| Electric Utility Sector Policies |
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Summary
Washington's diverse mix of private and public utilities has a long record 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 was 2.2% of total utility revenues in 2006—a clear sign of the state's leadership with energy efficiency as a resource. 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 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. |
| 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, Seattle City Light), investor-owned utilities, and rural cooperatives. Energy efficiency programs are provided by all the different types of utilities that comprise Washington's electric utility system. 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 as part of their member services 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 practices. BPA also has played and continues to play a strong leadership role in supporting individual utility program efforts.
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Washington is a non-restructured state and has no public benefits funding to support programs. Investor-owned utilities get cost recovery of energy efficiency programs through tariff riders. Program costs are expensed and trued up annually in proceedings before the Utilities and Transportation Commission. Most publicly owned utilities in Washington also provide funding for energy efficiency programs and services. Total energy efficiency program spending in Washington in 2006 was $113.3 million, which is 2.2% of total utility revenues statewide.
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| Energy Efficiency Resource Standard |
Washington voters approved an initiative in November, 2006 that set new requirements for electricity resources, including use of renewable energy and energy conservation. 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 are directed to determine their achievable cost-effective conservation potential through 2019, and a set of biennial acquisition targets for acquiring these resources. The law specifies that utilities must use methodologies consistent with those of regional power developed by the Northwest Power and Conservation Council (NPCC). The most recent NPPC plan identifies 2,700 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. Available cogeneration resources are not quantified.
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Washington had enacted decoupling for Puget Sound Energy in the early '90s, but the utility terminated this structure in the mid '90s in conjunction with a litigation settlement that terminated a broader set of rate adjustment mechanisms.
More recently, the Washington Utilities and Transportation Commission has actively investigated and reviewed a number of proposals to enact decoupling as part of rulemaking and utility rate case dockets. While WUTC has not yet approved any of the recent decoupling proposals before it, WUTC has made it clear that such rejection was based on specific details of proposals, not necessarily rejecting decoupling as a general principle. (For example, see the Pacific Power rate case, Final Order in Docket No. UE-050684)
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| Reward Structures for Successful Energy Efficiency Programs |
No performance incentive is in place or proposed by regulated utilities.
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| 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, clearly 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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Last Updated
11/18/2008
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