Energy Efficiency Resource Standard

Summary

Origin

Washington voters passed Initiative 937 in 2006, creating a renewable energy standard and an energy efficiency resource standard for the state's electric utilities. Initiative 937, enacted as the Energy Independence Act, calls for electric utilities that serve at least 25,000 retail customers in the state of Washington to undertake all cost-effective energy conservation. Investor-owned utilities (IOU), municipal utilities, rural electric cooperatives, and public utility districts that meet the customer total requirements are subject to this standard. Of Washington's roughly 60 utilities, 18 are considered qualifying utilities, representing about 80% of the electricity sold to Washington’s retail customers.

Electric Demand and Energy Reduction Standard

Utilities subject to the standard must pursue all available conservation that is cost-effective, reliable, and feasible. By January 1 of each even-numbered year (beginning in 2010) utilities must (1) identify achievable cost-effective conservation potential for the upcoming ten years, and (2) establish biennial targets for conservation. These targets shall be no less than its pro rata share of the ten-year potential.

High-efficiency cogeneration owned and used by a retail electric customer to meet its own needs may be counted toward conservation targets. Conservation achieved in excess of the biennial acquisition target may be used to help meet the immediately subsequent two biennial targets, no more than 20% of any biennial target may be met with excess conservation savings. A qualifying facility may also use conservation savings in excess of its biennial target from a single large facility (a single customer whose annual average electricity consumption exceeded 5 MW, before the conservation) to meet up to an additional 5% of the immediately subsequent two biennial acquisition targets. 

Program Administrator Type

Washington State's utilities directly administer the energy efficiency and demand-side management programs intended to meet the standard.

Cost Effectiveness and Program Evaluation

When evaluating achievable cost-effective conservation potential, utilities must use methodologies consistent with the Northwest Power and Conservation Council’s (NWPCC) power plan. Alternatively, utilities may use their own specific conservation measures, values, and assumptions to identify achievable cost-effective conservation potential. IOUs must derive their projection from their most recent IRP using methodologies consistent with NWPCC’s power plan.

Utility Cost Recovery Provisions

IOUs are permitted to propose "positive incentives" designed to stimulate the utility to exceed its biennial conservation target. Any proposed incentive must be included in the utility’s biennial conservation plan. In addition, IOUs must file with the Commission for recovery of all expected conservation cost changes and amortization of deferred balances and must include its conservation cost recovery procedures in its tariff.