Washington’s groundbreaking climate package examined
8 bills that transform Washington’s energy system
2019 was a landmark year for energy and climate legislation in Washington. The 2019 Washington State Legislative Digest summarizes each of eight major bills that have been signed into law by Governor Jay Inslee. Together these new laws will reduce carbon emissions and pollution, create jobs, enhance the health and quality of life for Washingtonians, and help ensure that the state’s transition to a clean energy economy is done in an orderly and equitable fashion. Here’s what those eight bills will do.
Electric System & Utility Bills
Senior Policy staffer, Joni Bosh, breaks down four bills starting with SB 5116, The Washington Clean Energy Transformation Act that requires utilities to transition to emission-free energy resources by 2045. Here are the highlights.
E2SSB 5116: The Washington Clean Energy Transformation Act
The bill contains a series of provisions to ensure an orderly transition to a clean electric system. Key provisions include:
- Coal eliminated. Each utility must eliminate coal-fired resources from its allocation of electricity by 2025.
- Utilities must go greenhouse gas neutral in 2030. Utilities may still acquire as much as 20% of their resources from fossil fuel by the year 2030, but emissions from those resources must be offset by the purchase of renewable energy credits (RECs), alternative compliance payments, or investments in energy transformation projects (ETPs). Utilities must also acquire all cost-effective, reliable and feasible conservation, efficiency, and demand response. Utilities that are covered by I-937, which sets out renewable portfolio and efficiency standards, must continue to comply with that law.
- 2045 clean energy standard. Starting January 1, 2045 utilities must use only non-emitting resources and renewable resources to meet 100% of retail load.
- By January 1, 2022, every utility must develop a four-year clean energy implementation plan (CEIP) that sets targets for meeting the standards as well as targets for efficiency, demand response and renewables. The law makes several other changes to IRPs. The social cost of carbon must be incorporated in planning and when evaluating and selecting mid- and long-term resources.
- Penalties for non-compliance. A utility or market customer that fails to meet the standards for 2030-2044 or fails to eliminate coal must pay an administrative penalty of $100/MWh for non-complying power. Additional penalties apply to any power acquired from coal after January 1, 2025 and a slightly discounted penalty will apply to the use of peaking gas-fired power plants.
- Penalties can be excused by the UTC in the case of Investor Owned Utilities (IOUs) and by the Auditor in the case of Consumer Owned Utilities (COUs) if reliability is threatened.
- Cost Cap. Any utility will be considered to be in compliance with SB 5116 if the cost of meeting the bill’s requirements exceed 2% of weather-adjusted sales revenue.
- All utilities must make programs and funding available for energy assistance to low-income households by July 31, 2021. Additionally, moneys collected through non-compliance penalties will be deposited into the state low-income weatherization and structural rehabilitation assistance account.
Fuel Mix Disclosures
The bill updates and strengthens standards for how utilities report on the fuel mix from which they acquire energy. Each retail supplier of electricity must report annually the amount of electricity delivered to retail customers by fuel type and by MWhs. The state Commerce Depart
ment will determine each utility’s fuel mix percentages; each utility must present that information in the form of a uniform “electricity product content label” provided to retail customers.
E2SSB 5223: Net Metering
The bill amends existing law to increase the net metering that each utility must offer on a first come, first served basis from .5% of 1996 peak load to 4.0% of 1996 peak load. Each utility must offer net metering until that threshold is reached or until June 30, 2029, whichever occurs first.
EHB 1126: Utility Planning for Distributed Energy
The bill requires that those utilities conducting distributed energy planning meet certain planning goals, and those plans be included in utilities’ Integrated Resource Plans (IRPs); and encourages both the acquisition of cost-effective Distributed Energy Resources (DERs) and the initiation of pilot programs for less well-known DERs.
Building & Appliance Efficiency
Policy Analyst, Amy Wheeless, reviews HB 1257, the Clean Buildings for Washington Act, and HB 1444, the Appliance Standards bill.
HB 1257: Clean Buildings for Washington Act
The bill creates energy performance standards and incentives for large commercial buildings of over 50,000 square feet with the goal of seeking maximum reductions of greenhouse gas emissions from the building sector. The Washington State Department of Commerce is directed to develop Energy Use Intensity (EUI) targets and adopt a conditional compliance method that ensures that covered commercial buildings that fail to meet the standards are taking action to achieve reductions in energy use. Buildings that fail to comply will be subject to an administrative penalty not to exceed $5,000 plus $1 per year per gross square foot of floor area.
The bill provides incentives for compliance and stipulates that building owners will not be required to make efficiency upgrades that do not pay for themselves over the life of the relevant item.
The bill also requires natural gas utilities to identify and acquire all conservation that is available and cost-effective and encourages gas utilities to acquire renewable natural gas. Finally, the bill amends the State Building Code update process to require that proposed changes be “yield the lowest cost to the building owner and occupant while meeting the energy reduction goals . . . “. The building code will also require that all new buildings that provide onsite parking also provide electric vehicle charging facilities.
HB 1444: Appliance Standards
The bill sets energy and water efficiency standards for 16 common consumer products and updates one existing standard. The new products are air compressors, commercial fryers, commercial dishwashers, commercial steam cookers, computers and monitors, faucets, high color rendering index fluorescent lamps, portable air conditioners, residential ventilating fans, showerheads, lawn spray sprinkler bodies, uninterruptible power supplies, urinals and water closets, and water coolers. The current standard for portable electric spas will be updated. Also, electric storage water heaters sold in Washington will be required to be equipped with a device that enables them to be connected to the electric grid so that, with the owner’s permission, they can be used to by the utility to manage load.
Policy Analyst, Annabel Drayton, summarizes bills that encourage utilities to plan for transportation electrification and that provide tax incentives for zero-emission vehicles and certain clean alternative fuel vehicles.
HB 1512: COU Authorization & IOU Clarification
The bill grants COUs authority to offer programs and services and also to make cost-effective investments in transportation electrification. It also provides clarity to IOUs regarding their transportation electrification plans and investments.
HB 2402: Green Transportation
The bill reinstates the sales and use tax exemption for certain alternative fuel vehicles and creates a sales tax incentive for qualifying zero-emission vehicles. Additional incentives are created for the electrification of buses and ships and for pilot ride-sharing programs to help low and moderate-income people who are not readily served by public transportation. The bill also sets annual vehicle registration fees for EVs, hybrids, and alternative fuel vehicles.