Washington’s Commerce Department and the Washington Utilities and Transportation Commission have conducted workshops on state’s new 100 percent clean electricity law, as a prelude to rulemaking over the next two years to implement the law known as the Clean Energy Transformation Act.
CETA set a hard target of Jan. 1, 2021, for making all rules necessary for implementing the law.
The rules commerce establishes will regulate consumer-owned utilities, while those WUTC establish will regulate investor-owned utilities.
The law, passed in May as Senate Bill 5116, establishes new planning requirements for the state’s more than 60 electric utilities and sets specific standards to reduce and eventually eliminate use of fossil fuels to generate electricity for Washington customers.
The first milestone under CETA is in 2022, when each utility must prepare and publish a clean energy implementation plan with its own targets for energy efficiency and renewable energy.
By 2025, utilities must eliminate coal-fired electricity from their state portfolios.
The first 100 percent clean standard applies in 2030, when the utilities must be greenhouse gas-neutral. CETA provides flexibility for this mandate, allowing the use of limited amounts of electricity from natural gas if it is offset by other actions.
By 2045, utilities must supply Washington customers with electricity that is 100 percent renewable or nonemitting, with no provision for offsets.
CETA also has provisions protecting utility customers from excessive rates or unreliable service. These include utilities adopting a slower transition path if necessary to avoid rate shock, and a mandate to improve assistance programs for low-income households.
The law provides for short-term waivers of the standards if needed to protect reliability.
The law also amends the Energy Independence Act passed in 2006 as Initiative 937, which established a renewable portfolio standard and energy conservation targets.
One of Commerce's rulemaking workshops identified and prioritized issues that will be addressed through administrative rules. These included documenting federal incremental hydro, which CETA allows under the EIA; clean energy implementation plans; utility reporting requirements about planning and compliance; thermal renewable energy certificates; and rules to document energy purchased and sold in wholesale power markets.
In a parallel effort, the Bonneville Power Administration has requested advisory opinions from Commerce affirming that the output it markets from five federal dams includes incremental generation from recent efficiency upgrades. Starting in 2020, this incremental hydro and the corresponding renewable energy credits are eligible under the EIA, and utilities will be able to claim a prorated amount under their RPS obligation.
A second workshop focused on CETA provisions concerning low-income energy burden, energy assistance and the equitable distribution of energy benefits.
This effort aims to provide definitions and guidelines to be used as the agency begins collecting data from utilities in July 2020, and to facilitate a discussion about the intent and opportunities in these sections of CETA.
WUTC mapped out a four-year plan for establishing CETA rules for IOUs.
The timeline, released Aug. 27, also includes steps for implementing several other pieces of legislation passed earlier this year affecting the electric sector, which will be considered in Docket U-190485.
Beyond that, much of phase one’s work lays the groundwork for rulemaking in phase two.
Commerce plans to post an inflation-adjusted social cost of carbon by Sept. 15, allowing utilities to incorporate that cost in integrated resource and conservation plans, as required by CETA. A draft version presented at an Aug. 22 workshop sets the social cost in 2020 at $50 per metric ton of CO2, rising to $95 in 2050. CETA requires the cost be calculated using an August 2016 analysis by the federal government.
Phase two, which runs from Jan. 1, 2021, through June 30, 2022, will tackle further rulemaking for CETA, as well as for House Bill 1257, which sets higher energy-performance standards for large buildings.