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Incentives/Policies for Renewables & Efficiency

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Renewable Energy Standard   

Last DSIRE Review: 08/22/2014
Program Overview:
State: Washington
Incentive Type: Renewables Portfolio Standard
Eligible Renewable/Other Technologies: Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Anaerobic Digestion, Tidal Energy, Wave Energy, Ocean Thermal, Biodiesel
Applicable Sectors: Municipal Utility, Investor-Owned Utility, Rural Electric Cooperative
Standard:15% renewables by 2020 and all cost-effective conservation
Technology Minimum:No
Credit Trading:Yes (WREGIS)
Credit Transfers Accepted From:None
Credit Transfers Accepted To:WREGIS into NAR, NC-RETS
(Refers to tracking system compatibility only, not RPS eligibility. Please see statutes and regulations for information on facility eligibility)
Web Site:
Authority 1:
Date Enacted:
RCW 19.285 - Energy Independence Act
Authority 2:
WAC 480-109
Authority 3:
WAC 194-37

With the passage of Initiative 937 in 2006, Washington became the second state after Colorado to pass a renewable energy standard by ballot initiative. Initiative 937, which was enacted as the Energy Independence Act (EIA), calls for electric utilities that serve more than 25,000 customers in the state of Washington to obtain 15% of their electricity from new renewable resources by 2020 and to undertake all cost-effective energy conservation. Investor-owned utilities, municipal utilities, rural electric cooperatives, and public utility districts are subject to this standard.* Of Washington's 62 utilities, 17 are considered qualifying utilities, representing about 81% of Washington's load (including load served by the Bonneville Power Administration).

The EIA also requires utilities to pursue all conservation that is cost-effective, reliable, and feasible. More information about the conservation requirements of the EIA is available here.

Utilities subject to the standard must use eligible renewable resources or acquire equivalent renewable energy credits (RECs), or a combination of both, to meet the following annual targets:

  • At least 3% of its load by 1/1/2012, and each year thereafter through 12/31/2015;
  • At least 9% of its load by 1/1/2016, and each year thereafter through 12/31/2019; and
  • At least 15% of its load by 1/1/2020, and each year thereafter.

Investor-owned utilities subject to the standard are entitled to recover all prudently incurred costs associated with compliance. 

Eligible Technologies
“Renewable resources" include electricity produced from: water; wind; solar energy; geothermal energy; landfill gas; wave, ocean, or tidal power; gas from sewage treatment facilities; biodiesel fuel (must meet specified standards); and biomass energy based on organic byproducts of the pulp and wood manufacturing process, animal waste, solid organic fuels from wood, forest, or field residues, or dedicated energy crops. Specifically excluded from the definition are wood pieces that have been treated with chemical preservatives such as creosote, pentachlorophenol, or copper-chrome arsenic; wood from old growth forests; and municipal solid waste.

Electricity from renewable resources other than fresh water is eligible for compliance if the generation facility begins operation after March 31, 1999. The facility must be located in the Pacific Northwest or the electricity from the facility must be delivered into Washington State on a real-time basis. "Pacific Northwest" has the same meaning as defined for the Bonneville Power Administration in Section 3 of the Pacific Northwest Electric Power Planning and Conservation Act (94 Stat. 2698; 16 U.S.C. Sec. 839a).  For qualifying utilities that serve customers in other states, the electricity from a non-fresh water generation facility is eligible for the RPS if the facility is located in the state where the qualifying utility serves retail electrical customers, and the utility either owns the facility in whole or part or has a long-term contract with the facility of at least 12 months.  Electricity from qualified biomass energy that began operation prior to March 31, 1999 is eligible if it contributes to a qualifying utility's load and is owned by a qualifying utility or an industrial facility that is directly interconnected to the utility.  Hydroelectric generation projects are eligible if:

  • Incremental electricity produced as a result of efficiency improvements completed after March 31, 1999, are made to hydroelectric projects owned by a utility subject to this standard and located in the Pacific Northwest where the generation does not result in new water diversions or impoundments; or 
  • Hydroelectric generation in irrigation pipes, irrigation canals, water pipes whose primary purpose is for the conveyance of water for municipal use, and wastewater pipes located in the Washington where the additional generation does not result in new water diversions or impoundments.

Credit Multipliers and Special Provisions
Distributed generation, defined as a "generation facility or any integrated cluster of such facilities" with a capacity of five megawatts (MW) or less, may be counted as double the facility's electrical output if the utility owns the facility, has contracted for the distributed generation and the associated RECs, or has contracted to purchase only the associated RECs. Eligible renewables from a facility that began operation after December 31, 2005 where the developer used an approved apprenticeship program during facility construction may count 1.2 times its base value. Multiplier credits may not be traded and turned in for compliance separately from the underlying RECs. 

Facilities that capture and destroy methane from a digester, a landfill gas collection system, or other means may separate the nonpower attributes into carbon offsets or greenhouse gas emission reduction credits and RECs, and may trade these credits or offsets separately from the RECs.   

Incremental electricity produced by efficiency improvements to hydroelectric generation may only be used for compliance by the utility taking the incremental generation, and may not be used to generate tradable RECs.

On or before June 1, 2012, and annually thereafter, each utility must file a report with the Department of Commerce regarding its progress in meeting its conservation and renewable resource targets during the preceding year. A utility may use RECs from the year prior to or the year subsequent to the current year to meet its requirements for the current compliance year. Although some exemptions apply, a utility’s failure to meet the energy conservation or renewable energy targets will result in an administrative penalty of $50/MWh (adjusted annually for inflation) paid to the state of Washington. The funds will be deposited in a special account for the purchase of renewable energy credits or for energy conservation projects at public facilities, local government facilities, community colleges, or state universities.

Cost Mitigation Measures
A utility is not required to meet a renewable energy target if it spends at least 4% of its retail revenue requirement on the incremental cost of renewable energy and RECs. Incremental cost refers to the difference between the cost of the renewable resource and the cost of a comparable non-renewable resource. A utility that has no load growth is not required to spend above 1% of its revenue requirements on renewable energy and RECs.** 

* Public Utility Districts are subject to this legislation, but are not specifically listed under "applicable sectors", as they are a form of municipal utilities.

** Utilities with no load growth must also have not purchased electricity from resources other than renewable resources, and as of 2014, "coal transition power", as defined in RCW 80.80.10.

  Glenn Blackmon
Washington State Department of Commerce
State Energy Office
1011 Plum St SE
PO Box 42525
Olympia, WA 98504-2525
Phone: (360) 725-3115
Web Site:
  Steve Johnson
Washington Utilities and Transportation Commission
1300 South Evergreen Park Drive, SW
P.O. Box 47250
Olympia, WA 98504-7250
Phone: (360) 664-1346
Web Site:
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2014 - 2015 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.