AN ACT Relating to district heating systems; and amending RCW 80.62.010, 80.62.020, 35.97.020, and 35.97.010.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

Sec. 1. Section 1, chapter 94, Laws of 1983 and RCW 80.62.010 are each amended to read as follows:

The legislature finds that traditional utility regulation may pose unnecessary barriers to((: (1) The widespread and rapid utilization of Washington's geothermal heat resource for district heating purposes; and (2) the efficient use of biomass materials and waste heat sources for district heating purposes)) using Washington's heat sources for district heating purposes. The legislature further finds that regulation may be necessary to protect the interests of the public in securing adequate heating services from these heat sources at reasonable cost. Therefore, it is the intent of the legislature and the purpose of this chapter to provide a streamlined permitting system which will encourage development and efficient utilization and distribution of heat while continuing to provide reasonable customer protections.

Sec. 2. Section 2, chapter 94, Laws of 1983 and RCW 80.62.020 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Biomass ((~~materials~~)) energy system" means a system that provides for the production or collection of organic materials such as wood and agricultural residues and municipal solid waste that are primarily ((~~waste~~)) organic materials and the conversion or use of such ((~~materials can be used to generate heat directly~~)) material for the production of heat or substitute fuels through several processes including, but not limited to, burning, pyrolysis, or anaerobic digestion.

(2) "Geothermal heat" means the natural thermal energy of the earth.

(3) "Heat" means thermal energy.

(4) "Heat source" includes but is not limited to((:)) (a) ((~~Generators of waste heat; (b) geothermal wells or springs; (c) combustion of biomass materials; or (d) collection of solar heat~~)) any integral part of a heat production or heat rejection system of an industrial facility, cogeneration facility, or electric power generation facility, (b) geothermal well or spring, (c) biomass energy system, (d) solar collection facility, and (e) hydrothermal resource or heat extraction process.

(5) "Heat supplier" means any private person, company, association, or corporation engaged or proposing to engage in developing, producing, transmitting, distributing, delivering, furnishing, or selling to or for the public heat from a heat source for any beneficial use other than electricity generation.

(6) "Commission" means the utilities and transportation commission.

(7) "Cogeneration facility" means any machinery, equipment, structure, process, or property, or any part thereof, installed or acquired for the primary purpose of cogeneration by a person or corporation.

(8) "Cogeneration" means the sequential generation of two or more forms of energy from a common fuel or energy source.

(9) "Waste heat" means the thermal energy which otherwise would be released to the environment from an industrial process, electric generation, or other process.

(10) "Hydrothermal resource" means the thermal energy available in wastewater, sewage effluent, wells, or other water sources, natural or manmade.

Sec. 3. Section 1, chapter 216, Laws of 1983 and RCW 35.97.020 are each amended to read as follows:

(1) It is the intent of the legislature that heating systems authorized pursuant to this chapter be developed in a way that minimizes any long-term rate impacts on customers of existing utilities.

(2) Counties, cities, towns, irrigation districts which distribute electricity, sewer districts, water districts, ((~~and~~)) port districts, and metropolitan municipal corporations are authorized pursuant to this chapter to establish heating systems and ((~~provide~~)) supply heating services from Washington's heat sources ((~~including, but not limited to, geothermal heat, steam or water heated by a biomass energy system, waste heat, and energy from a cogeneration facility~~)).

(3) Before a municipality may establish by ordinance a heating system or supply heating services, it shall conduct a public hearing and assess the long-term impacts on rates of utility customers in the area proposed to be served.

(4) Nothing in this chapter authorizes any municipality to generate, transmit, distribute, or sell electricity.

Sec. 4. Section 2, chapter 216, Laws of 1983 and RCW 35.97.010 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Biomass energy system" means a system that provides for the production or collection of organic materials such as wood and agricultural residues and municipal solid waste that are primarily ((~~waste~~)) organic materials and the conversion or use of that material for the production of ((~~energy~~)) heat or substitute fuels through several processes including, but not limited to, burning, pyrolysis, ((~~distillation,~~)) or anaerobic digestion.

(2) "Cogeneration" means the sequential generation of two or more forms of energy from a common fuel or energy source.

(3) "Cogeneration facility" means any machinery, equipment, structure, process, or property or any part thereof, installed or acquired for the primary purpose of cogeneration by a person or corporation.

(4) "Geothermal heat" means the natural thermal energy of the earth.

(5) "Waste heat" means the thermal energy which otherwise would be released to the environment from an industrial process, electric generation, or other process.

(6) "Heat" means thermal energy.

(7) "Heat source" includes but is not limited to (a) any integral part ((~~or process~~)) of a heat production or heat rejection system of an industrial facility, cogeneration facility, or electric power generation facility, (b) geothermal well or spring, (c) biomass energy system, (d) solar collection facility, and (e) hydrothermal resource or ((~~energy~~)) heat extraction process.

(8) "Municipality" means a county, city, town, ((~~sewer district, water district, port district, or~~)) irrigation district which distributes electricity, sewer district, water district, port district, or metropolitan municipal corporation.

(9) "Heating facilities or heating systems" means all real and personal property, or interests therein, necessary or useful for: (a) The acquisition, production, or extraction of heat; (b) the storage of heat; (c) the distribution of heat from its source to the place of utilization; (d) the extraction of heat at the place of utilization from the medium by which the heat is distributed; (e) the distribution of heat at the place of utilization; and (f) the conservation of heat.

(10) "Hydrothermal resource" means the thermal energy available in wastewater, sewage effluent, wells, or other water sources, natural or manmade.