Electric Transmission Development, Ownership, and Operation in Washington.

Transmission lines are high-voltage electrical lines that carry large amounts of electricity over long distances.  Investor-owned and consumer-owned electric utilities, including joint operating agencies, may build, own, and operate electric transmission lines.  These utilities may also enter into agreements with each other to own electrical transmission facilities.  The federal Bonneville Power Administration (BPA) owns and operates the majority of electric transmission lines in the state and across the Pacific Northwest.

Electric Utility Transmission Planning.

Electric utilities are encouraged to participate and contribute to statewide or multiutility planning activities through transmission planning processes.  To improve the planning and development of transmission capacity, they must consult with federal, interstate, and voluntary industry organizations with a role in the bulk power transmission system.

All investor-owned and consumer-owned electric utilities in the state with more than 25,000 customers must develop integrated resource plans (IRPs).  All other electric utilities in the state, including those that essentially receive all their power from the BPA must file either an IRP or a less-detailed resource plan.  An IRP must include an assessment and 20-year forecast of the availability of and requirements for regional generation and transmission capacity to provide and deliver electricity to the utility's customers and meet state clean energy and emissions reduction requirements.  The transmission assessment must also identify the utility's expected needs to acquire new long-term firm rights, develop new, or expand or upgrade existing transmission facilities.  If an electric utility operates transmission lines rated 115,000 volts or greater, the transmission assessment must consider opportunities to make more effective use of the existing transmission capacity.

When identifying any need to develop new, expand, or upgrade existing bulk transmission and distribution facilities, utilities must document existing and planned efforts to make more effective use of the existing transmission capacity and secure additional transmission capacity.

Clean Energy Transformation Act Transmission Corridors Work Group.

The Clean Energy Transformation Act (CETA) requires Washington's electric utilities to meet 100 percent of their retail electric load using non-emitting and renewable resources by January 1, 2045.  The 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 neutral by January 1, 2030.

Under the CETA, the Energy Facility Site Evaluation Council (EFSEC) convened a Transmission Corridors Work Group (TCWG) to:

• review the need for new or upgraded transmission facilities to meet Washington's renewable energy goals;
• identify where transmission and distribution facilities may need to be enhanced or constructed;
• identify environmental review options; and
• recommend ways to expedite review of transmission projects without compromising required environmental and cultural protection.

The TCWG issued its final report in October 2022 and identified several key themes including regional and interregional planning, staff resources in state agencies, enhanced resources for tribes, and pre-application planning and coordination.

State Environmental Policy Act.

The State Environmental Policy Act (SEPA) establishes a review process for state and local governments to identify environmental impacts that may result from governmental decisions, such as the issuance of permits or the adoption of land-use plans.  The SEPA environmental review process involves a project proponent, or the lead agency completing an environmental checklist to identify and evaluate probable environmental impacts.  Government decisions that the SEPA checklist process identifies as having significant adverse environmental impacts must then undergo a more comprehensive environmental analysis in the form of an environmental impact statement.  The SEPA provides categorical exemptions to remove specific types of projects from review.

Utilities and Transportation Commission Authorization for Rate of Return on Utility  Investments.

The Utilities and Transportation Commission (UTC) is a three-member commission with broad authority to regulate the rates, services, and practices of a variety of businesses in the state, including investor-owned gas and electrical companies.  The UTC must ensure rates charged by these companies are fair, just, reasonable, and sufficient.  The UTC initiates a general rate proceeding if a company requests a change in its authorized rate of return.

The UTC is authorized to allow an incentive rate of return of up to 2 percent for investor-owned electric utilities (IOUs) on capital expenditures for electric vehicle supply equipment through 2030.  The investments cannot increase the retail revenue requirement of the utility more than 0.25 percent and must be deployed for the benefit of ratepayers.

The UTC must allow a 2 percent incentive rate of return on investment for energy efficiency programs if priority is given to senior citizens and low-income citizens.  The UTC may allow an incentive rate of return on investment in additional energy efficiency programs, including, but not limited to, tree planting programs and cool roof programs.

Washington Electric Transmission Authority.

The Washington Electric Transmission Authority (Authority) is created as a public body.  The Authority is an instrumentality of the state exercising essential government functions related to electric transmission.  The Authority must employ an executive director, who must be appointed by the board of directors (Board) with an affirmative vote of at least five members.  The executive director must employ staff to accomplish the purposes of the Authority.

The purpose of the Authority is to:

• support expansion of new electric transmission capacity within the state that is prudent and needed to serve Washington customers;
• support the development of community microgrids, distributed energy resources, and energy conservation;
• pursue cost-effective nonwires alternatives to increase the capacity of existing electrical infrastructure;
• be a statewide resource for developing and coordinating upgrades to existing transmission lines;
• collaborate with electric utilities, independent transmission developers, local jurisdictions, neighboring states, regional entities, and the federal government to develop interstate and regional transmission resources;
• evaluate opportunities for regional wholesale markets; and
• support community and economic development.

The Authority must also seek to protect cultural and natural resources, avoid impacts to overburdened communities and vulnerable populations, support good jobs, maximize the use of existing rights-of-way for transmission development, and mitigate wildfire risk.  The Authority and any eligible facilities acquired by the Authority are not subject to the jurisdiction of the UTC.  Nothing allows an IOU to include the cost of eligible facilities in its rate base without the approval of the UTC.

The Authority may own electric transmission equipment and systems, and such ownership may not exceed the extent and duration necessary or useful to promote the public interest.  Before becoming an owner or partial owner of transmission facilities, the Authority must develop and publish a plan identifying the public purpose of ownership, the conditions that would make ownership no longer necessary, and a plan to divest the Authority of ownership as soon as economically prudent. 

The Authority may also:

• adopt rules;
• use the services of executive departments of the state upon mutually agreeable terms and conditions;
• exercise the power of eminent domain for land acquisition necessary to secure rights-of-way for new transmission corridors;
• enter into contracts and agreements;
• solicit, receive, and expend gifts, grants, and donations;
• apply for and accept federal loans;
• enter into partnerships with public or private entities, which may include a fee schedule for services provided under a partnership, and when entering into partnerships, serve as the SEPA lead and tribal consultation lead;
• engage in transmission planning activities with others in and outside Washington, along with regional and interregional cost allocation process discussions;
• lease, purchase, and accept donations of property;
• sell, lease, exchange, or dispose of property;
• select a qualified transmission builder or operator to build, finance, plan, acquire, maintain, and operate an electric transmission project;

• adopt criteria in rule for when the Authority may proceed to construction in the absence of selecting a qualified builder only as a last resort in instances where the Authority identifies a pressing need for a project and there is no available qualified transmission builder; and

• sell a state-owned electric transmission project at any stage of development to a utility serving customers in Washington, a joint operating agency, BPA, or an independent transmission developer or operator.

The Authority is not required to sell to the highest bidder, but before selling a project that is not part of a partnership agreement, the Authority must adopt criteria in rule for developing a transparent process including by issuing a competitive request for proposals, evaluating proposals, and selecting a project buyer.

When selling a project the Authority must also adopt criteria in rule to determine when the Authority would continue developing or operating a project after receiving bids on a request for proposal, if it determines that it is in the best interest of the public to continue owning the project.

The Authority may adopt criteria in rule for an initial local investment commitment fee and an annual local investment commitment fee for high-voltage projects that the Authority develops, owns, or sells under this act.  Rulemaking must provide that the fees are distributed among counties, cities, towns, and federally recognized Indian tribes whose treaty ceded areas or usual and accustomed places included parts of Washington.  The fees must also be distributed in proportion to the project's impact and be appurtenant to the project, such that the assessed fees are transferred with the title if the project is sold. 

The Authority must report on its activities, including an operating and financial statement for the previous fiscal year, to the Governor and Legislature by December 1, 2025 and annually every July 1 thereafter.

Transmission Needs Assessment.

The Department of Commerce (Commerce) must develop a 20-year needs assessment by October 30, 2026.  The Authority must update the needs assessment every five years thereafter.  The needs assessment must do the following:

• It must identify high-priority corridors needed to meet current and forecasted transmission demand.  
  • High-priority corridor identification must include forecasted transmission and interconnection demand of clean energy projects necessary to meet CETA targets and lower-conflict siting approaches to identify areas with forecasted transmission demands for in-state clean energy generation.
• It must identify investments in existing transmission lines, such as grid-enhancing technologies (GETs) and reconductoring with advanced conductors, that can unlock additional capacity and improve network performance to alleviate the need for new transmission lines.
  • GETs are the hardware and software that increase the capacity of electrical lines and improve the efficiency, reliability, and safety of the grid.
  • Reconductoring with advanced conductors means replacing the existing electric conductor with a conductor that increases the capacity of the electrical grid and/or improves efficiency, reliability, and safety.  Advanced conductors may include, but are not limited to:  conductors that have electrical resistance at least 10 percent lower than existing conductors of a similar diameter; or high-temperature low-sag conductors.
• It must identify and evaluate nonwires alternatives. 
  • Nonwires alternatives are any electrical grid investment that is intended to defer or remove the need to construct or upgrade components of a distribution and/or transmission system. 
• It must identify for the Authority regional and interregional transmission forums, and opportunities to coordinate, investigate, plan, prioritize, and negotiate with entities within and outside the state for the establishment of interstate transmission corridors.
• It must coordinate with and provide transmission-related expertise to relevant state agencies.
• It must consider opportunities to collocate transmission corridors along existing rights-of-way for other infrastructure.
• It must align with the state energy strategy.

When developing the needs assessment, Commerce may consider existing planning already completed by electric utilities and consult with the Board to use existing transmission plans developed by regional or federal entities, and must avoid duplicating plans or related analysis already available.

Information obtained by the Authority that is critical energy infrastructure information or proprietary technical or business information must be confidential and is not subject to inspection or public disclosure. 

Local Assistance and Identification of Debt Financing Instruments.

In addition to developing the first needs assessment, Commerce must:

• provide assistance to local and tribal governments that are permitting the construction and operation of electric transmission projects; and
• identify appropriate debt financing instruments needed to improve electric transmission capacity and submit a report to the Governor and Legislature with financing options and recommendations by November 1, 2025—in doing so Commerce may consult with the Office of the State Treasurer and the Office of the Attorney General.

Board of Directors for the Authority.

To advise the Authority, a nine-member Board is created.  Membership includes the Director of Commerce, or a director's designee, and the remaining members appointed by the Governor with one each representing the following:

• knowledge of the public utility industry;
• knowledge of land use planning and law and local permitting processes;
• expertise in clean energy development;
• expertise in ratepayer protection;
• a representative of electrical workers with expertise in building electrical transmission; 
• experience with financing large infrastructure projects;
• knowledge of wildlife conservation and land use policies; and from a federally recognized Indian tribe whose treaty ceded areas or usual and accustomed places included parts of Washington.

No Board member may represent an owner or operator of an electric generating or transmission facility.  After the initial staggered appointments, each Governor appointee must serve four-year terms.  Decisions require a simple majority vote of all the members on the Board.  The Board must elect its own chair from the membership for a two-year period and meet quarterly.  Commerce must staff the Board.

When developing the needs assessment, Commerce may consult with the Board about using existing transmission plans developed by regional or federal entities.

State Environmental Policy Act Exemption.

The following utility-related upgrading and rebuilding activities for existing electric transmission lines over 115 kilovolts, except on lands covered by water or underwater, are categorically exempt from compliance with SEPA:

• rebuilding or upgrading within an existing right-of way including reconductoring with advanced conductors and GETs;
• relocating segments of transmission lines within an existing right-of-way or within adjacent previously disturbed or developed lands; and
• widening an existing transmission line right-of-way to meet current electrical standards within previously disturbed or developed lands and only as needed to comply with applicable electrical standards.

For a categorically exempt transmission line project, the Authority must notify the Department of Archaeology and Historic Preservation (DAHP) and each federally recognized Indian tribe with usual and accustomed areas and ceded treaty areas, where the right-of-way exists before beginning the project.  A consultation must allow the Authority to determine that there are no existing archaeological, cultural, or tribal resources in the right-of-way.  The DAHP may require a survey in coordination with the affected federally recognized Indian tribe, must ensure that the consultation occurs, and determine whether archaeological, cultural, or tribal resources are identified in an existing right-of-way.  If any such resources are identified, the DAHP must ensure that the utility or transmission developer accounts for and protects the resources as provided under law.  Information provided by the federally recognized Indian tribe must be kept confidential and exempt from public disclosure.

Incentives for Electric Transmission Investments.

In establishing rates for each IOU, the Utilities and Transportation Commission (UTC) may allow an incentive rate of return on investment of capital expenditures for GETs and reconductoring with advanced conductors deployed for the benefit of ratepayers on transmission owned and operated by an IOU through December 31, 2040.  The UTC must consider and may adopt other policies to encourage increased deployment of electric transmission infrastructure.

For GETs or reconductoring investments, an increment of up to 2 percent may be added to the rate of return on common equity allowed on the company's other investments with demonstrated benefits to ratepayers.  The incentive applies only to projects which have been installed after July 1, 2025, and may be earned only for 15 years.

By December 31, 2029, the UTC must report to the Legislature on:  (1) the use of any incentives used for investments in GETs and reconductoring with advanced conductors, (2) the quantifiable impacts of the incentives on electric transmission deployment, and (3) any recommendations to the Legislature about further utility investments in electric transmission.

Accounts.

The Electric Transmission Operating Account (Operating Account) and the Electric Transmission Capital Account (Capital Account) are created in the State Treasury.  Revenues to the Operating Account consist of appropriations made by the Legislature federal funds, or gifts or grants from the private sector or foundations, and other sources.  Moneys in the Operating Account may be spent only after appropriation, and for operating cost purposes consistent with purposes of the Authority.

Revenues to the Capital Account consist of all moneys received for the acquisition, sale, management, and administration of the Authority's duties for electric transmission projects and all other revenue related to electric transmission projects created or acquired.  The Capital Account may also receive appropriations made by the Legislature:  gifts, grants, and endowments from public or private sources.  Moneys in the Capital Account may be spent only after appropriation.  The Authority's executive director, or the director's designee, may authorize expenditures from the Capital Account to reimburse management costs incurred by the Authority on electric transmission projects, for the acquisition of interests in land or property to be managed as projects, and for all other nonoperating costs.