Background:

The Energy Independence Act.

Approved by voters in 2006, the Energy Independence Act, also known as Initiative 937, requires electric utilities with 25,000 or more customers to meet targets for energy conservation and for using eligible renewable resources. Utilities that must comply with Initiative 937 are called qualifying utilities.

Energy Conservation Assessments and Targets.

Each qualifying electric utility must pursue all available conservation that is cost-effective, reliable, and feasible. By January 1, 2010, each qualifying utility must assess the conservation it can achieve through 2019, and update the assessments every two years for the next 10-year period. Beginning January 2010, each qualifying utility must meet biennial conservation targets that are consistent with its conservation assessments.

Eligible Renewable Resource Targets and Compliance Dates.

Each qualifying utility must use eligible renewable resources or acquire equivalent renewable energy credits, or a combination of both, to meet the following annual targets:

at least 3 percent of its load by January 1, 2012, and each year thereafter through December 31, 2015;
at least 9 percent of its load by January 1, 2016, and each year thereafter through December 31, 2019; and
at least 15 percent of its load by January 1, 2020, and each year thereafter.

Eligible Renewable Resource.

"Eligible renewable resource" includes: (1) wind; (2) solar; (3) geothermal energy; (4) landfill and sewage gas; (5) wave and tidal power; and (6) certain biomass and biodiesel fuels. Biomass is classified as an eligible renewable resource if it is derived from animal waste and solid organic fuels from wood, forest, or field residues and dedicated energy crops. Biomass derived from the following is not considered an eligible renewable resource: wood pieces that have been treated with chemical preservatives such as creosote, pentachlorophenol, or copper-chromearsenic; black liquor by-product from paper production; wood from old growth forests; and municipal solid waste.

Electricity produced from an eligible renewable resource must be generated in a facility that started operating after March 31, 1999. The facility must either be located in the Pacific Northwest or the electricity from the facility must be delivered into the state on a real-time basis. Incremental electricity produced from efficiency improvements at hydropower facilities owned by qualifying utilities is also an eligible renewable resource if the improvements were completed after March 31, 1999.

Determining Compliance.

Under Initiative 937, the State Auditor's Office is responsible for reviewing documentation and reporting submitted by qualifying utilities that are consumer owned utilities and determining whether a utility has complied with the law. For investor owned utilities, the Utilities and Transportation Commission (UTC) assesses compliance.

Investor owned utilities seeking an upfront determination as to whether a specific proposal would qualify as an eligible renewable resource under Initiative 937 may file a petition for a declaratory order with the UTC.

Consumer owned utilities do not have this option available to them under current law. However, any utility or project developer can seek an advisory opinion from the Initiative 937 Technical Working Group (TWG) as to whether a particular technology or resource is an eligible renewable resource under Initiative 937. This TWG is made up of staff from the Department of Commerce and the UTC. Such advisory opinions are not binding on the State Auditor, nor do they supersede the declaratory order process available to investor owned utilities through the UTC.

Summary of Bill:

A qualifying utility that is not an investor owned utility or a project developer may seek an advisory opinion from the Washington State University Extension Energy Program (WSU Energy Program) as to whether a proposed electric generation project or conservation resource qualifies to meet a target under Initiative 937. This advisory opinion must include a legal analysis.

Within 90 days of receiving an application for an advisory opinion, the WSU Energy Program must issue a signed advisory opinion indicating whether a proposed project or resource qualifies to meet a target. The governing body of the applicant must either adopt or reject the advisory opinion after giving notice and holding a public hearing.

Any advisory opinion adopted by the governing body is dispositive regarding the eligibility of the proposed project or resource if: (1) the advisory opinion affirmatively qualified the project or resource; and (2) the project or resource is built or acquired as proposed.

The WSU Energy Program may require an applicant to pay an application fee to cover the cost of reviewing a project and preparing an advisory opinion.