E2SHB 1301 -
By Representative Morris
Strike everything after the enacting clause and insert the following:
"NEW SECTION. Sec. 1 A new section is added to chapter 82.16 RCW
to read as follows:
It is the intent of the legislature, in modifying the existing
renewable energy investment cost recovery incentive program, to improve
utilization of the incentive by state residents, utilities, and
businesses, streamline program administration, and incubate the
development of clean energy technology. The clean technology sector of
Washington's economy has been experiencing rapid growth, even in a time
when other sectors have been stagnant or in a recession. In enacting
incentives for renewable energy systems, the legislature intends to
continue to grow a vibrant clean technology sector in Washington.
Sec. 2 RCW 82.16.110 and 2011 c 179 s 2 are each amended to read
as follows:
The definitions in this section apply throughout this chapter
unless the context clearly requires otherwise.
(1) "Administrator" means an owner and assignee of a community
solar project as defined in subsection (((2))) (3)(a)(i)(A) or
(a)(ii)(A) of this section that is responsible for applying for the
investment cost recovery incentive on behalf of the other owners and
performing such administrative tasks on behalf of the other owners as
may be necessary, such as receiving investment cost recovery incentive
payments, and allocating and paying appropriate amounts of such
payments to the other owners.
(2) "Commission" means the Washington state utilities and
transportation commission.
(3)(a) "Community solar project" means:
(i) For solar energy systems certified on or before June 30, 2014:
(A) A solar energy system that is capable of generating up to
seventy-five kilowatts of electricity and is owned by local
individuals, households, nonprofit organizations, or nonutility
businesses that is placed on the property owned by a cooperating local
governmental entity that is not in the light and power business or in
the gas distribution business;
(((ii))) (B) A utility-owned solar energy system that is capable of
generating up to seventy-five kilowatts of electricity and that is
voluntarily funded by the utility's ratepayers where, in exchange for
their financial support, the utility gives contributors a payment or
credit on their utility bill for the value of the electricity produced
by the project; or
(((iii))) (C) A solar energy system, placed on the property owned
by a cooperating local governmental entity that is not in the light and
power business or in the gas distribution business, that is capable of
generating up to seventy-five kilowatts of electricity, and that is
owned by a company whose members are each eligible for an investment
cost recovery incentive for the same customer-generated electricity as
provided in RCW 82.16.120.
(ii) For solar energy systems certified on or after July 1, 2014:
(A) A solar energy system that is capable of generating up to
seventy-five kilowatts of electricity and is owned by local
individuals, households, nonprofit organizations, or nonutility
businesses that is placed on property owned by a cooperating state or
local governmental entity, nonprofit organization, or educational
institution;
(B) A utility-owned solar energy system that is capable of
generating up to seventy-five kilowatts of electricity and that is
voluntarily funded by the utility's ratepayers where, in exchange for
their financial support, the utility gives contributors a payment or
credit on their utility bill for the value of the electricity produced
by the project; or
(C) A solar energy system, placed on the property owned by a
cooperating local governmental entity that is not in the light and
power business or in the gas distribution business, that is capable of
generating up to seventy-five kilowatts of electricity, and that is
owned by a company whose members are each eligible for an investment
cost recovery incentive for the same eligible electricity.
(b) For the purposes of "community solar project" as defined in (a)
of this subsection:
(i) "Company" means an entity that is:
(A)(I) A limited liability company;
(II) A cooperative formed under chapter 23.86 RCW; or
(III) A mutual corporation or association formed under chapter
24.06 RCW; and
(B) Not a "utility" as defined in this subsection (((2))) (3)(b);
((and))
(ii) "Nonprofit organization" means an organization exempt from
taxation under 26 U.S.C. Sec. 501(c)(3) of the federal internal revenue
code of 1986, as amended, as of January 1, 2009; and
(iii) "Utility" means a light and power business, an electric
cooperative, or a mutual corporation that provides electricity service.
(((3))) (4) "Customer-generated electricity" means a community
solar project or the alternating current electricity that is generated
from a renewable energy system located in Washington and installed on
an individual's, businesses', or local government's real property that
is also provided electricity generated by a light and power business.
Except for community solar projects, a system located on a leasehold
interest does not qualify under this definition. Except for utility-owned community solar projects, "customer-generated electricity" does
not include electricity generated by a light and power business with
greater than one thousand megawatt hours of annual sales or a gas
distribution business.
(((4))) (5) "Economic development kilowatt-hour" means the actual
kilowatt-hour measurement of customer-generated or eligible electricity
multiplied by the appropriate economic development factor.
(((5))) (6) "Eligible electricity" means:
(a) Electricity generated by a community solar project, as defined
in subsection (3)(a)(ii) of this section;
(b) Electricity generated by an energy system located in
Washington, where the customer owns the real property where the system
is installed and does not merely possess a leasehold interest, and the
system is:
(i) A utility-owned solar energy system, as defined in subsection
(3)(a)(ii)(B) of this section, installed on the premises of a customer
of the utility; or
(ii) A renewable energy system located in Washington and installed
on a person's or entity's real property that is also provided
electricity generated by a utility;
(c) Electricity generated by a project developed pursuant to a
utility-owned solar energy program;
(d) Electricity generated by a leased energy system; and
(e) Customer-generated electricity generated by a system for which
a person or entity applied for incentive payments prior to July 1,
2014.
(7) "Leased energy system" means a renewable energy system that:
(a) Is located in Washington, installed on an individual's,
business's, or local government's real property, and owned by an
electric utility or a third-party vendor; and
(b) Has been specifically authorized to offer service to retail
electric customers by a statute that establishes regulatory oversight
and consumer protections for such systems.
(8) "Local governmental entity" means any unit of local government
of this state including, but not limited to, counties, cities, towns,
municipal corporations, quasi-municipal corporations, special purpose
districts, and school districts.
(((6))) (9) "Photovoltaic cell" means a device that converts light
directly into electricity without moving parts.
(((7))) (10) "Renewable energy system" means a solar energy system,
an anaerobic digester as defined in RCW 82.08.900, or a wind generator
used for producing electricity.
(((8))) (11) "Solar energy system" means any device or combination
of devices or elements that rely upon direct sunlight as an energy
source for use in the generation of electricity.
(((9))) (12) "Solar inverter" means the device used to convert
direct current to alternating current in a solar energy system.
(((10))) (13) "Solar module" means the smallest nondivisible self-contained physical structure housing interconnected photovoltaic cells
and providing a single direct current electrical output.
(((11))) (14) "Stirling converter" means a device that produces
electricity by converting heat from a solar source utilizing a stirling
engine.
(15) "Storage system" means a system or technology that can store
electricity generated by a renewable energy system or systems at up to
twenty percent of the maximum total daily output of the renewable
energy system or systems to which the storage system is coupled. A
storage system can be coupled to a renewable energy system on the
premises where the system is located or can be coupled to multiple
systems on any premises served by the distribution feeder where the
renewable energy systems are located.
(16) "Utility" means a consumer-owned utility or investor-owned
utility as those terms are defined in RCW 19.280.020.
(17) "Utility solar energy program" means a leased energy systems
program offered by a utility that has been specifically authorized by
state law to offer such service to retail electric customers in a
statute that establishes regulatory oversight and consumer protections
for such systems.
(18)(a) "Economic development solar module" means a solar module
that is manufactured in Washington and meets the following criteria:
(i) The definition of manufacturing as defined in WAC 458-20-136 as
of January 1, 2014; and
(ii) The solar module is produced at a manufacturing facility
located in Washington that is registered and authorized to manufacture
and apply the UL 1703 certification mark for that solar photovoltaic
module by underwriters laboratory (UL), or an equivalent UL-approved
independent certification agency; and
(iii) The UL 1703 certification mark for the solar module, as
approved by UL or an equivalent UL-approved independent certification
agency, must be physically applied to the module at the manufacturing
facility described in (a)(ii) of this subsection (18).
(b) For purposes of (a) of this subsection (18), the act of simply
attaching a microinverter, direct current optimizer, or other power
electronics to a solar photovoltaic module that has received UL 1703
certification marks outside Washington from UL, or an equivalent UL-approved independent certification agency, may not be considered
manufactured in Washington.
NEW SECTION. Sec. 3 A new section is added to chapter 82.16 RCW
to read as follows:
(1) Beginning July 1, 2014, a person or entity who has applied for
an incentive payment under RCW 82.16.120 on or before June 30, 2014,
and was eligible to receive such an incentive payment may apply to
receive additional incentive payments for eligible electricity, as
provided in this section.
(2) The person or entity may receive incentive payments for
eligible electricity generated through June 30, 2020, or for a total of
ten years from the date of certification under RCW 82.16.120, whichever
date comes first.
(a) A certification, once issued, may not be retroactively changed
due to evolutionary standards or interpretations of the program
administrators.
(b) Certification of a renewable energy system follows the system
with the transfer of property.
(3) By July 1, 2014, the department must transfer to the commission
all records necessary to carry out the remaining incentive payments due
under this section.
(4) In order to continue to receive incentive payments under the
authority of this section, any person, administrator of a community
solar project, or company that received incentive payments under RCW
82.16.120 must pay a one-time administrative fee to the commission and
submit an application for certification, as provided in section 4 of
this act. The commission is authorized to establish such fee as
necessary in order to process records required to administer the
program and make available incentive payments under this section.
(5) Each year, by August 1st, the applicant must apply to the
commission to receive the incentive payment, following the application
process established in section 4 of this act.
NEW SECTION. Sec. 4 A new section is added to chapter 82.16 RCW
to read as follows:
(1)(a) Beginning July 1, 2014, any person, entity, utility, or
administrator or company owner of a community solar project may apply
to the commission for the commission to issue a certification
authorizing the utility serving the situs of the system to remit an
annual investment cost recovery incentive for each economic development
kilowatt-hour of eligible electricity generated.
(b) Annual investment cost recovery incentives allowed under this
subsection for a system that is a leased energy system may not be
assigned to a financial institution.
(c) Annual investment cost recovery incentives allowed under this
subsection for a system that already received incentive payments under
RCW 82.16.120 are subject to the limitations established in section 3
of this act.
(d) In the case of a community solar project, the administrator
must apply for the investment cost recovery incentive on behalf of each
of the other owners.
(e) In the case of a company-owned community solar project, the
company owning the community solar project must apply for the
investment cost recovery incentive on behalf of each member of the
company.
(2)(a) Before submitting to the commission for the first time the
certification for the incentive allowed under subsection (1) of this
section, the applicant must submit to the commission a processing fee
and an application for certification, in a form and manner prescribed
by the commission that includes, but is not limited to, the following
information:
(i) The name and address of the applicant and location of the
renewable energy system.
(A) If the applicant is an administrator of a community solar
project, the certification must also include the name and address of
each of the owners of the community solar project.
(B) If the applicant is a company that owns a community solar
project, the certification must also include the name and address of
each member of the company;
(ii) The applicant's tax registration number;
(iii) An affidavit that the premises on which the system applying
for the incentive either:
(A) Is not receiving, and has not received, any incentive under RCW
82.16.120; or
(B) For certification applications submitted after July 1, 2014,
pursuant to section 3 of this act, a statement of the date of the
notification from the department stating that the renewable energy
system was eligible to receive incentives under RCW 82.16.120;
(iv) That the electricity produced by the applicant meets the
definition of eligible electricity, and that the renewable energy
system produces electricity with:
(A) Any solar inverters and economic development solar modules
manufactured in Washington state;
(B) A wind generator powered by blades manufactured in Washington
state;
(C) A solar inverter manufactured in Washington state;
(D) An economic development solar module manufactured in Washington
state;
(E) A stirling converter manufactured in Washington state; or
(F) Solar or wind equipment manufactured outside of Washington
state;
(v) Storage system used, if any;
(vi) A statement of the amount of eligible electricity and economic
development kilowatt-hours expected to be generated by the renewable
energy system and an estimate of the annual electrical use of the
premises;
(vii) That the electricity can be transformed or transmitted for
entry into or operation in parallel with electricity transmission and
distribution systems;
(viii) The date that the renewable energy system received its final
electrical permit from the applicable local jurisdiction, as well as a
copy of the permit; and
(ix) Any other information the commission deems would be helpful in
facilitating the review of the performance of the tax preferences by
the joint legislative audit and review committee, as described in
section 6 of this act.
(b) Within thirty days of receipt of the application for
certification and the final electrical permit from the local
jurisdiction, the commission must notify the applicant and the utility
serving the situs of the system by mail, or electronically, whether the
renewable energy system qualifies and is certified for an incentive
under this section. System certifications and the information
contained therein are subject to disclosure under RCW 82.32.330(3)(l).
(c) Except as provided in section 3 of this act, once a system is
certified by the commission to be eligible for the incentive, that
certification is valid for ten years and may not be retroactively
changed due to evolutionary standards or interpretations by the
commission or the department, except for errors in the original
application or certification. Certification of a renewable energy
system follows the system with the transfer of property.
(3)(a) After a system is certified by the commission, an initial
application for the incentive under this section must be made to the
department and the participating utility serving the situs of the
system in a form and manner prescribed by the commission, after
consultation with the department, that includes, but is not limited to,
the following information:
(i) The name and address of the applicant and location of the
renewable energy system.
(A) If the applicant is an administrator of a community solar
project, the application must also include the name and address of each
of the owners of the community solar project.
(B) If the applicant is a company that owns a community solar
project, the application must also include the name and address of each
member of the company.
(C) If the applicant is a utility, the person designated by the
utility;
(ii) The applicant's tax registration number; and
(iii) The date of the notification from the commission stating that
the renewable energy system is certified and eligible for the
incentives under this section.
(b) Within sixty days of receipt of notification of the application
and approval by the department, the utility serving the situs of the
system must notify the department of any abnormal production claims
and, if none are identified, must issue the incentive payment.
(c) After the first year in which an incentive payment has been
authorized by the utility as provided under (b) of this subsection,
persons receiving the incentive must provide a statement, by August 1st
of each year, in the form of a signed affidavit to the department of
the amount of kilowatt-hours of eligible electricity generated by, and
the amount of economic development kilowatt-hours attributable to, the
renewable energy system in the prior fiscal year. The amount of
eligible electricity generated, in kilowatt-hours, may be determined
from a reading of the inverter or production meter connected to the
system, at the option of the utility. The amount of economic
development kilowatt-hours must be calculated by the amount of eligible
electricity multiplied by the multipliers certified in the system
certification.
(d) Persons and entities applying to receive incentives must take
a digital photo on the last day of each fiscal year of the production
meter or inverter reading and must keep and preserve, for a period of
five years, the digital photo as may be necessary to verify, upon
request, that the correct amount of incentive was applied for and
received.
(e) The department must calculate, for the prior fiscal year, and
provide to the utility the amount of the incentive payment due to each
utility customer, utility, and community solar project, located on the
premises serviced by that utility and the total amount of credit for
each utility against tax due under this chapter. The utility must
report to the department any abnormal production claims.
(f)(i) Persons and entities receiving incentive payments must keep
and preserve, for a period of five years, suitable records as may be
necessary to determine the amount of incentive applied for and
received. Such records must be open for examination at any time upon
notice by the department. If upon examination of any records or from
other information obtained by the department it appears that an
incentive has been paid in an amount that exceeds the correct amount of
incentive payable, the department may assess against the person that
received the excess incentive for the amount found to have been paid in
excess of the correct amount of incentive payable and must add thereto
interest and may assess penalties on the amount. Interest and
penalties are assessed in the manner that the department assesses
penalties and interest upon delinquent tax under RCW 82.32.050, except
that interest and penalties must be deducted from any future incentive
payments that may be due.
(ii) If it appears that the amount of incentive paid is less than
the correct amount of incentive payable, the department may authorize
additional payment to the utility or utility customer certified to
receive incentives and additional credit due to the utility.
(iii) If the department finds that a person has falsely reported
annual electricity production or consumption under this section with
the intent to claim entitlement to a greater incentive payment than the
person is eligible to receive under this section, the department must
impose a penalty, deducting from any incentive payment that would
otherwise be due the sum of five hundred dollars or fifty percent of
the incentive payment due, whichever is greater.
(4) Once a system is certified by the commission and has been
authorized by and has signed an interconnection agreement with the
utility serving the situs of the system, it will be considered to have
commenced operation. The eligible electricity base rate used to
calculate the investment cost recovery incentive, payable for a period
of ten years from commencement of operation, must be based on the year
in which the system commenced operation as follows:
2014: $0.15; for community solar: | $0.20 |
2015: $0.14; for community solar: | $0.19 |
2016: $0.13; for community solar: | $0.18 |
2017: $0.12; for community solar: | $0.17 |
2018: $0.11; for community solar: | $0.16 |
Sec. 5 RCW 82.16.130 and 2010 c 202 s 3 are each amended to read
as follows:
(1) A ((light and power business shall)) utility issuing incentive
payments under RCW 82.16.120 or section 3 or 4 of this act must be
allowed a credit against taxes due under this chapter in an amount
equal to investment cost recovery incentive payments made in any fiscal
year under RCW 82.16.120, section 3 of this act, and section 4 of this
act. The credit ((shall)) must be taken in a form and manner as
required by the department. The credit under this section for the
fiscal year may not exceed one-half percent of the ((businesses'))
utility's taxable power sales due under RCW 82.16.020(1)(b) or ((one))
two hundred fifty thousand dollars, whichever is greater. Incentive
payments to participants in a utility-owned community solar project as
defined in RCW 82.16.110(((2))) (3)(a)(((ii))) (i)(B) or in section 3
of this act may only account for up to twenty-five percent of the total
allowable credit. Incentive payments to participants in a company-owned community solar project as defined in RCW 82.16.110(((2)))
(3)(a)(((iii))) (i)(C) or in section 3 of this act may only account for
up to five percent of the total allowable credit. The credit may not
exceed the tax that would otherwise be due under this chapter. Refunds
shall not be granted in the place of credits. Expenditures not used to
earn a credit in one fiscal year may not be used to earn a credit in
subsequent years. Incentive payments for renewable energy systems
greater than ten kilowatts may not claim more than fifty percent of the
total allowable credit.
(2) For any ((business)) utility that has claimed credit for
amounts that exceed the correct amount of the incentive payable under
RCW 82.16.120 or section 4 of this act, the amount of tax against which
credit was claimed for the excess payments ((shall be)) is immediately
due and payable. The department ((shall)) must assess interest but not
penalties on the taxes against which the credit was claimed. Interest
((shall)) must be assessed at the rate provided for delinquent excise
taxes under chapter 82.32 RCW, retroactively to the date the credit was
claimed, and ((shall)) accrues until the taxes against which the credit
was claimed are repaid.
(3) Each utility making incentive payments and claiming tax credits
pursuant to this section must post on its web site and update quarterly
a report of the allowable credit limit established under subsection (1)
of this section and an estimate of the amount of credit that has not
yet been allocated for incentive payments to certified renewable energy
systems the situs of which is served by the utility.
(4) The right to earn tax credits under this section expires June
30, ((2020)) 2028. Credits may not be claimed after June 30, ((2021))
2029.
NEW SECTION. Sec. 6 A new section is added to chapter 82.16 RCW
to read as follows:
(1) This section is the tax preference performance statement for
the tax preference and incentives created under RCW 82.16.130 and
sections 3 and 4 of this act. This performance statement is only
intended to be used for subsequent evaluation of the tax preference and
incentives. It is not intended to create a private right of action by
any party or be used to determine eligibility for preferential tax
treatment or for certification under section 4 of this act.
(2) The legislature categorizes the tax preference and incentive
created in this act as intended to induce certain designated behavior
by taxpayers, as indicated in RCW 82.32.808(2)(a), and to create or
retain jobs, as indicated in RCW 82.32.808(2)(c).
(3)(a) The legislature's public policy objective is to increase and
improve utilization of clean energy technology in Washington by
providing the incentive in section 3 of this act and the credit in
section 6 of this act.
(b) It is also the objective of the legislature to increase the
number of jobs in the clean energy technology industry in Washington.
It is the legislature's intent to provide the incentives in sections 3
and 4 of this act and the credit in RCW 82.16.130 in order to reduce
the costs associated with installing and operating clean energy systems
by persons or entities receiving an incentive in sections 3 and 4 of
this act and to reduce the costs for providing those incentives by
entities receiving a credit in RCW 82.16.130, thereby increasing the
ability for clean energy technology firms to access the energy market
and expand their operations in Washington, thereby increasing the
number of jobs in the clean energy technology industry in Washington.
(4) As part of its 2018 tax preference reviews conducted under
chapter 43.136 RCW, the joint legislative audit and review committee
must review the tax preferences and incentives in RCW 82.16.120,
82.16.130, and sections 3 and 4 of this act. The legislature intends
for the legislative auditor to recommend extending the expiration date
of the tax preference if a review finds that the following performance
milestones have been met:
(a) Increased utilization of the available tax credits, as
evidenced by:
(i) A one hundred percent increase in the number of solar energy
systems installed and receiving the incentive, from the 2012 baseline;
and
(ii) A one hundred percent increase in the total generating
capacity of installed systems, from the 2012 baseline;
(b) A decrease over time in the levelized cost of the systems
receiving the tax preferences;
(c) Growth of solar-related employment, as evidenced by:
(i) An increase in the total number and per capita rate of solar
energy-related jobs in Washington, as reported by a relevant trade
association in the state; and
(ii) Achievement of a top ten national ranking for solar energy-related employment and a top nine ranking for per capita solar energy-related employment, as reported in a nationally recognized report; and
(d) Leveraging of nonstate funds, as measured by a report of the
total dollar value of tax credits awarded within each county and zip
code, and the total amount of nonstate funds leveraged within each
county and zip code.
(5) In order to obtain the data necessary to perform the review in
subsection (4) of this section, the joint legislative audit and review
committee may refer to the data collected by the commission and the
department under the application and certification process established
in section 4 of this act.
(6) The department is encouraged to collect, through the
application process, data from persons receiving the incentive payments
created in this act, as necessary, and may collect data from other
interested persons to report on progress toward achieving the
performance milestones listed in subsection (4) of this section.
(7) All recipients of tax credits or incentive payments awarded
under this chapter must provide any data requested by the commission or
the joint legislative audit and review committee for reporting
purposes. Failure to comply may result in the loss of a tax credit
award or incentive payment in the following year.
Sec. 7 RCW 82.16.120 and 2011 c 179 s 3 are each amended to read
as follows:
(1)(a) Any individual, business, local governmental entity, not in
the light and power business or in the gas distribution business, or a
participant in a community solar project may apply to the light and
power business serving the situs of the system, each fiscal year
beginning on July 1, 2005, and ending June 30, 2014, for an investment
cost recovery incentive for each kilowatt-hour from a customer-generated electricity renewable energy system.
(b) In the case of a community solar project as defined in RCW
82.16.110(((2))) (3)(a)(i)(A), the administrator must apply for the
investment cost recovery incentive on behalf of each of the other
owners.
(c) In the case of a community solar project as defined in RCW
82.16.110(((2))) (3)(a)(((iii))) (i)(C), the company owning the
community solar project must apply for the investment cost recovery
incentive on behalf of each member of the company.
(2)(a) Before submitting for the first time the application for the
incentive allowed under subsection (4) of this section, the applicant
must submit to the department of revenue and to the climate and rural
energy development center at the Washington State University,
established under RCW 28B.30.642, a certification in a form and manner
prescribed by the department that includes, but is not limited to, the
following information:
(i) The name and address of the applicant and location of the
renewable energy system.
(A) If the applicant is an administrator of a community solar
project as defined in RCW 82.16.110(((2))) (3)(a)(i)(A), the
certification must also include the name and address of each of the
owners of the community solar project.
(B) If the applicant is a company that owns a community solar
project as defined in RCW 82.16.110(((2))) (3)(a)(((iii))) (i)(C), the
certification must also include the name and address of each member of
the company;
(ii) The applicant's tax registration number;
(iii) That the electricity produced by the applicant meets the
definition of "customer-generated electricity" and that the renewable
energy system produces electricity with:
(A) Any solar inverters and solar modules manufactured in
Washington state;
(B) A wind generator powered by blades manufactured in Washington
state;
(C) A solar inverter manufactured in Washington state;
(D) A solar module manufactured in Washington state;
(E) A stirling converter manufactured in Washington state; or
(F) Solar or wind equipment manufactured outside of Washington
state;
(iv) That the electricity can be transformed or transmitted for
entry into or operation in parallel with electricity transmission and
distribution systems; and
(v) The date that the renewable energy system received its final
electrical permit from the applicable local jurisdiction.
(b) Within thirty days of receipt of the certification the
department of revenue must notify the applicant by mail, or
electronically as provided in RCW 82.32.135, whether the renewable
energy system qualifies for an incentive under this section. The
department may consult with the climate and rural energy development
center to determine eligibility for the incentive. System
certifications and the information contained therein are subject to
disclosure under RCW 82.32.330(3)(l).
(3)(a) By August 1st of each year application for the incentive
must be made to the light and power business serving the situs of the
system by certification in a form and manner prescribed by the
department that includes, but is not limited to, the following
information:
(i) The name and address of the applicant and location of the
renewable energy system.
(A) If the applicant is an administrator of a community solar
project as defined in RCW 82.16.110(((2))) (3)(a)(i)(A), the
application must also include the name and address of each of the
owners of the community solar project.
(B) If the applicant is a company that owns a community solar
project as defined in RCW 82.16.110(((2))) (3)(a)(((iii))) (i)(C), the
application must also include the name and address of each member of
the company;
(ii) The applicant's tax registration number;
(iii) The date of the notification from the department of revenue
stating that the renewable energy system is eligible for the incentives
under this section; and
(iv) A statement of the amount of kilowatt-hours generated by the
renewable energy system in the prior fiscal year.
(b) Within sixty days of receipt of the incentive certification the
light and power business serving the situs of the system must notify
the applicant in writing whether the incentive payment will be
authorized or denied. The business may consult with the climate and
rural energy development center to determine eligibility for the
incentive payment. Incentive certifications and the information
contained therein are subject to disclosure under RCW 82.32.330(3)(l).
(c)(i) Persons, administrators of community solar projects, and
companies receiving incentive payments must keep and preserve, for a
period of five years, suitable records as may be necessary to determine
the amount of incentive applied for and received. Such records must be
open for examination at any time upon notice by the light and power
business that made the payment or by the department. If upon
examination of any records or from other information obtained by the
business or department it appears that an incentive has been paid in an
amount that exceeds the correct amount of incentive payable, the
business may assess against the person for the amount found to have
been paid in excess of the correct amount of incentive payable and must
add thereto interest on the amount. Interest is assessed in the manner
that the department assesses interest upon delinquent tax under RCW
82.32.050.
(ii) If it appears that the amount of incentive paid is less than
the correct amount of incentive payable the business may authorize
additional payment.
(4) Except for community solar projects, the investment cost
recovery incentive may be paid fifteen cents per economic development
kilowatt-hour unless requests exceed the amount authorized for credit
to the participating light and power business. For community solar
projects, the investment cost recovery incentive may be paid thirty
cents per economic development kilowatt-hour unless requests exceed the
amount authorized for credit to the participating light and power
business. For the purposes of this section, the rate paid for the
investment cost recovery incentive may be multiplied by the following
factors:
(a) For customer-generated electricity produced using solar modules
manufactured in Washington state or a solar stirling converter
manufactured in Washington state, two and four-tenths;
(b) For customer-generated electricity produced using a solar or a
wind generator equipped with an inverter manufactured in Washington
state, one and two-tenths;
(c) For customer-generated electricity produced using an anaerobic
digester, or by other solar equipment or using a wind generator
equipped with blades manufactured in Washington state, one; and
(d) For all other customer-generated electricity produced by wind,
eight-tenths.
(5)(a) No individual, household, business, or local governmental
entity is eligible for incentives provided under subsection (4) of this
section for more than five thousand dollars per year.
(b) Except as provided in (c) through (e) of this subsection (5),
each applicant in a community solar project is eligible for up to five
thousand dollars per year.
(c) Where the applicant is an administrator of a community solar
project as defined in RCW 82.16.110(((2))) (3)(a)(i)(A), each owner is
eligible for an incentive but only in proportion to the ownership share
of the project, up to five thousand dollars per year.
(d) Where the applicant is a company owning a community solar
project that has applied for an investment cost recovery incentive on
behalf of its members, each member of the company is eligible for an
incentive that would otherwise belong to the company but only in
proportion to each ownership share of the company, up to five thousand
dollars per year. The company itself is not eligible for incentives
under this section.
(e) In the case of a utility-owned community solar project, each
ratepayer that contributes to the project is eligible for an incentive
in proportion to the contribution, up to five thousand dollars per
year.
(6) If requests for the investment cost recovery incentive exceed
the amount of funds available for credit to the participating light and
power business, the incentive payments must be reduced proportionately.
(7) The climate and rural energy development center at Washington
State University energy program may establish guidelines and standards
for technologies that are identified as Washington manufactured and
therefore most beneficial to the state's environment.
(8) The environmental attributes of the renewable energy system
belong to the applicant, and do not transfer to the state or the light
and power business upon receipt of the investment cost recovery
incentive.
(9) No incentive may be paid under this section for kilowatt-hours
generated before July 1, 2005, or after June 30, 2020.
(10) An individual, business, local governmental entity, not in the
light and power business or in the gas distribution business, or a
participant in a community solar project who has applied for and
received an incentive under this section may continue to receive
incentive payments after June 30, 2014, as provided in sections 3 and
4 of this act."
Correct the title.
EFFECT: The striking amendment makes the following changes as
compared with Engrossed Second Substitute House Bill 1301:
Program Administration.
Continues to guarantee incentive payments to eligible applicants for a
term of years, but changes the method of administration of these
payments and duration of the program.
(1) Requires the Utilities and Transportation Commission (UTC) to
certify eligibility to receive incentive payments, instead of providing
for a voucher program administered by an "agency to be designated by
the Governor".
(2) Provides that if an applicant was certified by the Department
of Revenue to receive incentive payments after July 1, 2005 and prior
to July 1, 2014, the applicant may apply to the UTC for a new
certification entitling the applicant to receive incentive payments for
electricity generated through June 30, 2020, or for a total of 10 years
from the original certification, whichever comes first.
(3) Provides that eligible applicants applying for certification to
receive the incentive after July 1, 2014 (new entrants) will be
certified for a term of 10 years.
(4) Shortens the duration of the program, providing that no
incentive may be paid for otherwise eligible electricity generated by
a renewable energy system that commences operation after December 31,
2018, in place of the former deadline for issuing new vouchers of June
30, 2023.
(5) Requires the applicant, before submitting to the Department of
Revenue for the first time the certification for the incentive, to
submit to the UTC an application for certification and a processing
fee. Authorizes the UTC to establish this fee to recover its costs of
administering the program.
(6) Makes additional changes in the certification and annual
application process, including requiring applicants to take digital
photos each year of the production meter reading and maintain these
records on file for five years.
Eligibility and Incentive Rates. Changes the maximum incentive payment
that can be received by an eligible system.
(1) Replaces the maximum annual incentive payments based on system
size limitations, of $5000 payment and 5 kilowatt system size for a
residential retail electric customer and $25,000 and 100 kilowatts for
non-retail customers, with a graduated scale for all customers based on
renewable energy system generating capacity: (a) $5,000 for systems
with a generating capacity between zero to ten kilowatts; (b) $15,000
for systems with a generating capacity between eleven and twenty-five
kilowatts; (c) $20,000 for systems with a generating capacity between
twenty-six and thirty kilowatts; and (d) $25,000 for systems with a
generating capacity over thirty kilowatts.
(2) Provides that the base rate for renewable energy systems starts
at 15 cents per kilowatt-hour in 2014 and decreases by one cent per
year through 2018, until the base rate equals 11 cents per kilowatt-
hour, rather than retaining the existing incentive rates and
authorizing new base rates and multipliers to go into effect only on or
after July 1, 2018.
(3) Provides that the base rate for community solar projects starts
at 20 cents per kilowatt-hour in 2014 and decreases by one cent per
year through 2018, until the base rate equals 16 cents per kilowatt-
hour, rather than retaining existing rates through July 1, 2018.
Changes the definition of solar modules that are eligible for
special economic development rate multipliers.
Changes eligibility requirements for receiving enhanced incentive
rates under "Community Solar" program.
Public Utility Tax Credit Cap.
Changes requirements related to the Public Utility Tax credit.
(1) Provides that a utility's credit may not exceed the greater of
one-half percent of the utility's taxable power sales or $250,000,
instead of providing that a utility's credit may not exceed the greater
of one-half percent of the utility's taxable power sales or $100,000.
(2) Provides that incentive payments for renewable energy systems
greater than 10 kilowatts may not claim more than 50 percent of the
total allowable credit.
(3) Provides that the utility's right to earn tax credits expires
June 30, 2028 and credits may not be claimed after June 30, 2029.
(4) Requires each utility making incentive payments and claiming
tax credits to post on its web site and update quarterly a report of
the allowable credit limit and an estimate of the amount of credit that
has been allocated for incentive payments to certified renewable energy
systems.
Third Party and Utility Financing of Solar Energy Systems.
(1) Removes express authorization to the UTC to allow utilities to
recover in tariffs the cost of certain distributed solar energy systems
(2) Expands the kinds of systems that generate "eligible
electricity" for which incentive payments may be received, including
leased systems, utility-owned solar energy systems, and electricity
generated by a project developed pursuant to a utility-owned solar
energy program.
(3) Establishes that electricity generated by a leased energy
system will be eligible for incentive payments if the leased system is
located in Washington, installed on an individual's, business's, or
local government's real property, owned by an electric utility or a
third-party vendor, and has been specifically authorized to offer
service to retail electric customers by a statute that establishes
regulatory oversight and consumer protections for such systems.
(4) Establishes that electricity generated by a utility-owned solar
system will be eligible for incentive payments.
(5) Provides that the certification of a renewable energy system
follows the system with the transfer of property.
(6) Specifies that the environmental attributes of the renewable
energy system belong to the applicant, except in the case of a system
leased from a utility, in which case the attributes belong to the
utility.
(7) Prohibits incentive payments for leased energy systems that
begin operations after December 31, 2015 that participate in the net
metering program.
Tax Preference Performance Statement.
(1) Establishes performance milestones using the tax preference
performance statement format specified under Senate Bill 5882, enacted
as Chapter 13, Laws of 2013.
(2) Directs the Joint Legislative Audit Review Committee to review
the tax preference and incentives and recommend extending the
expiration date of the tax preference if the review finds that these
milestones have been met in 2018, instead of 2019.
(3) Encourages the UTC and Department of Revenue to collect,
through the application and certification process, data as necessary to
report on progress toward achieving the performance milestones.