Clean Energy Transformation Act.  In 2019, the Legislature passed the Clean Energy Transformation Act (CETA), which requires Washington's electric utilities to meet 100 percent of their retail electric load using non-emitting and renewable resources by January 1, 2045.  Additionally, CETA requires electric utilities to eliminate coal-fired resources from their allocation of electricity by December 31, 2025, and make all retail sales of electricity greenhouse gas (GHG) neutral by January 1, 2030. 

An electric utility may satisfy up to 20 percent of the GHG neutral standard with an alternative compliance option, such as investing in energy transformation projects.  An energy transformation project must provide energy-related goods or services, other than the generation of electricity; result in a reduction of fossil fuel consumption and related GHG emissions; and provide benefits to electric utility customers. 

Energy Independence Act and Pre-Approval Process for Eligible Projects or Resource.  Approved by voters in 2006, the Energy Independence Act—Initiative 937 (I-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 I-937 are called qualifying utilities.  In 2012, the Legislature authorized project proponents or consumer-owned qualifying utilities to seek advisory opinions from the Department of Commerce (Commerce) on whether a proposed electric generation project or conservation resource would qualify under I-937.  

An advisory opinion adopted by the governing body of a consumer-owned qualifying utility that will use the project or resource is binding on the auditors responsible for determining compliance with I-937, but only if:  (1) the advisory opinion affirmatively qualifies the project or resource; (2) the governing board of the consumer-owned utility that will use the project or resource adopts the advisory opinion after public notice and hearing; and (3) the project or resource is built or acquired as proposed. 

Commerce must provide an analysis and advisory opinion on whether a proposed electric generation or energy transformation project (project) qualifies to meet CETA requirements when requested by an electric utility or a person proposing a project.

The electric utility or proponent of a project to be used by an electric utility may apply for an advisory opinion from Commerce.  The application must be in writing and must include an accurate description of the proposed project. 

Commerce must solicit and consider comments from interested parties, including staff of a requesting utility, when forming an advisory opinion. The Commerce director must issue a signed advisory opinion and include a legal analysis on whether the proposed project qualifies to meet CETA requirements within 90 days of receiving an application. 

Any project reviewed under this advisory opinion process must be deemed a compliant resource under CETA by any agency authorized to enforce CETA, including the Utilities and Transportation Commission (UTC), if the advisory opinion (1) affirmatively qualifies the project and (2) the project or resource is built or acquired as proposed in the application. 

Commerce may require an applicant to pay a fee to cover the cost of reviewing the project and preparing an advisory opinion.  Commerce may adopt rules to implement the advisory opinion process.  A project is considered to be used by a utility if the utility takes ownership in whole or in part of the project or enters into a contract to purchase the energy and nonenergy attributes of a project. 

Nothing in this bill preempts the authority of the governing board of a consumer-owned utility, the UTC, or any agency authorized to enforce the provisions of CETA from making a determination, independent of this advisory opinion process, on whether a project qualifies to meet CETA.