Washington State Register, Issue 21-04
| Jurisdiction | Washington |
| Library | Washington Register |
| Year | 2021 |
Washington State Register, Issue 21-04 WSR 21-02-022
[ 1 ] Permanent
WSR 21-02-022
PERMANENT RULES
UTILITIES AND TRANSPORTATION
COMMISSION
[Dockets UE-191023 and UE-190698, General Order 601—Filed December
28, 2020, 12:41 p.m., effective December 31, 2020]
In the matter of adopting rules relating to clean energy
implementation plans (CEIPs) and compliance with the
Clean Energy Transformation Act (CETA); and WAC 480-
100-238, relating to integrated resource planning.
SYNOPSIS
The Washington utilities and transportation commission
(commission) adopts rules implementing chapter 19.405
RCW, CETA, and revisions to chapters 19.280 and 80.28
RCW. The commission's goals in this rule making are to
implement sections of this new legislation, incorporate
changes to existing rules, identify commission decisions and
preferred practices implementing CETA, and engage with
stakeholders to address and resolve ambiguity where appro-
priate. The rules adopted here today include two primary sec-
tions addressing CETA's CEIPs and integrated resource plans
(IRPs).
I. INTRODUCTION
1 STATUTORY OR OTHER AUTHORITY: The commission
takes this action under Notice No. WSR 20-21-053, filed
with the code reviser on October 14, 2020. The commission
has authority to take this action pursuant to RCW 80.01.040,
80.04.160, and chapters 80.28, 19.280, and 19.405 RCW.
2 STATEMENT OF COMPLIANCE: This proceeding com-
plies with the Administrative Procedure Act (chapter 34.05
RCW), the State Register Act (chapter 34.08 RCW), the State
Environmental Policy Act of 1971 (chapter 43.21C RCW),
and the Regulatory Fairness Act (chapter 19.85 RCW).
3 DATE OF ADOPTION: The commission adopts these
rules on the date this order is entered.
4 CONCISE STATEMENT OF PURPOSE AND EFFECT OF
THE RULES: RCW 34.05.325(6) requires the commission to
prepare and publish a concise explanatory statement about
adopted rules. The statement must identify the commission's
reasons for adopting the rules, describe the differences
between the version of the proposed rules published in the
register and the rules adopted (other than editing changes),
summarize the comments received regarding the proposed
rule changes, and state the commission's responses to the
comments reflecting the commission's consideration of them.
5 To avoid unnecessary duplication in the record of this
docket, the commission designates the discussion in this
order, including appendices, as its concise explanatory state-
ment. This order provides a complete but concise explanation
of the agency's actions and its reasons for taking those
actions.
6 REFERENCE TO AFFECTED RULES: This order adopts
the following sections of the Washington Administrative
Code: Adopting WAC 480-100-600 Purpose, 480-100-605
Definitions, 480-100-610 Clean energy transformation stan-
dards, 480-100-620 Content of an IRP, 480-100-625 IRP
development and timing, 480-100-630 IRP advisory groups,
480-100-640 CEIP, 480-100-645 Process for review of CEIP
and updates, 480-100-650 Reporting and compliance, 480-
100-655 Public participation in a CEIP, 480-100-660 Incre-
mental cost of compliance, and 480-100-665 Enforcement.
II. PROCEDURAL HISTORY
7 PREPROPOSAL STATEMENT OF INQUIRY AND ACTIONS
THEREUNDER: On November 7, 2019, the commission filed
in Docket UE-190698 a Preproposal statement of inquiry
(CR-101) at WSR 19-23-005. The statement informed inter-
ested persons that the commission was initiating a rule mak-
ing to incorporate statutory changes made to WAC 480-100-
238, the commission's rule on IRP, since 2006, including
CETA, and to consider policy and process changes to create
more efficient rules that adapt to a changing energy land-
scape.1 The commission served notice of the CR-101 and rule
making on everyone on the commission's list of persons
requesting such information pursuant to RCW 34.05.320(3)
and the commission's lists of electric companies and utility
attorneys.
1An emergency and expedited rule making was initiated to repeal WAC
480-100-238 prior to this order. This emergency rule making was nec-
essary to avoid contradiction with these adopted rules.
8 On January 15, 2020, the commission filed in Docket
UE-191023 a CR-101 at WSR 20-03-107, initiating a rule
making to develop rules implementing chapter 19.405 RCW,
in particular, rules for CEIP, demonstrating compliance with
CETA; statutory revisions to RCW 80.84.010, and additions
to chapter 80.28 RCW, as enacted in CETA. The commission
served notice of the CR-101 and rule making on everyone on
the commission's list of persons requesting such information
pursuant to RCW 34.05.320(3) and the commission's lists of
electric companies and utility attorneys.
9 WRITTEN COMMENTS: Pursuant to the notices, the
commission received comments on December 20, 2019, in
Docket UE-190698 and on February 28, June 2, and June 29,
2020, in Docket UE-191023. After consolidating Dockets
UE-191023 and UE-190698 on August 18, 2020, the com-
mission received comments on September 11, November 12,
and December 3, 2020.
10 MEETINGS OR WORKSHOPS: The commission held
workshops in Docket UE-190698 on January 6 and 28, 2020,
and workshops in both Dockets UE-190698 and UE-191023
on February 5, May 5, May 22, and June 8, 2020. The com-
mission held further workshops in Docket UE-191023 on
March 17, June 16, and July 27, 2020.
11 CONSOLIDATION: On August 18, 2020, the commis-
sion filed a CR-101 at WSR 20-17-120 consolidating Dock-
ets UE-191023 and UE-190698 into one rule making. The
commission also informed persons of this consolidation by
providing notice and the CR-101 to everyone on the commis-
sion's list of persons requesting such information pursuant to
RCW 34.05.320(3), the commission's lists of electric compa-
nies and utility attorneys, and all persons who had expressed
interest in Dockets UE-190698 and UE-191023.
12 SMALL BUSINESS ECONOMIC IMPACT: On August 31,
2020, the commission issued a small business economic
impact statement (SBEIS) questionnaire to all interested per-
sons in the consolidated dockets. The commission received
one response to this questionnaire on October 1, 2020, from
Puget Sound Energy (PSE), which asserted in its response
WSR 21-02-022 Washington State Register, Issue 21-04
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that it is likely to incur increased costs from the proposed
rules. PSE, however, does not qualify as a small business
under chapter 19.85 RCW, and the approximate costs of
compliance, $6 million, are minor in comparison to PSE's
2019 annual electric revenue of $2.1 billion. In addition, PSE
may recover a significant portion of the increased costs from
its customers through general rate proceedings.
13 The commission's internal analysis shows that any
cost incurred by small businesses in this rule making is either
the result of implementing a statutory requirement or based
on voluntary participation in a utility's IRP or CEIP public
process, membership in a utility advisory group, providing
public comment on a utility plan to the commission, or inter-
vening in a commission adjudicatory proceeding. Addition-
ally, a utility's small business customers are represented in
commission proceedings by the public counsel unit of the
Washington state attorney general's office (public counsel).
Therefore, the commission finds that the best way to mitigate
the cost impact on small businesses is to apply regulatory
principles to ensure that rates are fair, just, reasonable, and
sufficient.
14 The commission after full review and analysis finds
that the proposed rules will only impose minor costs on elec-
tric utility companies and concludes that the proposed rules
will not have a disproportionate impact on small businesses.
15 NOTICE OF PROPOSED RULE M AKING: The commis-
sion filed a notice of Proposed rule making (CR-102) on
October 14, 2020, at WSR 20-21-053. The commission
scheduled this matter for virtual oral comment and adoption
under Notice No. WSR 20-21-053 at 9:30 a.m. on December
9, 2020. The notice provided interested persons the opportu-
nity to submit written comments to the commission.
16 WRITTEN COMMENTS: The commission received
written comments from twenty-four stakeholders. Commis-
sion staff's (staff) summary of and responses to those com-
ments are contained in Appendix A, which is attached to, and
made part of, this order. The commission adopts staff's
responses as its own, subject to the modifications we make to
the proposed rules and the rationale for those modifications
explained in this order.2 Additionally, we summarize and
respond in greater detail to certain comments received during
this rule-making proceeding in paragraphs 19-184, below.
2In the event of any discrepancy between the discussion in the body of
this order and the responses contained in Appendix A, the body of this
order will control.
17 RULE-MAKING HEARING: The commission consid-
ered the proposed rules for adoption at a rule-making hearing
on Wednesday, December 9, 2020, before Chair David W.
Danner, Commissioner Ann E. Rendahl, and Commissioner
Jay M. Balasbas. The commission heard oral comments from
Bradley Cebulko, representing staff; Avista Corporation,
d/b/a Avista Utilities (Avista); PSE; PacifiCorp, d/b/a Pacific
Power & Light Co. (PacifiCorp); public counsel; Sierra Club;
Renewable Northwest; Climate Solutions; Alliance of West-
ern Energy Consumers (AWEC); Court Olsen; Kevin Jones;
Washington Environmental Council (WEC); NW Energy
Coalition (NWEC); The Energy Project (TEP), and Elyette
Weinstein. Those comments primarily emphasized or supple-
mented those commenters' written comments.
18 Court Olsen, who did not previously submit written
comments, requested the commission explicitly include the
social cost of greenhouse gases (SCGHG) in the lowest rea-
sonable cost calculation and called for measures to hold util-
ities accountable when responding to customer comments
and questions. Additionally, the commission accepted writ-
ten comments in lieu of oral comments from Christine Grant
due to a scheduling conflict during the public hearing. Grant
expressed support for the proposed rules' implementation of
public participation opportunities and community benefits.
III. DISCUSSION
19 CETA is a novel and complex statute that establishes
many new requirements for utilities in pursuit of the legisla-
ture's overall objective of reducing and eventually eliminat-
ing carbon from the generation of electricity provided to
Washington consumers. As many commenters expressed at
the adoption hearing, the process of fully implementing
CETA will be an iterative process, and the effort in this rule
making is only the beginning. The rules we adopt here are the
first step in implementing the statutory requirements applica-
ble to investor-owned utilities. We expect to conduct addi-
tional rule makings to implement provisions of the law, and
to modify and refine these rules as the commission, utilities,
and stakeholders gain experience with the new law. In the
meantime, we provide additional guidance in this order on
our current interpretation of the statute and the rules we are
adopting.
A. Streamlining: Interaction with current rules,
orders, and practices.
20 RCW 19.405.100 directs the commission to find ways
to streamline the implementation of CETA with the require-
ments of the Energy Independence Act (EIA). The commis-
sion worked closely with the Washington department of com-
merce (commerce) to find areas to coordinate implementa-
tion of CETA with the requirements of EIA, recognizing that
each statute has distinct requirements and compliance inter-
vals. In the following section we reduce, simplify, or com-
bine existing and new reporting requirements and identify
areas that can be streamlined in the future. Finally, we
explain why we must adopt some duplicative requirements
based on statutory differences that would require statutory
changes.
1. Reducing administrative burden and aligning existing
and new requirements: WAC 480-100-620(3), 480-100-
650(3), 480-100-640(1), 480-100-625, and 480-100-655.
21 On May 20, 2016, in Docket U E-131883, the com-
mission requested that electric utilities submit semi-annual
reports disclosing the amount of distributed generation inter-
connected to investor-owned utilities in Washington. The
reports contain datapoints such as distributed generation sys-
tem adoption rates, distributed generation system counts,
average system sizes, and total monthly and annual energy
generated. Proposed WAC 480-100-620(3) and 480-100-
650(3) require utilities to provide this type of information in
the distributed energy resource (DER) assessment and report-
ing when preparing and submitting IRPs and CEIPs. The
reporting we requested in Docket UE-131883 is therefore no
longer necessary, and we withdraw our request for those
semi-annual reports. We nevertheless encourage companies
Washington State Register, Issue 21-04 WSR 21-02-022
[ 3 ] Permanent
to include substantively similar datapoints within the DER
assessments in their IRPs in consultation with interested
stakeholders.
22 The commission proposes to establish an October 1
due date for the CEIP required by WAC 480-100-640(1) to
align with the current requirement in chapter 480-109 WAC,
rules implementing EIA, that utilities provide a draft biennial
conservation plan (BCP) to their energy efficiency advisory
group.3 To facilitate that coordination, the proposed rules do
not require that the EIA target be final before it is included in
the specific energy efficiency target within the CEIP. Com-
mission approval of a utility's CEIP requires a review of the
details of the BCP. Including a draft BCP as part of the CEIP,
as an appendix or attachment, best serves the public interest
because it allows the utility to adjust the BCP based on feed-
back from the commission and the utility's advisory group.
3WAC 480-109-120 (1)(a) requires a November 1 filing date, and WAC
480-109-110(3) requires thirty days advance notice of filings to energy
efficiency advisory groups. Additional conditions in each utility's cur-
rent conservation dockets, Dockets UE-190905, UE-190908, and UE-
190912, require each utility to "provide the following information to
the Advisory Group: Draft ten-year conservation potential and two-
year target by August 2, 2021; draft program details, including budgets,
by September 1, 2021; and draft program tariffs by October 1, 2021. "
23 Proposed WAC 480-100-625 states that utilities' IRPs
must be filed with the commission by January 1, 2021, and on
January 1 every four years thereafter, unless otherwise
ordered by the commission. Given the changes in IRPs
required by CETA, the commission ordered in Dockets UE-
180259, UE-180738, UE-180607 that for each electric utility,
the next draft IRP must be submitted by January 4, 2021, and
its next final IRP must be submitted by April 1, 2021. To
avoid last-minute changes to utility requirements as we adopt
these rules, we waive the conflicting requirement in the pro-
posed rule and retain the dates established in thes e three
dockets for this upcoming set of IRPs.
24 Proposed WAC 48 0-100-650(3) requires utilities to
file annual clean energy progress reports by July 1, beginning
in 2023. Existing rules implementing EIA in chapter 480-109
WAC incorporate the June 1 reporting dates specified in
RCW 19.285.070. EIA requires that the annual conservation
report (included in WAC 480-109-120(3)) and the annual
renewable portfolio standard report (included in WAC 480-
109-210(1)) must be filed by June 1. A utility may satisfy
these requirements in the annual informational filings under
proposed WAC 480-100-650(3) by providing the references
to the reports the utility filed in compliance with chapter 480-
109 WAC. The utility need not duplicate the narrative from
its June 1 filing when it provides its July 1 annual report fil-
ing.
25 Proposed WAC 480-100-655 does not require utili-
ties to file a draft CEIP with the commission or the advisory
group. This eliminates a potentially unnecessary regulatory
burden over the long term. However, in the beginning the
CEIP will involve a new and significant process and docu-
ment, one that the utilities have never prepared, and that
stakeholders, and this commission have never reviewed. And
unlike the IRP, the CEIP will likely be subject to significant
scrutiny in an adjudicative process. Therefore, the commis-
sion finds that it is appropriate to request that utilities file a
draft of their first CEIP. Availability of a draft of a utility's
initial CEIP will allow the utility, staff, and stakeholders to
work through issues and concerns in a semi-formal process
that provides transparency and record building with maxi-
mum flexibility. Utilities, therefore, should file a draft initial
CEIP with the commission by August 15, 2021, which will be
the initial filing in each utility's CEIP docket.4
4The pending draft IRPs, to be filed in January 2021, and the final IRPs
to be filed in April 2021, will help inform the shape and style of a CEIP.
At a minimum, the draft CEIP must contain the utility's final proposed
specific actions, specific targets, and interim targets.
2. Other requirements that can be reduced or eliminated
in the future: WAC 480-109-120, 480-109-300.
26 In its written comments, PacifiCorp raised concerns
about the apparent duplication of reporting under the CETA
and EIA rules. In creating rules that fully implement CETA's
requirements, we recognize that some of the reporting
appears duplicative. However, as it is necessary to incorpo-
rate some elements of chapter 480-109 WAC, which imple-
ments EIA, into the rules we adopt in this order, some overlap
is inevitable. While this is a necessary step in the transition to
the new reporting requirements that will begin in 2023, we
identify in Table One, below, how we plan to reduce the
duplication in reporting over time. Table One shows how we
will smoothly transition regulation under EIA into regulation
under both EIA and CETA, with the goal of reducing admin-
istrative burden wherever possible. Most of the elements in
the table below should stay in effect until at least June 1,
2022, thus maintaining utility reporting under EIA until the
reporting under CETA begins in 2023. This transition plan
will avoid a reporting gap until the first CETA reports are due
in 2023.
27 In our review of EIA, we note that chapter 480-109
WAC includes some planning and reporting elements that are
not explicitly required by statute. Two examples are the
annual conservation plan in WAC 480-109-120(2) and the
final renewable portfolio standard compliance report in WAC
480-109-210(6), which we will address by amending provi-
sions in chapter 480-100 WAC, and then repealing these pro-
visions in chapter 480-109 WAC. As we transition, we will
likely find other requirements that the commission can
reduce or repeal. We expect to address these issues in a later
rule making after we have had sufficient experience with the
rules we adopt today to consider appropriate changes.
Table One: Requirements that can be reduced or repealed in the future
Proposed Chapter 480-100 WAC Chapter 480-109 WAC Commission Action
WAC 480-100-640 (3)(a)(i) energy effi-
ciency 2022-2025 specific target filed by
October 1, 2021.
WAC 480-109-120 (1)(a) conservation
2022-2023 target filed by November 1,
2021.
Accept draft biennial conservation plan
as part of CEIP specific conservation
target.
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