AN ACT Relating to the
management of state energy supply and demand; amending RCW 80.50.010,
80.50.060, 80.50.020, 80.50.030, 80.50.040, 80.50.090, 39.35.010, 39.35.030,
39.35.050, 39.35A.020, 39.35C.010, 39.35C.020, 43.19.668, 43.19.669, 43.19.670,
43.19.675, 43.19.680, 19.29A.040, 44.39.010, and 44.39.015; adding new sections
to chapter 80.50 RCW; adding a new section to chapter 82.04 RCW; adding a new
section to chapter 82.12 RCW; adding new sections to chapter 82.16 RCW; adding
a new section to chapter 82.32 RCW; adding a new section to chapter 39.35A RCW;
adding a new section to chapter 39.35C RCW; adding a new section to chapter
19.29A RCW; adding a new section to chapter 82.34 RCW; creating a new section;
providing an expiration date; and declaring an emergency.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF
WASHINGTON:
Sec. 1. RCW 80.50.010 and 1996 c
4 s 1 are each amended to read as follows:
The legislature finds
that the present and predicted growth in energy demands in the state of
Washington requires the development of a procedure for the selection and
utilization of sites for energy facilities and the identification of a state
position with respect to each proposed site. The legislature recognizes that
the selection of sites will have a significant impact upon the welfare of the
population, the location and growth of industry and the use of the natural
resources of the state.
It is the policy of the
state of Washington to recognize the pressing need for increased energy
facilities, and to ensure through available and reasonable methods, that the
location and operation of such facilities will produce minimal adverse effects
on the environment, ecology of the land and its wildlife, and the ecology of
state waters and their aquatic life.
It is the intent to
seek courses of action that will balance the increasing demands for energy
facility location and operation in conjunction with the broad interests of the
public. Such action will be based on these premises:
(1) To assure
Washington state citizens that, where applicable, operational safeguards are at
least as stringent as the criteria established by the federal government and
are technically sufficient for their welfare and protection.
(2) To preserve and
protect the quality of the environment; to enhance the public's opportunity to
enjoy the esthetic and recreational benefits of the air, water and land
resources; to promote air cleanliness; and to pursue beneficial changes in the
environment.
(3) To provide abundant
energy at reasonable cost.
(4) To avoid costs of
complete site restoration and demolition of improvements and infrastructure at
unfinished nuclear energy sites, and to use unfinished nuclear energy facilities
for public uses, including economic development, under the regulatory and
management control of local governments and port districts.
(5) To avoid costly
duplication in the siting process and ensure that decisions are made timely and
without unnecessary delay.
Sec. 2. RCW 80.50.060 and 1977
ex.s. c 371 s 5 are each amended to read as follows:
(1) The provisions of
this chapter shall apply to the construction of energy facilities which
includes the new construction of energy facilities and the reconstruction or
enlargement of existing energy facilities where the net increase in physical
capacity or dimensions resulting from such reconstruction or enlargement meets
or exceeds those capacities or dimensions set forth in RCW 80.50.020 (7) and (((17),
as now or hereafter amended)) (14). No construction of such energy
facilities may be undertaken, except as otherwise provided in this chapter,
after July 15, 1977, without first obtaining certification in the manner
provided in this chapter.
(2) The provisions
of this chapter apply to the construction, reconstruction, or enlargement of a
new or existing energy facility that exclusively uses alternative energy
resources and chooses to receive certification under this chapter, regardless
of the generating capacity of the project.
(3) The
provisions of this chapter shall not apply to normal maintenance and repairs
which do not increase the capacity or dimensions beyond those set forth in RCW
80.50.020 (7) and (((17), as now or hereafter amended)) (14).
(((3))) (4)
Applications for certification of energy facilities made prior to July 15, 1977
shall continue to be governed by the applicable provisions of law in effect on
the day immediately preceding July 15, 1977 with the exceptions of RCW
80.50.190 and 80.50.071 which shall apply to such prior applications and to
site certifications prospectively from July 15, 1977.
(((4))) (5)
Applications for certification shall be upon forms prescribed by the council
and shall be supported by such information and technical studies as the council
may require.
Sec. 3. RCW 80.50.020 and 1995 c
69 s 1 are each amended to read as follows:
The definitions in
this section apply throughout this chapter unless the context clearly requires
otherwise.
(1)
"Applicant" means any person who makes application for a site
certification pursuant to the provisions of this chapter((;)).
(2)
"Application" means any request for approval of a particular site or
sites filed in accordance with the procedures established pursuant to this
chapter, unless the context otherwise requires((;)).
(3) "Person"
means an individual, partnership, joint venture, private or public corporation,
association, firm, public service company, political subdivision, municipal
corporation, government agency, public utility district, or any other entity,
public or private, however organized((;)).
(4) "Site"
means any proposed or approved location of an energy facility((;)).
(5)
"Certification" means a binding agreement between an applicant and
the state which shall embody compliance to the siting guidelines, in effect as
of the date of certification, which have been adopted pursuant to RCW 80.50.040
as now or hereafter amended as conditions to be met prior to or concurrent with
the construction or operation of any energy facility((;)).
(6) "Associated
facilities" means storage, transmission, handling, or other related and
supporting facilities connecting an energy plant with the existing energy
supply, processing, or distribution system, including, but not limited to,
communications, controls, mobilizing or maintenance equipment, instrumentation,
and other types of ancillary transmission equipment, off-line storage or venting
required for efficient operation or safety of the transmission system and
overhead, and surface or subsurface lines of physical access for the
inspection, maintenance, and safe operations of the transmission facility and
new transmission lines constructed to operate at nominal voltages in excess of
200,000 volts to connect a thermal power plant to the northwest power grid:
PROVIDED, That common carrier railroads or motor vehicles shall not be
included((;)).
(7) "Transmission
facility" means any of the following together with their associated
facilities:
(a) Crude or refined
petroleum or liquid petroleum product transmission pipeline of the following
dimensions: A pipeline larger than six inches minimum inside diameter between
valves for the transmission of these products with a total length of at least
fifteen miles;
(b) Natural gas,
synthetic fuel gas, or liquified petroleum gas transmission pipeline of the
following dimensions: A pipeline larger than fourteen inches minimum inside
diameter between valves, for the transmission of these products, with a total
length of at least fifteen miles for the purpose of delivering gas to a
distribution facility, except an interstate natural gas pipeline regulated by
the United States federal power commission((;)).
(8) "Independent
consultants" means those persons who have no financial interest in the
applicant's proposals and who are retained by the council to evaluate the
applicant's proposals, supporting studies, or to conduct additional studies((;)).
(9) "Thermal power
plant" means, for the purpose of certification, any electrical generating
facility using any fuel, including nuclear materials, for distribution of
electricity by electric utilities((;)).
(10) "Energy
facility" means an energy plant or transmission facilities: PROVIDED,
That the following are excluded from the provisions of this chapter:
(a) Facilities for the
extraction, conversion, transmission or storage of water, other than water
specifically consumed or discharged by energy production or conversion for
energy purposes; and
(b) Facilities operated
by and for the armed services for military purposes or by other federal
authority for the national defense((;)).
(11)
"Council" means the energy facility site evaluation council created
by RCW 80.50.030((;)).
(12) "Counsel for
the environment" means an assistant attorney general or a special
assistant attorney general who shall represent the public in accordance with
RCW 80.50.080((;)).
(13)
"Construction" means on-site improvements, excluding exploratory
work, which cost in excess of two hundred fifty thousand dollars((;)).
(14) "Energy
plant" means the following facilities together with their associated
facilities:
(a) Any stationary
thermal power plant with generating capacity of ((two)) three
hundred fifty thousand kilowatts or more, measured using maximum continuous
electric generating capacity, less minimum auxiliary load, at average ambient
temperature and pressure, and floating thermal power plants of ((fifty))
one hundred thousand kilowatts or more, including associated facilities.
For the purposes of this subsection, "floating thermal power plants"
means a thermal power plant that is suspended on the surface of water by means
of a barge, vessel, or other floating platform;
(b) Facilities which
will have the capacity to receive liquified natural gas in the equivalent of
more than one hundred million standard cubic feet of natural gas per day, which
has been transported over marine waters;
(c) Facilities which
will have the capacity to receive more than an average of fifty thousand
barrels per day of crude or refined petroleum or liquified petroleum gas which
has been or will be transported over marine waters, except that the provisions
of this chapter shall not apply to storage facilities unless occasioned by such
new facility construction;
(d) Any underground
reservoir for receipt and storage of natural gas as defined in RCW 80.40.010
capable of delivering an average of more than one hundred million standard
cubic feet of natural gas per day; and
(e) Facilities capable
of processing more than twenty-five thousand barrels per day of petroleum into
refined products((;)).
(15) "Land use
plan" means a comprehensive plan or land use element thereof adopted by a
unit of local government pursuant to chapters 35.63, 35A.63, or 36.70 RCW((;)).
(16) "Zoning
ordinance" means an ordinance of a unit of local government regulating the
use of land and adopted pursuant to chapters 35.63, 35A.63, or 36.70 RCW or
Article XI of the state Constitution.
(17)
"Alternative energy resource" means: (a) Wind; (b) solar energy; (c)
geothermal energy; (d) landfill gas; (e) wave or tidal action; or (f) biomass
energy based on solid organic fuels from wood, forest, or field residues, or
dedicated energy crops that do not include wood pieces that have been treated
with chemical preservatives such as creosote, pentachlorophenol, or
copper-chrome-arsenic.
Sec. 4. RCW 80.50.030 and 1996 c
186 s 108 are each amended to read as follows:
(1) There is created
and established the energy facility site evaluation council.
(2)(a) The ((chairman))
chair of the council shall be appointed by the governor with the advice
and consent of the senate, shall have a vote on matters before the council, shall
serve for a term coextensive with the term of the governor, and is removable
for cause. The ((chairman)) chair may designate a member of the
council to serve as acting ((chairman)) chair in the event of the
((chairman's)) chair's absence. The salary of the chair shall
be determined under RCW 43.03.040. The ((chairman)) chair is
a "state employee" for the purposes of chapter 42.52 RCW. As
applicable, when attending meetings of the council, members may receive
reimbursement for travel expenses in accordance with RCW 43.03.050 and
43.03.060, and are eligible for compensation under RCW 43.03.250.
(b) The ((chairman))
chair or a designee shall execute all official documents, contracts, and
other materials on behalf of the council. The Washington state department of
community, trade, and economic development shall provide all administrative and
staff support for the council. The director of the department of community,
trade, and economic development has supervisory authority over the staff of the
council and shall employ such personnel as are necessary to implement this
chapter. Not more than three such employees may be exempt from chapter 41.06
RCW.
(3)(a) The
council shall consist of the directors, administrators, or their designees, of
the following departments, agencies, commissions, and committees or their
statutory successors:
(((a))) (i)
Department of ecology;
(((b))) (ii)
Department of fish and wildlife;
(((c) Department of
health;
(d) Military
department;
(e))) (iii) Department of community, trade,
and economic development;
(((f))) (iv)
Utilities and transportation commission; and
(((g))) (v)
Department of natural resources((;
(h) Department of
agriculture;
(i) Department of
transportation)).
(b) The directors, administrators,
or their designees, of the following departments, agencies, and commissions, or
their statutory successors, may participate as councilmembers at their own
discretion provided they elect to participate no later than sixty days after an
application is filed:
(i) Department of
agriculture;
(ii) Department of
health;
(iii) Military
department; and
(iv) Department of
transportation.
(c) Council
membership is discretionary for agencies that choose to participate under (b)
of this subsection only for applications that are filed with the council on or
after the effective date of this section. For applications filed before the
effective date of this section, council membership is mandatory for those
agencies listed in (b) of this subsection.
(4) The appropriate
county legislative authority of every county wherein an application for a
proposed site is filed shall appoint a member or designee as a voting member to
the council. The member or designee so appointed shall sit with the council
only at such times as the council considers the proposed site for the county
which he or she represents, and such member or designee shall serve until there
has been a final acceptance or rejection of the proposed site.
(5) The city
legislative authority of every city within whose corporate limits an energy
plant is proposed to be located shall appoint a member or designee as a voting
member to the council. The member or designee so appointed shall sit with the
council only at such times as the council considers the proposed site for the
city which he or she represents, and such member or designee shall serve until
there has been a final acceptance or rejection of the proposed site.
(6) For any port
district wherein an application for a proposed port facility is filed subject
to this chapter, the port district shall appoint a member or designee as a
nonvoting member to the council. The member or designee so appointed shall sit
with the council only at such times as the council considers the proposed site
for the port district which he or she represents, and such member or designee
shall serve until there has been a final acceptance or rejection of the
proposed site. The provisions of this subsection shall not apply if the port
district is the applicant, either singly or in partnership or association with
any other person.
NEW SECTION. Sec.
5. A new section is added
to chapter 80.50 RCW to read as follows:
(1) After the council
has received a site application, council staff shall assist applicants in
identifying issues presented by the application.
(2) Council staff shall
review all information submitted and recommend resolutions to issues in dispute
that would allow site approval.
(3) Council staff may
make recommendations to the council on conditions that would allow site
approval.
Sec. 6. RCW 80.50.040 and 1990 c
12 s 4 are each amended to read as follows:
The council shall have
the following powers:
(1) To adopt,
promulgate, amend, or rescind suitable rules and regulations, pursuant to
chapter 34.05 RCW, to carry out the provisions of this chapter, and the
policies and practices of the council in connection therewith;
(2) To develop and
apply environmental and ecological guidelines in relation to the type, design,
location, construction, and operational conditions of certification of energy
facilities subject to this chapter;
(3) To establish rules
of practice for the conduct of public hearings pursuant to the provisions of
the Administrative Procedure Act, as found in chapter 34.05 RCW;
(4) To prescribe the
form, content, and necessary supporting documentation for site certification;
(5) To receive
applications for energy facility locations and to investigate the sufficiency
thereof;
(6) To make and
contract, when applicable, for independent studies of sites proposed by the
applicant;
(7) To conduct hearings
on the proposed location of the energy facilities;
(8) To prepare written
reports to the governor which shall include: (a) A statement indicating
whether the application is in compliance with the council's guidelines, (b)
criteria specific to the site and transmission line routing, (c) a council
recommendation as to the disposition of the application, and (d) a draft
certification agreement when the council recommends approval of the
application;
(9) To prescribe the
means for monitoring of the effects arising from the construction and the
operation of energy facilities to assure continued compliance with terms of
certification and/or permits issued by the council pursuant to chapter 90.48
RCW or subsection (12) of this section: PROVIDED, That any on-site inspection
required by the council shall be performed by other state agencies pursuant to
interagency agreement: PROVIDED FURTHER, That the council ((shall)) may
retain authority for determining compliance relative to monitoring;
(10) To integrate its
site evaluation activity with activities of federal agencies having
jurisdiction in such matters to avoid unnecessary duplication;
(11) To present state
concerns and interests to other states, regional organizations, and the federal
government on the location, construction, and operation of any energy facility
which may affect the environment, health, or safety of the citizens of the
state of Washington;
(12) To issue permits
in compliance with applicable provisions of the federally approved state
implementation plan adopted in accordance with the Federal Clean Air Act, as
now existing or hereafter amended, for the new construction, reconstruction, or
enlargement or operation of energy facilities: PROVIDED, That such permits
shall become effective only if the governor approves an application for
certification and executes a certification agreement pursuant to this chapter:
AND PROVIDED FURTHER, That all such permits be conditioned upon compliance with
all provisions of the federally approved state implementation plan which apply
to energy facilities covered within the provisions of this chapter; and
(13) To serve as an
interagency coordinating body for energy-related issues.
Sec. 7. RCW 80.50.090 and 1989 c
175 s 173 are each amended to read as follows:
(1) The council shall
conduct ((a)) an informational public hearing in the county of
the proposed site ((within sixty days of)) as soon as practicable but
not later than sixty days after receipt of an application for site
certification: PROVIDED, That the place of such public hearing shall be as
close as practical to the proposed site.
(2) Subsequent to
the informational public hearing, the council ((must)) shall
conduct a public hearing to determine ((at the initial public hearing))
whether or not the proposed site is consistent and in compliance with county or
regional land use plans or zoning ordinances. If it is determined that the
proposed site does conform with existing land use plans or zoning ordinances in
effect as of the date of the application, the county or regional planning
authority shall not thereafter change such land use plans or zoning ordinances
so as to affect the proposed site.
(3) Prior to the
issuance of a council recommendation to the governor under RCW 80.50.100 a
public hearing, conducted as an adjudicative proceeding under chapter 34.05 RCW,
the Administrative Procedure Act, shall be held. At such public hearing any
person shall be entitled to be heard in support of or in opposition to the
application for certification.
(4) Additional public
hearings shall be held as deemed appropriate by the council in the exercise of
its functions under this chapter.
NEW SECTION. Sec.
8. A new section is added
to chapter 80.50 RCW to read as follows:
The governor shall
undertake an evaluation of the operations of the council to assess means to
enhance its efficiency. The assessment must include whether the efficiency of
the siting process would be improved by conducting the process under the state
environmental policy act in a particular sequence relative to the adjudicative
proceeding. The results of this assessment may include recommendations for
administrative changes, statutory changes, or expanded staffing levels.
NEW SECTION. Sec.
9. A new section is added
to chapter 82.04 RCW to read as follows:
(1) Unless the context
clearly requires otherwise, the definitions in this subsection apply throughout
this section.
(a) "Direct
service industrial customer" means a person who is an industrial customer
that contracts for the purchase of power from the Bonneville Power
Administration for direct consumption as of the effective date of this
section. "Direct service industrial customer" includes a person who
is a subsidiary that is more than fifty percent owned by a direct service industrial
customer and who receives power from the Bonneville Power Administration
pursuant to the parent's contract for power.
(b)
"Facility" means a gas turbine electrical generation facility that
does not exist on the effective date of this section and is owned by a direct
service industrial customer for the purpose of producing electricity to be
consumed by the direct service industrial customer.
(c) "Average
annual employment" means the total employment in this state for a calendar
year at the direct service industrial customer's location where electricity
from the facility will be consumed.
(2) Effective July 1,
2001, a credit is allowed against the tax due under this chapter to a direct
service industrial customer who purchases natural or manufactured gas from a
gas distribution business subject to the public utility tax under chapter 82.16
RCW. The credit is equal to the value of natural or manufactured gas purchased
from a gas distribution business and used to generate electricity at the
facility multiplied by the rate in effect for the public utility tax on gas
distribution businesses under RCW 82.16.020. This credit may be used each
reporting period for sixty months following the first month natural or
manufactured gas was purchased from a gas distribution business by a direct
service industrial customer who constructs a facility.
(3) Application for
credit shall be made by the direct service industrial consumer before the first
purchase of natural or manufactured gas. The application shall be in a form
and manner prescribed by the department and shall include but is not limited to
information regarding the location of the facility, the projected date of first
purchase of natural or manufactured gas to generate electricity at the
facility, the date construction is projected to begin or did begin, the
applicant's average annual employment in the state for the six calendar years
immediately preceding the year in which the application is made, and affirm the
applicant's status as a direct service industrial customer. The department
shall rule on the application within thirty days of receipt.
(4) Credit under this
section is limited to the amount of tax imposed under this chapter. Refunds
shall not be given in place of credits and credits may not be carried over to
subsequent calendar years.
(5) All or part of the
credit shall be disallowed and must be paid if the average of the direct
service industrial customer's average annual employment for the five calendar
years subsequent to the calendar year containing the first month of purchase of
natural or manufactured gas to generate electricity at a facility is less than
the six-year average annual employment stated on the application for credit
under this section. The direct service industrial customer will certify to the
department by June 1st of the sixth calendar year following the calendar year
in which the month of first purchase of gas occurs the average annual
employment for each of the five prior calendar years. All or part of the
credit that shall be disallowed and must be paid is commensurate with the
decrease in the five-year average of average annual employment as follows:
Decrease in Average Annual
Employment Over
Five-Year Period % of
Credit to be Paid
Less than 10% 10%
10% or more but less
than 25% 25%
25% or more but less
than 50% 50%
50% or more but less
than 75% 75%
75% or more 100%
(6)(a) The direct
service industrial customer shall begin paying the credit that is disallowed
and is to be paid in the sixth calendar year following the calendar year in
which the month following the month of first purchase of natural or
manufactured gas to generate electricity at the facility occurs. The first
payment will be due on or before December 31st with subsequent annual payments
due on or before December 31st of the following four years according to the
following schedule:
Payment Year % of Credit to be Paid
1 10%
2 15%
3 20%
4 25%
5 30%
(b) The department may
authorize an accelerated payment schedule upon request of the taxpayer.
(c) Interest shall not
be charged on the credit that is disallowed for the sixty-month period the
credit may be taken, although all other penalties and interest applicable to
delinquent excise taxes may be assessed and imposed. The debt for credit that
is disallowed and must be paid will not be extinguished by insolvency or other
failure of the direct service industrial customer. Transfer of ownership of
the facility does not affect eligibility for this credit. However, the credit
is available to the successor only if the eligibility conditions of this
section are met.
(7) The employment
security department shall make, and certify to the department of revenue, all
determinations of employment under this section as requested by the department.
(8) A person claiming
this credit shall supply to the department quarterly reports containing
information necessary to document the total volume of natural or manufactured
gas purchased in the quarter, the value of that total volume, and the
percentage of the total volume used to generate electricity at the facility.
NEW SECTION. Sec.
10. A new section is added
to chapter 82.12 RCW to read as follows:
(1) Unless the context
clearly requires otherwise, the definitions in this subsection apply throughout
this section.
(a) "Direct
service industrial customer" means a person who is an industrial customer
that contracts for the purchase of power from the Bonneville power
administration for direct consumption as of the effective date of this
section. "Direct service industrial customer" includes a person who
is a subsidiary that is more than fifty percent owned by a direct service
industrial customer and who receives power from the Bonneville Power
Administration pursuant to the parent's contract for power.
(b)
"Facility" means a gas turbine electrical generation facility that
does not exist on the effective date of this section and is owned by a direct
service industrial customer for the purpose of producing electricity to be
consumed by the direct service industrial customer.
(c) "Average
annual employment" means the total employment in this state for a calendar
year at the direct service industrial customer's location where electricity
from the facility will be consumed.
(2) Effective July 1,
2001, the tax levied in RCW 82.12.022 on the first sixty months' use of natural
or manufactured gas by a direct service industrial customer that owns a
facility shall be deferred. This deferral is limited to the tax on natural or
manufactured gas used or consumed to generate electricity at the facility.
(3) Application for
deferral shall be made by the direct service industrial customer before the
first use of natural or manufactured gas. The application shall be in a form
and manner prescribed by the department and shall include but is not limited to
information regarding the location of the facility, the projected date of first
use of natural or manufactured gas to generate electricity at the facility, the
date construction is projected to begin or did begin, the applicant's average
annual employment in the state for the six calendar years immediately preceding
the year in which the application is made, and shall affirm the applicant's
status as a direct service industrial customer. The department shall rule on
the application within thirty days of receipt.
(4)(a) The direct
service industrial customer shall begin paying the deferred tax in the sixth
calendar year following the calendar year in which the month of first use of
natural or manufactured gas to generate electricity at the facility occurs.
The first payment will be due on or before December 31st with subsequent annual
payments due on or before December 31st of the following four years according
to the following schedule:
Payment Year % of Deferred Tax to be Paid
1 10%
2 15%
3 20%
4 25%
5 30%
(b) The department may
authorize an accelerated payment schedule upon request of the taxpayer.
(c) Interest shall not
be charged on the tax deferred under this section for the period of deferral,
although all other penalties and interest applicable to delinquent excise taxes
may be assessed and imposed. The debt for deferred tax will not be
extinguished by insolvency or other failure of the direct service industrial
customer. Transfer of ownership of the facility does not affect deferral
eligibility. However, the deferral is available to the successor only if the
eligibility conditions of this section are met.
(5)(a) If the average
of the direct service industrial customer's average annual employment for the
five calendar years subsequent to the calendar year containing the first month
of use of natural or manufactured gas to generate electricity at a facility is
equal to or exceeds the six-year average annual employment stated on the
application for deferral under this section, the tax deferred need not be
paid. The direct service industrial customer shall certify to the department
by June 1st of the sixth calendar year following the calendar year in which the
month of first use of gas occurs the average annual employment for each of the
five prior calendar years.
(b) If the five-year
average calculated in (a) of this subsection is less than the average annual
employment stated on the application for deferral under this section, the tax
deferred under this section shall be paid in the amount as follows:
Decrease in Average Annual
Employment Over % of Deferred
Five-Year Period Tax
to be Paid
Less than 10% 10%
10% or more but less
than 25% 25%
25% or more but less
than 50% 50%
50% or more but less
than 75% 75%
75% or more 100%
(c) Tax paid under this
subsection shall be paid according to the schedule in subsection (4)(a) of this
section and under the terms and conditions of subsection (4)(b) and (c) of this
section.
(6) The employment
security department shall make, and certify to the department of revenue, all
determinations of employment under this section as requested by the department.
(7) A person claiming
this deferral shall supply to the department quarterly reports containing
information necessary to document the total volume of natural or manufactured
gas purchased in the quarter, the value of that total volume, and the
percentage of the total volume used to generate electricity at the facility.
NEW SECTION. Sec.
11. A new section is added
to chapter 82.16 RCW to read as follows:
(1) Unless the context
clearly requires otherwise, the definitions in this subsection apply throughout
this section.
(a) "Direct
service industrial customer" means a person who is an industrial customer
that contracts for the purchase of power from the Bonneville Power
Administration for direct consumption as of the effective date of this
section. "Direct service industrial customer" includes a person who
is a subsidiary that is more than fifty percent owned by a direct service
industrial customer and who receives power from the Bonneville Power
Administration pursuant to the parent's contract for power.
(b)
"Facility" means a gas turbine electrical generation facility that
does not exist on the effective date of this section.
(c) "Average
annual employment" means the total employment in this state for a calendar
year at the direct service industrial customer's location where electricity
from the facility will be consumed.
(2) Effective July 1,
2001, a credit is allowed against the tax due under this chapter on sales of
electricity made from a facility to a direct service industrial customer if the
contract for sale of electricity to a direct service industrial customer
contains the following terms:
(a) Sales of
electricity from the facility to the direct service industrial customer will be
made for ten consecutive years or more;
(b) The price charged
for the electricity will be reduced by an amount equal to the tax credit; and
(c) Disallowance of all
or part of the credit under subsection (5) of this section is a breach of
contract and the damages to be paid by the direct service industrial customer
to the facility are the amount of tax credit disallowed.
(3) The credit is equal
to the gross proceeds from the sale of the electricity to a direct service
industrial customer multiplied by the rate in effect at the time of the sale
for the public utility tax on light and power businesses under RCW 82.16.020.
The credit may be used each reporting period for sixty months following the
first month electricity is sold from a facility to a direct service industrial
customer. Credit under this section is limited to the amount of tax imposed
under this chapter. Refunds shall not be given in place of credits and credits
may not be carried over to subsequent calendar years.
(4) Application for
credit shall be made before the first sale of electricity from a facility to a
direct service industrial customer. The application shall be in a form and manner
prescribed by the department and shall include but is not limited to
information regarding the location of the facility, identification of the
direct service industrial customer who will receive electricity from the
facility, the projected date of the first sale of electricity to a direct
service industrial customer, the date construction is projected to begin or did
begin, and the average annual employment in the state of the direct service
industrial customer who will receive electricity from the facility for the six
calendar years immediately preceding the year in which the application is
made. A copy of the contract for sale of electricity must be attached to the
application. The department shall rule on the application within thirty days
of receipt.
(5) All or part of the
credit shall be disallowed and must be paid if the average of the direct
service industrial customer's average annual employment for the five calendar
years subsequent to the calendar year containing the first month of sale of electricity
from a facility to a direct service industrial customer is less than the
six-year average annual employment stated on the application for credit under
this section. The direct service industrial customer shall certify to the
department and to the facility by June 1st of the sixth calendar year following
the calendar year in which the month of first sale occurs the average annual
employment for each of the five prior calendar years. All or part of the
credit that shall be disallowed and must be paid is commensurate with the
decrease in the five-year average of average annual employment as follows:
Decrease in Average
Annual
Employment Over
Five-Year Period % of Credit to be Paid
Less than 10% 10%
10% or more but less
than 25% 25%
25% or more but less
than 50% 50%
50% or more but less
than 75% 75%
75% or more 100%
(6)(a) Payments on
credit that is disallowed shall begin in the sixth calendar year following the
calendar year in which the month following the first month of sale of electricity
from a facility to a direct service industrial customer occurs. The first
payment will be due on or before December 31st with subsequent annual payments
due on or before December 31st of the following four years according to the
schedule in this subsection.
Payment Year % of Credit to be Paid
1 10%
2 15%
3 20%
4 25%
5 30%
(b) The department may
authorize an accelerated payment schedule upon request of the taxpayer.
(c) Interest shall not
be charged on the credit that is disallowed for the sixty-month period the
credit may be taken, although all other penalties and interest applicable to
delinquent excise taxes may be assessed and imposed. The debt for credit that is
disallowed and must be paid will not be extinguished by insolvency or other
failure of the taxpayer. Transfer of ownership of the facility does not affect
eligibility for this credit. However, the credit is available to the successor
only if the eligibility conditions of this section are met.
(7) The employment
security department shall make, and certify to the department of revenue, all
determinations of employment under this section as requested by the department.
NEW SECTION. Sec.
12. A new section is added
to chapter 82.32 RCW to read as follows:
(1) The total combined
credits and deferrals that may be taken under sections 9 through 11 of this act
shall not exceed two million five hundred thousand dollars in any fiscal year.
Each person is limited to no more than a total of one million five hundred
thousand dollars in tax deferred and credit allowed in any fiscal year in which
more than one person takes tax credits and claims tax deferral. The department
may require reporting of the credits taken and amounts deferred in a manner and
form as is necessary to keep a running total of the amounts.
(2) Credits and
deferred tax are available on a first come basis. Priority for tax credits and
deferrals among approved applicants shall be designated based on the first
actual consumption of gas under section 9 or 10 of this act, or on the first
actual use of electricity under section 11 of this act, by each approved
applicant. The department shall disallow any credits or deferred tax, or
portion thereof, that would cause the total amount of credits taken and
deferred taxes claimed to exceed the fiscal year cap or to exceed the per
person fiscal year cap. If the fiscal cap is reached or exceeded the
department shall notify those persons who have approved applications under
sections 9 through 11 of this act that no more credits may be taken or tax
deferred during the remainder of the fiscal year. In addition, the department
shall provide written notice to any person who has taken any tax credits or
claimed any deferred tax in excess of the fiscal year cap. The notice shall
indicate the amount of tax due and shall provide that the tax be paid within
thirty days from the date of such notice.
(3) No portion of an
application for credit or deferral disallowed under this section may be carried
back or carried forward nor may taxes ineligible for credit or deferral due to
the fiscal cap having been reached or exceeded be carried forward or carried
backward.
NEW SECTION. Sec.
13. A new section is added
to chapter 82.16 RCW to read as follows:
(1) Unless the context
clearly requires otherwise, the definitions in this subsection apply throughout
this section.
(a) "Base
credit" means the maximum amount of credit against the tax imposed by this
chapter that each light and power business or gas distribution business may
take each fiscal year as calculated by the department. The base credit is
equal to the proportionate share that the total grants received by each light
and power business or gas distribution business in the prior fiscal year bears
to the total grants received by all light and power businesses and gas
distribution businesses in the prior fiscal year multiplied by two million five
hundred thousand dollars.
(b) "Billing
discount" means a reduction in the amount charged for providing service to
qualifying persons in Washington made by a light and power business or a gas
distribution business. Billing discount does not include grants received by
the light and power business or a gas distribution business.
(c) "Grant"
means funds provided to a light and power business or gas distribution business
by the department of community, trade, and economic development or by a
qualifying organization.
(d) "Low-income
home energy assistance program" means energy assistance programs for
low-income households as defined on December 31, 2000, in the low-income home
energy assistance act of 1981 as amended August 1, 1999, 42 U.S.C. Sec. 8623 et
seq.
(e) "Qualifying
person" means a Washington resident who applies for assistance and
qualifies for a grant regardless of whether that person receives a grant.
(f) "Qualifying
contribution" means money given by a light and power business or a gas
distribution business to a qualifying organization, exclusive of money received
in the prior fiscal year from its customers for the purpose of assisting other
customers.
(g) "Qualifying
organization" means an entity that has a contractual agreement with the
department of community, trade, and economic development to administer in a
specified service area low-income home energy assistance funds received from
the federal government and such other funds that may be received by the entity.
(2) Subject to the
limitations in this section, a light and power business or a gas distribution
business may take a credit each fiscal year against the tax imposed under this
chapter.
(a)(i) A credit may be
taken for qualifying contributions if the dollar amount of qualifying
contributions for the fiscal year in which the tax credit is taken is greater
than one hundred twenty-five percent of the dollar amount of qualifying
contributions given in fiscal year 2000.
(ii) If no qualifying
contributions were given in fiscal year 2000, a credit shall be allowed for the
first fiscal year that qualifying contributions are given. Thereafter, credit
shall be allowed if the qualifying contributions given exceed one hundred
twenty-five percent of qualifying contributions given in the first fiscal year.
(iii) The amount of
credit shall be fifty percent of the dollar amount of qualifying contributions
given in the fiscal year in which the tax credit is taken.
(b)(i) A credit may be
taken for billing discounts if the dollar amount of billing discounts for the
fiscal year in which the tax credit is taken is greater than one hundred
twenty-five percent of the dollar amount of billing discounts given in fiscal
year 2000.
(ii) If no billing
discounts were given in fiscal year 2000, a credit shall be allowed in the
first fiscal year that billing discounts are given. Thereafter, credit shall
be allowed if the dollar amount of billing discounts given exceeds one hundred
twenty-five percent of billing discounts given in the first fiscal year.
(iii) The amount of
credit shall be fifty percent of the dollar amount of the billing discounts
given in the fiscal year in which the tax credit is taken.
(c) The total amount of
credit that may be taken for qualifying contributions and billing discounts in
a fiscal year is limited to the base credit for the same fiscal year.
(3) The total amount of
credit, statewide, that may be taken in any fiscal year shall not exceed two
million five hundred thousand dollars. By May 1st of each year starting in
2002, the department of community, trade, and economic development shall notify
the department of revenue in writing of the grants received in the current
fiscal year by each light and power business and gas distribution business.
(4)(a) Not later than
June 1st of each year beginning in 2002, the department shall publish the base
credit for each light and power business and gas distribution business for the
next fiscal year.
(b) Not later than July
1st of each year beginning in 2002, application for credit must by made to the
department including but not limited to the following information: Billing
discounts given by the applicant in fiscal year 2000; qualifying contributions
given by the applicant in the prior fiscal year; the amount of money received
in the prior fiscal year from customers for the purpose of assisting other
customers; the base credit for the next fiscal year for the applicant; the
qualifying contributions anticipated to be given in the next fiscal year; and
billing discounts anticipated to be given in the next fiscal year. No credit
under this section will be allowed to a light and power business or gas
distribution business that does not file the application by July 1st.
(c) Not later than
August 1st of each year beginning in 2002, the department shall notify each
applicant of the amount of credit that may be taken in that fiscal year.
(d) The balance of base
credits not used by other light and power businesses and gas distribution
businesses shall be ratably distributed to applicants under the formula in
subsection (1)(a) of this section. The total amount of credit that may be
taken by an applicant is the base credit plus any ratable portion of unused
base credit.
(5) The credit taken
under this section is limited to the amount of tax imposed under this chapter
for the fiscal year. The credit must be claimed in the fiscal year in which
the billing reduction is made. Any unused credit expires. Refunds shall not
be given in place of credits.
(6) No credit may be
taken for billing discounts made before July 1, 2001. Within two weeks of the
effective date of this section, the department of community, trade, and
economic development shall notify the department of revenue in writing of the
grants received in fiscal year 2001 by each light and power business and gas
distribution business. Within four weeks of the effective date of this
section, the department of revenue shall publish the base credit for each light
and power business and gas distribution business for fiscal year 2002. Within
eight weeks of the effective date of this section, application to the
department must be made showing the information required in subsection (4)(b)
of this section. Within twelve weeks of the effective date of this section,
the department shall notify each applicant of the amount of credit that may be
taken in fiscal year 2002.
NEW SECTION. Sec.
14. (1) The legislature
hereby finds that:
(a) The economy of the
state and the health, safety, and welfare of its citizens are threatened by the
current energy supply and price instabilities;
(b) Many energy
efficiency programs for public buildings launched during the 1970s and 1980s
were not maintained during the subsequent sustained period of low energy costs
and abundant supply; and
(c) Conservation
programs originally established in the 1970s and 1980s can be improved or
updated. New programs drawing on recently developed technologies, including
demand-side energy management systems, can materially increase the efficiency
of energy use by the public sector.
(2) It is the policy of
the state of Washington that:
(a) State government is
committed to achieving significant gains in energy efficiency. Conventional
conservation programs will be reviewed and updated in light of experience
gained since their commencement;
(b) State government
must play a leading role in demonstrating updated and new energy efficiency
technologies. New programs or measures made possible by technological
advances, such as demand-side response measures and energy management systems,
shall be treated in the same manner as conventional conservation programs and
will be integrated into the state's energy efficiency programs.
Sec. 15. RCW 39.35.010 and 1982 c
159 s 1 are each amended to read as follows:
The legislature hereby
finds:
(1) That major publicly
owned or leased facilities have a significant impact on our state's consumption
of energy;
(2) That energy
conservation practices including energy management systems and renewable
energy systems adopted for the design, construction, and utilization of such
facilities will have a beneficial effect on our overall supply of energy;
(3) That the cost of
the energy consumed by such facilities over the life of the facilities shall be
considered in addition to the initial cost of constructing such facilities;
(4) That the cost of
energy is significant and major facility designs shall be based on the total
life-cycle cost, including the initial construction cost, and the cost, over
the economic life of a major facility, of the energy consumed, and of the
operation and maintenance of a major facility as they affect energy
consumption; and
(5) That the use of
energy systems in these facilities which utilize renewable resources such as
solar energy, wood or wood waste, or other nonconventional fuels ((should)),
and which incorporate energy management systems, shall be considered in the
design of all publicly owned or leased facilities.
Sec. 16. RCW 39.35.030 and 1996 c
186 s 402 are each amended to read as follows:
For the purposes of
this chapter the following words and phrases shall have the following meanings
unless the context clearly requires otherwise:
(1) "Public
agency" means every state office, officer, board, commission, committee,
bureau, department, and all political subdivisions of the state.
(2)
"Department" means the state department of general administration.
(3) "Major
facility" means any publicly owned or leased building having twenty-five
thousand square feet or more of usable floor space.
(4) "Initial
cost" means the moneys required for the capital construction or renovation
of a major facility.
(5)
"Renovation" means additions, alterations, or repairs within any
twelve-month period which exceed fifty percent of the value of a major facility
and which will affect any energy system.
(6) "Economic
life" means the projected or anticipated useful life of a major facility
as expressed by a term of years.
(7) "Energy
management system" means a program, energy efficiency equipment,
technology, device, or other measure including, but not limited to, a
management, educational, or promotional program, smart appliance, meter reading
system that provides energy information capability, computer software or
hardware, communications equipment or hardware, thermostat or other control
equipment, together with related administrative or operational programs, that
allows identification and management of opportunities for improvement in the
efficiency of energy use, including but not limited to a measure that allows:
(a) Energy consumers
to obtain information about their energy usage and the cost of energy in
connection with their usage;
(b) Interactive
communication between energy consumers and their energy suppliers;
(c) Energy consumers
to respond to energy price signals and to manage their purchase and use of
energy; or
(d) For other kinds
of dynamic, demand-side energy management.
(8)
"Life-cycle cost" means the initial cost and cost of operation of a
major facility over its economic life. This shall be calculated as the initial
cost plus the operation, maintenance, and energy costs over its economic life,
reflecting anticipated increases in these costs discounted to present value at
the current rate for borrowing public funds, as determined by the office of
financial management. The energy cost projections used shall be those provided
by the department. The department shall update these projections at least
every two years.
(((8))) (9)
"Life-cycle cost analysis" includes, but is not limited to, the
following elements:
(a) The coordination
and positioning of a major facility on its physical site;
(b) The amount and type
of fenestration employed in a major facility;
(c) The amount of
insulation incorporated into the design of a major facility;
(d) The variable
occupancy and operating conditions of a major facility; and
(e) An
energy-consumption analysis of a major facility.
(((9))) (10)
"Energy systems" means all utilities, including, but not limited to,
heating, air-conditioning, ventilating, lighting, and the supplying of domestic
hot water.
(((10))) (11)
"Energy-consumption analysis" means the evaluation of all energy
systems and components by demand and type of energy including the internal
energy load imposed on a major facility by its occupants, equipment, and
components, and the external energy load imposed on a major facility by the
climatic conditions of its location. An energy-consumption analysis of the
operation of energy systems of a major facility shall include, but not be
limited to, the following elements:
(a) The comparison of
three or more system alternatives, at least one of which shall include
renewable energy systems, and one of which shall comply at a minimum with
the sustainable design guidelines of the United States green building council
leadership in energy and environmental design silver standard or similar design
standard as may be adopted by rule by the department;
(b) The simulation of
each system over the entire range of operation of such facility for a year's
operating period; and
(c) The evaluation of
the energy consumption of component equipment in each system considering the
operation of such components at other than full or rated outputs.
The energy-consumption
analysis shall be prepared by a professional engineer or licensed architect who
may use computers or such other methods as are capable of producing predictable
results.
(((11))) (12)
"Renewable energy systems" means methods of facility design and
construction and types of equipment for the utilization of renewable energy
sources including, but not limited to, hydroelectric power, active or passive
solar space heating or cooling, domestic solar water heating, windmills, waste
heat, biomass and/or refuse-derived fuels, photovoltaic devices, and geothermal
energy.
(((12))) (13)
"Cogeneration" means the sequential generation of two or more forms
of energy from a common fuel or energy source. Where these forms are
electricity and thermal energy, then the operating and efficiency standards
established by 18 C.F.R. Sec. 292.205 and the definitions established by 18
C.F.R. 292.202 (c) through (m) as of July 28, 1991, shall apply.
(((13))) (14)
"Selected buildings" means educational, office, residential care, and
correctional facilities that are designed to comply with the design standards
analyzed and recommended by the department.
(((14))) (15)
"Design standards" means the heating, air-conditioning, ventilating,
and renewable resource systems identified, analyzed, and recommended by the
department as providing an efficient energy system or systems based on the
economic life of the selected buildings.
Sec. 17. RCW 39.35.050 and 1996 c
186 s 403 are each amended to read as follows:
The department, in
consultation with affected public agencies, shall develop and issue guidelines
for administering this chapter. The purpose of the guidelines is to define a
procedure and method for performance of life-cycle cost analysis to promote the
selection of low-life-cycle cost alternatives. At a minimum, the guidelines
must contain provisions that:
(1) Address energy
considerations during the planning phase of the project;
(2) Identify energy
components and system alternatives including energy management systems,
renewable energy systems, and cogeneration applications prior to
commencing the energy consumption analysis;
(3) Identify simplified
methods to assure the lowest life-cycle cost alternatives for selected
buildings with between twenty-five thousand and one hundred thousand square
feet of usable floor area;
(4) Establish times
during the design process for preparation, review, and approval or disapproval
of the life-cycle cost analysis;
(5) Specify the
assumptions to be used for escalation and inflation rates, equipment service
lives, economic building lives, and maintenance costs;
(6) Determine
life-cycle cost analysis format and submittal requirements to meet the
provisions of chapter 201, Laws of 1991;
(7) Provide for review
and approval of life-cycle cost analysis.
Sec. 18. RCW 39.35A.020 and 1985
c 169 s 2 are each amended to read as follows:
Unless the context
clearly indicates otherwise, the definitions in this section shall apply
throughout this chapter.
(1) "Energy
equipment and services" means energy management systems and any
equipment, materials, or supplies that are expected, upon installation, to
reduce the energy use or energy cost of an existing building or facility, and
the services associated with the equipment, materials, or supplies, including
but not limited to design, engineering, financing, installation, project
management, guarantees, operations, and maintenance.
(2) "Energy
management system" has the definition provided in RCW 39.35.030.
(3)
"Municipality" has the definition provided in RCW 39.04.010.
(((3))) (4)
"Performance-based contract" means one or more contracts for energy
equipment and services between a municipality and any other persons or
entities, if the payment obligation for each year under the contract, including
the year of installation, is either: (a) Set as a percentage of the annual energy
cost savings attributable under the contract to the energy equipment and
services; or (b) guaranteed by the other persons or entities to be less than
the annual energy cost savings attributable under the contract to the energy
equipment and services. Such guarantee shall be, at the option of the
municipality, a bond or insurance policy, or some other guarantee determined
sufficient by the municipality to provide a level of assurance similar to the
level provided by a bond or insurance policy.
NEW SECTION. Sec.
19. A new section is added
to chapter 39.35A RCW to read as follows:
The state department of
general administration shall maintain a registry of energy service contractors
and provide assistance to municipalities in identifying available
performance-based contracting services.
Sec. 20. RCW 39.35C.010 and 1996
c 186 s 405 are each amended to read as follows:
Unless the context
clearly requires otherwise, the definitions in this section apply throughout
this chapter.
(1)
"Cogeneration" means the sequential generation of two or more forms
of energy from a common fuel or energy source. If these forms are electricity
and thermal energy, then the operating and efficiency standards established by
18 C.F.R. Sec. 292.205 and the definitions established by 18 C.F.R. Sec.
292.202 (c) through (m) apply.
(2)
"Conservation" means reduced energy consumption or energy cost, or
increased efficiency in the use of energy, and activities, measures, or equipment
designed to achieve such results, but does not include thermal or electric
energy production from cogeneration.
(3)
"Cost-effective" means that the present value to a state agency or
school district of the energy reasonably expected to be saved or produced by a
facility, activity, measure, or piece of equipment over its useful life,
including any compensation received from a utility or the Bonneville power
administration, is greater than the net present value of the costs of
implementing, maintaining, and operating such facility, activity, measure, or
piece of equipment over its useful life, when discounted at the cost of public
borrowing.
(4) "Energy"
means energy as defined in RCW 43.21F.025(1).
(5) "Energy
audit" has the definition provided in RCW 43.19.670.
(6) "Energy
efficiency project" means a conservation or cogeneration project.
(((6))) (7)
"Energy efficiency services" means assistance furnished by the
department to state agencies and school districts in identifying, evaluating,
and implementing energy efficiency projects.
(((7))) (8)
"Department" means the state department of general administration.
(((8))) (9)
"Performance-based contracting" means contracts for which payment is
conditional on achieving contractually specified energy savings.
(((9))) (10)
"Public agency" means every state office, officer, board, commission,
committee, bureau, department, and all political subdivisions of the state.
(((10))) (11)
"Public facility" means a building or structure, or a group of
buildings or structures at a single site, owned by a state agency or school
district.
(((11))) (12)
"State agency" means every state office or department, whether
elective or appointive, state institutions of higher education, and all boards,
commissions, or divisions of state government, however designated.
(((12))) (13)
"State facility" means a building or structure, or a group of
buildings or structures at a single site, owned by a state agency.
(((13))) (14)
"Utility" means privately or publicly owned electric and gas
utilities, electric cooperatives and mutuals, whether located within or without
Washington state.
(((14))) (15)
"Local utility" means the utility or utilities in whose service
territory a public facility is located.
Sec. 21. RCW 39.35C.020 and 1996
c 186 s 406 are each amended to read as follows:
(1) Each state agency
and school district shall implement cost-effective conservation improvements
and maintain efficient operation of its facilities in order to minimize energy
consumption and related environmental impacts and reduce operating costs. Each
state agency shall undertake an energy audit and implement cost-effective
conservation measures pursuant to the time schedules and requirements set forth
in chapter 43.19 RCW, except that any state agency that, after December 31,
1997, has completed energy audits and implemented cost-effective conservation
measures, or has contracted with an energy service company for energy audits
and conservation measures, is deemed to have met the requirements of this
subsection for those facilities included in the audits and conservation
measures. Each school district shall undertake an energy audit and implement
cost-effective conservation measures pursuant to the time schedules and
requirements set forth in section 22 of this act. Performance-based
contracting shall be the preferred method for completing energy audits and
implementing cost-effective conservation measures.
(2) The department
shall assist state agencies and school districts in identifying, evaluating,
and implementing cost-effective conservation projects at their facilities. The
assistance shall include the following:
(a) Notifying state
agencies and school districts of their responsibilities under this chapter;
(b) Apprising state
agencies and school districts of opportunities to develop and finance such
projects;
(c) Providing technical
and analytical support, including procurement of performance-based contracting
services;
(d) Reviewing
verification procedures for energy savings; and
(e) Assisting in the
structuring and arranging of financing for cost-effective conservation
projects.
(3) Conservation
projects implemented under this chapter shall have appropriate levels of
monitoring to verify the performance and measure the energy savings over the
life of the project. The department shall solicit involvement in program
planning and implementation from utilities and other energy conservation
suppliers, especially those that have demonstrated experience in
performance-based energy programs.
(4) The department
shall comply with the requirements of chapter 39.80 RCW when contracting for
architectural or engineering services.
(5) The department
shall recover any costs and expenses it incurs in providing assistance pursuant
to this section, including reimbursement from third parties participating in
conservation projects. The department shall enter into a written agreement
with the public agency for the recovery of costs.
NEW SECTION. Sec.
22. A new section is added
to chapter 39.35C RCW to read as follows:
(1) Except as provided
in subsections (2) and (3) of this section, each school district shall conduct
an energy audit of its facilities. This energy audit may be conducted by
contract or by other arrangement, including appropriate district staff. Performance-based
contracting shall be the preferred method for implementing and completing
energy audits.
(a) For each district
facility, the energy consumption surveys shall be completed no later than
December 31, 2001, and the walk-through surveys shall be completed no later
than October 1, 2002. Upon completion of each walk-through survey, the
district shall implement energy conservation maintenance and operation
procedures that may be identified for any district facility. These procedures
shall be implemented as soon as possible, but not later than twelve months
after the walk-through survey.
(b) Except as provided
in subsection (3) of this section, if a walk-through survey has identified
potentially cost-effective energy conservation measures, the district shall
undertake an investment grade audit of the facility. Investment grade audits
shall be completed no later than June 30, 2003, and installation of
cost-effective conservation measures recommended in the investment grade audit
shall be completed no later than December 31, 2004.
(2) A school district
that, after December 31, 1997, has completed energy audits and implemented
cost-effective conservation measures, or has contracted with an energy service
company for energy audits and conservation measures, is deemed to have met the
requirements of this section for those facilities included in the audits and
conservation measures.
(3) A school district
that after reasonable efforts and consultation with the department is unable to
obtain a contract with an energy service company to conduct an investment grade
audit or install cost-effective conservation measures recommended in an
investment grade audit, is exempt from the requirements of subsection (1)(b) of
this section.
Sec. 23. RCW 43.19.668 and 1993 c
204 s 6 are each amended to read as follows:
The
legislature finds and declares that the buildings, facilities, equipment, and
vehicles owned or leased by state government consume significant amounts of
energy and that energy conservation actions, including energy management
systems, to provide for efficient energy use in these buildings,
facilities, equipment, and vehicles will reduce the costs of state government.
In order for the operations of state government to provide the citizens of this
state an example of energy use efficiency, the legislature further finds and
declares that state government should undertake an aggressive program designed
to reduce energy use in state buildings, facilities, equipment, and vehicles within
a reasonable period of time. The use of appropriate tree plantings for energy
conservation is encouraged as part of this program.
Sec. 24. RCW 43.19.669 and 1980 c
172 s 2 are each amended to read as follows:
It is the purpose of
RCW 43.19.670 through 43.19.685 to require energy audits in state-owned
buildings, to require energy audits as a lease condition in all new, renewed,
and renegotiated leases of buildings by the state, to undertake such
modifications and installations as are necessary to maximize the efficient use
of energy in these buildings, including but not limited to energy management
systems, and to establish a policy for the purchase of state vehicles,
equipment, and materials which results in efficient energy use by the state.
For a building that
is leased by the state, energy audits and implementation of cost-effective
energy conservation measures are required only for that portion of the building
that is leased by the state when the state leases less than one hundred percent
of the building. When implementing cost-effective energy conservation measures
in buildings leased by the state, those measures must generate savings
sufficient to finance the building modifications and installations over a loan
period not greater than ten years and allow repayment during the term of the
lease.
Sec. 25. RCW 43.19.670 and 1982 c
48 s 1 are each amended to read as follows:
As used in RCW
43.19.670 through 43.19.685, the following terms have the meanings indicated
unless the context clearly requires otherwise.
(1) "Energy
audit" means a determination of the energy consumption characteristics of
a facility which consists of the following elements:
(a) An energy
consumption survey which identifies the type, amount, and rate of energy
consumption of the facility and its major energy systems. This survey shall be
made by the agency responsible for the facility.
(b) A walk-through
survey which determines appropriate energy conservation maintenance and
operating procedures and indicates the need, if any, for the acquisition and
installation of energy conservation measures and energy management systems.
This survey shall be made by the agency responsible for the facility if it has
technically qualified personnel available. The director of general
administration shall provide technically qualified personnel to the responsible
agency if necessary.
(c) ((A technical
assistance study)) An investment grade audit, which is an intensive
engineering analysis of energy conservation and management measures for
the facility, net energy savings, and a cost-effectiveness determination. This
element is required only for those facilities designated in the ((technical
assistance study)) schedule adopted under RCW 43.19.680(((3))) (2).
(2) "Cost-effective
energy conservation measures" means energy conservation measures that the
investment grade audit concludes will generate savings sufficient to finance
project loans of not more than ten years.
(3) "Energy
conservation measure" means an installation or modification of an
installation in a facility which is primarily intended to reduce energy
consumption or allow the use of an alternative energy source, including:
(a) Insulation of the
facility structure and systems within the facility;
(b) Storm windows and
doors, multiglazed windows and doors, heat absorbing or heat reflective glazed
and coated windows and door systems, additional glazing, reductions in glass
area, and other window and door system modifications;
(c) Automatic energy
control systems;
(d) Equipment required
to operate variable steam, hydraulic, and ventilating systems adjusted by
automatic energy control systems;
(e) Solar space heating
or cooling systems, solar electric generating systems, or any combination
thereof;
(f) Solar water heating
systems;
(g) Furnace or utility
plant and distribution system modifications including replacement burners,
furnaces, and boilers which substantially increase the energy efficiency of the
heating system; devices for modifying flue openings which will increase the
energy efficiency of the heating system; electrical or mechanical furnace
ignitions systems which replace standing gas pilot lights; and utility plant
system conversion measures including conversion of existing oil- and gas-fired
boiler installations to alternative energy sources;
(h) Caulking and
weatherstripping;
(i) Replacement or
modification of lighting fixtures which increase the energy efficiency of the
lighting system;
(j) Energy recovery
systems; ((and))
(k) Energy
management systems; and
(l) Such other
measures as the director finds will save a substantial amount of energy.
(((3))) (4)
"Energy conservation maintenance and operating procedure" means
modification or modifications in the maintenance and operations of a facility,
and any installations within the facility, which are designed to reduce energy
consumption in the facility and which require no significant expenditure of funds.
(((4))) (5)
"Energy management system" has the definition contained in RCW
39.35.030.
(6) "Energy
savings performance contracting" means the process authorized by chapter
39.35C RCW by which a company contracts with a state agency to conduct no-cost
energy audits, guarantee savings from energy efficiency, provide financing for
energy efficiency improvements, install or implement energy efficiency
improvements, and agree to be paid for its investment solely from savings
resulting from the energy efficiency improvements installed or implemented.
(7) "Energy
service company" means a company or contractor providing energy savings
performance contracting services.
(8)
"Facility" means a building, a group of buildings served by a central
energy distribution system, or components of a central energy distribution
system.
(((5))) (9)
"Implementation plan" means the annual tasks and budget required to
complete all acquisitions and installations necessary to satisfy the
recommendations of the energy audit.
Sec. 26. RCW 43.19.675 and 1982 c
48 s 2 are each amended to read as follows:
For each state-owned
facility, the director of general administration, ((in cooperation with
the director of the state energy office)) or the agency responsible for
the facility if other than the department of general administration, shall
conduct((, by contract or other arrangement,)) an energy audit ((for
each state-owned)) of that facility. ((All energy audits shall
be coordinated with and complement other governmental energy audit programs.
The energy audit for each state-owned facility located on the capitol campus
shall be completed no later than July 1, 1981, and the results and findings of
each energy audit shall be compiled and transmitted to the governor and the
legislature no later than October 1, 1981.)) This energy audit may be
conducted by contract or by other arrangement, including appropriate agency
staff. Performance-based contracting shall be the preferred method for implementing
and completing energy audits. For ((every other)) each
state-owned facility, the energy consumption surveys shall be completed no
later than October 1, ((1982)) 2001, and the walk-through surveys
shall be completed no later than July 1, ((1983)) 2002.
Sec. 27. RCW 43.19.680 and 1996 c
186 s 506 are each amended to read as follows:
(1) Upon completion of
each walk-through survey required by RCW 43.19.675, the director of general
administration or the agency responsible for the facility if other than the
department of general administration shall implement energy conservation
maintenance and operation procedures that may be identified for any state-owned
facility. These procedures shall be implemented as soon as possible but not
later than twelve months after the walk-through survey.
(2) ((By December
31, 1981, for the capitol campus the director of general administration shall
prepare and transmit to the governor and the legislature an implementation
plan.)) If a walk-through survey has identified potentially
cost-effective energy conservation measures, the agency responsible for the
facility shall undertake an investment grade audit of the facility. Investment
grade audits shall be completed no later than December 1, 2002. Installation
of cost-effective energy conservation measures recommended in the investment
grade audit shall be completed no later than June 30, 2004.
(3) ((By December
31, 1983, for all other state-owned facilities, the director of general administration
shall prepare and transmit to the governor and the legislature the results of
the energy consumption and walk-through surveys and a schedule for the conduct
of technical assistance studies. This submission shall contain the energy
conservation measures planned for installation during the ensuing biennium.
Priority considerations for scheduling technical assistance studies shall
include but not be limited to a facility's energy efficiency, responsible
agency participation, comparative cost and type of fuels, possibility of
outside funding, logistical considerations such as possible need to vacate the
facility for installation of energy conservation measures, coordination with
other planned facility modifications, and the total cost of a facility modification,
including other work which would have to be done as a result of installing
energy conservation measures. Energy conservation measure acquisitions and
installations shall be scheduled to be twenty-five percent complete by June 30,
1985, or at the end of the capital budget biennium which includes that date,
whichever is later, fifty-five percent complete by June 30, 1989, or at the end
of the capital budget biennium which includes that date, whichever is later,
eighty-five percent complete by June 30, 1993, or at the end of the capital
budget biennium which includes that date, whichever is later, and fully
complete by June 30, 1995, or at the end of the capital budget biennium which
includes that date, whichever is later. Each state agency shall implement
energy conservation measures with a payback period of twenty-four months or
less that have a positive cash flow in the same biennium.))
For each biennium until
all measures are installed, the director of general administration shall report
to the governor and legislature installation progress, measures planned for
installation during the ensuing biennium((, and changes, if any, to the
technical assistance study schedule)). This report shall be submitted by
December 31, ((1984)) 2004, or at the end of the following year
whichever immediately precedes the capital budget adoption, and every two years
thereafter until all measures are installed.
(4) ((The director
of general administration shall adopt rules to facilitate private investment in
energy conservation measures for state-owned buildings consistent with state
law.)) Agencies may contract with energy service companies as authorized
by chapter 39.35C RCW for energy audits and implementation of cost-effective
energy conservation measures. The department shall provide technically
qualified personnel to the responsible agency upon request. The department
shall recover a fee for this service.
NEW SECTION. Sec.
28. A new section is added
to chapter 19.29A RCW to read as follows:
(1) Beginning January
1, 2002, each electric utility must provide to its retail electricity customers
a voluntary option to purchase qualified alternative energy resources in
accordance with this section.
(2) Each electric
utility must include with its retail electric customer's regular billing
statements, at least quarterly, a voluntary option to purchase qualified
alternative energy resources. The option may allow customers to purchase
qualified alternative energy resources at fixed or variable rates and for fixed
or variable periods of time, including but not limited to monthly, quarterly,
or annual purchase agreements. A utility may provide qualified alternative
energy resource options through either: (a) Resources it owns or contracts
for; or (b) the purchase of credits issued by a clearinghouse or other system by
which the utility may secure, for trade or other consideration, verifiable
evidence that a second party has a qualified alternative energy resource and
that the second party agrees to transfer such evidence exclusively to the
benefit of the utility.
(3) For the purposes of
this section, a "qualified alternative energy resource" means the
electricity produced from generation facilities that are fueled by: (a) Wind;
(b) solar energy; (c) geothermal energy; (d) landfill gas; (e) wave or tidal action;
(f) gas produced during the treatment of wastewater; (g) qualified hydropower;
or (h) biomass energy based on solid organic fuels from wood, forest, or field
residues, or dedicated energy crops that do not include wood pieces that have
been treated with chemical preservatives such as creosote, pentachlorophenol,
or copper‑chrome‑arsenic.
(4) For the purposes of
this section, "qualified hydropower" means the energy produced
either: (a) As a result of modernizations or upgrades made after June 1, 1998,
to hydropower facilities operating on the effective date of this section that
have been demonstrated to reduce the mortality of anadromous fish; or (b) by
run of the river or run of the canal hydropower facilities that are not
responsible for obstructing the passage of anadromous fish.
(5) The rates, terms,
conditions, and customer notification of each utility's option or options
offered in accordance with this section must be approved by the governing body
of the consumer-owned utility or by the commission for investor-owned
utilities. All costs and benefits associated with any option offered by an
electric utility under this section must be allocated to the customers who
voluntarily choose that option and may not be shifted to any customers who have
not chosen such option.
(6) Each consumer-owned
utility must report annually to the department and each investor-owned utility
must report annually to the commission beginning October 1, 2002, until October
1, 2012, describing the option or options it is offering its customers under
the requirements of this section, the rate of customer participation, the
amount of qualified alternative energy resources purchased by customers, and
the amount of utility investments in qualified alternative energy resources.
The department and the commission together shall report annually to the
legislature, beginning December 1, 2002, until December 1, 2012, with the
results of the utility reports.
Sec. 29. RCW 19.29A.040 and 1998
c 300 s 6 are each amended to read as follows:
The provisions of RCW
19.29A.020, 19.29A.030, ((and)) section 5, chapter 300, Laws of 1998,
and section 28 of this act do not apply to a small utility. However,
nothing in this section prohibits the governing body of a small utility from
determining the utility should comply with any or all of the provisions of RCW
19.29A.020, 19.29A.030, ((and)) section 5, chapter 300, Laws of 1998, and
section 28 of this act, which governing bodies are encouraged to do.
Sec. 30. RCW 44.39.010 and 1977
ex.s. c 328 s 13 are each amended to read as follows:
There is hereby created
the joint committee on energy ((and utilities)) supply of the
legislature of the state of Washington.
Sec. 31. RCW 44.39.015 and 1977
ex.s. c 328 s 14 are each amended to read as follows:
The committee shall
consist of four senators and four representatives who shall be selected
biennially as follows:
(1) The president of
the senate shall ((nominate)) appoint four members from the ((energy
and utilities)) senate to serve on the committee, including the ((chairman,))
chair of the committee responsible for energy issues. Two members ((being))
from each major political party((, to serve on the committee, and shall
submit the list of nominees to the senate for confirmation. Upon confirmation,
the senators shall be deemed installed as members)) must be appointed.
(2) The speaker or
co-speakers of the house of representatives shall ((nominate))
appoint four members from the ((energy and utilities)) house
of representatives to serve on the committee, including the ((chairman,))
chair or co-chairs of the committee responsible for energy issues. Two
members ((being)) from each major political party((, to serve on the
committee, and shall submit the list of nominees to the house of
representatives for confirmation. Upon confirmation, the representatives shall
be deemed installed as members. The chairmen of the senate and house energy
and utilities committees shall alternately serve as chairman for one year
terms. The chairman of the house committee shall serve as the initial
chairman. The chairman may designate another committee member to serve as
chairman in his or her absence)) must be appointed.
(3) The committee
shall elect a chair and a vice-chair. The chair shall be a member of the house
of representatives in even-numbered years and a member of the senate in
odd-numbered years. In the case of a tie in the membership of the house of
representatives in an even-numbered year, the committee shall elect co-chairs
from the house of representatives in that year.
NEW SECTION. Sec.
32. A new section is added
to chapter 82.34 RCW to read as follows:
(1) The following
definitions apply throughout this section:
(a) "Qualifying
facility" means an air pollution control facility as that term is defined
in RCW 82.34.010(1)(a) to be installed or acquired for a thermal electric
peaking plant with a capacity of less than one hundred megawatts and which is
approved pursuant to the Washington clean air act, chapter 70.94 RCW.
(b) "Thermal
electric peaking plant" means a natural gas-fired thermal electric
generating facility operated by a light and power business and placed into
service between January 1, 1978, and December 31, 1984, and that is registered
for the calendar year 2000 pursuant to RCW 70.94.151.
(c) "Light and
power business" has the same meaning as in RCW 82.16.010.
(2) A light and power
business is exempt from sales tax on the installation or acquisition of up to
two qualifying facilities after January 1, 2001, as provided in this section.
Upon written request of a light and power business to which the approval issued
under chapter 70.94 RCW is attached, the department shall make a determination
as to whether a plant is a thermal electric peaking plant acquiring or
installing a qualifying facility eligible under this section. The department
shall consult with the department of community, trade, and economic development
and the department of ecology in making the determination. If the
determination is in the affirmative, the department shall issue the light and
power business a sales and use tax exemption certificate in a form and manner
as deemed appropriate by the department.
(3) The charges for
installation or acquisition of a qualifying facility by the holder of the
certificate are exempt from sales tax imposed under chapter 82.08 RCW and use
tax imposed under chapter 82.12 RCW. The purchaser must provide the seller with
a copy of the sales and use tax exemption certificate. The seller shall retain
a copy of the certificate for the seller's files.
(4) The exemption in
this section is limited to the installation or acquisition of a qualifying
facility and does not apply to servicing, maintenance, operation, or repairs of
a thermal electric peaking plant or of an air pollution control facility.
(5) This section
expires June 30, 2003.
NEW SECTION. Sec.
33. 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.
NEW
SECTION. Sec. 34. This act is necessary for
the immediate preservation of the public peace, health, or safety, or support
of the state government and its existing public institutions, and takes effect
immediately.
