6001-S.E AMH CROU DURB 195

ESSB 6001 - H AMD 743

By Representative Crouse

WITHDRAWN 4/12/2007

   Strike everything after the enacting clause and insert the following:

   "NEW SECTION. Sec. 1. The following greenhouse gas emissions reduction and clean energy economy goals are established for Washington state:

   (1) By 2020, reduce greenhouse gas emissions in the state to 1990 levels;

   (2) By 2035, reduce greenhouse gas emissions in the state to twenty-five percent below 1990 levels;

   (3) By 2050, the state will do its part to reach global climate stabilization levels by reducing emissions to fifty percent below 1990 levels or seventy percent below the state's expected emissions that year;

   (4) By 2020, increase the number of clean energy sector jobs to twenty-five thousand from the eight thousand four hundred jobs the state had in 2004; and

   (5) By 2020, reduce expenditures by twenty percent on fuel imported into the state by developing Washington resources and supporting efficient energy use.

   NEW SECTION. Sec. 2. (1) Executive Order No. 07-02 shall provide the mechanisms for identifying the policies and strategies necessary to achieve the economic and emission reduction goals of section 1 of this act. Consistent with the Executive Order's directive to seek a healthier and more prosperous future for Washington state, agency and stakeholder representatives participating in the Washington climate change challenge shall also seek emission reduction policies and strategies that, to the maximum extent possible, minimize economic disruptions and protect jobs for Washington state workers, citizens, and businesses, while avoiding policies and strategies that would result in the transfer or outsourcing of economic advantages or jobs to other states, regions, or nations.

   NEW SECTION. Sec. 3. By December 31st of each even-numbered year beginning in 2010, the departments of ecology and community, trade, and economic development shall report to the governor and the appropriate committees of the senate and house of representatives the total greenhouse gas emissions for the preceding two years, and totals in each major source sector.

   NEW SECTION. Sec. 4. A new section is added to chapter 80.28 RCW to read as follows:

   (1) In establishing rates for each electrical company regulated under chapter 80.28 RCW, the commission shall adopt policies allowing an additional return on investments to encourage meeting energy requirements through distributed generation as defined in RCW 19.285.030, and to accelerate efficiencies in electric transmission and distribution systems that increase reliability and reduce energy losses or otherwise increase the efficiency of energy delivery to end-use consumers. These policies shall include but are not limited to adding an increment of two percent to the rate of return on common equity permitted on an electrical company's other investments for prudently incurred investments in distributed generation, and in measures that improve, as measured in kilowatt-hour savings, the overall efficiency of transmission, distribution, and end-use consumption of electricity through energy efficiency technologies, including any device, instrument, machine, appliance, or process related to the transmission, distribution, and consumption of electricity to increase energy efficiency, including but not limited to smart grid technology, smart meters, and demand response technologies. The rate of return increment must be allowed for a period, at the commission's discretion, of at least seven but not more than thirty years after the investment is first placed in the rate base. Measures or projects encouraged under this section are those for which construction or installation is begun after July 1, 2007, and before January 1, 2017, and which, at the time they are placed in the rate base, are reasonably expected to save, produce, or generate energy at a total incremental system cost per unit of energy delivered to end use that is less than or equal to the incremental system cost per unit of energy delivered to end use from new baseload or peaking electric generation and that the electrical company could acquire to meet energy demand in the same time period.

   (2) For purposes of this section, "commission" means the utilities and transportation commission.

   NEW SECTION. Sec. 5. A new section is added to chapter 82.16 RCW to read as follows:

   (1) Subject to the limitations in this section, a consumer-owned utility may claim a credit against the tax imposed under this chapter.

   (2) The amount of credit is equal to two percent of the amount of qualifying investments made each fiscal year beginning July 1, 2007, in distributed generation, and in measures that improve, as measured in kilowatt-hour savings, the overall efficiency of transmission, distribution, and end-use consumption of electricity through energy efficiency technologies, including any device, instrument, machine, appliance, or process related to the transmission, distribution, and consumption of electricity to increase energy efficiency, including but not limited to smart grid technology, smart meters, and demand response technologies.

   (3) The credit may be claimed only after the qualifying investment has been made. The credit shall be claimed against taxes due for the same fiscal year in which the qualifying investment has been made. The credit for each reporting period shall not exceed the amount of tax otherwise due under this chapter for the reporting period. Credits earned for any fiscal year shall not be carried forward or backward and claimed against taxes due for prior or subsequent fiscal years. Refunds may not be granted in the place of a credit. Any unused credit expires.

   (4) The total amount of credit that may be taken by a consumer-owned utility for qualifying investments in a fiscal year is limited to its base credit plus any ratable portion of unused base credit as calculated by the department. The balance of base credits not used by other consumer-owned utilities may be ratably distributed to qualifying applicants under the formula in subsection (7)(a) of this section. The total credit shall be claimed against taxes due for the same fiscal year in which the qualifying investments are made.

   (5) The total amount of credit, statewide, that may be taken in any fiscal year shall not exceed one million dollars.

   (6) The department of community, trade, and economic development shall determine and certify to the department those investments made by a consumer-owned utility that qualify for the credit under this section.

   (7) Unless the context clearly requires otherwise, the definitions in this subsection apply throughout this section.

   (a) "Base credit" means the maximum amount of credit against the tax imposed by this chapter that each consumer-owned utility may take each fiscal year as calculated by the department. The base credit is equal to the proportionate share of in-state retail electricity revenues received by each consumer-owned utility in the prior fiscal year that bears to the total amount of in-state retail electricity revenues received by all consumer-owned utilities in the prior fiscal year multiplied by one million dollars.

   (b) "Consumer-owned utility" means a municipal utility formed under Title 35 RCW, a public utility district formed under Title 54 RCW, an irrigation district formed under chapter 87.03 RCW, a cooperative formed under chapter 23.86 RCW, a mutual corporation or association formed under chapter 24.06 RCW, or port district within which an industrial district has been established as authorized by Title 53 RCW, that is engaged in the business of distributing electricity to more than one retail electric customer in the state.

   (c) "Qualifying investment" means investments in distributed generation, and those measures under subsection (2) of this section which, at the time they are placed in the rate base, are reasonably expected to save, produce, or generate energy at a total incremental system cost per unit of energy delivered to end use that is less than or equal to the incremental system cost per unit of energy delivered to end use from new baseload or peaking electric generation and that the consumer owned utility could acquire to meet energy demand in the same time period.

   (8) This section expires July 1, 2037.

   NEW SECTION. Sec. 6. Sections 1 through 3 of this act constitute a new chapter in Title 43 RCW."

   Correct the title.

   EFFECT:   Strikes the provisions of the underlying bill, which contained provisions relating to establishment of a greenhouse gas emissions performance standard, greenhouse gas emission reduction goals, legislative findings, and other related provisions.

   Establishes greenhouse gas emissions reduction and clean energy economy goals.

   Specifies that the Governor's Executive Order No. 07-02 shall provide the mechanisms for identifying the policies and strategies necessary to achieve the economic and emission reduction goals.

   Requires the Utilities and Transportation Commission to adopt policies to allow investor-owned utilities to receive an incremental two percent rate of return on common equity for investments that: (1) encourage meeting energy requirements through distributed generation; (2) accelerate efficiencies in electric transmission and distribution systems or (3) increase the efficiency of energy delivery to end-use customers.

   Allows consumer-owned utilities to claim an annual public utility tax (PUT) credit equal to two percent of investments in distributed generation or energy efficiency improvements. The total amount of credit for all consumer-owned utilities is limited to $1 million per calendar year.