| Washington State House of Representatives Office of Program Research |
BILL ANALYSIS |
| Technology, Energy & Communications Committee | |
HB 2351
Brief Description: Concerning energy resource planning and renewable energy standards.
Sponsors: Representatives Morris and Hudgins.
Brief Summary of Bill |
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Hearing Date: 1/10/06
Staff: Scott Richards (786-7156).
Background:
Least Cost Planning
In Washington, most of the electricity sold to retail customers is generated by hydroelectric
power. According to the state's 2004 fuel mix disclosure report using 2003 electricity production
data, hydroelectric power accounts for 66.6 percent of electricity sold; coal represents 17.7
percent; natural gas 9.8 percent; and nuclear power supplies 4.6 percent. Non-hydro renewable
resources such as wind, landfill gas, or biomass represent 1.3 percent.
Traditionally, electric utilities have been guided in their efforts to acquire resources for meeting
their customers' demand for electricity by a least cost planning analysis. In conducting least cost
planning, utilities choose a mix of supply and demand side resources that minimizes the cost of
services to the customer. The mix may include electricity that is generated by the utility itself,
purchased on long-term contracts from other producers, or may include some electricity
purchased on the short-term or spot market. It may also include conservation and energy
efficiency.
The Bonneville Power Administration (BPA) sells wholesale electric power to utilities for resale
generated by the federal hydroelectric dams that are part of the Federal Columbia River Power
System, a nuclear facility and other nonfederal power plants.
The rules of the Washington State Utilities and Transportation Commission (UTC) require the
investor-owned electric utilities regulated by the UTC to develop least cost plans in consultation
with the staff of the UTC.
Renewable Energy
Beginning January 1, 2002, all electric utilities (other than small electric utilities) had to offer
their customers an option to purchase electricity generated using alternative energy resources.
This was a voluntary approach to encouraging the use and development of electricity generation
using a mix of renewable resources. The Department of Community, Trade, and Economic
Development (DCTED) and the UTC must report annually on the products offered to customers,
customer participation, and the investments made by each utility in qualifying alternative energy
resources.
Summary of Bill:
Integrated Resource Plans
Investor-owned and consumer-owned electric utilities are required to develop integrated resource
plans that describe the mix of generating resources and improvements in efficient use of
electricity to meet current and future needs at the lowest reasonable cost to ratepayers.
Development of an integrated resource plan must include demand forecasts, assessment of
technically feasible improvements, assessment of technically feasible generating technologies,
resource evaluation, and specific actions to be taken by the utility consistent with the integrated
resource plan. For all plans subsequent to the initial integrated resource plan, the plan must also
include a progress report that relates the new plan to the previous plan.
The investor-owned utilities must submit integrated resource plans to the UTC. Consumer-owned utilities must develop and publish a work schedule for the preparation of an integrated
resource plan and the governing body shall approve an integrated resource plan after public
notice and hearing. Consumer-owned utilities must provide a copy of the integrated resource plan
to the DCTED.
The DCTED must review the integrated resource plans of consumer-owned utilities and prepare
a statewide summary report to the legislature. The UTC must provide information on the
investor-owned utilities to the DCTED for inclusion in the statewide summary report.
Renewable Energy Goal
By December 1, 2007, the DCTED shall establish a statewide renewable energy goal using the
integrated resource plans that investor-owned utilities and consumer-owned utilities must
develop. The DCTED shall update the goal in 2009, 2013, and 2019 using the integrated resource
plans that the investor-owned utilities and consumer-owned utilities must develop.
Renewable energy targets, beginning January 1, 2011, are also established for electric utilities to
include renewable energy in their mix of resources. The targets are set as follows:
of annual retail load represented by eligible renewable resources or equivalent renewable energy credits equal to the statewide renewable energy goal established in 2009.
Renewable resources include water, wind, solar energy, geothermal energy, landfill gas, biomass
energy from animal waste, solid organic fuels from wood, forest, field residues, or energy crops,
wave or tidal power, and gas from sewage treatment facilities. Not all electric generation using
renewable resources is eligible to meet the standard. Resources are limited by date of operation
or upgrade for a facility and, in some cases, its geographic location.
An electric utility may meet the renewable energy standard by counting electricity from
renewable resources for which it receives credit under BPA conservation and renewable
programs and from renewable resources that are part of the BPA electricity portfolio. An electric
utility may include electricity generated from renewable resources provided to customers through
optional pricing programs (green options programs).
An electric utility may contribute additional credit toward meeting the target for early acquisition
of eligible renewable resources physically located in Washington state and for renewable
resources acquired from facilities constructed using apprenticeship programs.
Electricity generated by a utility through distributed generation used to serve the customer's
electricity needs may count towards meeting both standards.
Electricity from resources used by a utility to meet a federally legislated standard may be used to
meet the standards but not electricity used to meet a standard established through legislation in
another state.
Compliance and Monitoring
By January 1, 2010, and every two years thereafter, utilities must report on the renewable energy
acquired to meet the target and its annual retail load. Consumer-owned utilities report to the
DCTED and investor-owned utilities report to the UTC.
Referendum
This bill directs the secretary of state to submit this act as a referendum to the people for
adoption and ratification, or rejection at the next general election.
Appropriation: None.
Fiscal Note: Available.
Effective Date: The bill takes effect 90 days after adjournment of session in which bill is passed.