AN ACT Relating to low-income energy assistance; amending RCW 70.164.010, 70.164.020, and 80.28.260; adding new sections to chapter 70.164 RCW; adding new sections to chapter 80.28 RCW; adding a new section to chapter 54.04 RCW; adding a new section to chapter 35.92 RCW; adding a new section to chapter 23.86 RCW; adding a new section to chapter 43.63A RCW; and adding a new section to chapter 43.21F RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. RCW 70.164.010 and 1987 c 36 s 1 are each amended to read as follows:

(1) The legislature finds and declares:

(a) The health, welfare, and prosperity of the people of the state of Washington require that all citizens receive essential levels of heat and electric service regardless of economic circumstance;

(b) That weatherization of the residences of low-income households will help conserve energy resources in this state and can reduce the need to obtain energy from more costly conventional energy resources((~~. The legislature also finds~~));

(c) That rising energy costs have had a negative effect on the affordability of housing for low-income citizens and have made it difficult for low-income citizens of the state to afford adequate fuel for residential space heat((.));

(d) Weatherization of residences will lower energy consumption, making space heat more affordable for persons in low-income households((~~. It~~)), and will ((~~also~~)) reduce the uncollectible accounts of fuel suppliers resulting from low-income customers not being able to pay fuel bills((.));

(e) That the best time to make energy conservation improvements to existing residential dwellings is during rehabilitation;

(f) That energy conservation is an important component of housing affordability; and

(g) That the public interest is served by the health and welfare of low-income persons benefited by a substantial increase in the pace of weatherizing low-income homes.

(2) The legislature declares that it is the policy of the state:

(a) To increase the pace of weatherization activities by requiring energy suppliers to have low-income weatherization programs and by improving financial incentives for regulated utilities toward this end;

(b) That energy conservation improvements through the retrofit of existing residential dwellings shall be coordinated with rehabilitation activities funded with state resources or resources administered through the state; and

(3) The program implementing the policy of this chapter is necessary to support the poor and infirm and also to benefit the health, safety, and general welfare of all citizens of the state.

Sec. 2. RCW 70.164.020 and 1987 c 36 s 2 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Department" means the department of community development.

(2) "Energy assessment" means an analysis of a dwelling unit to determine the need for cost-effective energy conservation measures as determined by the department.

(3) "Energy supplier" means an electric utility or natural gas utility, whether privately or publicly owned, a heating oil dealer, or a propane dealer.

(4) "Heating oil dealer" means a person who supplies fuel oil at retail for space heating of dwellings.

(5) "Household" means an individual or group of individuals living in a dwelling unit as defined by the department.

((~~(4)~~)) (6) "Low income" means household income that is at or below one hundred twenty-five percent of the federally established poverty level.

((~~(5)~~)) (7) "Nonutility sponsor" means any sponsor other than a public service company, municipality, public utility district, mutual or cooperative, furnishing gas or electricity used to heat low-income residences.

((~~(6)~~)) (8) "Propane dealer" means a person who supplies liquefied petroleum gas at retail for space heating of dwellings.

(9) "Residence" means a dwelling unit as defined by the department.

((~~(7)~~)) (10) "Sponsor" means any entity that submits a proposal under RCW 70.164.040, including but not limited to any local community action agency, community service agency, or any other participating agency or any public service company, municipality, public utility district, mutual or cooperative, or any combination of such entities that jointly submit((s)) a proposal.

((~~(8)~~)) (11) "Sponsor match" means the share, if any, of the cost of weatherization to be paid by the sponsor.

((~~(9)~~)) (12) "Weatherization" means materials or measures, and their installation, that are used to improve the thermal efficiency of a residence, including educational programs to enable residents to make best use of materials or measures.

((~~(10)~~)) (13) "Weatherizing agency" means any approved department grantee or any public service company, municipality, public utility district, mutual or cooperative, or other entity that bears the responsibility for ensuring the performance of weatherization of residences under this chapter and has been approved by the department.

NEW SECTION. Sec. 3. A new section is added to chapter 70.164 RCW to read as follows:

(1) Energy suppliers either individually or jointly through a common fund or otherwise by December 31, 1991, shall submit a plan to the department to complete weatherization of one-half of the residences of their low-income customers by the year 2001. The residences to be included in the plan are all low-income households in existence on the effective date of this section.

(2) Before submitting a weatherization plan required under this section, the energy supplier shall make the proposed plan available to its customers, public agencies, and other interested parties for a thirty-day review and comment period. The energy supplier shall consider any comments or views on the proposed weatherization plan. A summary of these comments or views must be attached to the plan and submitted to the department.

(3) The department shall review and comment on weatherization plans required under subsection (1) of this section. After an energy supplier's weatherization plan has been reviewed by the department, the department shall transmit the plan from energy suppliers regulated by the utilities and transportation commission and any written comments to the utilities and transportation commission.

(4) By December 31, 1992, and every year thereafter until December 31, 2001, energy suppliers shall annually review and report, in a form prescribed by the department, on the progress the energy supplier has made in carrying out its weatherization plan. This progress report must include an evaluation of the energy supplier's progress in meeting its goal of weatherizing one-half of the low-income residences in their service area by the year 2001. The report must also include information on the number and type of households served, the level of weatherization assistance per household, and energy education efforts by the energy supplier.

NEW SECTION. Sec. 4. A new section is added to chapter 70.164 RCW to read as follows:

The department shall develop model energy education programs to be provided as a part of the department's energy assistance and weatherization programs. The model energy education programs shall include, but are not limited to, necessary instruction and demonstration of energy conservation measures and money management techniques that the household can adopt to effectively use and preserve energy resources. The model energy education programs shall also provide written educational materials, instructional aids, and follow-up procedures.

NEW SECTION. Sec. 5. A new section is added to chapter 70.164 RCW to read as follows:

The director of the department of community development, by January 1 of each year, shall prepare an annual report and send copies to the house of representatives committee on housing and energy and utilities committee and the senate committee on energy and utilities on the progress and status of the low-income weatherization programs authorized in this act. Such report shall include, but not be limited to, the stated low-income weatherization goals of energy suppliers, the actual number of low-income residences weatherized by energy suppliers, the source of funding for low-income weatherization activities under this act, and recommendations for improvement of the programs authorized under this act.

NEW SECTION. Sec. 6. A new section is added to chapter 80.28 RCW to read as follows:

The commission shall require that electrical and gas company low-income residence weatherization programs include all energy efficiency measures that are in the public interest, taking into account the measures that are cost-effective in reference to the company's avoided cost for additional energy supplies, the savings for all ratepayers that can be realized by reducing costs associated with uncollectible accounts, and levels of weatherization for low-income residences determined in consultation with the department of community development.

NEW SECTION. Sec. 7. A new section is added to chapter 80.28 RCW to read as follows:

Each electrical and gas company shall file an energy conservation tariff, including a component applicable to low-income residential customers, with the commission by December 31, 1991, and at least every five years thereafter until the year 2011. The filing shall include all energy conservation tariffs in effect at the time of filing and any proposed conservation tariff. Conservation tariffs shall reflect low-income weatherization plans required by section 3 of this act.

Sec. 8. RCW 80.28.260 and 1990 c 2 s 9 are each amended to read as follows:

(1) The commission shall adopt a policy allowing an incentive rate of return on investment (a) for payments made under RCW 19.27A.035 and (b) for programs that improve the efficiency of energy end use if priority is given to senior citizens and low-income citizens in the course of carrying out such programs. The incentive rate of return on investments set forth in this subsection is established by adding an increment of two percent to the rate of return on common equity permitted on the company's other investments.

(2) The commission shall consider and may adopt a policy allowing an incentive rate of return on investment in additional programs to improve the efficiency of energy end use or other incentive policies to encourage utility investment in such programs.

(3) The commission shall consider and may adopt other policies to protect a company from a reduction of short-term earnings that may be a direct result of utility programs to increase the efficiency of energy use. These policies may include allowing a periodic rate adjustment for investments in end use efficiency or allowing changes in price structure designed to produce additional new revenue and encourage adoption of least cost planning and operation.

(4) The commission may adopt a policy allowing the recovery of a utility's expenses incurred under RCW 19.27A.055.

NEW SECTION. Sec. 9. A new section is added to chapter 54.04 RCW to read as follows:

Public utility districts shall provide low-income residence weatherization programs that include all energy efficiency measures that are in the public interest, taking into account the measures that are cost-effective in reference to the company's avoided cost for additional energy supplies, the savings for all ratepayers that can be realized by reducing costs associated with uncollectible accounts, and levels of weatherization for low-income residences determined in consultation with the department of community development.

NEW SECTION. Sec. 10. A new section is added to chapter 35.92 RCW to read as follows:

Municipal-owned utility companies shall provide low-income residence weatherization programs that include all energy efficiency measures that are in the public interest, taking into account the measures that are cost-effective in reference to the company's avoided cost for additional energy supplies, the savings for all ratepayers that can be realized by reducing costs associated with uncollectible accounts, and levels of weatherization for low-income residences determined in consultation with the department of community development.

NEW SECTION. Sec. 11. A new section is added to chapter 23.86 RCW to read as follows:

An electric cooperative or mutual shall provide low-income residence weatherization programs that include all energy efficiency measures that are in the public interest, taking into account the measures that are cost-effective in reference to the company's avoided cost for additional energy supplies, the savings for all ratepayers that can be realized by reducing costs associated with uncollectible accounts, and levels of weatherization for low-income residences determined in consultation with the department of community development.

NEW SECTION. Sec. 12. A new section is added to chapter 43.63A RCW to read as follows:

The department shall require applicants requesting assistance to rehabilitate either single-family or multifamily residential dwellings to coordinate available energy conservation assistance with rehabilitation activities funded through the Washington housing trust fund under chapter 43.185 RCW and the community development block grant program for states and small cities under the Title I housing and community development act of 1974 (42 U.S.C. 5301 et seq.).

NEW SECTION. Sec. 13. A new section is added to chapter 43.21F RCW to read as follows:

The office, in consultation with the department of community development, may prepare proposals to sell low-income conservation to utilities.

NEW SECTION. Sec. 14. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.