SB5295 – Multiyear and performance based rate setting for gas and electrical utilities; expanded assistance for low-income customers and vulnerable populations; and supporting energy conservation measures in rental housing.
Prime Sponsor – Senator Carlyle (D; 36th District; NW Seattle) (Co-sponsor Short – R)
Current status –
In the Senate – Passed
Had a hearing in the Senate Committee on Environment, Energy and Technology January 27th, replaced by a substitute, amended, and passed out of committee February 10th. Referred to Rules. Replaced by a striker and passed by the Senate March 5th. Senate concurred in the House’s changes April 15th.
In the House – Passed
Referred to the House Committee on Environment and Energy. Had a hearing March 16th; amended and passed out of committee March 25th. Referred to Rules; amended on the floor and passed by the House April 7th. Returned to the Senate for consideration of concurrence.
Next step would be – To the Governor.
Legislative tracking page for the bill.
Comments –
Representative Shewmake’s HB1125 had nearly identical provisions for efficiency and conservation measures in rental properties, without the required reporting on the results every two years. It’s dead for this session.
Summary –
House floor amendment –
This simply required utilities to propose grants and other assistance programs for low income customers as well as discount rates for them to the UTC for review.
House committee amendments –
One broadened the declarations of State policy about providing gas and electrical services to be declarations about energy services. One requires private gas and electrical companies to propose discount rates for low income customers, to be approved or modified by the UTC. One requires them to defer all revenues more than 0.5% above their approved rate of return for refunds to customers or allocation by the commission; requires, rather than authorizes them, to enter financial assistance agreements when requested with organizations that represent broad customer interests in regulatory proceedings; and specifies a number of other things about such agreements that are summarized by staff at the end of the amendment.
Senate Striker –
The prime sponsor’s striker authorizes the UTC to deal with multi-year rate plan proposals rather than requiring that; requires it to set performance measures in approving such plans rather than allowing that; and makes a number of other changes, mostly to the low-income assistance provisions, that are summarized at the end of it.
Substitute –
There’s a staff summary of the changes, at the beginning of the substitute, which removes the provision allowing utilities to invest in rental energy conservation in lieu of contributions from the owner and makes quite a few adjustments to the rules. (The amendment was minor.)
Original Bill –
The bill would replace the current processes for setting the rates of regulated private gas and electric utilities with multiyear rate plans, to be reviewed and approved by the UTC if it finds they’re lawful, establish just and reasonable rates, are supported by appropriate evidence, and are consistent with the public interest. They could cover up to four years, and are to include a budget, a forecast, a clean energy implementation plan, a price index, and a fixed escalation rate. The Commission’s to approve rates for each year of the plan in advance, and they’d stay as set if actual rates of return remained within 0.5% of those in the plan. If a company’s quarterly reports demonstrated its actual rate of return was falling more than 0.5% below the approved rate in the plan, it could apply to modify the plan, defer some costs, adopt a new multi-year plan, or start a new general rate setting procedure altogether. (However, the bill also says the UTC can establish procedures to ensure that rates remain just and reasonable during the course of the plan. Presumably, those would deal with rates of return rising more than 0.5% above approved rates.) A company could defer new costs associated with complying with governmental policies or plans that didn’t exist when the plan was developed, without owing interest, and apply to recover those in its next rate case or multi-year plan.
Utilities may ask the UTC to approve proposals for recovering up to 5% of their approved revenue for the first year of a plan from ratepayers to pay for expanding the affordability of services to customers including bill assistance programs or special rates for low-income residential customers. The bill expands utilities’ authority to provide discounts to low income customers to include discounts for customers receiving public benefit assistance that provides cash, housing, food, or medical care including temporary assistance for needy families; supplemental security income; emergency assistance to elders, disabled, and children; supplemental nutrition assistance program benefits; public housing; federally subsidized or state-subsidized housing; the low-income home energy assistance program; veterans’ benefits. They’re to send out information about the available ways for customers to reduce their bills twice a year, and do substantial outreach to inform customers of these particular discounts, including enrolling them as the default if they’re on a list of the recipients of qualifying public benefits and providing them with information about the program.
The bill authorizes the Utilities and Transportation Commission to allow private electric and gas utilities to invest in energy efficiency and conservation measures in rental properties that wouldn’t currently be cost-effective unless the owner paid part of the initial cost. They’re to be allowed a return on these investments over a period of time that reduces the customer’s energy burden and minimizes the impact on the customer’s bill, while incentivizing the company to make them. These investments are to be secured by the meter, and repaid over time through an “energy services charge” on the regular bills paid by tenants or the building owner. (If the owner pays the bill, there has to be a site-specific services agreement; if tenants pay it, the owner has to provide them with at least thirty days notice before work on the project begins, including a description of the work being done and the expected benefits of the conservation measures.) Utilities must prioritize these investments to reduce the energy burden of low-income customers, vulnerable populations, and customers in highly impacted communities. They must report on the performance of these conservation measures to the UTC and the WSU Energy Office every two two years, using smart meter data, and including an estimate of the annual energy savings using normalized weather conditions along with any available supporting data; an estimate of savings on energy costs; and an updated estimate of the payback period.
Utilities may agree to assist organizations representing the interests of customers belonging to a highly impacted community or in vulnerable populations with the costs of participating in the UTC’s regulatory proceedings, and may recover the costs in rates. (More than one utility and more than one organization might participate in one of these agreements.) They’d have to be approved by the UTC, which could determine how they were administered, including how much financial assistance might be provided; how it was distributed, and how it was to be recovered in rates.