State Energy Office Concludes Non-Utility Conservation Can Be Used for I-937 Compliance

June 13, 2013

The Washington State Energy Office (which operates within the Department of Commerce) recently issued an Advisory Opinion of considerable importance to utilities required to meet Initiative 937's energy conservation targets. The Advisory Opinion concludes that a utility may count documented and cost-effective energy savings toward I-937 conservation targets even if the utility has no direct involvement in carrying out the conservation measure.

Passed by Washington voters in 2006, I-937 (also known as the Washington Energy Independence Act) is well known for imposing a Renewable Portfolio Standard that requires covered utilities to purchase an increasing amount of qualified renewable resources, ultimately requiring 15% of their portfolios to be supplied by renewables by 2020. Less well know, but equally important, I-937 also requires covered utilities to develop and carry out plans for acquiring "all available conservation that is cost-effective, reliable, and feasible." The Advisory Opinion answers some important questions for utilities carrying out this conservation mandate.

Energy conservation start-up Seinergy LLC initated the Advisory Opinion process, taking advantage of legislation adopted last year that modified I-937 in an effort to provide regulatory clarity, especially for Washington's publicly-owned utilities. Seinergy has developed a software system that allows contractors and homeowners to identify energy savings that might otherwise fall through the cracks of utility conservation programs. Documenting such savings is of value to utilities that must meet I-937's requirement that energy savings be documented in accordance with the Northwest Power & Conservation Council methodology. Because these savings often arise from the efforts of homeowners or contractors that are unconnected to utility-sponsored energy conservation programs, Seinergy sought assurance that these "non-programmatic" energy savings can be used by utilities to satsify I-937 conservation targets.

The Advisory Opinion makes clear that utilities can use both programmatic and non-programmatic energy conservation to meet I-937 as long as they meet the law's other requirements. The Advisory Opinion thus provides assurance to utilities that any expenditures made to document conservation through Seinergy will be counted toward I-937 targets. Similarly, it provides assurance to investors, contractors, and others who are considering Seinergy as a business partner that Seinergy's business model will fit into the I-937 framework.

If you have any questions about the Advisory Opinion discussed in this post, Initiative 937, the utility industry, renewable energy development, or electric transmission, please contact a member of GTH's Energy, Telecommunications, and Utilities practice group.