Media Contact: (360) 664-1116 or media@utc.wa.gov
Docket numbers: UE- 190837, UE-191023, UE-190652
UTC rolls out new clean energy rules
OLYMPIA, Wash. – The Utilities and Transportation Commission has adopted a package of rules that move the state a step further toward its goal of removing carbon emissions from electric utility services.
The rules implement key parts of the Clean Energy Transformation Act (CETA), passed in 2019, which requires electric utilities in Washington to eliminate coal-fired electricity by 2026, transition to a carbon-neutral supply of electricity by 2030, and source 100% of their electricity from renewable or non-carbon-emitting sources by 2045.
The new rules address utility practices when planning for and acquiring new energy resources, promoting diversity among suppliers and contractors, calculating greenhouse gas content in their resource mix, facilitating public engagement in planning and procurement, assessing impacts of resources on vulnerable communities, and establishing caps for utilities’ spending in compliance with CETA.
The commission rules apply to the investor-owned utilities operating in Washington – Puget Sound Energy, Avista, and Pacific Power. The Dept. of Commerce has developed similar rules that apply to municipal and other consumer-owned utilities.
The package contains three separate rules, Purchase of Resources (Docket UE-190837), Energy Independence Act (Docket UE-190652), and Clean Energy Implementation Plans and Integrated Resource Plans (CEIP/IRP) (UE-191023).
Commission Chair Dave Danner and Commissioners Ann Rendahl and Jay Balasbas signed the orders adopting the Purchase of Resources and Energy Independence Act rules. Commissioner Balasbas dissented from portions of the CEIP/IRP rules regarding costs and did not sign the order adopting them.
Purchase of Resources, Docket: UE-190837
In November 2019, the commission proposed changes to its Purchases of Electricity rules, to be renamed Purchases of Resources, to implement certain sections of the Clean Energy Transformation Act. The new rules update utility purchasing practices and require utilities to conduct outreach to minority-owned and other diverse businesses.
Changes include:
• When purchasing new resources, utilities must consider both the energy and non-energy benefits and burdens to highly impacted communities and vulnerable populations.
• Utilities must seek potential bids from underrepresented organizations and bidders, such as minority-, women-, disabled-, and veteran-owned businesses to encourage equitable participation in the bidding process.
• For resource contracts by the utilities, the utility must collect and report their contractors’ use of diverse businesses, including but not limited to women-, minority-, disabled-, and veteran-owned businesses.
• Where utilities are required to use an independent evaluator, the utility must consult with stakeholders and commission staff when choosing an independent evaluator.
• The independent evaluator’s assessment of resources is expanded to include the benefits and burdens of a resource choice to highly impacted and vulnerable communities.
The commission received 43 comments from stakeholders regarding this rulemaking.
Clean Energy Implementation Plan/Integrated Resource Plan, Docket: UE-191023
The commission consolidated the rulemakings for Clean Energy Implementation Plans (CEIPs), required in CETA, and proposed updates to current rules addressing Integrated Resource Plans (IRPs), the biannual plans that model utilities’ customer demand and electric generation needs over the next 20 years. These updated rules provide guidance to investor-owned utilities and their stakeholders as utilities transition from fossil fuels, establishing policy and process changes that incorporate recent advances in the energy industry, and improving the IRP process for regulated companies, stakeholders, and the public.
CETA requires the commission and its regulated utilities to consider equity in the transition to clean energy. Under these new rules, utilities will create utility advisory groups to discuss the equitable distribution of benefits, and reduction of harm to overburdened communities during the clean energy transition. Additionally, these rules clarify the public participation processes for utilities when developing resource plans and implementation plans.
These updated rules also streamline and coordinate processes required by CETA with existing rules, commission orders, and practices.
Commissioner Balasbas did not sign the final order adopting these rules. Although he agrees and supports most of the rules, he opposed adoption of the incremental cost of compliance and enforcement sections, as well as the definition of “alternative lowest reasonable cost and reasonably available portfolio.” In dissent, Commissioner Balasbas stated, “in examining the record in this proceeding, legislative intent, and the statutory provisions of CETA, I cannot in good conscience support sections of these rules that eviscerate and render the ratepayer protections included as part of CETA useless and meaningless.”
The majority determined that the incremental cost calculation in the rules does not remove ratepayer protections, but “appropriately strikes the balance between giving the utilities enough room to make the required changes while restraining unfettered spending, as directed by the statute. Indeed, to adopt a lower calculation would not only be inconsistent with statute, but could restrain investment to a level that would undermine the statute’s very purpose – to eliminate carbon emissions in the electricity sector.”
The commission held a virtual adoption and public comment hearing on Dec. 9 and received a total of 46 comments from stakeholders during this rulemaking.
Energy Independence Act, Docket: UE-190652
In October 2019, the commission initiated a rulemaking to update rules implementing the Energy Independence Act, or EIA, a law established in 2007 by Initiative 937. This act requires utilities over a certain size to provide at least 15% of electricity from renewable energy sources and pursue all cost-effective conservation. These updates incorporate new requirements enacted in CETA and other legislative action, and improve the processes for administering the EIA.
Changes include:
• Adding several definitions included in CETA, notably “energy assistance,” “energy assistance need,” “energy burden,” and “low-income.”
• Strengthening rules governing energy conservation programs for low-income customers.
• Amending rules that address the use of renewable energy credits, tradable certificates that represent energy generated by renewable resources,
• Adding a calculation of greenhouse gas content to energy and emissions intensity reports that utilities must file.
The commission received 34 comments from stakeholders regarding this rulemaking.
The UTC is the state agency that regulates private, investor-owned electric and natural gas utilities in Washington. It is the commission’s responsibility to ensure regulated companies provide safe and reliable service to customers at reasonable rates, while allowing them the opportunity to earn a fair profit.
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