SB 5223

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

As of January 24, 2019

Title: An act relating to net metering.

Brief Description: Concerning net metering.

Sponsors: Senators Palumbo, Rivers, Rolfes, King, Carlyle, Mullet, McCoy, Wellman, Das, Nguyen, Randall, Frockt, Salomon, Keiser, Wilson, C., Kuderer, Darneille, Cleveland, Saldaña, Dhingra, Pedersen, Conway and Van De Wege.

Brief History:

Committee Activity: Environment, Energy & Technology: 1/16/19.

Brief Summary of Bill

  • Increases the 0.5 percent minimum threshold to 4 percent for the cumulative generating capacity that a utility must make available for net metering systems.

  • Requires as of March 31, any remaining unused kilowatt-hour (kWh) credit generated for the calendar year to be used to assist low-income residential utility customers.

  • Requires electric or gas utilities to include on customer bills the total amount of kWh of electricity consumed for the most recent 12-month period.

  • Directs the Department of Commerce to convene a workgroup to identify when compensation changes for net metering systems are warranted.


Staff: Kimberly Cushing (786-7421)

Background: Net Metering. Net metering allows electricity customers to offset their consumption of purchased electricity with electricity generated by their own small-scale, renewable systems. Net-metered electricity is valued at the utility's retail rate. Under current law, a net-metering system must be located on a customer's premises and must generate no more than 100 kilowatts (kW) using cogeneration, fuel cells, water, wind, solar energy, or biogas. On April 30th of each year, any remaining unused kWh credit accumulated during the previous year must be granted to the utility without compensation to the customer.

Electric utilities must offer to make net metering available to eligible customer-generators on a first-come, first-served basis until the cumulative generating capacity of net metering systems equals 0.5 percent of the utility's peak demand during 1996. As of December 2018, 20 utilities have exceed the 0.5 percent threshold.

Information Required on Customer Billings. Any customer billing issued by a light or power business that serves more than 20,000 customers in Washington must include:

Summary of Bill: Net Metering. The 0.5 percent threshold for each utility's cumulative generating capacity of net metering systems is increased to 4 percent.

The date changes from April 30 to March 31 for determining whether a customer has any remaining unused kWh credit accumulated. Additionally, any unused kWh credits on March 31 are required to be used to assist low-income residential utility customers.

Amount of kWh of Electricity on Customer Bills. All electric or gas utilities in Washington that serve more than 20,000 customers are required to include the total amount of kWh of electricity consumed for the most recent 12-month period on customer bills.

The State Building Code Council Study. The State Building Code Council, in consultation with the Department of Commerce (Commerce) and local governments, is required to conduct a study of the building code and adopt changes necessary to encourage greater use of renewable energy systems.

Net Metering Workgroup. Commerce must convene a workgroup with specific representatives to identify issues and laws associated with the future of net metering. The workgroup must identify the specific circumstances in which changes in compensation for net metering systems would be warranted and what the policy should be for each customer-generator rate class, as well as consider the reduction in utility income associated with different levels of net metering and whether there are any cost shifts to associated ratepayers. The workgroup must report back to the Legislature by December 1, 2020.

Appropriation: None.

Fiscal Note: Available.

Creates Committee/Commission/Task Force that includes Legislative members: No.

Effective Date: Ninety days after adjournment of session in which bill is passed.

Staff Summary of Public Testimony: PRO: Palumbo: This bill passed out of the Senate last year. Ninety percent of utility owners live in service areas of utilities that hit the threshold. Washington State has the most restrictive net metering law. Four utilities have abandoned net metering. Utilities want clarification. Solar customers are all over the map and stimulate economic growth in the state. Net metering allows the average person to make their own clean energy. Customers pay a basic charge for having utility connection and should not be penalized for not using any electricity. We are at net metering 1.0 and should think about 2.0. The task force is the way to do this. Two solar representatives should be on the taskforce, one for installers and one for manufacturers.

CON: Electric cooperatives must pass on to members all costs regardless of how insignificant. Some have reached the 0.5 threshold and some have continued to provide this even though aware of cost-shifting, but local boards made this decision. If the local governing board wants to subsidize the non net metering customers, that is their choice. Overall state policies are in a period of transition with many states considering other options, such as net billing to address cost shifts from high to low-value homes. Hold off on section one of the bill. We support making recommendations on the best and fairest way to move forward.

OTHER: This is a timely discussion because there is a lot of development in self-generation with customers taking advantage of tax incentives. Net metering shifts costs from more affluent customers to other rate payers. Avista is approaching cap and wants to establish the appropriate mechanism. The meter aggregation statues are unworkable. Customers don't want to apply their unused credits to other customers.

Persons Testifying: PRO: Senator Guy Palumbo, Prime Sponsor; Dave Warren, Silfab Solar Inc.; Allison Arnold, Solar Installers of Washington; Jeremy Smithson, Puget Sound Solar. CON: Kent Lopez, Washington Rural Electric Cooperative Association; Nicolas Garcia, WPUDA. OTHER: John Rothlin, Avista.

Persons Signed In To Testify But Not Testifying: No one.