BILL REQ. #: S-3296.1
State of Washington | 62nd Legislature | 2012 Regular Session |
Read first time 01/09/12. Referred to Committee on Energy, Natural Resources & Marine Waters.
AN ACT Relating to promoting thermal energy recovery from fossil-fueled electrical generation facilities; and amending RCW 80.70.010, 80.70.020, and 80.70.040.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1 RCW 80.70.010 and 2004 c 224 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" has the meaning provided in RCW 80.50.020 and
includes an applicant for a permit for a fossil-fueled thermal electric
generation facility subject to RCW 70.94.152 and 80.70.020(1) (b) or
(d).
(2) "Authority" means any air pollution control agency whose
jurisdictional boundaries are coextensive with the boundaries of one or
more counties.
(3) "Carbon credit" means a verified reduction in carbon dioxide or
carbon dioxide equivalents that is registered with a state, national,
or international trading authority or exchange that has been recognized
by the council.
(4) "Carbon dioxide equivalents" means a metric measure used to
compare the emissions from various greenhouse gases based upon their
global warming potential.
(5) "Cogeneration credit" means the carbon dioxide emissions that
the council, department, or authority, as appropriate, estimates would
be produced on an annual basis by a stand-alone industrial and
commercial facility equivalent in operating characteristics and output
to the industrial or commercial heating or cooling process component of
the cogeneration plant. Where electricity in a stand-alone facility is
used to make thermal energy, the emissions attributable to such
electricity usage will be deemed to be equivalent to a natural gas
fired combined cycle generation plant with a heat rate of seven
thousand one hundred British thermal units per kilowatt-hour of
electricity.
(6) "Cogeneration plant" means a fossil-fueled thermal power plant
in which the heat or steam is also used for industrial or commercial
heating or cooling purposes and that meets federal energy regulatory
commission standards for qualifying facilities under the public utility
regulatory policies act of 1978.
(7) "Commercial operation" means the date that the first
electricity produced by a facility is delivered for commercial sale to
the power grid.
(8) "Council" means the energy facility site evaluation council
created by RCW 80.50.030.
(9) "Department" means the department of ecology.
(10) "Fossil fuel" means natural gas, petroleum, coal, or any form
of solid, liquid, or gaseous fuel derived from such material to produce
heat for the generation of electricity.
(11) "Mitigation plan" means a proposal that includes the process
or means to achieve carbon dioxide mitigation through use of mitigation
projects or carbon credits.
(12) "Mitigation project" means one or more of the following:
(a) Projects or actions that are implemented by the certificate
holder or order of approval holder, directly or through its agent, or
by an independent qualified organization to mitigate the emission of
carbon dioxide produced by the fossil-fueled thermal electric
generation facility. This term includes but is not limited to the use
of, energy efficiency measures, clean and efficient transportation
measures, qualified alternative energy resources, demand side
management of electricity consumption, and carbon sequestration
programs;
(b) Direct application of combined heat and power (cogeneration),
including the recovery, transmission, and distribution of thermal
energy from power generation facilities through district energy
networks;
(c) Recovery, transmission, and distribution of thermal energy from
industrial or commercial waste heat sources through district energy
networks;
(d) Verified carbon credits traded on a recognized trading
authority or exchange; or
(((d))) (e) Enforceable and permanent reductions in carbon dioxide
or carbon dioxide equivalents through process change, equipment
shutdown, or other activities under the control of the applicant and
approved as part of a carbon dioxide mitigation plan.
(13) "Order of approval" means an order issued under RCW 70.94.152
with respect to a fossil-fueled thermal electric generation facility
subject to RCW 80.70.020(1) (b) or (d).
(14) "Permanent" means that emission reductions used to offset
emission increases are assured for the life of the corresponding
increase, whether unlimited or limited in duration.
(15) "Qualified alternative energy resource" has the same meaning
as in RCW 19.29A.090, and includes thermal energy recovered,
transmitted, and distributed from cogeneration systems or industrial
and commercial waste heat sources.
(16) "Station generating capability" means the maximum load a
generator can sustain over a given period of time without exceeding
design limits, and measured using maximum continuous electric
generation capacity, less net auxiliary load, at average ambient
temperature and barometric pressure.
(17) "Total carbon dioxide emissions" means:
(a) For a fossil-fueled thermal electric generation facility
described under RCW 80.70.020(1) (a) and (b), the amount of carbon
dioxide emitted over a thirty-year period based on the manufacturer's
or designer's guaranteed total net station generating capability, new
equipment heat rate, an assumed sixty percent capacity factor for
facilities under the council's jurisdiction or sixty percent of the
operational limitations on facilities subject to an order of approval,
and taking into account any enforceable limitations on operational
hours or fuel types and use; and
(b) For a fossil-fueled thermal electric generation facility
described under RCW 80.70.020(1) (c) and (d), the amount of carbon
dioxide emitted over a thirty-year period based on the proposed
increase in the amount of electrical output of the facility that
exceeds the station generation capability of the facility prior to the
applicant applying for certification or an order of approval pursuant
to RCW 80.70.020(1) (c) and (d), new equipment heat rate, an assumed
sixty percent capacity factor for facilities under the council's
jurisdiction or sixty percent of the operational limitations on
facilities subject to an order of approval, and taking into account any
enforceable limitations on operational hours or fuel types and use.
Sec. 2 RCW 80.70.020 and 2004 c 224 s 2 are each amended to read
as follows:
(1) The provisions of this chapter apply to:
(a) New fossil-fueled thermal electric generation facilities with
station-generating capability of three hundred fifty thousand kilowatts
or more and fossil-fueled floating thermal electric generation
facilities of one hundred thousand kilowatts or more under RCW
((80.50.020(14)(a))) 80.50.020(12)(b), for which an application for
site certification is made to the council after July 1, 2004;
(b) New fossil-fueled thermal electric generation facilities with
station-generating capability of more than twenty-five thousand
kilowatts, but less than three hundred fifty thousand kilowatts, except
for fossil-fueled floating thermal electric generation facilities under
the council's jurisdiction, for which an application for an order of
approval has been submitted after July 1, 2004;
(c) Fossil-fueled thermal electric generation facilities with
station-generating capability of three hundred fifty thousand kilowatts
or more that have an existing site certification agreement and, after
July 1, 2004, apply to the council to increase the output of carbon
dioxide emissions by fifteen percent or more through permanent changes
in facility operations or modification or equipment; and
(d) Fossil-fueled thermal electric generation facilities with
station-generating capability of more than twenty-five thousand
kilowatts, but less than three hundred fifty thousand kilowatts, except
for fossil-fueled floating thermal electric generation facilities under
the council's jurisdiction, that have an existing order of approval
and, after July 1, 2004, apply to the department or authority, as
appropriate, to permanently modify the facility so as to increase its
station-generating capability by at least twenty-five thousand
kilowatts or to increase the output of carbon dioxide emissions by
fifteen percent or more, whichever measure is greater.
(2)(a) A proposed site certification agreement submitted to the
governor under RCW 80.50.100 and a final site certification agreement
issued under RCW 80.50.100 shall include an approved carbon dioxide
mitigation plan.
(b) For fossil-fueled thermal electric generation facilities not
under jurisdiction of the council, the order of approval shall require
an approved carbon dioxide mitigation plan.
(c) Site certification agreement holders or order of approval
holders may request, at any time, a change in conditions of an approved
carbon dioxide mitigation plan if the council, department, or
authority, as appropriate, finds that the change meets all requirements
and conditions for approval of such plans.
(3) An applicant for a fossil-fueled thermal electric generation
facility shall include one or a combination of the following carbon
dioxide mitigation options as part of its mitigation plan:
(a) Payment to a third party to provide mitigation;
(b) Direct purchase of permanent carbon credits; or
(c) Either (i) investment in applicant-controlled carbon dioxide
mitigation projects, including combined heat and power (cogeneration);
or (ii) recovery, transmission, and distribution of thermal energy from
existing electric generation or from industrial and commercial waste
heat sources, or both.
(4) Fossil-fueled thermal electric generation facilities that
receive site certification approval or an order of approval shall
provide mitigation for twenty percent of the total carbon dioxide
emissions produced by the facility.
(5) If the certificate holder or order of approval holder chooses
to pay a third party to provide the mitigation, the mitigation rate
shall be one dollar and sixty cents per metric ton of carbon dioxide to
be mitigated. For a cogeneration plant, the monetary amount is based
on the difference between twenty percent of the total carbon dioxide
emissions and the cogeneration credit.
(a) Through rule making, the council may adjust the rate per ton
biennially as long as any increase or decrease does not exceed fifty
percent of the current rate. The department or authority shall use the
adjusted rate established by the council pursuant to this subsection
for fossil-fueled thermal electric generation facilities subject to the
provisions of this chapter.
(b) In adjusting the mitigation rate the council shall consider,
but is not limited to, the current market price of a ton of carbon
dioxide. The council's adjusted mitigation rate shall be consistent
with RCW 80.50.010(3).
(6) The applicant may choose to make to the third party a lump sum
payment or partial payment over a period of five years.
(a) Under the lump sum payment option, the payment amount is
determined by multiplying the total carbon dioxide emissions by the
twenty percent mitigation requirement under subsection (4) of this
section and by the per ton mitigation rate established under subsection
(5) of this section.
(b) No later than one hundred twenty days after the start of
commercial operation, the certificate holder or order of approval
holder shall make a one-time payment to the independent qualified
organization for the amount determined under subsection (5) of this
section.
(c) As an alternative to a one-time payment, the certificate holder
or order of approval holder may make a partial payment of twenty
percent of the amount determined under subsection (5) of this section
no later than one hundred twenty days after commercial operation and a
payment in the same amount or as adjusted according to subsection
(5)(a) of this section, on the anniversary date of the initial payment
in each of the following four years. With the initial payment, the
certificate holder or order of approval holder shall provide a letter
of credit or other comparable security acceptable to the council or the
department for the remaining eighty percent mitigation payment amount
including possible changes to the rate per metric ton from rule making
under subsection (5)(a) of this section.
Sec. 3 RCW 80.70.040 and 2004 c 224 s 4 are each amended to read
as follows:
(1) The carbon dioxide mitigation option that provides for direct
investment shall be implemented through mitigation projects conducted
directly by, or under the control of, the certificate holder or order
of approval holder.
(2) Mitigation projects must be approved by the council,
department, or authority, as appropriate, and made a condition of the
proposed and final site certification agreement or order of approval.
Direct investment mitigation projects shall be approved if the
mitigation projects provide a reasonable certainty that the performance
requirements of the mitigation projects will be achieved and the
mitigation projects were implemented after July 1, 2004. No
certificate holder or order of approval holder shall be required to
make direct investments that would exceed the cost of making a lump sum
payment to a third party, had the certificate holder or order of
approval holder chosen that option under RCW 80.70.020.
(3) Mitigation projects must be fully in place within a reasonable
time after the start of commercial operation. Failure to implement an
approved mitigation plan is subject to enforcement under chapter 80.50
or 70.94 RCW.
(4) The certificate holder or order of approval holder may not use
more than twenty percent of the total funds for the selection,
monitoring, and evaluation of mitigation projects and the management
and enforcement of contracts.
(5)(a) For facilities under the jurisdiction of the council, the
implementation of a carbon dioxide mitigation project, other than
purchase of a carbon credit shall be monitored by an independent entity
for conformance with the performance requirements of the carbon dioxide
mitigation plan. The independent entity shall make available the
mitigation project monitoring results to the council, and the council
shall transmit the results to the appropriate committees of the
legislature.
(b) For facilities under the jurisdiction of the department or
authority pursuant to RCW 80.70.020(1) (b) or (c), the implementation
of a carbon dioxide mitigation project, other than a purchase of carbon
dioxide equivalent emission reduction credits, shall be monitored by
the department or authority issuing the order of approval.
(6) Upon promulgation of federal requirements for carbon dioxide
mitigation for fossil-fueled thermal electric generation facilities,
those requirements may be deemed by the council, department, or
authority to be equivalent and a replacement for the requirements of
this section.