Local energy resilience

AN ACT Relating to encouraging utility investment in local energy 1
resilience by providing an alternative compliance pathway to meet the 2
eligible renewable resource mandate in the energy independence act; 3
amending RCW 19.285.040; and creating a new section.4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
NEW SECTION. Sec. 1. The legislature finds and declares that 6
the Pacific Northwest utilities conference committee has estimated 7
demand for electricity in the region will increase 30 percent over 8
the next decade. High-tech manufacturing, increasing electrification 9
of buildings and transportation, and surging data center needs 10
contribute to the expected increase in demand. Local economies 11
benefit from projects that will help meet this demand and improve 12
distribution system resilience with local resources and investments.13
The legislature finds and declares that utilities are essential 14
partners in achieving the state's decarbonization goals while meeting 15
increasing demand and ensuring grid reliability. Such projects can 16
create high quality jobs, provide opportunities for training 17
apprentice workers, and help utilities leverage their own expertise, 18
community relationships, and resources to address our energy 19
challenges. 20
S-0653.1
SENATE BILL 5445
State of Washington 69th Legislature 2025 Regular Session
By Senators Boehnke, Hasegawa, and Slatter
Read first time 01/23/25. Referred to Committee on Environment,
Energy & Technology.
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The legislature intends to support utilities who make significant 1
investments in energy resilience by establishing an alternate 2
compliance pathway in the energy independence act for utilities who 3
invest in local energy resilience projects. 4
Sec. 2. RCW 19.285.040 and 2024 c 278 s 2 are each amended to 5
read as follows: 6
(1) Each qualifying utility shall pursue all available 7
conservation that is cost-effective, reliable, and feasible.8
(a) By January 1, 2010, using methodologies consistent with those 9
used by the Pacific Northwest electric power and conservation 10
planning council in the most recently published regional power plan 11
as it existed on June 12, 2014, or a subsequent date as may be 12
provided by the department or the commission by rule, each qualifying 13
utility shall identify its achievable cost-effective conservation 14
potential through 2019. Nothing in the rule adopted under this 15
subsection precludes a qualifying utility from using its utility 16
specific conservation measures, values, and assumptions in 17
identifying its achievable cost-effective conservation potential. At 18
least every two years thereafter, the qualifying utility shall review 19
and update this assessment for the subsequent ten-year period.20
(b) Beginning January 2010, each qualifying utility shall 21
establish and make publicly available a biennial acquisition target 22
for cost-effective conservation consistent with its identification of 23
achievable opportunities in (a) of this subsection, and meet that 24
target during the subsequent two-year period. At a minimum, each 25
biennial target must be no lower than the qualifying utility's pro 26
rata share for that two-year period of its cost-effective 27
conservation potential for the subsequent ten-year period.28
(c)(i) Except as provided in (c)(ii) and (iii) of this 29
subsection, beginning on January 1, 2014, cost-effective conservation 30
achieved by a qualifying utility in excess of its biennial 31
acquisition target may be used to help meet the immediately 32
subsequent two biennial acquisition targets, such that no more than 33
20 percent of any biennial target may be met with excess conservation 34
savings. 35
(ii) Beginning January 1, 2014, a qualifying utility may use 36
single large facility conservation savings in excess of its biennial 37
target to meet up to an additional five percent of the immediately 38
subsequent two biennial acquisition targets, such that no more than 39
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25 percent of any biennial target may be met with excess conservation 1
savings allowed under all of the provisions of this section combined. 2
For the purposes of this subsection (1)(c)(ii), "single large 3
facility conservation savings" means cost-effective conservation 4
savings achieved in a single biennial period at the premises of a 5
single customer of a qualifying utility whose annual electricity 6
consumption prior to the conservation savings exceeded five average 7
megawatts. 8
(iii) Beginning January 1, 2012, and until December 31, 2017, a 9
qualifying utility with an industrial facility located in a county 10
with a population between 95,000 and 115,000 that is directly 11
interconnected with electricity facilities that are capable of 12
carrying electricity at transmission voltage may use cost-effective 13
conservation from that industrial facility in excess of its biennial 14
acquisition target to help meet the immediately subsequent two 15
biennial acquisition targets, such that no more than 25 percent of 16
any biennial target may be met with excess conservation savings 17
allowed under all of the provisions of this section combined.18
(d) In meeting its conservation targets, a qualifying utility may 19
count high-efficiency cogeneration owned and used by a retail 20
electric customer to meet its own needs. High-efficiency cogeneration 21
is the sequential production of electricity and useful thermal energy 22
from a common fuel source, where, under normal operating conditions, 23
the facility has a useful thermal energy output of no less than 33 24
percent of the total energy output. The reduction in load due to 25
high-efficiency cogeneration shall be: (i) Calculated as the ratio of 26
the fuel chargeable to power heat rate of the cogeneration facility 27
compared to the heat rate on a new and clean basis of a 28
best-commercially available technology combined -cycle natural 29
gas-fired combustion turbine; and (ii) counted towards meeting the 30
biennial conservation target in the same manner as other conservation 31
savings. 32
(e) A qualifying utility is considered in compliance with its 33
biennial acquisition target for cost-effective conservation in (b) of 34
this subsection if events beyond the reasonable control of the 35
utility that could not have been reasonably anticipated or 36
ameliorated prevented it from meeting the conservation target. Events 37
that a qualifying utility may demonstrate were beyond its reasonable 38
control, that could not have reasonably been anticipated or 39
ameliorated, and that prevented it from meeting the conservation 40
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target include: (i) Natural disasters resulting in the issuance of 1
extended emergency declarations; (ii) the cancellation of significant 2
conservation projects; and (iii) actions of a governmental authority 3
that adversely affects the acquisition of cost-effective conservation 4
by the qualifying utility. 5
(f) The commission may determine if a conservation program 6
implemented by an investor-owned utility is cost -effective based on 7
the commission's policies and practice. 8
(g) In addition to the requirements of RCW 19.280.030(3), in 9
assessing the cost-effective conservation required under this 10
section, a qualifying utility is encouraged to promote the adoption 11
of air conditioning, as defined in RCW 70A.60.010, with refrigerants 12
not exceeding a global warming potential of 750 and the replacement 13
of stationary refrigeration systems that contain ozone-depleting 14
substances or hydrofluorocarbon refrigerants with a high global 15
warming potential. 16
(h) The commission may rely on its standard practice for review 17
and approval of investor-owned utility conservation targets.18
(2)(a) Except as provided in (j) of this subsection, each 19
qualifying utility shall use eligible renewable resources or acquire 20
equivalent renewable energy credits, or any combination of them, to 21
meet the following annual targets: 22
(i) At least three percent of its load by January 1, 2012, and 23
each year thereafter through December 31, 2015; 24
(ii) At least nine percent of its load by January 1, 2016, and 25
each year thereafter through December 31, 2019; and26
(iii) At least 15 percent of its load by January 1, 2020, and 27
each year thereafter. 28
(b) A qualifying utility may count distributed generation at 29
double the facility's electrical output if the utility: (i) Owns or 30
has contracted for the distributed generation and the associated 31
renewable energy credits; or (ii) has contracted to purchase the 32
associated renewable energy credits. 33
(c) In meeting the annual targets in (a) of this subsection, a 34
qualifying utility shall calculate its annual load based on the 35
average of the utility's load for the previous two years.36
(d) A qualifying utility shall be considered in compliance with 37
an annual target in (a) of this subsection if: (i) The utility's 38
weather-adjusted load for the previous three years on average did not 39
increase over that time period; (ii) after December 7, 2006, the 40
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utility did not commence or renew ownership or incremental purchases 1
of electricity from resources other than coal transition power or 2
renewable resources other than on a daily spot price basis and the 3
electricity is not offset by equivalent renewable energy credits; and 4
(iii) the utility invested at least one percent of its total annual 5
retail revenue requirement that year on eligible renewable resources, 6
renewable energy credits, or a combination of both.7
(e) A qualifying utility may use renewable energy credits to meet 8
the requirements of this section, subject to the limitations of this 9
subsection. 10
(i) A renewable energy credit from electricity generated by a 11
resource other than freshwater may be used to meet a requirement 12
applicable to the year in which the credit was created, the year 13
before the year in which the credit was created, or the year after 14
the year in which the credit was created. 15
(ii) A renewable energy credit from electricity generated by 16
freshwater: 17
(A) May only be used to meet a requirement applicable to the year 18
in which the credit was created; and 19
(B) Must be acquired by the qualifying utility through ownership 20
of the generation facility or through a transaction that conveyed 21
both the electricity and the nonpower attributes of the electricity.22
(iii) A renewable energy credit transferred to an investor-owned 23
utility pursuant to the Bonneville power administration's residential 24
exchange program may not be used by any utility other than the 25
utility receiving the credit from the Bonneville power 26
administration. 27
(iv) Each renewable energy credit may only be used once to meet 28
the requirements of this section and must be retired using procedures 29
of the renewable energy credit tracking system. 30
(f) In complying with the targets established in (a) of this 31
subsection, a qualifying utility may not count: 32
(i) Eligible renewable resources or distributed generation where 33
the associated renewable energy credits are owned by a separate 34
entity; or 35
(ii) Eligible renewable resources or renewable energy credits 36
obtained for and used in an optional pricing program such as the 37
program established in RCW 19.29A.090. 38
(g) Where fossil and combustible renewable resources are cofired 39
in one generating unit located in the Pacific Northwest where the 40
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cofiring commenced after March 31, 1999, the unit shall be considered 1
to produce eligible renewable resources in direct proportion to the 2
percentage of the total heat value represented by the heat value of 3
the renewable resources. 4
(h)(i) A qualifying utility that acquires an eligible renewable 5
resource or renewable energy credit may count that acquisition at one 6
and two-tenths times its base value: 7
(A) Where the eligible renewable resource comes from a facility 8
that commenced operation after December 31, 2005; and9
(B) Where the developer of the facility used apprenticeship 10
programs approved by the council during facility construction.11
(ii) The council shall establish minimum levels of labor hours to 12
be met through apprenticeship programs to qualify for this extra 13
credit. 14
(i) A qualifying utility shall be considered in compliance with 15
an annual target in (a) of this subsection if events beyond the 16
reasonable control of the utility that could not have been reasonably 17
anticipated or ameliorated prevented it from meeting the renewable 18
energy target. Such events include weather -related damage, mechanical 19
failure, strikes, lockouts, and actions of a governmental authority 20
that adversely affect the generation, transmission, or distribution 21
of an eligible renewable resource under contract to a qualifying 22
utility. 23
(j)(i) Beginning January 1, 2016, only a qualifying utility that 24
owns or is directly interconnected to a qualified biomass energy 25
facility may use qualified biomass energy to meet its compliance 26
obligation under this subsection. 27
(ii) A qualifying utility may no longer use electricity and 28
associated renewable energy credits from a qualified biomass energy 29
facility if the associated industrial pulping or wood manufacturing 30
facility ceases operation other than for purposes of maintenance or 31
upgrade. 32
(k) An industrial facility that hosts a qualified biomass energy 33
facility may only transfer or sell renewable energy credits 34
associated with qualified biomass energy generated at its facility to 35
the qualifying utility with which it is directly interconnected with 36
facilities owned by such a qualifying utility and that are capable of 37
carrying electricity at transmission voltage. The qualifying utility 38
may only use an amount of renewable energy credits associated with 39
qualified biomass energy that are equivalent to the proportionate 40
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amount of its annual targets under (a)(ii) and (iii) of this 1
subsection that was created by the load of the industrial facility. A 2
qualifying utility that owns a qualified biomass energy facility may 3
not transfer or sell renewable energy credits associated with 4
qualified biomass energy to another person, entity, or qualifying 5
utility. 6
(l) A qualifying utility shall be considered in compliance with 7
the annual target in subsection (2)(a) of this section if the 8
qualifying utility cumulatively invests at least two percent of its 9
total annual retail revenue requirement in local energy resilience 10
projects.11
(m) Beginning January 1, 2020, a qualifying utility may use 12
eligible renewable resources as identified under RCW 19.285.030(12) 13
(g) and (h) to meet its compliance obligation under this subsection 14
(2). A qualifying utility may not transfer or sell these eligible 15
renewable resources to another utility for compliance purposes under 16
this chapter. 17
(((m))) (n) Beginning January 1, 2030, a qualifying utility is 18
considered to be in compliance with an annual target in (a) of this 19
subsection if the utility uses electricity from: (i) Renewable 20
resources and renewable energy credits as defined in RCW 19.285.030; 21
and (ii) nonemitting electric generation as defined in RCW 22
19.405.020, in an amount equal to 100 percent of the utility's 23
average annual retail electric load. Nothing in this subsection 24
relieves the requirements of a qualifying utility to comply with 25
subsection (1) of this section. 26
(((n))) (o) A qualifying utility shall exclude from its annual 27
targets under this subsection (2) its voluntary renewable energy 28
purchases. 29
(3) Utilities that become qualifying utilities after December 31, 30
2006, shall meet the requirements in this section on a time frame 31
comparable in length to that provided for qualifying utilities as of 32
December 7, 2006. 33
(4) For the purposes of this section, the following definitions 34
apply:35
(a) "Additional conservation" means conservation not included in 36
the utility's biennial acquisition target.37
(b) "Local energy resilience project" means any combination of 38
the following investments in the geographical area in which the 39
utility provides electric service: (i) Additional conservation; (ii) 40
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community or individual solar generation; (iii) demand response; (iv) 1
battery storage; (v) in-pipe generation; (vi) wind generation; (vii) 2
grid hardening to reduce the risk to infrastructure from wildfires, 3
earthquakes, floods or other potential natural disasters; and (viii) 4
microgrids. 5
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