Residential energy storage

AN ACT Relating to incentivizing grid-connected residential 1
battery energy storage systems; adding new sections to chapter 43.31 2
RCW; adding a new section to chapter 82.04 RCW; and creating a new 3
section. 4
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:5
NEW SECTION. Sec. 1. The legislature finds that it is in the 6
public interest to increase energy storage capacity across the state 7
in response to increases in peak electrical loads, wildfire 8
potential, and windstorms and other catastrophic events that may lead 9
to power outages. Residential battery energy storage systems and 10
distributed energy resources will be a key part of the solution, but 11
they must be connected to the grid and dispatchable by utilities 12
during peak load events, and available to customers in the case of 13
power outages. The initial cost of residential battery energy storage 14
systems is a barrier for many electric utility customers. With a 15
targeted incentive program, the state can aid utilities and their 16
customers in the adoption of these systems with the goal of reducing 17
costly transmission and distribution capital expenditures, maximizing 18
system benefits for all retail electric customers, and identifying 19
opportunities for improving access to transformative technologies for 20
S-3681.1
SENATE BILL 6008
State of Washington 69th Legislature 2026 Regular Session
By Senators Hunt, Slatter, Liias, and Nobles
Prefiled 01/07/26. Read first time 01/12/26. Referred to Committee
on Environment, Energy & Technology.
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low-income and moderate-income customers. Such incentive programs 1
would help achieve clean energy transformation act goals.2
NEW SECTION. Sec. 2. A new section is added to chapter 43.31 3
RCW to read as follows: 4
The definitions in this section apply throughout section 3 of 5
this act unless the context clearly requires otherwise.6
(1) "Customer-generator" has the same meaning as in RCW 7
80.60.010. 8
(2) "Demand charge" means a fee billed to consumers of 9
electricity based on the highest rate of electricity consumption 10
recorded in a billing period. 11
(3) "Department" means the department of commerce.12
(4) "Distributed energy resource" has the same meaning as in RCW 13
19.405.020. 14
(5) "Electric utility" means: 15
(a) An electric utility as defined in RCW 19.405.020; or16
(b) A tribally owned utility in the business of serving electric 17
customers. 18
(6) "Flexible demand program" means an electric utility program 19
that encourages consumers to shift or modulate their electricity 20
demand in ways that benefit the electric utility's electric system. 21
This could include incentives, time of use rates, virtual power 22
plants, and other mechanisms for signaling end use load and customer 23
energy storage systems to respond to price signals.24
(7) "Low-income" has the same meaning as in RCW 19.405.020.25
(8) "Moderate-income household" means a single person, family, or 26
unrelated persons living together whose adjusted income is more than 27
80 percent but is at or below 115 percent of the median family income 28
adjusted for family size, for the county, city, or metropolitan 29
statistical area, where the project is located, as reported by the 30
United States department of housing and urban development.31
(9) "Qualified electric utility customer" means a residential 32
customer of an electric utility with a flexible demand program.33
(10) "Residential battery energy storage system" means a 34
stationary and permanently installed battery system no smaller than 5 35
kWh serving a customer that can store and discharge energy to support 36
utility demand management. A residential battery energy storage 37
system is not an industrial-scale battery energy storage system.38
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(11) "Time-of-use rate" means an electricity billing structure 1
where the price of electricity varies based on the time of day it is 2
used, typically with higher prices during peak demand hours and lower 3
prices during off-peak hours, intended to encourage consumers to 4
shift their energy usage to times of off-peak demand.5
(12) "Tribes' contracted service provider" means an organization 6
or consultant contracted with a federally recognized tribal 7
government for work benefiting tribal communities, tribal lands, or 8
both tribal communities and tribal lands. 9
(13) "Virtual power plant" means an aggregation of connected 10
distributed energy resources that when coordinated via software or 11
rates, can balance electrical loads, lower electricity demand peaks, 12
and provide utility grid services like a traditional power plant.13
NEW SECTION. Sec. 3. A new section is added to chapter 43.31 14
RCW to read as follows: 15
(1) Subject to the availability of amounts appropriated for this 16
specific purpose, a residential battery incentive grant program is 17
established to improve access to residential battery energy storage 18
systems for low-income and moderate-income customers and maximize 19
system benefits for all retail electric customers.20
(2) Within available funding, the department shall award grants 21
to electric utilities with qualified residential battery incentive 22
programs. No more than 35 percent of funding in a biennium shall be 23
awarded to a single utility, and no more than 50 percent of grant 24
funds in a biennium shall be awarded to investor-owned utilities. If 25
the department decides to award funds in multiple rounds during a 26
biennium, these funding caps do not apply on the final funding round.27
(3) An electric utility interested in participating in the 28
department's grant program must submit an application to the 29
department. The application must include the details of an electric 30
utility's proposed flexible demand program as described in subsection 31
(4) of this section and must also include the application information 32
required in subsection (5) of this section. 33
(4) An electric utility's proposed residential battery incentive 34
program may be approved by the department for grant funding only if 35
the program: 36
(a) Provides an upfront battery incentive payment for a qualified 37
electric utility customer; 38
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(b) Includes a plan for how the electric utility will incorporate 1
the residential battery energy storage systems and any connected 2
distributed energy resources into its flexible demand program and 3
financially encourage qualified electric utility customers to:4
(i) Manage their electricity by responding to time of use rate or 5
demand charge price signals in a way that reduces costs to the 6
electric utility's electrical system; or 7
(ii) Provide the electric utility or the electric utility's 8
contractor the means to manage the batteries collectively to benefit 9
utility grid operations; 10
(c) Allows for a customer-generator to fully participate in the 11
program. Customer-generators who choose to opt out of their electric 12
utility's flexible demand program as described in subsection (7) of 13
this section must be allowed to enroll in the electric utility's 14
otherwise applicable tariff that was available to the customer-15
generator at the generating system's original time of 16
interconnection; 17
(d) Does not allow for residential battery energy storage system 18
leases to customers unless in utility-owned rent-to-own circumstance, 19
or in systems that are owned by an electric utility and leased at no 20
cost to low-income or moderate-income customers; 21
(e) Is designed by the electric utility to lower qualified 22
electric utility customers' current total annual electric utility 23
expenses, if all other parameters are held static and market 24
conditions are ideal; and 25
(f) Reserves at least 40 percent of the residential battery 26
incentive grant program funding for the benefit of low-income 27
households, moderate-income households, tribal households, or a 28
combination thereof. 29
(5) The department's application process with utilities desiring 30
to establish a residential battery incentive program must include:31
(a) Plans for how the utility's residential battery incentive 32
program will encourage low-income household participation;33
(b) An example application for qualified electric utility 34
customers to apply for the battery incentive, which must require 35
income verification for low-income and moderate-income customers at 36
the time of enrollment. Income verification may include categorical 37
eligibility based on participation in other government programs or 38
may be performed by low-income service providers, housing 39
authorities, tribal governments, or tribes' contracted service 40
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providers on behalf of an electric utility. Electric utilities must 1
submit an annual compliance attestation to the department as the 2
utility is responsible for regularly auditing income verification of 3
program participants at the time of enrollment; 4
(c) A statement on whether the utility intends to use utility-5
owned rent-to-own residential battery energy storage systems as part 6
of its flexible demand program, or utility-owned leased residential 7
battery energy systems for income-qualified customers, and the 8
details and terms and conditions of the utility-owned rent-to-own or 9
leased agreements; 10
(d) Expected monthly savings to participating qualified electric 11
utility customers' electrical bill expenses, if all other parameters 12
are held static and market conditions are ideal; 13
(e) A description of any prioritization that will be applied to 14
qualified electric utility customer applications to the flexible 15
demand program such as prioritizing customers in high fire risk areas 16
or areas prone to frequent outages; 17
(f) A description of how customer feedback was used by the 18
electric utility to design the incentive program; 19
(g) Documentation of all electric utility expenses and upgrades 20
proposed as part of program implementation. Expenses and upgrades may 21
not exceed 20 percent of the total grant funds received by the 22
utility during a biennium, and may include: 23
(i) Advanced metering infrastructure; and 24
(ii) Applicable subscription fees paid by the electric utility to 25
operators of an electric utility-owned virtual power plant; and26
(h) A notarized signed and sworn statement on behalf of the 27
electric utility that qualified electric utility customer data will 28
not be sold or aggregated for any purposes beyond the direct 29
operation of its flexible demand program. 30
(6) Third parties may not own residential battery energy storage 31
systems receiving incentives as part of a residential battery 32
incentive program. Electric utilities are not third parties.33
(7) Customers who opt out of their electric utility's flexible 34
demand program early after receiving an upfront battery incentive may 35
be required by the electric utility to pay back a pro rata share of 36
the incentive. The electric utility must have disclosed the pro rata 37
repayment terms and calculation to the customer at the time of 38
enrollment and must publish this information on the electric 39
utility's website. Any monies collected by an electric utility as 40
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part of repayment must be allocated back to the utility's residential 1
battery incentive program. 2
(8) Any electricity exported onto the distribution grid by a 3
customer-generator must be justly compensated in accordance with the 4
value of electricity on the distribution system at that given time, 5
or at full retail rate. 6
(9) An electric utility may establish residential battery energy 7
storage system installer partners and required equipment 8
specifications for its residential battery incentive program.9
(10) If the department approves an electric utility's residential 10
battery incentive program, the electric utility may commence such a 11
program. Electric utilities must reapply to the department at the 12
start of each biennium for additional funding and the department must 13
confirm that each utility's program is or has been implemented 14
according to the requirements outlined in this section.15
(11) An electric utility with more than 100,000 retail electric 16
customers in Washington must implement a flexible demand program in 17
accordance with this section by December 31, 2026. All other electric 18
utilities may choose to implement a flexible demand program.19
(12) A qualified electric utility customer who has or who plans 20
to enroll in a participating electric utility's approved flexible 21
demand program may apply to their utility for a one-time battery 22
incentive between July 1, 2026, and June 30, 2036, for an incentive 23
payment for a residential battery energy storage system. Electric 24
utility customers who are not enrolled or do not plan to enroll in an 25
approved flexible demand program may not receive an incentive 26
payment. A tax equity investor partnership which owns residential 27
properties may apply to the program if a nonprofit organization, 28
public entity, tribal government, or academic institution is the 29
controlling partner for that partnership. 30
(13)(a) A battery incentive must be paid in the following 31
amounts, unless the requests exceed the total grant funding received 32
by the participating electric utility: 33
(i) For low-income and moderate-income qualified electric utility 34
customers, the incentive shall be up to $13,800 per customer; and35
(ii) For all other customers, the incentive shall be up to $8,100 36
per customer. 37
(b) The department may adjust the maximum dollar amount per 38
customer for incentive payments based on a review of market 39
conditions. 40
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(c) Utilities may request a different incentive amount in their 1
application to the department and the department may authorize a 2
different incentive amount for due cause in approving an electric 3
utility's program. 4
(14) On a quarterly basis, each electric utility participating in 5
the grant program must submit a report to the department with:6
(a) The zip code of the recipient, unique application ID, and 7
kilowatt capacity of the residential battery energy storage system;8
(b) Evidence that the residential battery energy storage system 9
has been approved for use by the connected electric utility;10
(c) The unique application ID of any previously enrolled 11
customers who have opted out of the flexible demand program and any 12
incentive amounts paid to those customers; and 13
(d) The total number of customers and total load in kWh 14
participating in the utility's demand flexibility program.15
NEW SECTION. Sec. 4. A new section is added to chapter 82.04 16
RCW to read as follows: 17
(1) This chapter does not apply to the receipt of grants by 18
electric utilities from the department of commerce as authorized 19
under section 3 of this act. 20
(2) The provisions of RCW 82.32.805 and 82.32.808 do not apply to 21
subsection (1) of this section. 22
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