ESSB 5840 -
By Representative McCoy
NOT CONSIDERED 04/26/2009
Strike everything after the enacting clause and insert the following:
"Sec. 1 RCW 19.285.030 and 2007 c 1 s 3 are each amended to read
as follows:
The definitions in this section apply throughout this chapter
unless the context clearly requires otherwise.
(1) "Attorney general" means the Washington state office of the
attorney general.
(2) "Auditor" means: (a) The Washington state auditor's office or
its designee for qualifying utilities under its jurisdiction that are
not investor-owned utilities; or (b) an independent auditor selected by
a qualifying utility that is not under the jurisdiction of the state
auditor and is not an investor-owned utility.
(3) "Biomass energy" includes: (a) Byproducts of pulping and wood
manufacturing process; (b) animal waste; (c) solid organic fuels from
wood; (d) forest or field residues; (e) wooden demolition or
construction debris; (f) food waste; (g) liquors derived from algae and
other sources; (h) dedicated energy crops; (i) biosolids; and (j) yard
waste. "Biomass energy" does not include wood pieces that have been
treated with chemical preservatives such as creosote,
pentachlorophenol, or copper-chrome-arsenic; wood from old growth
forests; or municipal solid waste.
(4) "Commission" means the Washington state utilities and
transportation commission.
(((4))) (5) "Conservation" means any reduction in electric power
consumption resulting from increases in the efficiency of energy use,
production, or distribution.
(((5))) (6) "Cost-effective" has the same meaning as defined in RCW
80.52.030.
(((6))) (7) "Council" means the Washington state apprenticeship and
training council within the department of labor and industries.
(((7))) (8) "Customer" means a person or entity that purchases
electricity for ultimate consumption and not for resale.
(((8))) (9) "Department" means the department of community, trade,
and economic development or its successor.
(((9))) (10) "Distributed generation" means an eligible renewable
resource where the generation facility or any integrated cluster of
such facilities has a generating capacity of not more than ((five))
seven megawatts.
(((10))) (11) "Eligible renewable resource" means:
(a) Electricity from a generation facility powered by a renewable
resource ((other than fresh water)) that commences operation after
March 31, 1999, where((: (i))) the facility is located ((in the
Pacific Northwest; or (ii) the electricity from the facility is
delivered into Washington state on a real-time basis without shaping,
storage, or integration services)) within the geographic boundary of
the western electricity coordinating council or its successor entity;
((or))
(b) ((Incremental electricity produced as a result of efficiency
improvements completed after March 31, 1999, to hydroelectric
generation projects owned by a qualifying utility and located in the
Pacific Northwest or to hydroelectric generation in irrigation pipes
and canals located in the Pacific Northwest, where the additional
generation in either case does not result in new water diversions or
impoundments)) (i) Electricity from a hydroelectric generating facility
with an installed generating capacity of five megawatts or less that
discharges the water it uses for power generation into either:
(A) A conduit, with the water flowing directly to a point of
agricultural, municipal, or industrial consumption; or
(B) A natural water body if a quantity of water equal to or greater
than the quantity discharged from the hydroelectric facility is
withdrawn from the natural water body on which the hydroelectric
generating facility is located, unless that consumption would occur for
agricultural, municipal, or industrial consumption purposes even if
hydroelectric generating facilities were not installed;
(ii) Electricity from a hydroelectric generating facility must not
come from a dam or weir that creates more than intraday storage of
water;
(iii) Electricity from a hydroelectric generating facility must be
certified by a nationally recognized organization that certifies
hydroelectric facilities as low-impact hydroelectric;
(c) Electricity from a biomass energy powered generation facility
located in Washington that commenced operation before March 31, 1999,
that is: (i) Owned by a qualifying utility as of the effective date of
this section; or (ii) subject to a maximum of twenty-five percent of
the electrical output delivered to a qualifying utility, owned by an
entity other than a qualifying utility as of the effective date of this
section; or
(d) Electricity from an existing generation facility powered by a
fresh water renewable resource that commenced operation before March
31, 1999.
(((11))) (12) "Intraday storage of water" means the amount of water
that is retained by a dam or weir over a twenty-four hour period that
is in excess of normal stream flow.
(13) "Investor-owned utility" has the same meaning as defined in
RCW 19.29A.010.
(((12))) (14) "Load" means the amount of kilowatt-hours of
electricity delivered in the most recently completed year by a
qualifying utility to its Washington retail customers.
(((13))) (15) "Nonpower attributes" means all environmentally
related characteristics, exclusive of energy, capacity reliability, and
other electrical power service attributes, that are associated with the
generation of electricity from a renewable resource, including but not
limited to the facility's fuel type, geographic location, vintage,
qualification as an eligible renewable resource, and avoided emissions
of pollutants to the air, soil, or water, and avoided emissions of
carbon dioxide and other greenhouse gases. For an anaerobic digester,
its nonpower attributes may be separated into avoided emissions of
carbon dioxide, and other greenhouse gases, and into renewable energy
credits.
(((14))) (16) "Pacific Northwest" has the same meaning as defined
for the Bonneville power administration in section 3 of the Pacific
Northwest electric power planning and conservation act (94 Stat. 2698;
16 U.S.C. Sec. 839a).
(((15))) (17) "Public facility" has the same meaning as defined in
RCW 39.35C.010.
(((16))) (18) "Qualifying utility" means an electric utility, as
the term "electric utility" is defined in RCW 19.29A.010, that serves
more than twenty-five thousand customers in the state of Washington.
The number of customers served may be based on data reported by a
utility in form 861, "annual electric utility report," filed with the
energy information administration, United States department of energy.
(((17))) (19) "Renewable energy credit" means a tradable
certificate of proof of at least one megawatt-hour of an eligible
renewable resource ((where the generation facility is not powered by
fresh water)), the certificate includes all of the nonpower attributes
associated with that one megawatt-hour of electricity, and the
certificate is verified by a renewable energy credit tracking system
selected by the department.
(((18))) (20) "Renewable resource" means: (a) Water; (b) wind; (c)
solar energy; (d) geothermal energy; (e) landfill gas; (f) wave, ocean,
or tidal power; (g) gas from sewage treatment facilities; (h) biodiesel
fuel as defined in RCW 82.29A.135 that is not derived from crops raised
on land cleared from old growth ((or first-growth)) forests where the
clearing occurred after December 7, 2006; ((and)) or (i) biomass energy
((based on animal waste or solid organic fuels from wood, forest, or
field residues, or dedicated energy crops that do not include (i) wood
pieces that have been treated with chemical preservatives such as
creosote, pentachlorophenol, or copper-chrome-arsenic; (ii) black
liquor byproduct from paper production; (iii) wood from old growth
forests; or (iv) municipal solid waste)).
(((19))) (21) "Rule" means rules adopted by an agency or other
entity of Washington state government to carry out the intent and
purposes of this chapter.
(((20))) (22) "Year" means the twelve-month period commencing
January 1st and ending December 31st.
Sec. 2 RCW 19.285.040 and 2007 c 1 s 4 are each amended to read
as follows:
(1) Each qualifying utility shall pursue all available conservation
that is cost-effective, reliable, and feasible.
(a) By January 1, 2010, using methodologies consistent with those
used by the Pacific Northwest electric power and conservation planning
council in its most recently published regional power plan, each
qualifying utility shall identify its achievable cost-effective
conservation potential through 2019. At least every two years
thereafter, the qualifying utility shall review and update this
assessment for the subsequent ten-year period.
(b) ((Beginning)) By January 1, 2010, each qualifying utility shall
establish and make publicly available a biennial acquisition target for
cost-effective conservation consistent with its identification of
achievable opportunities in (a) of this subsection, and meet that
target during the subsequent two-year period. At a minimum, each
biennial acquisition target must be no lower than the qualifying
utility's pro rata share for that two-year period of its cost-effective
conservation potential for the subsequent ten-year period. A
qualifying utility may not use incremental electricity produced as a
result of efficiency improvements to hydroelectric generation
facilities to meet its biennial conservation acquisition target if the
improvements were used to meet its targets under subsection (2)(a) of
this section.
(c) In meeting its conservation targets, a qualifying utility may
count high-efficiency cogeneration owned and used by a retail electric
customer to meet its own needs. High-efficiency cogeneration is the
sequential production of electricity and useful thermal energy from a
common fuel source, where, under normal operating conditions, the
facility ((has a useful thermal energy output of no less than thirty-three percent of the total energy output)) is designed to have a
projected overall thermal conversion efficiency of at least seventy
percent. For the purposes of this section, "overall thermal conversion
efficiency" means the output of electricity plus usable heat divided by
fuel input. The reduction in load due to high-efficiency cogeneration
shall be((: (i) Calculated as the ratio of the fuel chargeable to
power heat rate of the cogeneration facility compared to the heat rate
on a new and clean basis of a best-commercially available technology
combined-cycle natural gas-fired combustion turbine; and (ii))) counted
towards meeting the biennial conservation target in the same manner as
other production conservation savings.
(d) The commission may determine if a conservation program
implemented by an investor-owned utility is cost-effective based on the
commission's policies and practice.
(e) The commission may rely on its standard practice for review and
approval of investor-owned utility conservation targets.
(2)(a) Each qualifying utility shall use eligible renewable
resources or acquire equivalent renewable energy credits, or a
combination of both, to meet the following annual targets:
(i) At least three percent of its load by January 1, 2012, and each
year thereafter through December 31, 2015;
(ii) At least ((nine)) ten and twenty-five one-hundredths of one
percent of its load by January 1, 2016, and each year thereafter
through December 31, 2019; and
(iii) At least ((fifteen)) sixteen and twenty-five one-hundredths
of one percent of its load by January 1, 2020, and each year
thereafter.
(b) It must be the goal of the state for each qualifying utility to
use eligible renewable resources or acquire equivalent renewable energy
credits or a combination of both to meet an annual renewable resource
goal of at least twenty percent of its load by January 1, 2025, and
each year thereafter.
(c) Except as provided in (k) of this subsection, a qualifying
utility may count distributed generation at double the facility's
electrical output if the utility: (i) Owns or has contracted for the
distributed generation and the associated renewable energy credits; or
(ii) has contracted to purchase the associated renewable energy
credits.
(((c))) (d) In meeting the annual targets in (a) of this
subsection, a qualifying utility shall calculate its annual load based
on the average of the utility's load for the previous two years.
(((d))) (e) A qualifying utility with annual sales of less than two
million megawatt hours is considered in compliance with an annual
target in (a) of this subsection if: (i) In any given target year its
load growth, measured as load served in the target year compared to the
utility's annual average load served in 2010 and 2011, is less than the
target in (a) of this subsection for that year; and (ii) the utility
meets one hundred percent of any increase in load for that target year
with eligible renewable resources or renewable energy credits.
(f) A qualifying utility shall be considered in compliance with an
annual target in (a) of this subsection if: (i) The utility's weather-adjusted load for the previous three years on average did not increase
over that time period; (ii) after December 7, 2006, the utility did not
commence or renew ownership or incremental purchases of electricity
from resources other than renewable resources other than on a daily
spot price basis and the electricity is not offset by equivalent
renewable energy credits; and (iii) the utility invested at least one
percent of its total annual retail revenue requirement that year on
eligible renewable resources, renewable energy credits, or a
combination of both.
(((e))) (g) The requirements of this section may be met for any
given target year with renewable energy credits produced during that
year, the preceding two years, or the subsequent year. Each renewable
energy credit may be used only once to meet the requirements of this
section.
(((f))) (h) In complying with the targets established in (a) of
this subsection, a qualifying utility may not count:
(i) Eligible renewable resources or distributed generation where
the associated renewable energy credits are owned by a separate entity;
((or))
(ii) Eligible renewable resources or renewable energy credits
obtained for and used in an optional pricing program such as the
program established in RCW 19.29A.090; or
(iii) Efficiency improvements to hydroelectric generation
facilities whose energy output is marketed by the Bonneville power
administration that is attributable to any other utility other than the
qualifying utility.
(((g))) (i) Where fossil and combustible renewable resources are
cofired in one generating unit located in the Pacific Northwest where
the cofiring commenced after March 31, 1999, the unit shall be
considered to produce eligible renewable resources in direct proportion
to the percentage of the total heat value represented by the heat value
of the renewable resources.
(((h))) (j)(i) A qualifying utility that acquires an eligible
renewable resource or renewable energy credit may count that
acquisition at one and two-tenths times its base value:
(A) Where the eligible renewable resource comes from a facility
that commenced operation after December 31, 2005; and
(B) Where the developer of the facility used apprenticeship
programs approved by the council during facility construction.
(ii) The council shall establish minimum levels of labor hours to
be met through apprenticeship programs to qualify for this extra
credit.
(((i))) (k) A qualifying utility that acquires solar energy located
in Washington or meeting the definition of distributed generation may
count that acquisition at four times its base value, or six times its
base value where the energy is produced using solar inverters and
modules manufactured in Washington state, provided the qualifying
utility: (i) Owns or has contracted for the solar energy generation
and the associated renewable energy credits; or (ii) has contracted to
purchase the associated renewable energy credits.
(l) A qualifying utility shall be considered in compliance with an
annual target in (a) of this subsection if events beyond the reasonable
control of the utility that could not have been reasonably anticipated
or ameliorated prevented it from meeting the renewable energy target.
Such events include weather-related damage, mechanical failure,
strikes, lockouts, and actions of a governmental authority that
adversely affect the generation, transmission, or distribution of an
eligible renewable resource under contract to a qualifying utility.
(3) Utilities that become qualifying utilities after December 31,
2006, shall meet the requirements in this section on a time frame
comparable in length to that provided for qualifying utilities as of
December 7, 2006.
Sec. 3 RCW 19.285.070 and 2007 c 1 s 7 are each amended to read
as follows:
(1) On or before June 1, 2012, and annually thereafter, each
qualifying utility shall report to the department on its progress in
the preceding year in meeting the targets established in RCW
19.285.040, including expected electricity savings from the biennial
conservation target, expenditures on conservation, actual electricity
savings results, the utility's annual load for the prior two years, the
amount of megawatt-hours needed to meet the annual renewable energy
target, the amount of megawatt-hours of each type of eligible renewable
resource acquired, the type and amount of renewable energy credits
acquired, and the percent of its total annual retail revenue
requirement invested in the incremental cost of eligible renewable
resources and the cost of renewable energy credits. ((For each year
that a qualifying utility elects to demonstrate alternative compliance
under RCW 19.285.040(2) (d) or (i) or 19.285.050(1), it must include in
its annual report relevant data to demonstrate that it met the criteria
in that section.)) A qualifying utility may submit its report to the
department in conjunction with its annual obligations in chapter 19.29A
RCW.
(2) A qualifying utility that is an investor-owned utility shall
also report all information required in subsection (1) of this section
to the commission, and on or before June 1, 2014, and annually
thereafter, report to the commission its compliance in meeting the
targets established in RCW 19.285.040. All other qualifying utilities
shall also make all information required in subsection (1) of this
section available to the auditor, and on or before June 1, 2014, and
annually thereafter, make available to the auditor its determination of
compliance in meeting the targets established in RCW 19.285.040. For
each year that a qualifying utility elects to demonstrate alternative
compliance under RCW 19.285.040(2) or 19.285.050(1), it must include in
its annual report relevant data to demonstrate that it met the criteria
in that section.
(3) A qualifying utility shall also make reports required in this
section available to its customers.
Sec. 4 RCW 19.285.080 and 2007 c 1 s 8 are each amended to read
as follows:
(1) The commission may adopt rules to ensure the proper
implementation and enforcement of this chapter as it applies to
investor-owned utilities.
(2) The department shall adopt rules concerning only process,
timelines, and documentation to ensure the proper implementation of
this chapter as it applies to qualifying utilities that are not
investor-owned utilities. Those rules include, but are not limited to,
rules associated with a qualifying utility's development of
conservation targets under RCW 19.285.040(1); a qualifying utility's
decision to pursue alternative compliance in RCW 19.285.040(2) (((d)))
(f) or (((i))) (l) or 19.285.050(1); and the format and content of
reports required in RCW 19.285.070. Nothing in this subsection may be
construed to restrict the rate-making authority of the commission or a
qualifying utility as otherwise provided by law.
(3) The commission and department may coordinate in developing
rules related to process, timelines, and documentation that are
necessary for implementation of this chapter.
(4)(a) Pursuant to the administrative procedure act, chapter 34.05
RCW, rules needed for the implementation of this chapter must be
adopted by ((December 31, 2007)) June 30, 2010. These rules may be
revised as needed to carry out the intent and purposes of this chapter.
(b) Within six months of the adoption by the Pacific Northwest
electric power and conservation planning council of each of its
regional power plans, the department shall initiate rule making to
consider adopting any changes in methodologies used by the Pacific
Northwest electric power and conservation planning council that would
impact a qualifying utility's conservation potential assessment in
accordance with RCW 19.285.040(1).
(c) Within six months of the adoption by the Pacific Northwest
electric power and conservation planning council of each of its
regional power plans, the commission shall initiate rule making to
consider adopting any changes in methodologies used by the Pacific
Northwest electric power and conservation planning council that would
impact a qualifying utility's conservation potential assessment in
accordance with RCW 19.285.040(1).
(d) Rules adopted under (b) and (c) of this subsection must be
applied to the next biennial target that begins at least six months
after the adoption date of the rules.
NEW SECTION. Sec. 5 (1) Within existing resources, the
department of community, trade, and economic development shall report
to the legislature by December 1, 2009, its recommendations on how low-cost hydroelectric generation may be used to firm, shape, and integrate
renewable energy resources into the northwestern electric grid for
delivery to Washington residents. The report must make recommendations
on the economic and environmental benefits of using hydroelectric
generation in place of fossil fuel-fired generation for integration
services. The report must include results from existing studies and
analyses from the Pacific Northwest electric power and conservation
planning council, the Bonneville power administration, and other
relevant organizations. The department of community, trade, and
economic development shall also consider information and
recommendations from integration service providers and users.
(2) The department of community, trade, and economic development
shall conduct a study of the impacts of electricity costs on low-income
families. The department shall select two cities, one east of the
crest of the Cascade mountains and one west of the crest of the Cascade
mountains, and through analysis and case studies determine the impacts
of electricity costs on low-income families. The department shall also
review the extent to which government energy programs help mitigate
electricity costs for low-income families. By December 10, 2009, the
department shall provide recommendations to the governor and the
appropriate committees of the legislature on how the impacts of
electricity costs on low-income families might be further mitigated."
Correct the title.