WSR 15-07-002 PERMANENT RULES DEPARTMENT OF COMMERCE [Filed March 6, 2015, 10:51 a.m., effective April 6, 2015] Effective Date of Rule: Thirty-one days after filing.
Purpose: Update rules relating to process, timelines and documentation for consumer-owned electric utilities subject to the Washington renewable portfolio and energy efficiency standard, chapter 19.285 RCW. Amendments strengthen and clarify documentation requirements, increase transparency of utility performance, improve consistency with comparable rules of the utilities and transportation commission and provide additional flexibility for compliance. Unnecessary sections are repealed.
Citation of Existing Rules Affected by this Order: Repealing WAC 194-37-090 and 194-37-100; and amending WAC 194-37-040, 194-37-050, 194-37-060, 194-37-070, 194-37-080, 194-37-110, 194-37-120, 194-37-130, and 194-37-210.
Statutory Authority for Adoption: RCW 19.285.080.
Adopted under notice filed as WSR 15-02-076 on January 7, 2015.
Number of Sections Adopted in Order to Comply with Federal Statute: New 0, Amended 0, Repealed 0; Federal Rules or Standards: New 0, Amended 0, Repealed 0; or Recently Enacted State Statutes: New 0, Amended 0, Repealed 0.
Number of Sections Adopted at Request of a Nongovernmental Entity: New 0, Amended 0, Repealed 0.
Number of Sections Adopted on the Agency's Own Initiative: New 1, Amended 9, Repealed 2.
Number of Sections Adopted in Order to Clarify, Streamline, or Reform Agency Procedures: New 0, Amended 0, Repealed 0.
Number of Sections Adopted Using Negotiated Rule Making: New 0, Amended 0, Repealed 0; Pilot Rule Making: New 0, Amended 0, Repealed 0; or Other Alternative Rule Making: New 0, Amended 0, Repealed 0.
Date Adopted: March 6, 2015.
Brian Bonlender
Director
AMENDATORY SECTION (Amending WSR 14-04-015, filed 1/24/14, effective 2/24/14)
WAC 194-37-040 Definitions.
The definitions in chapter 19.285 RCW apply throughout this chapter.
(1) "Annual revenue requirement" and "total annual revenue requirement" mean((s)) that portion of a utility's annual budget approved by its governing body for the target year that is intended to be recovered through retail electricity sales in the state of Washington in the target year, or as otherwise documented by the utility pursuant to WAC 194-37-150.
(2) (("Average water generation" means the average megawatt-hours of generation from a hydroelectric project over a period of ten consecutive years or more, taking into account differences in water flows from year to year.
(3))) "Biennial target" means a utility's biennial conservation target.
(((4))) (3) "BPA" means the Bonneville Power Administration.
(((5) "Distributed generation" means an eligible renewable resource where the facility or any integrated cluster of generating units has a generating capacity of not more than five megawatts. If several five-megawatt or smaller projects are located in the same immediate area but are owned or controlled by different developers, each qualifies as a separate, independent distributed generation project. For the purposes of this rule, an eligible renewable resource or group of similar eligible renewable resources cannot be subdivided into amounts less than five megawatts solely to be considered distributed generation.
(6) "Incremental hydropower" means the incremental amount of kilowatt-hours of electricity generated from a base or constant amount of water.
(7) "Integrated cluster" of eligible renewable resources means colocated projects owned or controlled by the same entity that feed into the same substation.
(8))) (4) "Measurement protocol" means a procedure or method used, consistent with industry standards, to establish with reasonable certainty the amount of energy savings that will result from the installation of a conservation measure. Industry standards include a range of appropriate protocols reflecting a balancing of cost and accuracy, such as the application of a deemed savings value established through industry processes for a measure that has broad application and uniform characteristics and the use of engineering calculations, metering, utility billing analysis, and computer simulation for a measure installed as part of a customer-specific project.
(5) "Multifuel generating facility" means a generating facility that is capable of producing energy from more than one nonrenewable fuel, renewable fuel, or nonfuel energy source, either simultaneously or as alternatives, provided that at least one fuel source (energy source) is a renewable resource and the relative quantities of electricity production can be measured or calculated, and verified.
(((9))) (6) "NWPCC" means Pacific Northwest Electric Power and Conservation Planning Council also known as the Northwest Power and Conservation Council. Its calculation of avoided costs and publications are available at www.nwcouncil.org.
(((10) "Qualified incremental hydropower efficiency improvements" means the installation or modification of equipment and structures, or operating protocols that increase the amount of electricity generated from the same amount of water. These may include rewinding of existing generators, replacing turbines with more efficient units and changing control systems to optimize electricity generation, and improvements to hydraulic conveyance systems that decrease head loss. They do not include additions to capacity by increasing pondage or elevation head, or diverting additional water into the project.
(11))) (7) "REC" means renewable energy credit.
(8) "Regional technical forum" or "RTF" means a voluntary advisory committee that reports to the executive director of the NWPCC and whose members are appointed by the NWPCC's chair.
(((12))) (9) "Renewable energy target" means the amount, in megawatt-hours or RECs, necessary for a utility to satisfy the requirements of RCW 19.285.040 (2)(a) in a specific target year.
(10) "Substitute resource" means reasonably available electricity or generating facilities, of the same contract length or facility life as the eligible renewable resource the utility invested in to comply with chapter 19.285 RCW requirements, that otherwise would have been used to serve a utility's retail load in the absence of chapter 19.285 RCW requirements to serve that retail load with eligible renewable resources.
(((13))) (11) "Target year" means ((the)) a specific year ((for which a renewable energy target must be met)) in which a utility must comply with the renewable energy requirements of chapter 19.285 RCW.
(((14))) (12) "Ten-year potential" means the ten-year cost effective conservation resource potential.
(((15))) (13) "Utility" means a consumer-owned electric utility, as the term consumer-owned utility is defined in RCW 19.29A.010, that ((serves more than twenty-five thousand retail customers in the state of Washington. The number of customers served shall be based on data reported by a utility in Form EIA - 861, "Annual Electric Power Industry Report," filed with the Energy Information Administration, United States Department of Energy.
A consumer-owned electric utility whose number of retail customers grows beyond twenty-five thousand over the course of a year shall be subject to the requirements of this chapter, or per chapter 19.285 RCW shall become a qualifying utility, starting January 1 of the following year. All applicable target dates, per chapter 19.285 RCW will be delayed by the same number of years as there are between January 1, 2007, and the year in which the utility becomes a qualifying utility.
(16))) is a qualifying utility.
(14) "Verification protocol" means a procedure or method used, consistent with industry standards, to establish with reasonable certainty that a conservation measure was installed and is in service. Industry standards include a range of appropriate protocols reflecting a balance of cost and accuracy, such as tracking installation of measures through incentive payments and the use of on-site inspection of measures installed as part of a customer-specific project.
(15) "Weather-adjusted load" means load calculated after variations in peak and average temperatures from year to year are taken into account.
(((17))) (16) "WREGIS" means the Western Renewable Energy Generation Information System. WREGIS is an independent, renewable energy registry and tracking system for the region covered by the Western Interconnection. WREGIS creates renewable energy certificates, WREGIS certificates, for verifiable renewable generation from units that register in the registry and tracking system.
AMENDATORY SECTION (Amending WSR 14-04-015, filed 1/24/14, effective 2/24/14)
WAC 194-37-050 Documentation and ((auditing)) timelines.
(1) Each utility must maintain all records necessary to document its compliance with the Energy Independence Act, as described in this chapter. All current and historical reports required by this chapter shall be available to a utility's customers and may be provided in conjunction with the utility's requirements under RCW 19.29A.050.
(2) Each utility that is not under the jurisdiction of the Washington state auditor must be audited for compliance with the Energy Independence Act by an independent auditor at least every twenty-four months and must submit a copy of the audit report to the department.
(3) A consumer-owned utility that becomes subject to this chapter and chapter 19.285 RCW after December 31, 2006, pursuant to RCW 19.285.040(3), must notify the department of its status as a qualifying utility by June 1st of the year after it becomes a qualifying utility and must submit the reports required by WAC 194-37-060 and 194-37-110 starting five years after the notice to the department is due. For the purposes of this requirement, the utility must rely on the number of customers reported by the utility in Form EIA - 861, "Annual Electric Power Industry Report," filed with the Energy Information Administration, United States Department of Energy.
AMENDATORY SECTION (Amending WSR 14-04-015, filed 1/24/14, effective 2/24/14)
WAC 194-37-060 Conservation reporting requirements.
Each utility shall submit an annual conservation report to the department by June 1st using a form provided by the department. The conservation report ((shall document)) must show the utility's progress in the preceding year in meeting the conservation targets established in RCW 19.285.040 and ((shall)) must include the following:
(1) The total electricity savings ((by customer sector - Residential, commercial, industrial, and agricultural, by production efficiencies, and by distribution efficiencies)) and expenditures for conservation by the following sectors: Residential, commercial, industrial, agricultural, distribution system, and production system. A utility may report results achieved through nonutility programs, as identified in WAC 194-37-080(5), by program, if the results are not included in the reported results by customer sector. Reports submitted in odd-numbered years must include an estimate of savings and expenditures in the prior year. Reports submitted in even-numbered years must include the amount of savings and expenditures in the prior two years. All savings must be documented pursuant to WAC 194-37-080.
(2) ((If the utility counts towards its biennial target any electricity savings from local, regional, state, or federal market transformation programs, or local, state or federal codes or standards, the utility shall include copies of reports of the annual electricity savings for the utility's service territory as estimated and recorded by entities such as the department, the NWPCC, regional market transformation organizations, or the utility.
(3))) A brief description of the methodology used to establish the utility's ten-year potential and biennial target to capture cost-effective conservation((, including the share of this target to be captured by efficiency improvements in customer measures, and, if any, in distribution measures and production measures.
(4) The utility's total expenditures for conservation broken down by residential sector, commercial sector, industrial sector, and agricultural sector, and, if any, production efficiency and distribution efficiency.
(5) The most recent final audit report(s), if any, that evaluate(s) the utility's compliance with chapter 19.285 RCW and the information the utility reported per this chapter.
(6) In even years this report must include the following information categorized by customer conservation savings, and if any, total distribution efficiency savings, and total production efficiency savings:
(a) The utility's achievement in meeting its preceding biennial target; and
(b) The utility's current ten-year potential and biennial target)).
(3) In even-numbered years the report must include the utility's ten-year conservation potential and biennial targets established pursuant to WAC 194-37-070.
AMENDATORY SECTION (Amending WSR 14-04-015, filed 1/24/14, effective 2/24/14)
WAC 194-37-070 Development of conservation potential and biennial conservation targets.
(1) Ten-year potential. By January 1st of each even-numbered year, each utility shall identify its achievable cost-effective conservation potential for the upcoming ten years.
(2) Biennial target. By January 1st of each even-numbered year, each utility shall establish and make public a biennial conservation target. The utility's biennial target shall be no less than its pro rata share of the ten-year potential identified pursuant to subsection (1) of this section.
(3) Each utility must document the methodologies and inputs used in the development of its ten-year potential and biennial target and must document that its ten-year potential and biennial target are consistent with the requirements of RCW 19.285.040(1).
(4) Each utility must establish its ten-year potential and biennial target by action of the utility's governing board, after public notice and opportunity for public comment.
(5) The methodologies used by the NWPCC in its most recently published regional power plan ((consist of the following elements)) are summarized in (a) through (o) of this subsection:
(a) Analyze a broad range of energy efficiency measures considered technically feasible;
(b) Perform a life-cycle cost analysis of measures or programs, including the incremental savings and incremental costs of measures and replacement measures where resources or measures have different measure lifetimes;
(c) Set avoided costs equal to a forecast of regional market prices, which represents the cost of the next increment of available and reliable power supply available to the utility for the life of the energy efficiency measures to which it is compared;
(d) Calculate the value of the energy saved based on when it is saved. In performing this calculation, use time differentiated avoided costs to conduct the analysis that determines the financial value of energy saved through conservation;
(e) Conduct a total resource cost analysis that assesses all costs and all benefits of conservation measures regardless of who pays the costs or receives the benefits. The NWPCC identifies conservation measures that pass the total resource cost test as economically achievable;
(f) Identify conservation measures that pass the total resource cost test, by having a benefit/cost ratio of one or greater as economically achievable;
(g) Include the increase or decrease in annual or periodic operations and maintenance costs due to conservation measures;
(h) Include deferred capacity expansion benefits for transmission and distribution systems in its cost-effectiveness analysis;
(i) Include all nonpower benefits that a resource or measure may provide that can be quantified and monetized;
(j) Include an estimate of program administrative costs;
(k) Discount future costs and benefits at a discount rate based on a weighted, after-tax, cost of capital for utilities and their customers for the measure lifetime;
(l) Include estimates of the achievable ((customer)) conservation penetration rates for ((retrofit)) conservation measures ((and for lost-opportunity (long-lived) measures. The NWPCC's twenty-year achievable penetration rates, for use when a utility assesses its twenty-year potential, are eighty-five percent for retrofit measures and sixty-five percent for lost opportunity measures achieved through a mix of utility programs and local, state and federal codes and standards. The NWPCC's ten-year achievable penetration rates, for use when a utility assesses its ten-year potential, are sixty-four percent for nonlost opportunity measures and twenty-three percent for lost-opportunity measures; the weighted average of the two is a forty-six percent ten-year achievable penetration rate));
(m) Include a ten percent bonus for conservation measures as defined in 16 U.S.C. § 839a of the Pacific Northwest Electric Power Planning and Conservation Act;
(n) Analyze the results of multiple scenarios. This includes testing scenarios that accelerate the rate of conservation acquisition in the earlier years; and
(o) Analyze the costs of estimated future environmental externalities in the multiple scenarios that estimate costs and risks.
AMENDATORY SECTION (Amending WSR 14-04-015, filed 1/24/14, effective 2/24/14)
WAC 194-37-080 Documentation of conservation savings.
(((1) The utility shall document:
(a) That it achieved its biennial conservation target;
(b) The total savings in customer efficiency measures; and
(c) If included in the target, the savings in the production and distribution sectors.
(2) A conservation measure or program counts towards a utility biennial target if it meets the following criteria:
(a) The conservation has a measure life of at least two years, or, if the measure life is less than two years the utility can verify that it has acquired the conservation for the entire biennium;
(b) It meets the definitions of conservation and cost effective as contained in WAC 194-37-040; and
(c) The NWPCC includes the measure or program in its power plan, or the measure or program is not identified by the NWPCC but it meets the definition of cost effective in RCW 19.285.030.
(3) The utility shall count the total first year savings of a conservation measure in the year during which either the measure was installed or the utility paid for it.
(4))) (1) Each utility must document its acquisition of conservation savings relative to its biennial target.
(2) Each utility must record conservation savings as the total first-year electricity savings in megawatt-hours or kilowatt-hours.
(3)(a) Each utility must maintain and apply measurement and verification protocols to determine the amount of energy savings resulting from conservation measures and to verify the acquisition or installation of the conservation measures being recorded or claimed.
(b) A utility may comply with this requirement using the measurement and verification protocols adopted by the RTF or by BPA in its energy efficiency implementation manual. If a utility uses other measurement and verification protocols, the measurement and verification protocols must be consistent with recognized industry practices, and the utility must document the methodologies, assumptions, and factual inputs used in its measurement and verification of energy savings.
(4) A utility may count the conservation savings from a conservation measure toward its biennial target if the measure, or a project or program consisting of more than one measure, meets the following criteria:
(a) The utility has established that the measure, or a program or project consisting of more than one measure, was cost-effective;
(b) The utility has documented that the measure was installed within its retail service area during the biennial period, or in the case of programs described in subsection (5) of this section, that the savings were attributed to the utility using a reasonable and consistent method;
(c) The utility used a reasonable and consistent method of assigning conservation savings to biennial periods such as, by the date the conservation measure was installed, by the date an incentive was paid to a customer, or by the date the conservation measure was reported to an external funding agency such as BPA; and
(d) The utility applied a reasonable and consistent policy of incorporating changes in unit energy savings values subsequent to the adoption of a biennial conservation target. Such a policy may either count savings using the unit energy savings values in effect at the time the biennial target is established or update all unit energy savings values as they are changed by the entity responsible for establishing the values.
(5) Subject to the requirements of subsection (4) of this section, each utility may count toward((s)) its biennial conservation target((s)) the proportionate share of savings resulting in its service territory from the ((following conservation efforts during the one biennium in which either the measure or program was placed in service or the utility paid for the measure:
(a) End-use savings from region-wide conservation projects that are centrally funded by BPA and for which the utility shared in the funding through its BPA rates.
(b) Savings from regional market transformation efforts if the NWPCC includes the program measures in its most recently published Power Plan's conservation resource potential or, as a newly emerging technology, the measure has yet to be included in the NWPCC's resource potential. Each utility will report a proportion of savings from these programs using established distribution methods, based on each utility's relative share of funding the regional market transformation effort through both direct funding and indirect funding through their BPA rates.
(c) Savings from improved federal minimum energy efficiency standards or Washington state building energy code improvements or improved state appliance codes and standards in the biennium in which they become effective, as proportionate to the utility's service territory. After that biennium, a utility may no longer include savings from those specific codes and/or standards in its next ten-year potential.
(5) Utilities may count savings from more stringent local building and/or local equipment codes and standards, including utility new service or connection standards, towards meeting their biennial conservation target in the biennium in which they become effective and in each biennium the local standards continue to be enforced and achieve incremental savings above minimum state energy codes or minimum federal energy standards)) implementation of regional or multistate conservation programs, market transformation programs, appliance standards, building energy codes, and nonprogrammatic savings including, but not limited to, the Northwest Energy Efficiency Alliance and BPA.
(6) A utility ((cannot count the loss of load due to curtailments or matters outside of the utility's control (such as a facility shut-down) as achievement towards its conservation targets. However, such losses of load may change the level of current and future targets to the extent that they reduce the conservation potential available to the utility.
(7) The energy savings from an increase in distribution efficiencies are described, documented and counted under WAC 194-37-090. The energy savings from an increase in production efficiencies are described, documented and counted under WAC 194-37-100.
(8) Conservation savings from utility programs for measures for which the NWPCC and the regional technical forum have established per unit energy savings values will be based on the per unit savings set by the NWPCC's regional technical forum unless the utility documents its variations in electricity saving estimates from the regional technical forum.
(9) Conservation savings from utility programs for custom measures shall be developed pursuant to the NWPCC's custom requirements or through a similar analytical framework.
(10) A utility may document shortfalls in meeting its biennial conservation target due to lack of customer participation. Documentation of such shortfalls shall include a demonstration that:
(a) A broad array of marketing and program options were provided to customers throughout the biennium; and
(b))) must not count as conservation a reduction in electricity consumption due to curtailment of a customer's process or service, such as the shutdown of a manufacturing facility. A change in the operating practices of a customer that reduces electricity consumption without reducing the level of output or other benefits of electricity consumption is not curtailment.
(7) A utility that does not acquire conservation savings during a biennial period sufficient to meet its biennial conservation target may document its level of effort at conservation acquisition. The documentation should include:
(a) A description of the utility's marketing programs, education programs, custom project proposals, monetary incentives, financing offers, and other efforts during the biennial period to motivate customers to install conservation measures;
(b) A detailed report of the utility's budget and actual expenditures for the activities in (a) of this subsection;
(c) An identification of all conservation measures, programs, or projects for which the utility offered ((throughout the biennium)) to pay customers an incentive in an amount equal to the utility's full avoided cost over the lifetime of measures((, up to one hundred percent of the incremental cost of measures. Any such shortfall cannot be automatically deducted from the utility's conservation potential assessment for the subsequent biennium)); and
(d) An identification of all conservation measures that were included in the biennial target and became unavailable to the utility due to the shutdown or curtailment of operations of a retail customer.
AMENDATORY SECTION (Amending WSR 14-04-015, filed 1/24/14, effective 2/24/14)
WAC 194-37-110 Renewable resource energy reporting.
Each utility ((shall)) must submit a renewable resource energy report to the department by June 1st of each year((. Reporting requirements vary, as follows, depending upon how the utility elects to comply with chapter 19.285 RCW.
(1) Universal renewable energy reporting requirements. The renewable resource energy report shall include)) using a form provided by the department. The report must reflect the actions that the utility took by the previous January 1st to meet the renewable requirements of chapter 19.285 RCW for that year. For example, a utility must report by June 1, 2015, the actions it took by January 1, 2015, to meet requirements applicable to the 2015 target year.
(1) Reporting requirements applicable to all utilities. Each utility must report the following information:
(a) The compliance method:
(i) Renewable energy target using renewable resources and RECs – RCW 19.285.040 (2)(a);
(ii) Incremental cost – RCW 19.285.050; or
(iii) No-growth cost – RCW 19.285.040 (2)(d).
(b) The utility's ((annual)) load for the two years preceding ((each renewable energy)) the target year and the average load for those two years.
(((b) The amount of megawatt-hours needed to meet the utility's annual renewable energy targets identified in RCW 19.285.040. These annual targets are established as a percentage of the utility's average retail load for the two years prior to the renewable energy target year: Three percent of each year 2012 through 2015; nine percent of each year 2016 through 2019; and fifteen percent for year 2020 and each year thereafter.
(c) The names of the eligible renewable resource facilities and/or the vintage (year in which associated power was generated) of renewable energy credits by generator that the utility owns or with which the utility has a contract dated no later than January 1 of the target year; and the estimated annual quantity (megawatt-hours) of eligible renewable resources or RECs that will be produced, or has been produced, through these resources or contracts to meet its annual targets.
(i) The list of resources will identify any resource that both commenced operations after December 31, 2005, and meets the apprenticeship construction practice standards as adopted by the council per WAC 194-37-120(1), thereby earning a 1.2 multiplier credit on its electricity output.
(ii) The list of resources will identify any resource that meets the definition of distributed generation and that the utility owns or contracts for the associated REC, thereby earning a 2.0 multiplier credit on the electricity output.
(d))) (c) The utility's renewable energy target for the target year.
(d) The amount of eligible renewable resources, RECs, and multiplier credits to be applied toward the utility's renewable energy target for the target year. The report must identify, by generating facility or hydroelectric project, including the WREGIS generating unit identification where applicable, and, in the case of RECs, by vintage year:
(i) The eligible renewable resources in megawatt-hours to be applied toward the renewable energy target for the target year;
(ii) The RECs to be applied toward the renewable energy target for the target year;
(iii) Any additional credit for eligible renewable resources or RECs from generating facilities eligible for the apprentice labor provision in RCW 19.285.040 (2)(h), applied toward the renewable energy target for the target year;
(iv) Any additional credit for RECs from generating facilities eligible for the distributed generation in RCW 19.285.040 (2)(b), applied toward the renewable energy target for the target year.
(e) The percent of its total annual retail revenue requirement invested in the incremental cost of eligible renewable resources and the cost of renewable energy credits. Each utility must include in its report documentation of the calculations and inputs to this amount.
(((e) The most recent final audit report(s), if any, that evaluate(s) the utility's compliance with chapter 19.285 RCW and the information reported per this chapter.
(2) A utility that does not meet the renewable energy requirements in RCW 19.285.040(2), the financial requirements in RCW 19.285.050, or the financial requirements in RCW 19.285.040 (2)(d) shall include the following information in its June 1 report of each year beginning in 2014:
(a) The quantity of eligible renewable resources acquired by December 31 of the target year;
(b) The quantity of RECs acquired from the target year, the year prior or the year subsequent to the target year; or
(c) The combination of (a) and (b) of this subsection.
(3) Renewable energy target reporting.
(a) A utility that meets the renewable energy requirements in RCW 19.285.040 (2)(a) shall include the following in its June 1 report of each year beginning in 2014.
(i) Demonstration that it acquired:
(A) By January 1 of the target year, megawatt-hours of eligible renewable resources and that those megawatt-hours were actually generated by December 31 of the target year.
(B) By January 1 of the target year, RECs produced during the target year, the year prior or the year subsequent to the target year; or
(C) Any combination of (a)(i)(A) and (B) of this subsection, in amounts sufficient to meet the percent of load target for the calendar year two years prior. Utilities may report shortfalls in expected generation from resources documented in (a)(i)(A) of this subsection and production of RECs documented in (a)(i)(B) of this subsection and may document that the shortfalls were offset by additional purchases of RECs or eligible renewable resources.
(ii) Documentation of the amount of megawatt-hours purchased or generated, the amount of RECs purchased and the names of the respective eligible renewable facilities that produced the associated power, specified by the year it was generated.
(b) The utility may, in addition, submit a copy of its fuel mix report, per chapter 19.29A RCW, for each target year.
(4) Resource cost reporting.
Each year that a utility does not meet the renewable energy target requirements in RCW 19.285.040, but meets the financial requirements in RCW 19.285.050, the utility shall include the following information in its June 1 report of that year:
(a) Its)) (2) Incremental cost compliance method report. Each utility reporting pursuant to subsection (1)(a) of this section its use of the incremental cost compliance method for the target year must include the following information in its report:
(a) Annual revenue requirement for the target year;
(b) The annual levelized delivered cost of its eligible renewable resource(s) reported separately for each resource;
(c) The annual levelized delivered cost of its substitute resources and the eligible renewable resource with which it is being compared;
(d) The total cost of renewable energy credits to be applied in the reporting year;
(e) The percentage of its annual revenue requirement invested in the incremental cost of eligible renewable resources and the cost of RECs; and
(f) The most current information required by WAC 194-37-160 used for this financial demonstration.
(((5) Nonload growing utility reporting.
Each year that a utility does not meet the renewable energy target requirements in RCW 19.285.040 (2)(a), but meets the financial requirements in RCW 19.285.040 (2)(d), the utility shall report to the department each June 1 its:))
(3) No-growth cost compliance method report. Each utility reporting pursuant to subsection (1)(a) of this section its use of the no-growth cost compliance method for the target year must include the following information in its report:
(a) Annual revenue requirement for the target year;
(b) Actual and weather-adjusted load for each ((of the three years immediately prior to the target)) year used in determining that the utility's load did not increase;
(c) Delivered cost of its eligible renewable resource(s), RECs or a combination of both for the target year to be applied to the one percent of annual revenue requirement, reported separately for each resource;
(d) ((Quantity of megawatt-hours for each target year for which the utility:
(i) Commenced or renewed ownership of nonrenewable resources after December 7, 2006; or
(ii) Made electricity purchases from nonrenewable energy resources, incremental to its annual electricity purchases made or contracted for prior to December 7, 2006. Sources of power for daily spot market purchases are not counted; and
(e) List of RECs that the utility acquired, in addition to any RECs purchased in (c) of this subsection, to offset nonrenewable purchases listed in (d) of this subsection.
(6) Reporting of uncontrollable events.)) Generating facility identification, vintage, quantity and cost of any RECs to be retired as an offset for nonrenewable resource purchases pursuant to RCW 19.285.040 (2)(d).
(4) Final compliance report. A utility must submit a final renewable compliance report by the later of (a) two years after the filing of the report required in subsections (1) through (3) of this section; or (b) ninety days after the issuance of the auditor's report for the target year. The final renewable compliance report must provide an update of any revisions to the information previously reported pursuant to this section or, if no revisions were made, notify the department that the initial report should be considered the final report. For any target year that a utility demonstrates to the auditor that it did not meet the annual renewable resource requirements in chapter 19.285 RCW due to events beyond the reasonable control of the utility per RCW 19.285.040 (2)(i), the utility ((shall)) must summarize these events in ((its June 1 report to the department immediately following the target year)) the final compliance report.
AMENDATORY SECTION (Amending WSR 14-04-015, filed 1/24/14, effective 2/24/14)
WAC 194-37-120 Documentation of ((renewable energy achievement)) use of eligible renewable resources and RECs for compliance.
((Each utility shall provide the auditor access to contracts indicating purchases of or documentation indicating ownership of RECs and/or megawatt-hours from eligible renewable/resources equal to or exceeding the annual percentage standard for the target year. The megawatt-hours from owned eligible renewable resources count towards the percentage annual renewable energy target as long as the associated nonpower attributes, or RECs, if any have been created, are not owned by a separate entity or have not been used in an optional pricing program. A utility's power purchase contract, for eligible renewable resources, provides documentation for this section if the contract specifies that the nonpower attributes, or RECs if any have been created, associated with the power from the eligible renewable resources have been acquired by the utility. A utility using RECs to meet any of the requirements of chapter 19.285 RCW must document that the RECs have been retired pursuant to WREGIS procedures indicating the target year as the compliance period and Washington as the state program.
(1) Each utility that claims a 1.2 multiplier credit for the electricity output from an eligible renewable resource per RCW 19.285.040 (2)(h)(i) shall provide a copy of written documentation from the council that the facility met the apprenticeship labor standard of fifteen percent of the total labor hours used in its construction.
(2) A utility may provide a copy of documentation from the BPA indicating a quantity of power that BPA sold to the utility for the target year that was supplied by an eligible renewable resource.
(3) Each utility that claims a 2.0 multiplier credit for the electricity output from an eligible renewable resource per RCW 19.285.040 (2)(b) shall provide documentation that the REC applied in that year, associated with the distributed generation resource, is owned by the utility.
(4) To document the annual amount of power supplied by BPA from eligible renewable resources, the utility may rely on BPA's determination of the portion of its power supply provided by eligible renewable resources during a calendar year for which no RECs have been created, or if RECs have been created, that the RECs have been or will be retired. A utility may count any purchase of:
(a) Electricity from BPA that is generated by eligible renewable resources for which no RECs have been created, or if RECs have been created, for which the RECs have been or will be retired; or
(b) RECs from BPA generated by eligible renewable resources to meet all or any portion of its annual eligible renewable resource targets.)) A utility using an eligible renewable resource or REC for compliance with a requirement of chapter 19.285 RCW must document that use by following the procedures in this section.
(1) Documentation of energy from eligible renewable resources. Each utility using an eligible renewable resource for compliance must document the following for each resource:
(a) The electricity was generated by a generating facility that is an eligible renewable resource;
(b) The electricity was generated during the target year;
(c) If the utility sold, exchanged, or otherwise transferred the electricity to any person other than its retail customer, the utility retained ownership of the nonpower attributes; and
(d) The utility retired, consistent with the requirements of subsection (2) of this section, any RECs representing the nonpower attributes associated with the electricity or, if no RECs have been created, the utility has committed to use the nonpower attributes exclusively for the compliance purpose stated in its documentation.
(2) Documentation of renewable energy certificates. Each utility using a REC for compliance must document the following:
(a) The REC represents the output of an eligible renewable resource;
(b) The vintage of the REC is the year immediately prior to the target year, the year of the target year, or the year immediately after the target year; and
(c) The utility has removed the REC from circulation by transferring the REC to a retirement subaccount of the utility within WREGIS using the following values in the certificate transfer:
(i) Retirement type: Used by the account holder for a state-regulated renewable portfolio standard/provincial utility portfolio standard;
(ii) State/province: Washington; and
(iii) Compliance year: Applicable target year.
AMENDATORY SECTION (Amending WSR 08-07-079, filed 3/18/08, effective 4/18/08)
WAC 194-37-130 Documentation of incremental hydropower.
(((1) Utilities may count toward their annual renewable resource targets incremental power acquired from qualified incremental hydropower efficiency improvements made at the following facilities since 1999:
(a) Hydropower facilities in the Pacific Northwest owned by a qualifying utility where the new generation does not result in new water diversions or impoundments.
(b) Hydroelectric generation facilities in irrigation pipes and canals located in the Pacific Northwest, where the additional generation does not result in new water diversions or impoundments.
(2) The utility shall calculate renewable resource power from incremental hydropower as the increase in annual megawatt-hours of generation attributable to the qualified incremental hydropower efficiency improvements under average water generation.
(3) The increase in annual megawatt-hours of generation attributable to the qualified incremental hydropower efficiency improvements shall be documented by engineering studies or with before and after generation data. The documentation shall clearly explain:
(a) Where the facility is located;
(b) When the improvements were made;
(c) How the amount of generation in "average water generation" was calculated;
(d) What other factors may have caused an increase in electricity production and how the amount "attributable to the qualified improvements" was extracted from the total increase;
(e) How and why the "qualified improvements" increased hydropower production; and
(f) How the utility came to acquire the incremental output associated with the qualified improvements.)) (1) Each utility using electricity produced as a result of a hydropower efficiency improvement, as defined in RCW 19.285.030 (12)(b), to meet a renewable energy target must provide documentation that:
(a) The hydroelectric generation project is owned by a qualifying utility and is located in the Pacific Northwest;
(b) The hydropower efficiency improvement was completed after March 31, 1999; and
(c) The additional generation does not result in new water diversions or impoundments.
(2) If the amount of electricity generated as a result of the hydropower efficiency improvement is directly measurable, the utility must use the measured output of the hydropower efficiency improvement as documentation of the amount of additional generation.
(3)(a) If the amount of electricity generated as a result of the hydropower efficiency improvements is not directly measurable, the utility must document the amount of electricity generated as a result of the hydropower efficiency improvement using an engineering analysis comparing the output in megawatt-hours of the hydroelectric generation project with the efficiency improvement to the output in megawatt-hours of the hydroelectric generation project without the efficiency improvement. Multiple efficiency improvements to a single hydroelectric generation project may be combined for purposes of the engineering analysis.
(b) The engineering analysis required by (a) of this subsection must be performed using an engineering model of the hydroelectric generation project that quantifies the relationship of stream flows, reservoir elevation, and other relevant factors to the electric output of the generating facility. The engineering model must accurately reflect the physical characteristics and operating requirements of the hydroelectric generation project during the target year and must accurately estimate the electric generation of the hydroelectric generation project without and with the hydropower efficiency improvement.
(c) A utility using the engineering analysis method to determine incremental generation must adopt and consistently apply in each target year one of the following methods:
(i) Method one - Actual incremental generation. A utility using this method must prepare an analysis using actual stream flows and the engineering model described in (b) of this subsection during each target year to determine incremental generation in the target year. A utility using this method must perform an updated calculation each year to determine the incremental generation amount for that target year.
(ii) Method two - Percentage generation.
(A) A utility using method two must prepare an analysis establishing the expected amount of incremental generation based on stream flows available to the hydroelectric generation project, adjusted for any known and measurable changes to stream flows due to environmental regulations or other factors, during a historical study period.
(B) The historical study period used in method two must be reasonably representative of the stream flows that would have been available to the hydroelectric project over the period of time for which stream flow records are readily available. A historical study period meets the requirements of this subsection if it includes the most recent readily available stream flow records and consists of a consecutive record of stream flow records at least five years in length.
(C) The amount of incremental generation using method two is calculated by multiplying the actual generation in megawatt-hours in the target year by a percentage amount equal to the difference between the calculated average generation over the historical study period with the hydropower efficiency improvement and the calculated average generation over the historical study period without the hydropower efficiency improvement, divided by the calculated average generation over the historical study period without the hydropower efficiency improvement.
(iii) Method three - Fixed amount of generation.
(A) A utility using method three must prepare an analysis establishing the expected amount of incremental generation based on stream flows available to the hydroelectric generation project, adjusted for any known and measurable changes to stream flows due to environmental regulations or other factors during a historical study period.
(B) The historical study period used in method three must be reasonably representative of the stream flows that would have been available to the hydroelectric project over the period of time for which stream flow records are readily available. A historical study period meets the requirements of this subsection if it includes the most recent readily available stream flow records and consists of a consecutive record of stream flow records at least ten years in length.
(C) The amount of incremental generation using method three is calculated as an amount in megawatt-hours equal to the difference between the calculated average generation over the historical study period with the hydropower efficiency improvement and the calculated average generation over the historical study period without the hydropower efficiency improvement. The amount must be adjusted in each target year for any reduction in availability of the hydroelectric generation project's generating capacity during the target year that is not accounted for in the analysis used to calculate the incremental generation amount.
(4) The requirements of this section are in addition to the documentation requirements specified in WAC 194-37-120(1).
NEW SECTION
WAC 194-37-136 Documentation of apprentice labor and distributed generation multipliers.
(1) Apprentice labor credit. A utility claiming an additional credit for the electricity output from an eligible renewable resource per RCW 19.285.040 (2)(h)(i) must document that the facility commenced operation after December 31, 2005, and must provide written documentation from the Washington state apprenticeship and training council within the department of labor and industries that the facility qualified for the apprentice labor credit.
(2) Distributed generation credit. A utility claiming an additional credit for distributed generation pursuant to RCW 19.285.040 (2)(b) must meet the following requirements:
(a) The utility may claim a distributed generation credit only if the generating facility is registered in WREGIS and the utility retires all RECs associated with its distributed generation claim.
(b) In determining whether a generating facility has a generating capacity of not more than five megawatts, the capacity of the generating facility will be based on its nameplate rating measured in alternating current.
(c) In determining whether a generating facility is eligible for the distributed generation credit, the generating capacity of the generating facility will be based on the aggregate generating capacity of the generating facility and all other generating facilities in the same integrated cluster. An integrated cluster of generating facilities consists of all generating facilities that:
(i) Are located on the same or contiguous property. In determining whether properties are contiguous, interruptions in contiguity caused by easements, public thoroughfares, transportation rights of way, or utility rights of way must be disregarded; and
(ii) Have any of the following elements in common:
(A) Ownership. Each person with more than five percent beneficial ownership, other than tax equity owners, will be considered an owner for purposes of determining common ownership of generating facilities;
(B) Operational control; or
(C) Interconnection. Generating facilities have common interconnection if they have the same point of common coupling with the area electric power system.
AMENDATORY SECTION (Amending WSR 14-04-015, filed 1/24/14, effective 2/24/14)
WAC 194-37-210 Renewable energy credit tracking system.
(1) WREGIS is the renewable energy credit tracking system for purposes of verification of RECs under chapter 19.285 RCW.
(2) Upon request by a utility, the department may approve a special purpose renewable energy credit tracking system for the generation of any specific generating facility acquired through ownership or contract by a utility prior to January 1, 2015, if the utility certifies that it would be impractical or financially burdensome to track the generation of the facility using WREGIS. The approval of a special purpose tracking system may include limitations or conditions on the transfer of RECs. All references to WREGIS in this chapter include such approved special purpose tracking systems.
REPEALER
The following sections of the Washington Administrative Code are repealed:
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