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State Energy Efficiency Policy Database

Washington

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Summary

Washington's private and public utilities have long records of offering customer energy efficiency and conservation programs supported by regional organizations including the Northwest Energy Efficiency Alliance (NEEA), the Northwest Power and Conservation Council (NPPC), and the Bonneville Power Authority (BPA). Washington voters approved the Energy Independence Act in November 2006 that established an energy efficiency resource standard (EERS) by setting new requirements for electricity resources, including greater use of renewable energy and conservation. Utilities are required "[T]o pursue all available conservation that is cost-effective, reliable and feasible." The legislation also requires utilities to use methodologies for analyzing and selecting demand-side resources that are consistent with the methodologies used by NPPC.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

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November 8, 2013


Customer Energy Efficiency Programs

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 each type. Investor-owned utilities carry out energy efficiency programs with 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.

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.

Puget Sound Energy's self-direct program combines a dedicated incentive funding structure based on customer contributions with a competitive bidding process for unclaimed funds.  Self-direct customers pay their cost-recovery mechanism (CRM) fees but have access to 82.5% of it to fund up to 100% of efficiency measure costs.  Customers have 24 months to complete their projects, after which all unused funds are pooled together and a competitive request for proposals is issued to all program-eligible customers for their use.  More information on large customer self-direct programs can be found in the ACEEE report, Follow the Leaders: Improving Large Customer Self-Direct Programs.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

Links:

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November 8, 2013


Energy Efficiency Resource Standards

Summary: Utilities set annual targets to achieve all cost-effective conservation. ~1.4% annual incremental electricity savings.

Washington voters approved ballot initiative 937 in November 2006 which set new renewable energy resource and conservation requirements for large electric utilities to meet. The ballot, codified in Chapter 19.285 RCW, had rules adopted for its implementation in 2007 and 2008 (WAC 480-109, WAC 194-37).  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.” Seventeen utilities, both publicly owned and investor owned, currently meet the definition of qualifying utility.

The law requires utilities to use the Northwest Power and Conservation Council’s (NPCC) methodology to determine their achievable cost-effective conservation potential through 2019, and update that potential assessment every two years for the subsequent ten-year period. Utilities also must establish a biennial acquisition target beginning in 2010-2011, and update that target every two years. If a utility does not meet its conservation goals, it must pay an administrative fine for each MWh of shortfall, starting at $50 and adjusting annually for inflation beginning in 2007.

Although Washington does not have a natural gas EERS, each natural gas investor-owned utility develops an annual target and business plan with the Commission for natural gas energy efficiency.  


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August 12, 2013


Alternative Business Models

Avista Utilities has a lost revenue recovery mechanism for its natural gas conservation portfolio. The pilot began in 2007 and did not include the effects of weather or customer growth in the determination of lost margin recoverable by the utility. The mechanism was made permanent by request of the company. (Docket No. UG-060518 (February 2007), Order 04 and UE-090135/UG-090135 Order 10 (December 22, 2009)

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. The pilot ended in 2010. Cascade withdrew a petition seeking to extend the pilot in 2010 (See Cascade Natural Gas: Docket No. UG-060256 (January 2007), Order Nos. 05, 06, and 07 and UG-101656 (October 1, 2010)).

In November 2010 the Utilities and Transportation Commission issued a report and policy statement laying out the elements that a proposed decoupling mechanism should meet for both gas and electric utilities. (Docket U-100522).

In October, 2012, Puget Sound Energy filed a petition to begin a decoupling mechanism for its electric and natural gas service (See Docket UE-121697, UG-121705).  A revised petition was filed with the Commission on March 1, 2013. One of the provisions of the proposal would increase the acquisition of annual electric conservation savings by five percent each year and increase the funding available for low-income conservation. Review of the petition is ongoing. 


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August 9, 2013


Reward Structures for Successful Energy Efficiency Programs

No reward is in place or proposed by regulated electric utilities; however they can be penalized if they fail to meet energy savings goals. (Dockets UE-011570, UG-011571 and UE-100177 (Order 5).  

In November 2010 the Utilities and Transportation Commission issued a report and policy statement laying out the elements that a proposed incentive mechanism should meet for both gas and electric utilities. (Docket U-100522).

  • Washington Utilities and Transportation Commission docket search

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August 9, 2013


Energy Efficiency as a Resource

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. The Northwest Power and Conservation Council (NWPCC) approved its Sixth Power Plan, which aims to save 5,900 megawatts over 20 years. The Power Plan is a regional energy blueprint developed by the NWPCC that guides the region’s largest electricity supplier, the federal Bonneville Power Administration. Under federal law, the Council revises the 20-year plan every five years. While Bonneville implements the plan, the plan also serves as a reference document for the region’s electric utilities in their own planning.


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August 13, 2013


Evaluation, Measurement & Verification
  • Cost-effectiveness test(s) used: TRC, UCT, PCT, RIM
  • Uses a deemed savings database: no

Evaluation of ratepayer-funded energy efficiency programs in Washington relies on regulatory orders (Docket UE-100176, Docket UE-100170, and Docket UE-100177 for Avista Corporation, Pacific Power and Light Company, and Puget Sound Energy respectively). Evaluations are mainly conducted by the independent third-party consultants selected by the utilities. Companies should follow the Northwest Power and Conservation Council methodologies per the Regional Technical Forum. In addition, each electric utility has filed an EM&V Framework as well as an EM&V Plan, which they will file with their next Biennial Conservation Plan. Washington uses four of the five classic benefit-cost tests identified in the California Standard Practice Manual. These are the Total Resource Cost (TRC), Utility/Programs Administrator (UCT), Participant (PCT), and Ratepayer Impact Measure (RIM). Washington specifies the TRC to be its primary test for decision making. The benefit-cost tests are required for overall portfolio and customer project level screening. Companies may implement Low Income programs that have a TRC ratio of 0.67 or above. The rules for benefit-cost tests are stated in the Energy Independence Act of 2006.

The above refers to electric EM&V and cost-effectiveness.  For natural gas, the Commission initiated a rulemaking procedure in July, 2012 to address the cost-effectiveness of natural gas conservation portfolios in light of low natural gas prices and avoided costs (Docket UG-121207).  The Commission expects to issue a policy statement on natural gas conservation cost-effectivness as a result of this proceeding. 


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August 21, 2013