their application to recover them through rates.

HB1792

HB1792– Expanding various tax exemptions for the production, distribution, and use of hydrogen made by electrolysis.
Prime Sponsor – Representative Ramel (D; 40th District; Whatcom County.) (Co-Sponsors Representatives Orcutt, Abbarno – Rs, and Fitzgibbon -D)
Current status – Referred to Rules.
Next step would be – Action by the Rules Committee.
Legislative tracking page for the bill.

Summary –
In the House –
Had a hearing in Environment & Energy January 18th. Passed out of committee January 21st. Referred to Finance. Had a hearing there February 7th. Amended by the prime sponsor to reduce the length of the exemption to 15 years, and passed out of committee February 17th.

Original Bill –
The bill would define electrolytic hydrogen production facilities (using any energy source) as “fuel cell vehicle infrastructure”, including them in the current sales and use tax exemptions for labor, services, and materials used in installing, constructing, repairing, or improving fuel cell infrastructure. That definition would also exempt leased public land used for installing, maintaining, and operating electrolytic hydrogen facilities from the excise tax ordinarily collected from leaseholders in place of the property tax. (These exemptions all currently expire July 1st, 2025.)

The bill would create a new exemption from the public utilities tax for the sales of electricity to an electrolytic hydrogen production business, a business producing hydrogen using renewable resources as the source of the hydrogen and the energy, or a business compressing, liquifying, or dispensing either of these. The exemption would last for 25 years from when the business began commercial operations, provided it began by July 1, 2032, and provided the electricity used for hydrogen was metered separately from the power for the businesses’ general operations, and the price for it was reduced by an amount equal to the tax exemption. (The exemption would not apply to any remarketing or resale of electricity originally obtained by contract for the production of electrolytic hydrogen.)

The bill would authorize public utility districts to produce, use and sell electrolytic hydrogen under the current regulations governing their renewable gas businesses. It would authorize municipal utilities to use renewable and electrolytic hydrogen as well as natural gas.

SB5666

SB5666– Allows public electric utilities to fund outreach and investment to convert customers’ equipment from fossil fuels to electricity if they have approved plans establishing that will provide net benefits to the utility.
Prime Sponsor – Senator Liias (D; 21st District; Everett.) (Co-Sponsor Senator Carlyle – D) (By request of the Governor.)
Current status – Had a hearing in Environment, Energy & Technology January 19th. Still in committee at cutoff.
Next step would be – Dead bill.
Legislative tracking page for the bill.
HB1767 is a companion bill in the House.

Summary –
The bill would allow public electric utilities to adopt a targeted electrification plan after public comment, establishing that the sum of the benefits of an option for electrifying its residential and commercial customers’ gas or wood equipment would equal or exceed the sum of its costs. (These utilities would still be authorized to offer incentives and programs to accelerate the electrification of homes and buildings if that were in their direct economic interest.)

The benefits they consider may include system impacts, as well as:
(i) Utility revenue from increased retail load;
(ii) Distribution and transmission system efficiencies resulting from demand response or other load management opportunities associated with the increased load, including direct control and dynamic pricing;
(iii) System reliability improvements;
(iv) Indoor and outdoor air quality benefits to existing and future customers;
(v) Reductions in customers’ greenhouse gas emissions, taking into consideration the utility’s obligations under the cap and invest act and the State’s greenhouse gas emissions limits;
(vi) Public health benefits, such as resilience in dealing with extreme heat and wildfire smoke for low-income customers, highly impacted communities, and vulnerable populations.
The analysis may differentiate the benefits and costs for low-income customers, highly impacted communities, and vulnerable populations in their service area.

The costs they consider must include:
(i) The electricity, which must be demonstrated to have a lower greenhouse gas emissions profile than direct use of natural gas or any other resources that might be used to serve or offset the load from electrification during the life of the equipment;
(ii) Any upgrades to the utility’s distribution or transmission system or load management practices and equipment made necessary by the increased load; and
(iii) The cost of any incentives, advertising, or other inducements used to encourage customers to electrify a use served by a different fuel.

After adopting a plan, a public utility would be authorized to offer incentives and establish other programs to accelerate the targeted electrification of homes and buildings, including the promotion of electrically powered equipment, advertising programs and projects, educational programs, and customer incentives or rebates. A utility offering these incentives and programs would be required to prioritize service to vulnerable populations and highly impacted communities, and to ensure that all customers were benefiting from the transition to clean energy through the equitable distribution of energy and non energy benefits and the reduction of burdens to vulnerable populations and highly impacted communities including long-term and short-term public health and environmental benefits; reduction of those costs and risks; and energy security and resiliency.

HB1767

HB1767– Allows public electric utilities to fund outreach and investment to convert customers’ equipment from fossil fuels to electricity if they have approved plans establishing that will provide net benefits to the utility.
Prime Sponsor – Representative Ramel (D; 40th District; Whatcom County.) (Co-Sponsors Representatives Macri, Berry, Dolan, Fitzgibbon, and Ryu – Ds) (By request of the Governor.)
Current status – Passed out of committee January 20th. Referred to Rules; still there at cutoff.
Next step would be – Dead bill.
Legislative tracking page for the bill.
SB5666 is a companion bill in the Senate.

In the House –
Had a hearing in the House Committee on Environment & Energy January 18th.

Summary –
The bill would allow public electric utilities to adopt a targeted electrification plan after public comment, establishing that the sum of the benefits of an option for electrifying its residential and commercial customers’ gas or wood equipment would equal or exceed the sum of its costs. (These utilities would still be authorized to offer incentives and programs to accelerate the electrification of homes and buildings if that were in their direct economic interest.)

The benefits they consider may include system impacts, as well as:
(i) Utility revenue from increased retail load;
(ii) Distribution and transmission system efficiencies resulting from demand response or other load management opportunities associated with the increased load, including direct control and dynamic pricing;
(iii) System reliability improvements;
(iv) Indoor and outdoor air quality benefits to existing and future customers;
(v) Reductions in customers’ greenhouse gas emissions, taking into consideration the utility’s obligations under the cap and invest act and the State’s greenhouse gas emissions limits;
(vi) Public health benefits, such as resilience in dealing with extreme heat and wildfire smoke for low-income customers, highly impacted communities, and vulnerable populations.
The analysis may differentiate the benefits and costs for low-income customers, highly impacted communities, and vulnerable populations in their service area.

The costs they consider must include:
(i) The electricity, which must be demonstrated to have a lower greenhouse gas emissions profile than direct use of natural gas or any other resources that might be used to serve or offset the load from electrification during the life of the equipment;
(ii) Any upgrades to the utility’s distribution or transmission system or load management practices and equipment made necessary by the increased load; and
(iii) The cost of any incentives, advertising, or other inducements used to encourage customers to electrify a use served by a different fuel.

After adopting a plan, a public utility would be authorized to offer incentives and establish other programs to accelerate the targeted electrification of homes and buildings, including the promotion of electrically powered equipment, advertising programs and projects, educational programs, and customer incentives or rebates. A utility offering these incentives and programs would be required to prioritize service to vulnerable populations and highly impacted communities, and to ensure that all customers were benefiting from the transition to clean energy through the equitable distribution of energy and non energy benefits and the reduction of burdens to vulnerable populations and highly impacted communities including long-term and short-term public health and environmental benefits; reduction of those costs and risks; and energy security and resiliency.

HB1766

HB1766 – Modifying the regulation of gas companies to reduce greenhouse gas emissions.
Prime Sponsor – Representative Ramel (D; 40th District; Whatcom County.) (Co-Sponsor Representative Slatter -D) (By request of the Governor.)
Current status – Had a hearing in  Environment & Energy January 28th. Still in committee by cutoff.
Next step would be – Dead bill.
SB5668 is a companion bill in the Senate.

Summary –
The bill would require each non-municipal gas utility to develop a clean heat transition plan for meeting the state’s greenhouse gas limits with respect to the emissions from fossil natural gas combustion; limiting the expansion of the gas system for residential and commercial space and water heating; advancing the use of high-efficiency electric equipment and production and the distribution of clean gas fuels; and ensuring the safe and equitable transition of the system. Plans would have to ensure that the transition achieves benefits for low-income households, overburdened communities, and vulnerable populations; and ensure the equitable distribution of the energy and nonenergy benefits of the utility’s programs and infrastructure to those communities and populations, including the reduction of energy burdens and improvement of indoor and outdoor air quality.

Plans would have to identify specific actions to achieve the company’s share of the State’s greenhouse gas reduction targets; and include an evaluation of the costs and benefits of alternative transition actions, including those for vulnerable populations and overburdened communities, and incorporating the social cost of emissions. They would have to consider recommendations from the latest state energy strategy; identify changes to depreciation schedules or rate design consistent with specific actions in the plan; and prioritize the remaining use of fossil natural gas by residential and commercial customers in consultation with electric utilities. They would have to assess overall current conditions within the company’s service territory, including the state of the economy, public health, and environmental conditions; the energy and nonenergy benefits and burdens associated with the utility’s infrastructure and programs, including those caused by utility actions outside its service area; and the relative impact of alternative emissions reduction strategies on indoor air pollution and the health of customers. Plans would have to support an equitable transition for overburdened communities and low-income customers through no-cost grant programs for low- income residents and low-cost or specially targeted incentive programs for moderate income or fixed income seniors. Companies would have to consult with any electric utility with customers in their service area in developing plans, and those would be subject to review, modification, and approval by the Utilities and Transportation Commission.

Plans would have to be based on a comprehensive evaluation and comparison of multiple emissions reduction strategies to identify the combination that complied with the requirements at lowest reasonable cost.They would be required to consider:
(a) Measures to increase the efficiency of energy use in residential, industrial, and commercial buildings through thermal load reduction strategies such as envelope efficiency improvements, hot water conservation, or process load reductions;
(b) Development of geothermal and industrial waste heat, and other heat sources that don’t involve substantial emissions of greenhouse gases;
(c) Development of district heating systems using waste heat; and
(d) Reduction of the carbon content of delivered gas by incorporating renewable natural gas or renewable hydrogen.
They might also consider expanding voluntary renewable natural gas programs, using dual heating systems to limit the use of fossil gas to periods of peak energy demand during a transition period, converting existing customers to high-efficiency electric equipment; targeted programs to permanently decommission areas of the company’s distribution systems; using offset credits to the extent the cap and invest program allows; and implementing projects to reduce nonhazardous leaks from pipelines.

The bill would exempt gas companies from the requirement that utilities provide new service on request, and prohibit companies from extending service to new customers unless they determined that was compatible with their plan; it would prohibit them from expanding their service area unless the UTC determined that was consistent with their plan and would not result in a net increase in emissions over the expected useful life of the gas plant to be installed in the expanded area. It would require them to charge the full cost of a line extension. (They can currently provide a rebate of up to $4,300 to subsidize an extension to a new customer.) After December 31, 2024, it would prohibit them from including any conservation measure that requires the installation of new gas-fired equipment in their conservation acquisition targets or offering financial incentives to acquire any, unless the commission found the measures were consistent with the company’s plan and didn’t result in a net increase in emissions over the expected useful life of the equipment.

It would expand the renewable natural gas program to allow a utility to propose delivering renewable hydrogen and hydrogen produced by hydrolysis using any energy source as well, provided that it demonstrated that would reduce its greenhouse gas intensity per therm, including life-cycle emissions, and would not reduce the safety or reliability of its service. The bill would require the UTC to establish safety standards for the use of hydrogen before approving a program that includes it, and would allow the retail customer charge for a program to exceed 5% of the charge for natural gas if the Commission determined that was necessary under an approved transition plan.

Once major projects in an approved plan began operating, the bill would allow the utilities to account for and defer all operating and maintenance costs, depreciation, taxes, and cost of capital incurred in connection with them, as well as costs for contracts to purchase renewable natural gas or renewable hydrogen, until the UTC considered their application to recover them through rates.

HB1623

HB1623 – Requires the next annual meeting of Commerce, the UTC, electric utilities, and other stakeholders to specifically address the extent to which we’re at risk of rolling blackouts and power supply inadequacy events.
Prime Sponsor – Representative Mosbrucker (R; 14th District; Klickitat County) (Co-sponsor Rep. Fitzgibbon – D)
Current status – Vetoed by the Governor.
Next step would be – Dead bill.
Legislative tracking page for the bill.

In the House – Passed
Had a hearing in the House Committee on Environment & Energy January 11th; replaced by a substitute eliminating language in the findings stressing risks and adding language about the benefits of transitioning off fossil fuels and steps that are reducing risks, and passed out of committee January 14th. Referred to Rules, and passed by the House February 10th.

In the Senate – Passed
Had a hearing in the Senate Committee on Environment, Energy and Technology February 16th, and passed out of committee the 22nd. Referred to Rules, and passed by the Senate March 1st.

Summary –
RCW 19.280.065 requires the Department of Commerce and the UTC to convene a meeting with utilities and other stakeholders at least once a year to discuss the current, short-term, and long-term adequacy of energy resources to serve the state’s electric needs, and address specific steps the utilities can take to coordinate planning. The convenors provide a summary of each meeting, and any recommended actions, to the Governor and the Legislature.

This bill would require the meeting in 2022 to address the extent to which we’re at risk of rolling blackouts and power supply inadequacy events; survey stakeholders for recommendations on policy options to prevent severe blackouts; focus discussion on the extent to which an aggressive timeline for building and transportation system electrification may require new state policies for resource adequacy; and seek to identify regulatory and statutory incentives to enhance and ensure resource adequacy and reliability during a clean energy transition. (It would also make the requirement for annual meetings expire January 1, 2030 rather than January 1, 2025.)

SB5493

SB5493 – Reopens the Renewable Energy System Incentive Program, but only for residential systems.
Prime Sponsor – Senator Jeff Wilson (R; 19th District; Southwest Washington)
Current status – Referred to Environment, Energy & Technology.
Next step would be – Scheduling a hearing.
Legislative tracking page for the bill.

Summary –
The Renewable Energy System Incentive Program established by ESSB 5729 in 2017 for residential and commercial renewable energy projects and for community solar projects reached its $100 million cap early in 2019, though the bill would have allowed new enrollments for another two and a half years if the funding had not been used up. This bill would reopen the program for residential systems only.

It would place a new $100 million cap on the program as a whole. Incentives would still be distributed to customers by participating utilities, with funding for those provided to each utilitiy as credits against its taxes, up to an annual limit of one and one-half percent of its power sales in 2014 or $250,000, whichever was greater. The reopened program would phase down the incentives in the same way, going from $0.16/kWh for systems certified in 2022 down to $0.10/kWh in 2025, and stepping the Made in Washington bonus from $0.05/kWh down to $0.02/kWh. Annual payments for a residential system would still be limited to $5,000. There would still be a one-time application fee of $125.

Details –
Utility participation in the program is still voluntary. Puget Sound Energy submitted a letter withdrawing from it in December 2019. (Apparently, PSE and some other utilities withdrew from the program because the law required the Energy Program to keep accepting applications after the money for funding them ran out, confusing people and supporting some misleading sales pitches by some bad actors; withdrawing from the program shut down applications in a utility’s service territory.) I don’t know if they’ll renew their participation now or not, though it would seem likely. A comment on the WSU Energy Program’s web page about its administration of the  program does make it sound as if residential projects on PSE’s waiting list at that point might well be eligible for a renewed program.

The bill drops the requirements for a report on the program to the Legislature.