WSR 18-08-039

PROPOSED RULES

DEPARTMENT OF COMMERCE

[Filed March 28, 2018, 10:55 a.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 17-23-185.

Title of Rule and Other Identifying Information: WAC 194-37-140(2) Documentation of renewable resource financial path for no-load growth utilities.

Hearing Location(s): On May 17, 2018, at 11:00 a.m., at the Washington Department of Commerce, 1011 Plum Street S.E., Olympia, WA 98504.

Date of Intended Adoption: May 18, 2018.

Submit Written Comments to: Glenn Blackmon, Washington Department of Commerce, P.O. Box 42525, Olympia, WA 98504, email eia@commerce.wa.gov, by May 17, 2018.

Assistance for Persons with Disabilities: Contact Carolee Sharp, phone 260-725-3118 [360-725-3118], TTY 360-586-0772, email carolee.sharp@commerce.wa.gov, by May 10, 2018.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The proposed rule revises the method of determining whether a qualifying utility is eligible to use the no-growth compliance method under RCW 19.285.040 (2)(d) of the Energy Independence Act. The revision is proposed in response to a request from the state auditor for an interpretation of the existing calculation rule. The proposed method more closely tracks the language in the statute. The proposed method supports the policy objectives of the Energy Independence Act by clarifying and limiting the application of the no-growth cost cap provision.

Reasons Supporting Proposal: The proposed amendment will improve clarity by identifying the baseline year. The statute is ambiguous in that it specifies that a utility's weather-adjusted load "for the previous three years on average did not increase over that time period" without stating the baseline to which the three year average must be compared. The proposed rule specifies that the baseline period is the year prior to the three year period. The proposed rule will maintain consistency and fairness by establishing a single calculation method applicable to all qualifying utilities in all compliance years. The proposed rule will support the ability of qualifying utilities to make plans based on expected eligibility or ineligibility to use the no-growth method.

Statutory Authority for Adoption: RCW 19.285.080(2).

Statute Being Implemented: RCW 19.285.040 (2)(d).

Rule is not necessitated by federal law, federal or state court decision.

Name of Proponent: Washington state department of commerce, governmental.

Name of Agency Personnel Responsible for Drafting: Glenn Blackmon, Department of Commerce, 1011 Plum Street S.E., P.O. Box 42525, Olympia, WA 98504-2525, 360-725-3115; Implementation: Washington State Department of Commerce, 1011 Plum Street S.E., P.O. Box 42525, Olympia, WA 98504-2525, 360-407-6000; and Enforcement: Attorney General of Washington, 1125 Washington Street S.E., P.O. Box 40100, Olympia, WA 98504-0100, 360-753-6200.

A school district fiscal impact statement is not required under RCW 28A.305.135.

A cost-benefit analysis is not required under RCW 34.05.328. RCW 34.05.328 does not apply to the department of commerce.

The proposed rule does not impose more-than-minor costs on businesses. Following is a summary of the agency's analysis showing how costs were calculated. The rule applies to fourteen entities, none of whom is a small business. The rule does not impose any additional cost on any entity.

March 28, 2018

Jaime Rossman

Rules Coordinator

AMENDATORY SECTION (Amending WSR 14-04-015, filed 1/24/14, effective 2/24/14)

WAC 194-37-140 Documentation of renewable resource financial path for no-load growth utilities.

For each year that a utility meets the renewable energy financial cost cap, associated with no load growth, identified in RCW 19.285.040 (2)(d), the utility must document the following by January 1:

(1) That it used a consistent methodology from year to year to weather-adjust its retail load;

(2) That ((its weather-adjusted load for the most recent prior year is lower than the third year prior)) the average of weather-adjusted loads over the three previous years did not increase over the weather-adjusted load in the year immediately prior to the three-year period;

(3) That it invested at least one-percent of its total annual revenue requirement in each target year on eligible renewable resources, RECs, or a combination of both;

(4) That it executed contracts, dated no later than January 1 of the target year, for power purchases of sufficient eligible renewable resources and/or RECs;

(5) The quantity of megawatt-hours for each target year for which the utility:

(a) Commenced or renewed ownership of nonrenewable resources, other than coal transition power, after December 7, 2006; or

(b) Made electricity purchases from nonrenewable energy resources, other than coal transition power, incremental to its annual electricity purchases made or contracted for before December 7, 2006.

Sources of power for daily spot market purchases are not included in this calculation;

(6) The RECs the utility acquired, in addition to any RECs acquired for subsection (3) of this section, to offset power purchases listed in subsection (5) of this section; and

(7) Annual revenue requirement for the target year.