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I-937 Updates: New Legislation and New Administrative Rules May Alter Washington's Renewable Portfolio Standard

April 7, 2014

As a result of both legislative and administrative action, several notable changes to Washington's Initiative 937 ("I-937", also known as the Washington Energy Independence Act) are on the horizon. While rejecting large-scale reform, the legislature made significant course corrections related to treatment of conservation and conduit hydro projects under the initiative. Those changes, and possibly several others, will be addressed in ongoing rulemaking proceedings at the Washington Department of Commerce and Washington Utilities & Transportation Commission ("UTC").

Two changes to I-937 were enacted in the 2014 session of the Washington Legislature. First, HB 1643, popularly known as the "conservation smoothing" legislation, allows utilities that achieve conservation in excess of specified targets to credit the excess toward future compliance periods, within limits. As originally enacted by the voters in 2006, I-937 required all covered utilities to obtain all "achievable cost-effective conservation." This mandate was carried out in a two-year process, which requires utilities first to identify conservation targets, then to adopt a plan to achieve those targets. In carrying out this mandate, many utilities, especially smaller utilities, found that conservation is not achieved in neat blocks, but instead is often achieved in major increments that may exceed specific biennial conservation targets. In these circumstances, I-937 both denied utilities the benefit of conservation achieved above biennial targets and created a perverse incentive to delay these conservation achievements.

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Beginning of the End for Colstrip? Washington UTC Rejects Puget Sound Energy's Analysis of Coal Plant Economics

February 7, 2014

The Washington Utilities & Transportation Commission ("UTC") yesterday rejected Puget Sound Energy's ("PSE") economic justification for continued operation of its Colstrip coal plant. The UTC's action, while not sealing the fate of Colstrip, sends PSE back to the drawing board and casts doubt on the future of the plant, which is already the subject of legal action brought by a coalition of environmental groups.

The UTC's findings were made in the context of PSE's 2013 Integrated Resource Plan. Under Washington law, the state's investor-owned utilities are required to develop and submit an Integrated Resource Plan to the UTC, which must be updated every two years. The Integrated Resource Plan is intended to analyze the alternatives available to meet the utility's anticipated load, and to identify the least-cost alternatives.

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Washington UTC Clears The Path for Innovative Solar Financing

July 30, 2013

The Washington Utilities and Transportation Commission ("UTC") earlier this month issued an order laying the legal groundwork for innovative financing of small renewable energy systems in the state. The UTC's ruling, which amends its small generation interconnection standards, RCW 480-108, addresses three questions of particular importance to the future of solar energy in the state. The order answers two of those questions in a manner that will ease the way for expansion of small solar systems but defers the third question.

The first and most important question addressed in the UTC order is whether third parties may own and operate net metering systems, which are small renewable systems located on the property of a utility customer that feed power back into the utility grid. The UTC order concludes that third-party ownership is permissible under Washington's net metering statute. This determination is critical because it opens the door for innovative financing arrangements in which a private company owns and operates rooftop solar systems on behalf of utility customers. These arrangements allow rooftop solar systems to be constructed with little or no upfront cost to the consumer, thus overcoming a major barrier to expansion of distributed solar generation. Such innovative financing arrangements are often credited with allowing the rapid expansion of rooftop solar systems in other states, especially California. Increasingly, these arrangements are being used for other types of distributed generation, as well.

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Gov. Inslee Fills Key Energy and Natural Resource Positions With A Mix of Insiders and Experienced Government Hands

February 12, 2013

With this week's announcement that David W. Danner has been appointed the new Chairman of the Washington Utilities & Transportation Commission ("UTC"), Washington Governor Jay Inslee has completed the slate of key positions influencing energy and natural resources policy in the state. The key appointments are a mixture of long-time Inslee confidants and individuals with long experience in state government.

Mr. Danner is typical of Inslee appointees who have worked for many years in Washington state government. Mr. Danner has served since 2005 as the Executive Director of the UTC. Prior to that, he served as Gov. Gary Locke's policy advisor on energy and environmental issues, and served on the State's Pollution Control Hearings Board and Shoreline Hearings Board. Mr. Danner will fill the seat recently vacated by Commissioner Patrick Oshie. He will replace Jeff Goltz as UTC Chair, although Commissioner Goltz will continue to serve on the UTC along with Commissioner Phil Jones.

Other key appointments include:

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