Washington

Summary Washington's diverse mix of private and public utilities have long records of offering customer energy efficiency and conservation programs. Washington's energy customers are served by a wide variety of utilities and programs, supported by regional organizations (the Northwest Energy Efficiency Alliance and the Bonneville Power Authority). Collectively, program spending in Washington on electric efficiency programs was $126.7 million, saving 635,062 MWh in 2007. Spending on natural gas efficiency programs reached $18.9 million in 2008, saving 5.3 million therms that year. Washington voters approved an initiative in November 2006 that set new requirements for electricity resources, including greater use of renewable energy and conservation. Utilities now are required "[T]o pursue all available conservation that is cost-effective, reliable and feasible." The state's investor-owned electric and natural gas utilities have historically offered customer energy efficiency programs even though Washington has not had the type of state legislative requirements seen in many states. The BPA and a regional energy planning organization, the Northwest Power and Conservation Council (NPPC), have been very influential in advancing energy efficiency as both customer and system resources for public and private utilities. Under the new conservation initiative, utilities must now use methodologies for analyzing and selecting demand-side resources that are consistent with the methodologies used by NPPC. These new efforts are just underway and should further advance energy efficiency in Washington.

Customers in Washington are served by a wide variety of utilities---public utility districts, municipal utilities (including one of the nation's largest municipal utilities, Seattle City Light), investor-owned utilities, and rural cooperatives. Energy efficiency programs are provided by all of these types of utilities. The investor-owned utilities carry out DSM programs with regulatory oversight by the state's regulatory body, the Utilities and Transportation Commission. Publicly-owned utilities provide programs to their members with oversight by their respective governance bodies. The Northwest Energy Efficiency Alliance, a regional organization seeking to transform markets for energy efficiency, provides a strong unifying force for the many individual utility programs offered across the state—particularly for products and services most amenable to market transformation approaches, such as consumer products and building design, construction and operation. BPA also has played and continues to play a strong leadership role in supporting individual utilities' efforts.

Collectively, program spending in Washington on electric efficiency programs saved 635,062 MWh in 2007 and 5.3 million therms in 2008.

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Washington is a non-restructured state and has no public benefits funding to support programs. Investor-owned utilities recover the costs of energy efficiency programs through tariff riders. Program costs are reported and adjusted annually in proceedings before the Utilities and Transportation Commission. Most publicly-owned utilities in Washington also provide funding for energy efficiency programs and services. Program spending in Washington was $126.7 million on electric efficiency programs and $18.9 million on natural gas programs in 2008.

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Washington voters approved an initiative in November 2006 that required energy conservation and the use of renewable energy. The energy conservation section requires each qualifying utility (those with more than 25,000 customers in Washington) to “pursue all available conservation that is cost-effective, reliable and feasible.” “High-efficiency cogeneration” is included as part of conservation and the term is defined in the law. By January 1, 2010, utilities must determine their achievable cost-effective conservation potential through 2019 and establish biennial acquisition targets for conservation. The law specifies that utilities must use methodologies consistent with those of the Northwest Power and Conservation Council (NPCC).

The most recent NPPC plan identifies 2700 average MW of conservation savings as being cost-effective and achievable by 2025, amounting to 10.6% of projected needs in that year if additional conservation is not pursued. Overall, the state is expected to achieve savings of 1% annually. Available cogeneration resources are not quantified.

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Cascade Natural Gas began a margin-per-customer decoupling 3-year pilot for residential and general commercial service customers in October 2007. Approval of the decoupling mechanism depended on approval of Cascade’s Conservation and Low Income Weatherization Plan. The plan included specified savings targets, an earnings cap based on an 8.85% rate of return, and penalties for not achieving savings targets.

Avista Utilities is currently operating a decoupling pilot. For Avista’s decoupling pilot, the difference in weather-normalized sales volume is multiplied by set margin per customer for residential and commercial customer classes. This 3-year pilot began in 2007 and imposes a 2% limit on the annual rate increase. The level of revenue recovery is based on the level of DSM targets achieved, capped at a 9.11% rate of return. The Company recently requested a continuation of the program in April 2009.

Cascade Natural Gas: Docket No. UG-060256 (January 2007), Order Nos. 05, 06, and 07; Avista: Docket No. UG-060518 (February 2007), Order 04.

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No performance incentive is in place or proposed by regulated electric utilities. Ballot initiative 937 guides the PSC to determine if it should provide positive incentives for IOU’s to exceed established targets. Since 1995 (Case No. UG 950288), Puget Sound Energy has had a mechanism which allows for a return on funds used to conserve energy.

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Washington, as part of the four-state region served by the Bonneville Power Authority and the Northwest Power and Conservation Council, incorporates energy efficiency as a resource for planning and investment decisions. In the 5th Northwest Electric Power and Conservation Plan, "conservation" (energy efficiency and conservation resources) are established as the cheapest and most readily available energy resources for meeting load growth—enough to meet all load growth through 2012 and about 50% of load growth through 2024. The plan is the basis for utility investment decisions in the region and individual utilities are tasked with meeting individual goals that support meeting this regional goal.

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• Washington Utilities and Transportation Commission (see links from this page to utility integrated resource plans, energy conservation program summaries for investor-owned utilities, and related energy efficiency and conservation information)

• Northwest Power and Conservation Council

• Northwest Energy Efficiency Alliance

• Bonneville Power Administration, Energy Efficiency

• Washington state incentives for renewables and efficiency

• I-937

Last Updated 10/13/2009

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