S-2208 _______________________________________________
SUBSTITUTE SENATE BILL NO. 5948
_______________________________________________
State of Washington 51st Legislature 1989 Regular Session
By Senate Committee on Energy & Utilities (originally sponsored by Senators Benitz, Williams, Stratton, Sutherland, Owen, Nelson, Bluechel and Pullen)
Read first time 2/27/89.
AN ACT Relating to gas, electric, and water companies; and amending RCW 80.28.025 and 82.16.055.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
Sec. 1. Section 2, chapter 149, Laws of 1980 and RCW 80.28.025 are each amended to read as follows:
(1) In
establishing rates for each gas and electric company regulated by this chapter,
the commission shall adopt policies to encourage meeting or reducing energy
demand through cogeneration as defined in RCW 82.35.020, measures which improve
the efficiency of energy end use, and new projects which produce or generate
energy from renewable resources, such as solar energy, wind energy,
hydroelectric energy, geothermal energy, wood, wood waste, municipal wastes,
agricultural products and wastes, and end-use waste heat. ((These policies
shall include but are not limited to))
(2) The
commission shall adopt a policy allowing a return on investment in measures
to improve the efficiency of energy end use, cogeneration, or projects which
produce or generate energy from renewable resources ((which)). The
return on investment is established by adding an increment of two
percent to the rate of return on common equity permitted on the company's other
investment and allowing the capitalization of carrying costs associated with
the investment in such measures until they are included in the rate base for
ratemaking purposes. The rate of return increment shall be allowed for a
period not to exceed thirty years after the measure or project is first placed
in the rate base.
(3) The commission shall consider and may adopt other policies to protect a company from a reduction of short-term earnings that may be a direct result of utility programs to increase the efficiency of energy use. The policies may include allowing a periodic rate adjustment for investments in end-use efficiency or allowing changes in price structure designed to produce additional net revenue.
(4)
Measures or projects encouraged under this section are those for which
construction or installation is begun after June 12, 1980, and before January
1, ((1990, and which,)) 2000. At the time they are placed in the
rate base, ((are)) the measures or projects must be reasonably
expected to save, produce, or generate energy at a total incremental system
cost per unit of energy delivered to end use which is less than or equal to the
incremental system cost per unit of energy delivered to end use from similarly
available conventional energy resources ((which utilize nuclear energy or
fossil fuels and)) which the gas or electric company could acquire to meet
energy demand in the same time period. ((The rate of return increment shall
be allowed for a period not to exceed thirty years after the measure or project
is first placed in the rate base.))
Sec. 2. Section 3, chapter 149, Laws of 1980 and RCW 82.16.055 are each amended to read as follows:
(1) In computing tax under this chapter there shall be deducted from the gross income:
(a) An amount equal to the cost of production at the plant for consumption within the state of Washington of:
(i) Electrical energy produced or generated from cogeneration as defined in RCW 82.35.020; and
(ii) Electrical energy or gas produced or generated from renewable energy resources such as solar energy, wind energy, hydroelectric energy, geothermal energy, wood, wood wastes, municipal wastes, agricultural products and wastes, and end-use waste heat; and
(b) Those amounts expended to improve consumers' efficiency of energy end use or to otherwise reduce the use of electrical energy or gas by the consumer.
(2) This
section applies only to new facilities for the production or generation of
energy from cogeneration or renewable energy resources or measures to improve
the efficiency of energy end use on which construction or installation is begun
after June 12, 1980, and before January 1, ((1990)) 2000.
(3) Deductions under subsection (1)(a) of this section shall be allowed for a period not to exceed thirty years after the project is placed in operation.
(4)
Measures or projects encouraged under this section shall at the time they are
placed in service be reasonably expected to save, produce, or generate energy
at a total incremental system cost per unit of energy delivered to end use
which is less than or equal to the incremental system cost per unit of energy
delivered to end use from similarly available conventional energy resources ((which
utilize nuclear energy or fossil fuels and)) which the gas or electric
utility could acquire to meet energy demand in the same time period.
(5) The department of revenue, after consultation with the utilities and transportation commission in the case of investor-owned utilities and the governing bodies of locally regulated utilities, shall determine the eligibility of individual projects and measures for deductions under this section.