SB5336 – Advancing electric transportation.
Prime Sponsor – Senator Palumbo (D, 1st District, Snohomish County) (Requested by the Governor.)
Current status – Had a hearing in the Senate Committee on Environment, Energy & Technology, February 12th. Significantly changed substitute bill passed out of committee February 20th. Referred to the Committee on Transportation, which passed a 2nd substitute with some further changes March 6th. Referred to Ways and Means. Had a hearing March 19th 2019. Reintroduced and retained in present status for 2020 session.
Next step would be – Action by the committee.
Legislative tracking page for the bill.
HB1664 is an identical companion bill in the House.

Comments –
First substitute:
The changes in the first substitute bill are summarized on p. 5 of the Senate Bill Report. (However, the bill only expands existing commercial vehicle tax breaks; it doesn’t “add” them. The original didn’t “require” Ecology to adopt the ZEV standard; it removed the prohibition on doing that.)

The substitute leaves the prohibition on adopting the Zero Emission Vehicle Standard in place. The Department of Commerce is to create a program to provide, subject to funding, rebates between $1,250 and $5,000 for low and moderate income households in areas with high levels of air pollution that scrap a vehicle that’s more than ten years old and replace it with a new or used zero-emission vehicle. [My economist friends predict that this will raise the price of used ZEVs.]

It specifies that local sales and use taxes are included in the exemptions. It roughly doubles the B&O and public utility tax credits for clean alternative fuel commercial vehicles, raises the annual cap on these exemptions from six million to forty, and extends the exemption from 2021 to 2050. Rather than raising registration fees on EVs, it funds the first thirty-three million in repayments to the general fund for the commercial vehicle tax exemptions from the multi-modal transportation account and anything above that as well as the reimbursements for the sales and use tax exemptions from the forward flexible account (which seems to be some part of the motor vehicle fund).

It makes all utilities’ authorizations for investments in EV infrastructure dependent on their creation of approved electrification of transportation plans, and sets 2030 as the limit to how long private utilities can earn incentive rates of return on investments in electric vehicle infrastructure. (The original bill only seemed to provide specific provisions for private utilities and municipal utilities, not the PUDs.)

Second substitute:
The second substitute has the tax exemptions expire at a $100 million cap, rather than when they’ve been received by 10% of the registered vehicles, and simply caps the commercial vehicle exemptions at $33 million. It eliminates the rebate program for scrapping vehicles.

Summary of the original bill –

Washington would join the other nine states that have adopted California’s zero emission vehicle standards. (Those currently require manufacturers to have about 2.5% of the cars they sell in a given state be free of tailpipe emissions, and establish a market for trading credits that manufacturers who sell more battery and fuel-cell cars than required can sell to those who don’t sell enough or decide it would be cheaper to buy credits than produce and sell the cars.)

The bill requires all utilities to engage in electrifying transportation, and specifically authorizes them to build and promote charging infrastructure (as well as to invest in making energy infrastructure in general more efficient). It removes the requirement that their chargers must be in places where cars will plug in for at least four hours if they want to earn a rate of return on the investment.

It authorizes cities with municipal utilities serving more than 400,000 customers to do as much as the Washington Constitution allows to provide financing to help customers electrify transportation, and to offer programs, services, and make investments to provide that, if that will benefit ratepayers and the city has adopted a plan for electrifying transportation.

Utilities regulated by the UTC can submit a plan for investing in chargers or providing other programs, services, or incentives to support electrifying transportation. (In fact, they now have to have a plan if they want earn an increased rate of return on EV infrastructure.) The plan may not “increase costs to customers in excess of one-quarter of one percent above the benefits of electric transportation to all customers” over the twenty years of its current integrated resource plan. The UTC can allow an addition to the rate of return of up to 2% for capital investments in chargers behind the customer’s meter, provided that won’t increase costs to ratepayers more than 0.25%.

The bill provides a sales tax exemption of up to $1,000 and a use tax exemption of up to $1,000 on the sale or lease of new or used fully electric cars, light trucks, and medium-duty passenger vehicles with a manufacturer’s suggested retail price of less than $45,000 for the base model. (If you buy the car at the end of the lease you can get the tax exemptions on that purchase as well as on the lease payments.) The exemption expires when the number of vehicles that have received the exemption reaches 10% of the number of cars, light trucks and medium-duty passenger vehicles in the state.

It funds the program with the vehicle registration fee for plug-in cars that go at least 30 miles on the battery and raises it from $100/year to $150. (That fee currently goes to the motor vehicle fund to be spent on highways.)

Details –
In reviewing a private utility’s electrification plan, the UTC has to consider multiple options for the electrification of transportation for all customer classes; its impact on loads, and whether demand response or opportunities for managing load are appropriate; system reliability and distribution system efficiencies; interoperability concerns, including the interaction of hardware and software systems in proposals; benefits and costs; and the overall customer experience.

The bill removes the current prohibition against adopting California’s zero emissions vehicle requirements, and no longer requires Ecology to have any changes in emissions rules reviewed by an advisory group of stakeholders.