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Incentives/Policies for Renewables & Efficiency

Printable Version
Energy Efficiency Resource Standard   

Last DSIRE Review: 10/28/2014
Program Overview:
State: Washington
Incentive Type: Energy Efficiency Resource Standard
Eligible Efficiency Technologies: CHP/Cogeneration, Custom/Others pending approval, Production Efficiency, Distribution System Upgrades
Applicable Sectors: Municipal Utility, Investor-Owned Utility, Rural Electric Cooperative
Electric Sales ReductionVaries
Electric Peak Demand ReductionVaries
Web Site:
Authority 1:
Date Enacted:
RCW 19.285 - Energy Independence Act
Authority 2:
WAC 480-109
Authority 3:
WAC 194-37


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 more than 25,000 customers in the state of Washington to undertake all cost-effective energy conservation. Investor-owned utilities, municipal utilities, rural electric cooperatives and public utility districts which meet the customer total requirements 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).

Electric Demand and Energy Reduction Standard

Utilities subject to the standard must pursue all available conservation that is cost-effective, reliable, and feasible. Specifically, by January 1, 2010, utilities must (1) identify achieveable cost-effective conservation potential through 2019, with reviews and updates every two years for the subsequent 10 years; and (2) establish and meet biennial targets for conservation. 

High-efficiency cogeneration owned and used by a retail electric customer to meet its own needs may be counted toward conservation targets. Utilities may also count avoided energy supply required as a result of a distribution system upgrade or improved management practice that results in lower line losses and/or transformation losses, to the extent it can be documented. Production efficiency improvements may be measured and reported based upon the fraction of fuel savings achieved.

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

To evaluate the cost effectiveness of its efficiency and demand reduction activities, Washington utilizes the Total Resource Cost test (TRC) (one of the five "California tests" from the California Standard Practice Manual) as its primary test for measuring the cost-effectiveness of energy efficiency programs. 

Utility Cost Recovery Provisions

Investor-owned utilities are permitted to propose "positive incentives" related to compliance with the standard. In addition, Washington's three investor-owned utilities have proposed decoupling mechanisms in order to comply with the law. To date, however, no utility has proposed an incentive compensation mechanisn, nor has a decoupling mechanism been approved.

Special Provisions 

In determining target levels of efficiency, a utility's projections must be consistent with its proportionate share of the most recent Northwest Power and Conservation Council (NWPCC) power plan. Utilities may alternatively base their efficiency targets on their most recent integrated resource plan, provided the plan is consistent with the NWPCC's power plan. Utilities must also develop projections of achievable cost-effective conservation potential for the immediate two-year period.Beginning in January 2014, a qualifying utility may apply conservation achieved in excess of its biennial target to meet up to 25% of its subesequent two biennial conservation targets. 

  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, S.W.
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.