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.