Energy independence act

AN ACT Relating to modernizing the energy independence act to 1
avoid regulatory duplication and overlap with other laws; amending 2
RCW 19.285.010, 19.285.020, 19.285.040, 19.285.045, 19.285.050, 3
19.285.060, 19.285.070, 19.285.080, 19.29A.060, and 19.405.040; 4
creating a new section; and providing an effective date.5
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:6
NEW SECTION. Sec. 1. The legislature finds that it would be 7
beneficial to harmonize the 2006 energy independence act with the 8
2019 clean energy transformation act. Both laws govern the types of 9
generation resources that utilities may use to provide electricity to 10
Washington residents. As a result of this overlap, utilities are 11
subject to multiple standards for the same activity. The legislature 12
intends to address this unnecessary duplication by retaining the 13
conservation elements of the energy independence act while ending the 14
generation requirements. This will not create a gap in Washington's 15
energy laws because the requirements of the clean energy 16
transformation act continue to set the policy direction for the 17
state. The legislature intends for this act to create efficiencies 18
and cost savings for utilities, which will provide affordable power 19
to consumers.20
S-0710.1
SENATE BILL 5425
State of Washington 69th Legislature 2025 Regular Session
By Senators Boehnke and Chapman
Read first time 01/22/25. Referred to Committee on Environment,
Energy & Technology.
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Sec. 2. RCW 19.285.010 and 2007 c 1 s 1 are each amended to read 1
as follows: 2
((This chapter concerns requirements for new energy resources. )) 3
This chapter requires large utilities to ((obtain fifteen percent of 4
their electricity from new renewable resources such as solar and wind 5
by 2020 and)) undertake cost-effective energy conservation.6
Sec. 3. RCW 19.285.020 and 2007 c 1 s 2 are each amended to read 7
as follows: 8
Increasing energy conservation ((and the use of appropriately 9
sited renewable energy facilities )) builds on the strong foundation 10
of low-cost renewable hydroelectric generation in Washington state 11
and will promote energy independence in the state and the Pacific 12
Northwest region. Making the most of our plentiful local resources 13
will stabilize electricity prices for Washington residents, provide 14
economic benefits for Washington counties and farmers, create high 15
quality jobs in Washington, provide opportunities for training 16
apprentice workers in the renewable energy field, protect clean air 17
and water, and position Washington state as a national leader in 18
clean energy technologies. 19
Sec. 4. RCW 19.285.040 and 2024 c 278 s 2 are each amended to 20
read as follows: 21
(1) Each qualifying utility shall pursue all available 22
conservation that is cost-effective, reliable, and feasible.23
(a) By January 1, 2010, using methodologies consistent with those 24
used by the Pacific Northwest electric power and conservation 25
planning council in the most recently published regional power plan 26
as it existed on June 12, 2014, or a subsequent date as may be 27
provided by the department or the commission by rule, each qualifying 28
utility shall identify its achievable cost-effective conservation 29
potential through 2019. Nothing in the rule adopted under this 30
subsection precludes a qualifying utility from using its utility 31
specific conservation measures, values, and assumptions in 32
identifying its achievable cost-effective conservation potential. At 33
least every two years thereafter, the qualifying utility shall review 34
and update this assessment for the subsequent ((ten)) 10-year period.35
(b) Beginning January 2010, each qualifying utility shall 36
establish and make publicly available a biennial acquisition target 37
for cost-effective conservation consistent with its identification of 38
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achievable opportunities in (a) of this subsection, and meet that 1
target during the subsequent two-year period. At a minimum, each 2
biennial target must be no lower than the qualifying utility's pro 3
rata share for that two-year period of its cost-effective 4
conservation potential for the subsequent ((ten)) 10-year period.5
(c)(i) Except as provided in (c)(ii) and (iii) of this 6
subsection, beginning on January 1, 2014, cost-effective conservation 7
achieved by a qualifying utility in excess of its biennial 8
acquisition target may be used to help meet the immediately 9
subsequent two biennial acquisition targets, such that no more than 10
20 percent of any biennial target may be met with excess conservation 11
savings. 12
(ii) Beginning January 1, 2014, a qualifying utility may use 13
single large facility conservation savings in excess of its biennial 14
target to meet up to an additional five percent of the immediately 15
subsequent two biennial acquisition targets, such that no more than 16
25 percent of any biennial target may be met with excess conservation 17
savings allowed under all of the provisions of this section combined. 18
For the purposes of this subsection (1)(c)(ii), "single large 19
facility conservation savings" means cost-effective conservation 20
savings achieved in a single biennial period at the premises of a 21
single customer of a qualifying utility whose annual electricity 22
consumption prior to the conservation savings exceeded five average 23
megawatts. 24
(iii) Beginning January 1, 2012, and until December 31, 2017, a 25
qualifying utility with an industrial facility located in a county 26
with a population between 95,000 and 115,000 that is directly 27
interconnected with electricity facilities that are capable of 28
carrying electricity at transmission voltage may use cost-effective 29
conservation from that industrial facility in excess of its biennial 30
acquisition target to help meet the immediately subsequent two 31
biennial acquisition targets, such that no more than 25 percent of 32
any biennial target may be met with excess conservation savings 33
allowed under all of the provisions of this section combined.34
(d) In meeting its conservation targets, a qualifying utility may 35
count high-efficiency cogeneration owned and used by a retail 36
electric customer to meet its own needs. High-efficiency cogeneration 37
is the sequential production of electricity and useful thermal energy 38
from a common fuel source, where, under normal operating conditions, 39
the facility has a useful thermal energy output of no less than 33 40
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percent of the total energy output. The reduction in load due to 1
high-efficiency cogeneration shall be: (i) Calculated as the ratio of 2
the fuel chargeable to power heat rate of the cogeneration facility 3
compared to the heat rate on a new and clean basis of a 4
best-commercially available technology combined -cycle natural 5
gas-fired combustion turbine; and (ii) counted towards meeting the 6
biennial conservation target in the same manner as other conservation 7
savings. 8
(e) A qualifying utility is considered in compliance with its 9
biennial acquisition target for cost-effective conservation in (b) of 10
this subsection if events beyond the reasonable control of the 11
utility that could not have been reasonably anticipated or 12
ameliorated prevented it from meeting the conservation target. Events 13
that a qualifying utility may demonstrate were beyond its reasonable 14
control, that could not have reasonably been anticipated or 15
ameliorated, and that prevented it from meeting the conservation 16
target include: (i) Natural disasters resulting in the issuance of 17
extended emergency declarations; (ii) the cancellation of significant 18
conservation projects; and (iii) actions of a governmental authority 19
that adversely affects the acquisition of cost-effective conservation 20
by the qualifying utility. 21
(f) The commission may determine if a conservation program 22
implemented by an investor-owned utility is cost -effective based on 23
the commission's policies and practice. 24
(g) In addition to the requirements of RCW 19.280.030(3), in 25
assessing the cost-effective conservation required under this 26
section, a qualifying utility is encouraged to promote the adoption 27
of air conditioning, as defined in RCW 70A.60.010, with refrigerants 28
not exceeding a global warming potential of 750 and the replacement 29
of stationary refrigeration systems that contain ozone-depleting 30
substances or hydrofluorocarbon refrigerants with a high global 31
warming potential. 32
(h) The commission may rely on its standard practice for review 33
and approval of investor-owned utility conservation targets.34
(2)(((a) Except as provided in (j) of this subsection, each 35
qualifying utility shall use eligible renewable resources or acquire 36
equivalent renewable energy credits, or any combination of them, to 37
meet the following annual targets:38
(i) At least three percent of its load by January 1, 2012, and 39
each year thereafter through December 31, 2015;40
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(ii) At least nine percent of its load by January 1, 2016, and 1
each year thereafter through December 31, 2019; and2
(iii) At least 15 percent of its load by January 1, 2020, and 3
each year thereafter.4
(b) A qualifying utility may count distributed generation at 5
double the facility's electrical output if the utility: (i) Owns or 6
has contracted for the distributed generation and the associated 7
renewable energy credits; or (ii) has contracted to purchase the 8
associated renewable energy credits.9
(c) In meeting the annual targets in (a) of this subsection, a 10
qualifying utility shall calculate its annual load based on the 11
average of the utility's load for the previous two years.12
(d) A qualifying utility shall be considered in compliance with 13
an annual target in (a) of this subsection if: (i) The utility's 14
weather-adjusted load for the previous three years on average did not 15
increase over that time period; (ii) after December 7, 2006, the 16
utility did not commence or renew ownership or incremental purchases 17
of electricity from resources other than coal transition power or 18
renewable resources other than on a daily spot price basis and the 19
electricity is not offset by equivalent renewable energy credits; and 20
(iii) the utility invested at least one percent of its total annual 21
retail revenue requirement that year on eligible renewable resources, 22
renewable energy credits, or a combination of both.23
(e) A qualifying utility may use renewable energy credits to meet 24
the requirements of this section, subject to the limitations of this 25
subsection.26
(i) A renewable energy credit from electricity generated by a 27
resource other than freshwater may be used to meet a requirement 28
applicable to the year in which the credit was created, the year 29
before the year in which the credit was created, or the year after 30
the year in which the credit was created.31
(ii) A renewable energy credit from electricity generated by 32
freshwater:33
(A) May only be used to meet a requirement applicable to the year 34
in which the credit was created; and35
(B) Must be acquired by the qualifying utility through ownership 36
of the generation facility or through a transaction that conveyed 37
both the electricity and the nonpower attributes of the electricity.38
(iii) A renewable energy credit transferred to an investor-owned 39
utility pursuant to the Bonneville power administration's residential 40
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exchange program may not be used by any utility other than the 1
utility receiving the credit from the Bonneville power 2
administration. 3
(iv) Each renewable energy credit may only be used once to meet 4
the requirements of this section and must be retired using procedures 5
of the renewable energy credit tracking system.6
(f) In complying with the targets established in (a) of this 7
subsection, a qualifying utility may not count:8
(i) Eligible renewable resources or distributed generation where 9
the associated renewable energy credits are owned by a separate 10
entity; or11
(ii) Eligible renewable resources or renewable energy credits 12
obtained for and used in an optional pricing program such as the 13
program established in RCW 19.29A.090.14
(g) Where fossil and combustible renewable resources are cofired 15
in one generating unit located in the Pacific Northwest where the 16
cofiring commenced after March 31, 1999, the unit shall be considered 17
to produce eligible renewable resources in direct proportion to the 18
percentage of the total heat value represented by the heat value of 19
the renewable resources.20
(h)(i) A qualifying utility that acquires an eligible renewable 21
resource or renewable energy credit may count that acquisition at one 22
and two-tenths times its base value:23
(A) Where the eligible renewable resource comes from a facility 24
that commenced operation after December 31, 2005; and25
(B) Where the developer of the facility used apprenticeship 26
programs approved by the council during facility construction.27
(ii) The council shall establish minimum levels of labor hours to 28
be met through apprenticeship programs to qualify for this extra 29
credit.30
(i) A qualifying utility shall be considered in compliance with 31
an annual target in (a) of this subsection if events beyond the 32
reasonable control of the utility that could not have been reasonably 33
anticipated or ameliorated prevented it from meeting the renewable 34
energy target. Such events include weather-related damage, mechanical 35
failure, strikes, lockouts, and actions of a governmental authority 36
that adversely affect the generation, transmission, or distribution 37
of an eligible renewable resource under contract to a qualifying 38
utility.39
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(j)(i) Beginning January 1, 2016, only a qualifying utility that 1
owns or is directly interconnected to a qualified biomass energy 2
facility may use qualified biomass energy to meet its compliance 3
obligation under this subsection.4
(ii) A qualifying utility may no longer use electricity and 5
associated renewable energy credits from a qualified biomass energy 6
facility if the associated industrial pulping or wood manufacturing 7
facility ceases operation other than for purposes of maintenance or 8
upgrade.9
(k) An industrial facility that hosts a qualified biomass energy 10
facility may only transfer or sell renewable energy credits 11
associated with qualified biomass energy generated at its facility to 12
the qualifying utility with which it is directly interconnected with 13
facilities owned by such a qualifying utility and that are capable of 14
carrying electricity at transmission voltage. The qualifying utility 15
may only use an amount of renewable energy credits associated with 16
qualified biomass energy that are equivalent to the proportionate 17
amount of its annual targets under (a)(ii) and (iii) of this 18
subsection that was created by the load of the industrial facility. A 19
qualifying utility that owns a qualified biomass energy facility may 20
not transfer or sell renewable energy credits associated with 21
qualified biomass energy to another person, entity, or qualifying 22
utility.23
(l) Beginning January 1, 2020, a qualifying utility may use 24
eligible renewable resources as identified under RCW 19.285.030(12) 25
(g) and (h) to meet its compliance obligation under this subsection 26
(2). A qualifying utility may not transfer or sell these eligible 27
renewable resources to another utility for compliance purposes under 28
this chapter.29
(m) Beginning January 1, 2030, a qualifying utility is considered 30
to be in compliance with an annual target in (a) of this subsection 31
if the utility uses electricity from: (i) Renewable resources and 32
renewable energy credits as defined in RCW 19.285.030; and (ii) 33
nonemitting electric generation as defined in RCW 19.405.020, in an 34
amount equal to 100 percent of the utility's average annual retail 35
electric load. Nothing in this subsection relieves the requirements 36
of a qualifying utility to comply with subsection (1) of this 37
section.38
(n) A qualifying utility shall exclude from its annual targets 39
under this subsection (2) its voluntary renewable energy purchases.40
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(3))) Utilities that become qualifying utilities after December 1
31, 2006, shall meet the requirements in this section on a time frame 2
comparable in length to that provided for qualifying utilities as of 3
December 7, 2006. 4
Sec. 5. RCW 19.285.045 and 2012 c 254 s 1 are each amended to 5
read as follows: 6
(1) When requested by a consumer-owned qualifying utility or by a 7
person proposing ((an electric generation project or )) a conservation 8
resource, the department is authorized to and shall provide analysis 9
and an advisory opinion on whether a proposed ((electric generation 10
project or )) conservation resource qualifies to meet a target under 11
RCW 19.285.040. The advisory opinion must include a legal analysis. 12
When forming its advisory opinion, the department must: (a) Consider, 13
and may rely on, previous opinions issued by the I-937 technical 14
working group established by the commission and the department; and 15
(b) solicit and consider comments from interested parties, including 16
staff of the requesting utility. The department must give priority to 17
any application regarding ((an electric generation project or )) a 18
conservation resource that previously received an affirmative 19
advisory opinion from the I-937 technical working group.20
(2) Consumer-owned qualifying utilities and persons proposing 21
((electric generation projects or )) conservation resources may apply 22
for an advisory opinion from the department. The application must be 23
in writing and must include information that accurately describes the 24
proposed ((project or )) resource. Within ((ninety)) 90 days of 25
receiving an application, the director of the department must issue a 26
signed advisory opinion on whether the proposed ((project or )) 27
resource qualifies to meet a target under RCW 19.285.040. The 28
governing board of the consumer-owned utility that will use the 29
resource ((or project )) must either adopt or reject the advisory 30
opinion after public notice and hearing. Under its responsibilities 31
in RCW 19.285.060, the auditor shall consider any ((project or )) 32
resource reviewed and adopted under the process in this section as 33
being in compliance with RCW 19.285.040 and 19.285.060, but only if: 34
(a) The advisory opinion affirmatively qualifies the ((project or )) 35
resource; (b) the governing board of the consumer-owned utility that 36
will use the ((project or )) resource adopts the advisory opinion 37
after public notice and hearing; and (c) the ((project or)) resource 38
is built or acquired as proposed. 39
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(3) The department may require an applicant to pay an application 1
fee to cover the cost of reviewing the ((project)) resource and 2
preparing an advisory opinion. 3
(4) ((An electric generation project reviewed and adopted under 4
this section may produce renewable energy credits as defined in RCW 5
19.285.030.6
(5))) The department may adopt rules to implement this section.7
(((6))) (5) Nothing in this section preempts the authority of any 8
governing board of a consumer-owned utility from making a 9
determination, independent of the process in this section, on whether 10
a proposed ((electric generation project or )) conservation resource 11
may qualify to meet a target under RCW 19.285.040.12
Sec. 6. RCW 19.285.050 and 2007 c 1 s 5 are each amended to read 13
as follows: 14
(((1)(a) A qualifying utility shall be considered in compliance 15
with an annual target created in RCW 19.285.040(2) for a given year 16
if the utility invested four percent of its total annual retail 17
revenue requirement on the incremental costs of eligible renewable 18
resources, the cost of renewable energy credits, or a combination of 19
both, but a utility may elect to invest more than this amount.20
(b) The incremental cost of an eligible renewable resource is 21
calculated as the difference between the levelized delivered cost of 22
the eligible renewable resource, regardless of ownership, compared to 23
the levelized delivered cost of an equivalent amount of reasonably 24
available substitute resources that do not qualify as eligible 25
renewable resources, where the resources being compared have the same 26
contract length or facility life.27
(2))) An investor-owned utility is entitled to recover all 28
prudently incurred costs associated with compliance with this 29
chapter. The commission shall address cost recovery issues of 30
qualifying utilities that are investor -owned utilities that serve 31
both in Washington and in other states in complying with this 32
chapter. 33
Sec. 7. RCW 19.285.060 and 2021 c 79 s 2 are each amended to 34
read as follows: 35
(1) Except as provided in subsection (2) of this section, a 36
qualifying utility that fails to comply with the energy conservation 37
((or renewable energy )) targets established in RCW 19.285.040 shall 38
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pay an administrative penalty to the state of Washington in the 1
amount of ((fifty dollars)) $50 for each megawatt-hour of shortfall. 2
Beginning in 2007, this penalty shall be adjusted annually according 3
to the rate of change of the inflation indicator, gross domestic 4
product-implicit price deflator, as published by the bureau of 5
economic analysis of the United States department of commerce or its 6
successor. 7
(2) A qualifying utility that does not meet ((an annual renewable 8
energy target established in RCW 19.285.040(2) or)) a biennial 9
acquisition target for cost-effective conservation in RCW 10
19.285.040(1) is exempt from the administrative penalty in subsection 11
(1) of this section for that year if the commission for investor-12
owned utilities or the auditor for all other qualifying utilities 13
determines that the utility complied with RCW 19.285.040 (1)(e) ((or 14
(2) (d) or (i) or 19.285.050(1))). 15
(3) A qualifying utility must notify its retail electric 16
customers in published form within three months of incurring a 17
penalty regarding the size of the penalty and the reason it was 18
incurred. 19
(4) The commission shall determine if an investor-owned utility 20
may recover the cost of this administrative penalty in electric 21
rates, and may consider providing positive incentives for an 22
investor-owned utility to exceed the targets established in RCW 23
19.285.040. 24
(5) Administrative penalties collected under this chapter shall 25
be deposited into the energy independence act special account which 26
is hereby created. All receipts from administrative penalties 27
collected under this chapter must be deposited into the account. 28
Expenditures from the account may be used only for ((the purchase of 29
renewable energy credits or for )) energy conservation projects at 30
public facilities, local government facilities, community colleges, 31
or state universities. The state shall own and retire any renewable 32
energy credits purchased using moneys from the account. Only the 33
director of enterprise services or the director's designee may 34
authorize expenditures from the account. The account is subject to 35
allotment procedures under chapter 43.88 RCW, but an appropriation is 36
not required for expenditures. 37
(6) For a qualifying utility that is an investor-owned utility, 38
the commission shall determine compliance with the provisions of this 39
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chapter and assess penalties for noncompliance as provided in 1
subsection (1) of this section. 2
(7) For qualifying utilities that are not investor-owned 3
utilities, the auditor is responsible for auditing compliance with 4
this chapter and rules adopted under this chapter that apply to those 5
utilities and the attorney general is responsible for enforcing that 6
compliance. 7
Sec. 8. RCW 19.285.070 and 2007 c 1 s 7 are each amended to read 8
as follows: 9
(1) On or before June 1, 2012, and annually thereafter, each 10
qualifying utility shall report to the department on its progress in 11
the preceding year in meeting the targets established in RCW 12
19.285.040, including expected electricity savings from the biennial 13
conservation target, expenditures on conservation, actual electricity 14
savings results, and the utility's annual load for the prior two 15
years((, the amount of megawatt -hours needed to meet the annual 16
renewable energy target, the amount of megawatt -hours of each type of 17
eligible renewable resource acquired, the type and amount of 18
renewable energy credits acquired, and the percent of its total 19
annual retail revenue requirement invested in the incremental cost of 20
eligible renewable resources and the cost of renewable energy 21
credits. For each year that a qualifying utility elects to 22
demonstrate alternative compliance under RCW 19.285.040(2) (d) or (i) 23
or 19.285.050(1), it must include in its annual report relevant data 24
to demonstrate that it met the criteria in that section )). A 25
qualifying utility may submit its report to the department in 26
conjunction with its annual obligations in chapter 19.29A RCW.27
(2) A qualifying utility that is an investor -owned utility shall 28
also report all information required in subsection (1) of this 29
section to the commission, and all other qualifying utilities shall 30
also make all information required in subsection (1) of this section 31
available to the auditor. 32
(3) A qualifying utility shall also make reports required in this 33
section available to its customers. 34
Sec. 9. RCW 19.285.080 and 2017 c 315 s 3 are each amended to 35
read as follows: 36
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(1) The commission may adopt rules to ensure the proper 1
implementation and enforcement of this chapter as it applies to 2
investor-owned utilities. 3
(2) The department shall adopt rules concerning only process, 4
timelines, and documentation to ensure the proper implementation of 5
this chapter as it applies to qualifying utilities that are not 6
investor-owned utilities. Those rules include, but are not limited 7
to, rules associated with a qualifying utility's development of 8
conservation targets under RCW 19.285.040(1)((; a qualifying 9
utility's decision to pursue alternative compliance in RCW 10
19.285.040(2) (d) or (i) or 19.285.050(1);)) and the format and 11
content of reports required in RCW 19.285.070((; and the development 12
of a methodology for calculating baseline levels of generation under 13
RCW 19.285.030(12)(f))). Nothing in this subsection may be construed 14
to restrict the rate-making authority of the commission or a 15
qualifying utility as otherwise provided by law. 16
(3) The commission and department may coordinate in developing 17
rules related to process, timelines, and documentation that are 18
necessary for implementation of this chapter. 19
(4) Pursuant to the administrative procedure act, chapter 34.05 20
RCW, rules needed for the implementation of this chapter must be 21
adopted by December 31, 2007. These rules may be revised as needed to 22
carry out the intent and purposes of this chapter.23
Conforming Amendments24
Sec. 10. RCW 19.29A.060 and 2019 c 222 s 4 are each amended to 25
read as follows: 26
(1) Each retail supplier must disclose to its customers the fuel 27
characteristics of each electricity product it offers to retail 28
electric customers using information consistent with the retail 29
supplier's source and disposition report. 30
(2) The fuel characteristics disclosures required by this section 31
must identify for each electricity product the percentage of the 32
total electricity product sold by a retail supplier during the 33
previous calendar year from each of the following categories, using a 34
uniform format: 35
(a) Coal; 36
(b) Hydroelectric; 37
(c) Natural gas; 38
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(d) Nuclear; 1
(e) Petroleum; 2
(f) Solar; 3
(g) Wind; 4
(h) Other generation, except that when a component of the other 5
generation category meets or exceeds two percent of the total 6
electricity product sold by a retail supplier during the previous 7
calendar year, the retail supplier shall identify the component or 8
components and display the fuel mix percentages for these component 9
sources. A retail supplier may voluntarily identify any component or 10
components within the other generation category that comprises two 11
percent or less of annual sales; and 12
(i) Unspecified sources. 13
(3) If the percentage amount of unspecified sources identified in 14
subsection (2) of this section exceeds two percent for an electricity 15
product, the retail supplier must include on the label a general 16
description of unspecified sources and an explanation of why some 17
power sources are unknown to the retail supplier. 18
(4) A retail supplier may not include in the electricity product 19
content label any environmental quality or environmental impact 20
qualifier, other than those permitted or required by this chapter, 21
related to any of the generation categories disclosed.22
(5) For the portion of an electricity product purchased from the 23
Bonneville power administration, a retail supplier may incorporate 24
the Bonneville power administration system mix in its disclosure.25
(6) A retail supplier may include with the electricity product 26
content label additional information concerning the quantity of 27
renewable energy certificates, if not otherwise included in the 28
retail supplier's declared resources, that are retired ((for 29
compliance with RCW 19.285.040(2) in the)) in a reporting year.30
Sec. 11. RCW 19.405.040 and 2019 c 288 s 4 are each amended to 31
read as follows: 32
(1) It is the policy of the state that all retail sales of 33
electricity to Washington retail electric customers be greenhouse gas 34
neutral by January 1, 2030. 35
(a) For the four-year compliance period beginning January 1, 36
2030, and for each multiyear compliance period thereafter through 37
December 31, 2044, an electric utility must demonstrate its 38
compliance with this standard using a combination of nonemitting 39
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electric generation and electricity from renewable resources, or 1
alternative compliance options, as provided in this section. To 2
achieve compliance with this standard, an electric utility must: (i) 3
Pursue all cost-effective, reliable, and feasible conservation and 4
efficiency resources to reduce or manage retail electric load, using 5
the methodology established in RCW 19.285.040, if applicable; and 6
(ii) use electricity from renewable resources and nonemitting 7
electric generation in an amount equal to ((one hundred)) 100 percent 8
of the utility's retail electric loads over each multiyear compliance 9
period. An electric utility must achieve compliance with this 10
standard for the following compliance periods: January 1, 2030, 11
through December 31, 2033; January 1, 2034, through December 31, 12
2037; January 1, 2038, through December 31, 2041; and January 1, 13
2042, through December 31, 2044. 14
(b) Through December 31, 2044, an electric utility may satisfy up 15
to ((twenty)) 20 percent of its compliance obligation under (a) of 16
this subsection with an alternative compliance option consistent with 17
this section. An alternative compliance option may include any 18
combination of the following: 19
(i) Making an alternative compliance payment under RCW 20
19.405.090(2); 21
(ii) Using unbundled renewable energy credits, provided that 22
there is no double counting of any nonpower attributes associated 23
with renewable energy credits within Washington or programs in other 24
jurisdictions, as follows: 25
(A) Unbundled renewable energy credits produced from eligible 26
renewable resources, as defined under RCW 19.285.030((, which may be 27
used by the electric utility for compliance with RCW 19.285.040 and 28
this section as provided under RCW 19.285.040(2)(e))); and29
(B) Unbundled renewable energy credits, other than those included 30
in (b)(ii)(A) of this subsection, that represent electricity 31
generated within the compliance period; 32
(iii) Investing in energy transformation projects, including 33
additional conservation and efficiency resources beyond what is 34
otherwise required under this section, provided the projects meet the 35
requirements of subsection (2) of this section and are not credited 36
as resources used to meet the standard under (a) of this subsection; 37
or 38
(iv) Using electricity from an energy recovery facility using 39
municipal solid waste as the principal fuel source, where the 40
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facility was constructed prior to 1992, and the facility is operated 1
in compliance with federal laws and regulations and meets state air 2
quality standards. An electric utility may only use electricity from 3
such an energy recovery facility if the department and the department 4
of ecology determine that electricity generation at the facility 5
provides a net reduction in greenhouse gas emissions compared to any 6
other available waste management best practice. The determination 7
must be based on a life-cycle analysis comparing the energy recovery 8
facility to other technologies available in the jurisdiction in which 9
the facility is located for the waste management best practices of 10
waste reduction, recycling, composting, and minimizing the use of a 11
landfill. 12
(c) Electricity from renewable resources used to meet the 13
standard under (a) of this subsection must be verified by the 14
retirement of renewable energy credits. Renewable energy credits must 15
be tracked and retired in the tracking system selected by the 16
department. 17
(d) Hydroelectric generation used by an electric utility in 18
meeting the standard under (a) of this subsection may not include new 19
diversions, new impoundments, new bypass reaches, or expansion of 20
existing reservoirs constructed after May 7, 2019, unless the 21
diversions, bypass reaches, or reservoir expansions are necessary for 22
the operation of a pumped storage facility that: (i) Does not 23
conflict with existing state or federal fish recovery plans; and (ii) 24
complies with all local, state, and federal laws and regulations.25
(e) Nothing in (d) of this subsection precludes an electric 26
utility that owns and operates hydroelectric generating facilities, 27
or the owner of a hydroelectric generating facility whose energy 28
output is marketed by the Bonneville power administration, from 29
making efficiency or other improvements to its hydroelectric 30
generating facilities existing as of May 7, 2019, or from installing 31
hydroelectric generation in pipes, culverts, irrigation canals, and 32
other man-made waterways, as long as those changes do not create 33
conflicts with existing state or federal fish recovery plans and 34
comply with all local, state, and federal laws and regulations.35
(f) Nonemitting electric generation used to meet the standard 36
under (a) of this subsection must be generated during the compliance 37
period and must be verified by documentation that the electric 38
utility owns the nonpower attributes of the electricity generated by 39
the nonemitting electric generation resource. 40
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(g) Nothing in this section prohibits an electric utility from 1
purchasing or exchanging power from the Bonneville power 2
administration. 3
(2) Investments in energy transformation projects used to satisfy 4
an alternative compliance option provided under subsection (1)(b) of 5
this section must use criteria developed by the department of 6
ecology, in consultation with the department and the commission. For 7
the purpose of crediting an energy transformation project toward the 8
standard in subsection (1)(a) of this section, the department of 9
ecology must establish a conversion factor of emissions reductions 10
resulting from energy transformation projects to megawatt-hours of 11
electricity from nonemitting electric generation that is consistent 12
with the emission factors for unspecified electricity, or for energy 13
transformation projects in the transportation sector, consistent with 14
default emissions or conversion factors established by other 15
jurisdictions for clean alternative fuels. Emissions reductions from 16
energy transformation projects must be: 17
(a) Real, specific, identifiable, and quantifiable;18
(b) Permanent: The department of ecology must look to other 19
jurisdictions in setting this standard and make a reasonable 20
determination on length of time; 21
(c) Enforceable by the state of Washington; 22
(d) Verifiable; 23
(e) Not required by another statute, rule, or other legal 24
requirement; and 25
(f) Not reasonably assumed to occur absent investment, or if an 26
investment has already been made, not reasonably assumed to occur 27
absent additional funding in the near future. 28
(3) Energy transformation projects must be associated with the 29
consumption of energy in Washington and must not create a new use of 30
fossil fuels that results in a net increase of fossil fuel usage.31
(4) The compliance eligibility of energy transformation projects 32
may be scaled or prorated by an approved protocol in order to 33
distinguish effects related to reductions in electricity usage from 34
reductions in fossil fuel usage. 35
(5) Any compliance obligation fulfilled through an investment in 36
an energy transformation project is eligible for use only: (a) By the 37
electric utility that makes the investment; (b) if the investment is 38
made by the Bonneville power administration, by electric utilities 39
that are preference customers of the Bonneville power administration; 40
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or (c) if the investment is made by a joint operating agency 1
organized under chapter 43.52 RCW, by a member of the joint operating 2
agency. An electric utility making an investment in partnership with 3
another electric utility or entity may claim credit proportional to 4
its share invested in the total project cost. 5
(6)(a) In meeting the standard under subsection (1) of this 6
section, an electric utility must, consistent with the requirements 7
of RCW 19.285.040, if applicable, pursue all cost-effective, 8
reliable, and feasible conservation and efficiency resources, and 9
demand response. In making new investments, an electric utility must, 10
to the maximum extent feasible: 11
(i) Achieve targets at the lowest reasonable cost, considering 12
risk; 13
(ii) Consider acquisition of existing renewable resources; and14
(iii) In the acquisition of new resources constructed after May 15
7, 2019, rely on renewable resources and energy storage, insofar as 16
doing so is consistent with (a)(i) of this subsection.17
(b) Electric utilities subject to RCW 19.285.040 must demonstrate 18
pursuit of all conservation and efficiency resources through 19
compliance with the requirements in RCW 19.285.040.20
(7) An electric utility that fails to meet the requirements of 21
this section must pay the administrative penalty established under 22
RCW 19.405.090(1), except as otherwise provided in this chapter.23
(8) In complying with this section, an electric utility must, 24
consistent with the requirements of RCW 19.280.030 and 19.405.140, 25
ensure that all customers are benefiting from the transition to clean 26
energy: Through the equitable distribution of energy and nonenergy 27
benefits and reduction of burdens to vulnerable populations and 28
highly impacted communities; long-term and short-term public health 29
and environmental benefits and reduction of costs and risks; and 30
energy security and resiliency. 31
(9) Affected market customers must comply with the standard 32
established under subsection (1) of this section. 33
(10) A market customer that purchases electricity exclusively 34
from carbon-free resources and eligible renewable resources, as 35
defined in RCW 19.285.030 as of January 1, 2019, pursuant to a 36
special contract with an investor-owned utility approved, prior to 37
May 7, 2019, by order of the commission is subject to the 38
requirements of such an order and not to the standard established in 39
this section. For purposes of interpreting any such special contract, 40
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chapter 19.285 RCW, as in effect on January 1, 2019, is not, either 1
directly or indirectly, amended or supplemented. 2
(11) To reduce costs for utility customers or avoid exceeding the 3
cost impact limit in RCW 19.405.060(3)(a), a multistate electric 4
utility with fewer than ((two hundred fifty thousand )) 250,000 5
customers in Washington may apply the total amount of megawatt-hours 6
of coal-fired resources eliminated from the utility's allocation of 7
electricity before December 31, 2025, as an equivalent amount of 8
megawatt-hours of nonemitting electric generation or electricity from 9
renewable resources required to comply with subsection (1)(a) of this 10
section. The utility must demonstrate that for every megawatt-hour of 11
early action compliance credit there is a real, permanent reduction 12
in greenhouse gas emissions in the western interconnection directly 13
associated with that credit. A multistate electric utility must 14
request to use early action compliance credit in its clean energy 15
implementation plan that is submitted under RCW 19.405.060. The 16
multistate electric utility must specify in its clean energy 17
implementation plan the compliance years to which the early action 18
compliance credit will apply, but in no event may the multistate 19
electric utility use the early action compliance credits beyond 2035. 20
The commission must establish conditions for use of early action 21
compliance credits, including a determination of whether action 22
constitutes early action, before the multistate electric utility's 23
use of early action compliance credits in a clean energy 24
implementation plan. 25
Effective Date26
NEW SECTION. Sec. 12. This act takes effect January 1, 2030.27
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