In 2006, Washington became the second state, following Colorado, to establish a renewable energy standard through a ballot initiative with the adoption of Initiative 937. This initiative, known as the Energy Independence Act (EIA), mandates that electric utilities serving over 25,000 customers in Washington source 15% of their electricity from new renewable resources by 2020 and implement all cost-effective energy conservation measures. This standard applies to investor-owned utilities, municipal utilities, rural electric cooperatives, and public utility districts. Out of Washington’s 62 utilities, 18 meet the qualifying criteria, covering approximately 80% of Washington’s energy load, including that served by the Bonneville Power Administration.
The EIA obligates utilities to invest in cost-effective, reliable, and feasible conservation.
The Clean Energy Transformation Act (S.B. 5116, 2019) further mandates a transition to 100% clean electricity by 2045. As an initial step, utilities must eliminate coal from their Washington state portfolios by the end of 2025. By 2030, utilities are required to be greenhouse gas neutral, with a portion of this target potentially met through specific offsets. By 2045, all electricity in Washington must be sourced from renewable or non-emitting resources. The Washington Utilities and Transportation Commission is currently formulating rules to enforce this law. Below is a summary of the Renewable Energy Standard as established by Initiative 937.
Requirements:
- Utilities must utilize eligible renewable resources or acquire renewable energy credits (RECs), or both, to meet annual targets:
- 3% of load by 1/1/2012 through 12/31/2015
- 9% of load by 1/1/2016 through 12/31/2019
- 15% of load from 1/1/2020 onward
- Investor-owned utilities can recover all costs prudently incurred for compliance.
Eligible Technologies:
- “Renewable resources” include electricity from water, wind, solar, geothermal, landfill gas, wave, ocean, tidal power, gas from sewage facilities, biodiesel fuel (meeting specific standards), and biomass energy from organic byproducts of pulp and wood manufacturing, animal waste, and solid organic fuels from wood, forest, or field residues, or dedicated energy crops. Exclusions apply to certain wood pieces and waste.
- S.B. 5128 (2017) allows for additional eligibility for incremental electricity from capital investments in biomass facilities post-1/1/2010.
- Electricity from renewables other than fresh water qualifies if the generation facility began operation post-3/31/1999 and is located in the Pacific Northwest or delivers electricity real-time into Washington.
- Eligibility criteria also apply to hydroelectric generation projects under certain conditions.
Credit Multipliers and Special Provisions:
- Distributed generation (up to 5 MW) can count double if owned or contracted by the utility.
- Facilities using approved apprenticeship programs post-2005 can count as 1.2 times the value.
- Methane capture facilities can separate nonpower attributes into separate tradable credits.
- Efficiency improvements in hydroelectric generation are for utility compliance only, not for tradable RECs.
Compliance:
- Utilities must annually report to the Department of Commerce on their conservation and renewable resource targets.
- Utilities can use RECs from adjacent years for current year compliance.
- Non-compliance results in a $50/MWh penalty, adjusted for inflation since 2007, with funds allocated to renewable credits or conservation projects.
Cost Mitigation Measures:
- A utility is exempt from meeting renewable targets if it spends at least 4% of retail revenue on the incremental cost of renewable energy and RECs, reduced to 1% for utilities with no load growth.
