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HomeMy WebLinkAbout20210623Avista to Staff 7 Attachment A - WA HB 1257.pdfCERTIFICATION OF ENROLLMENT ENGROSSED THIRD SUBSTITUTE HOUSE BILL 1257 66th Legislature 2019 Regular Session Passed by the House April 18, 2019 Yeas 55 Nays 39 Speaker of the House of Representatives Passed by the Senate April 15, 2019 Yeas 25 Nays 23 President of the Senate CERTIFICATE I, Bernard Dean, Chief Clerk of the House of Representatives of the State of Washington, do hereby certify that the attached is ENGROSSED THIRD SUBSTITUTE HOUSE BILL 1257 as passed by the House of Representatives and the Senate on the dates hereon set forth. Chief Clerk Approved FILED Governor of the State of Washington Secretary of State State of Washington AN ACT Relating to energy efficiency; amending RCW 19.27A.140,1 19.27A.170, 19.27A.025, and 19.27.540; adding new sections to chapter2 19.27A RCW; adding a new section to chapter 82.16 RCW; adding new3 sections to chapter 80.28 RCW; creating new sections; prescribing4 penalties; and providing an expiration date.5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:6 NEW SECTION. Sec. 1. (1) The legislature finds that state7 policy encouraging energy efficiency has been extremely successful in8 reducing energy use, avoiding costly investment in new generating9 capacity, lowering customer energy bills, and reducing air pollution10 and greenhouse gas emissions. The state's 2019 biennial energy report11 indicates that utility conservation investments under chapter 19.28512 RCW, the energy independence act, now save consumers more than seven13 hundred fifty million dollars annually, helping to keep Washington's14 electricity prices among the lowest in the nation.15 (2) Studies by the Northwest power and conservation council and16 by individual Washington utilities repeatedly show that efficiency is17 the region's largest, cheapest, lowest risk energy resource; that18 without it, the Northwest would have needed to invest in additional19 natural gas-fired generation; and that, looking ahead, efficiency can20 approach the size of the region's hydropower system as a regional21 ENGROSSED THIRD SUBSTITUTE HOUSE BILL 1257 AS AMENDED BY THE SENATE Passed Legislature - 2019 Regular Session State of Washington 66th Legislature 2019 Regular Session By House Appropriations (originally sponsored by Representatives Doglio, Tarleton, Lekanoff, Fitzgibbon, Dolan, Fey, Mead, Peterson, Kloba, Riccelli, Macri, Hudgins, Morris, Stanford, Appleton, Slatter, Tharinger, Jinkins, Pollet, and Goodman; by request of Governor Inslee) READ FIRST TIME 03/21/19. p. 1 E3SHB 1257.PL resource. The Northwest power and conservation council forecasts that1 with an aggressive new energy efficiency policy, the region can2 potentially meet one hundred percent of its electricity load growth3 over the next twenty years with energy efficiency.4 (3) Energy efficiency investments that reduce energy use in5 buildings bring cobenefits that directly impact Washingtonians'6 quality of life. These benefits include improved indoor air quality,7 more comfortable homes and workplaces, and lower tenant energy bills.8 The legislature notes that according to the United States department9 of energy's energy and employment report, 2017, the energy efficiency10 sector has created more than sixty-five thousand jobs in the state,11 more than two-thirds of which are in the construction sector, and12 that the number continues to grow.13 (4) Considering the benefits of and the need for additional14 energy efficiency to meet regional energy demand, the legislature15 notes that attaining as much of this resource as possible from the16 buildings sector can have a significant effect on state greenhouse17 gas emissions by deferring or displacing the need for natural gas-18 fired electricity generation and reducing the direct use of natural19 gas. Buildings represent the second largest source of greenhouse gas20 emissions in Washington and emissions from the buildings sector have21 grown by fifty percent since 1990, far outpacing all other emission22 sources.23 (5) The legislature therefore determines that it is in the24 state's interest to maximize the full potential of energy efficiency25 standards, retrofit incentives, utility programs, and building codes26 to keep energy costs low and to meet statutory goals for increased27 building efficiency and reduced greenhouse gas emissions.28 (6) It is the intent of this act to provide incentives and29 regulations that encourage greater energy efficiency in all aspects30 of new and existing buildings, including building design, energy31 delivery, and utilization and operations. This act:32 (a) Establishes energy performance standards for larger existing33 commercial buildings;34 (b) Provides financial incentives and technical assistance for35 building owners taking early action to meet these standards before36 they are required to be met;37 (c) Enhances access to commercial building energy consumption38 data in order to assist with monitoring progress toward meeting39 energy performance standards; and40 p. 2 E3SHB 1257.PL (d) Establishes efficiency performance requirements for natural1 gas distribution companies, recognizing the significant contribution2 of natural gas to the state's greenhouse gas emissions, the role that3 natural gas plays in heating buildings and powering equipment within4 buildings across the state, and the greenhouse gas reduction benefits5 associated with substituting renewable natural gas for fossil fuels.6 NEW SECTION. Sec. 2. A new section is added to chapter 19.27A7 RCW to read as follows:8 The definitions in this section apply throughout sections 39 through 6 of this act unless the context clearly requires otherwise.10 (1) "Agricultural structure" means a structure designed and11 constructed to house farm implements, hay, grain, poultry, livestock,12 or other horticultural products, and that is not a place used by the13 public or a place of human habitation or employment where14 agricultural products are processed, treated, or packaged.15 (2) "Baseline energy use intensity" means a building's weather16 normalized energy use intensity measured the previous year to making17 an application for an incentive under section 4 of this act.18 (3) "Building owner" means an individual or entity possessing19 title to a building.20 (4) "Building tenant" means a person or entity occupying or21 holding possession of a building or premises pursuant to a rental22 agreement.23 (5) "Conditional compliance" means a temporary compliance method24 used by building owners that demonstrate the owner has implemented25 energy use reduction strategies required by the standard, but has not26 demonstrated full compliance with the energy use intensity target.27 (6) "Consumer-owned utility" has the same meaning as defined in28 RCW 19.27A.140.29 (7) "Covered commercial building" means a building where the sum30 of nonresidential, hotel, motel, and dormitory floor areas exceeds31 fifty thousand gross square feet, excluding the parking garage area.32 (8) "Department" means the department of commerce.33 (9) "Director" means the director of the department of commerce34 or the director's designee.35 (10) "Electric utility" means a consumer-owned utility or an36 investor-owned utility.37 (11) "Eligible building owner" means: (a) The owner of a covered38 commercial building required to comply with the standard established39 p. 3 E3SHB 1257.PL in section 3 of this act; or (b) the owner of a multifamily1 residential building where the floor area exceeds fifty thousand2 gross square feet, excluding the parking garage area.3 (12) "Energy" includes: Electricity, including electricity4 delivered through the electric grid and electricity generated at the5 building premises using solar or wind energy resources; natural gas;6 district steam; district hot water; district chilled water; propane;7 fuel oil; wood; coal; or other fuels used to meet the energy loads of8 a building.9 (13) "Energy use intensity" means a measurement that normalizes a10 building's site energy use relative to its size. A building's energy11 use intensity is calculated by dividing the total net energy consumed12 in one year by the gross floor area of the building, excluding the13 parking garage. "Energy use intensity" is reported as a value of14 thousand British thermal units per square foot per year.15 (14) "Energy use intensity target" means the net energy use16 intensity of a covered commercial building that has been established17 for the purposes of complying with the standard established under18 section 3 of this act.19 (15) "Gas company" includes every corporation, company,20 association, joint stock association, partnership, and person, their21 lessees, trustees, or receiver appointed by any court whatsoever, and22 every city or town owning, controlling, operating, or managing any23 gas plant within this state.24 (16) "Greenhouse gas" includes carbon dioxide, methane, nitrous25 oxide, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride.26 (17)(a) "Gross floor area" means the total number of square feet27 measured between the exterior surfaces of the enclosing fixed walls28 of a building, including all supporting functions such as offices,29 lobbies, restrooms, equipment storage areas, mechanical rooms, break30 rooms, and elevator shafts.31 (b) "Gross floor area" does not include outside bays or docks.32 (18) "Investor-owned utility" means a company owned by investors,33 that meets one of the definitions of RCW 80.04.010, and that is34 engaged in distributing electricity to more than one retail electric35 customer in the state.36 (19) "Multifamily residential building" means a building37 containing sleeping units or more than two dwelling units where38 occupants are primarily permanent in nature.39 p. 4 E3SHB 1257.PL (20) "Net energy use" means the sum of metered and bulk fuel1 energy entering the building, minus the sum of metered energy leaving2 the building.3 (21) "Qualifying utility" means a consumer-owned or investor-4 owned gas or electric utility that serves more than twenty-five5 thousand customers in the state of Washington.6 (22) "Savings-to-investment ratio" means the ratio of the total7 present value savings to the total present value costs of a bundle of8 an energy or water conservation measure estimated over the projected9 useful life of each measure. The numerator of the ratio is the10 present value of net savings in energy or water and nonfuel or11 nonwater operation and maintenance costs attributable to the proposed12 energy or water conservation measure. The denominator of the ratio is13 the present value of the net increase in investment and replacement14 costs less salvage value attributable to the proposed energy or water15 conservation measure.16 (23) "Standard" means the state energy performance standard for17 covered commercial buildings established under section 3 of this act.18 (24) "Thermal energy company" has the same meaning as defined in19 RCW 80.04.550.20 (25) "Weather normalized" means a method for modifying the21 measured building energy use in a specific weather year to energy use22 under normal weather conditions.23 NEW SECTION. Sec. 3. A new section is added to chapter 19.27A24 RCW to read as follows:25 (1)(a) By November 1, 2020, the department must establish by rule26 a state energy performance standard for covered commercial buildings.27 (b) In developing energy performance standards, the department28 shall seek to maximize reductions of greenhouse gas emissions from29 the building sector. The standard must include energy use intensity30 targets by building type and methods of conditional compliance that31 include an energy management plan, operations and maintenance32 program, energy efficiency audits, and investment in energy33 efficiency measures designed to meet the targets. The department34 shall use ANSI/ASHRAE/IES standard 100-2018 as an initial model for35 standard development. The department must update the standard by July36 1, 2029, and every five years thereafter. Prior to the adoption or37 update of the standard, the department must identify the sources of38 information it relied upon, including peer-reviewed science.39 p. 5 E3SHB 1257.PL (2) In establishing the standard under subsection (1) of this1 section, the department:2 (a) Must develop energy use intensity targets that are no greater3 than the average energy use intensity for the covered commercial4 building occupancy type with adjustments for unique energy using5 features. The department must also develop energy use intensity6 targets for additional property types eligible for incentives in7 section 4 of this act. The department must consider regional and8 local building energy utilization data, such as existing energy star9 benchmarking data, in establishing targets for the standard. Energy10 use intensity targets must be developed for two or more climate zones11 and be representative of energy use in a normal weather year;12 (b) May consider building occupancy classifications from ANSI/13 ASHRAE/IES standard 100-2018 and the United States environmental14 protection agency's energy star portfolio manager when developing15 energy use intensity targets;16 (c) May implement lower energy use intensity targets for more17 recently built covered commercial buildings based on the state energy18 code in place when the buildings were constructed;19 (d)(i) Must adopt a conditional compliance method that ensures20 that covered commercial buildings that do not meet the specified21 energy use intensity targets are taking action to achieve reduction22 in energy use, including investment criteria for conditional23 compliance that ensure that energy efficiency measures identified by24 energy audits are implemented to achieve a covered commercial25 building's energy use intensity target. The investment criteria must26 require that a building owner adopt an implementation plan to meet27 the energy intensity target or implement an optimized bundle of28 energy efficiency measures that provides maximum energy savings29 without resulting in a savings-to-investment ratio of less than 1.0,30 except as exempted in (d)(ii) of this subsection. The implementation31 plan must be based on an investment grade energy audit and a life-32 cycle cost analysis that accounts for the period during which a33 bundle of measures will provide savings. The building owner's cost34 for implementing energy efficiency measures must reflect net cost,35 excluding any costs covered by utility or government grants. The36 implementation plan may exclude measures that do not pay for37 themselves over the useful life of the measure and measures excluded38 under (d)(ii) of this subsection. The implementation plan may include39 phased implementation such that the building owner is not required to40 p. 6 E3SHB 1257.PL replace a system or equipment before the end of the system or1 equipment's useful life;2 (ii) For those buildings or structures that are listed in the3 state or national register of historic places; designated as a4 historic property under local or state designation law or survey;5 certified as a contributing resource with a national register listed6 or locally designated historic district; or with an opinion or7 certification that the property is eligible to be listed on the8 national or state registers of historic places either individually or9 as a contributing building to a historic district by the state10 historic preservation officer or the keeper of the national register11 of historic places, no individual energy efficiency requirement need12 be met that would compromise the historical integrity of a building13 or part of a building.14 (3) Based on records obtained from each county assessor and other15 available information sources, the department must create a database16 of covered commercial buildings and building owners required to17 comply with the standard established in accordance with this section.18 (4) By July 1, 2021, the department must provide the owners of19 covered buildings with notification of compliance requirements.20 (5) The department must develop a method for administering21 compliance reports from building owners.22 (6) The department must provide a customer support program to23 building owners including, but not limited to, outreach and24 informational material, periodic training, phone and email support,25 and other technical assistance.26 (7) The building owner of a covered commercial building must27 report the building owner's compliance with the standard to the28 department in accordance with the schedule established under29 subsection (8) of this section and every five years thereafter. For30 each reporting date, the building owner must submit documentation to31 demonstrate that:32 (a) The weather normalized energy use intensity of the covered33 commercial building measured in the previous calendar year is less34 than or equal to the energy use intensity target; or35 (b) The covered commercial building has received conditional36 compliance from the department based on energy efficiency actions37 prescribed by the standard; or38 p. 7 E3SHB 1257.PL (c) The covered commercial building is exempt from the standard1 by demonstrating that the building meets one of the following2 criteria:3 (i) The building did not have a certificate of occupancy or4 temporary certificate of occupancy for all twelve months of the5 calendar year prior to the building owner compliance schedule6 established under subsection (8) of this section;7 (ii) The building did not have an average physical occupancy of8 at least fifty percent throughout the calendar year prior to the9 building owner compliance schedule established under subsection (8)10 of this section;11 (iii) The sum of the buildings gross floor area minus12 unconditioned and semiconditioned spaces, as defined in the13 Washington state energy code, is less than fifty thousand square14 feet;15 (iv) The primary use of the building is manufacturing or other16 industrial purposes, as defined under the following use designations17 of the international building code: (A) Factory group F; or (B) high18 hazard group H;19 (v) The building is an agricultural structure; or20 (vi) The building meets at least one of the following conditions21 of financial hardship: (A) The building had arrears of property taxes22 or water or wastewater charges that resulted in the building's23 inclusion, within the prior two years, on a city's or county's annual24 tax lien sale list; (B) the building has a court appointed receiver25 in control of the asset due to financial distress; (C) the building26 is owned by a financial institution through default by a borrower;27 (D) the building has been acquired by a deed in lieu of foreclosure28 within the previous twenty-four months; (E) the building has a senior29 mortgage subject to a notice of default; or (F) other conditions of30 financial hardship identified by the department by rule.31 (8) A building owner of a covered commercial building must meet32 the following reporting schedule for complying with the standard33 established under this section:34 (a) For a building with more than two hundred twenty thousand35 gross square feet, June 1, 2026;36 (b) For a building with more than ninety thousand gross square37 feet but less than two hundred twenty thousand and one gross square38 feet, June 1, 2027; and39 p. 8 E3SHB 1257.PL (c) For a building with more than fifty thousand gross square1 feet but less than ninety thousand and one square feet, June 1, 2028.2 (9)(a) The department may issue a notice of violation to a3 building owner for noncompliance with the requirements of this4 section. A determination of noncompliance may be made for any of the5 following reasons:6 (i) Failure to submit a compliance report in the form and manner7 prescribed by the department;8 (ii) Failure to meet an energy use intensity target or failure to9 receive conditional compliance approval;10 (iii) Failure to provide accurate reporting consistent with the11 requirements of the standard established under this section; and12 (iv) Failure to provide a valid exemption certificate.13 (b) In order to create consistency with the implementation of the14 standard and rules adopted under this section, the department must15 reply and cite the section of law, code, or standard in a notice of16 violation for noncompliance with the requirements of this section17 when requested to do so by the building owner or the building owner's18 agent.19 (10) The department is authorized to impose an administrative20 penalty upon a building owner for failing to submit documentation21 demonstrating compliance with the requirements of this section. The22 penalty may not exceed an amount equal to five thousand dollars plus23 an amount based on the duration of any continuing violation. The24 additional amount for a continuing violation may not exceed a daily25 amount equal to one dollar per year per gross square foot of floor26 area. The department may by rule increase the maximum penalty rates27 to adjust for the effects of inflation.28 (11) Administrative penalties collected under this section must29 be deposited into the low-income weatherization and structural30 rehabilitation assistance account created in RCW 70.164.030.31 (12) The department must adopt rules as necessary to implement32 this section, including but not limited to:33 (a) Rules necessary to ensure timely, accurate, and complete34 reporting of building energy performance for all covered commercial35 buildings;36 (b) Rules necessary to enforce the standard established under37 this section; and38 (c) Rules that provide a mechanism for appeal of any39 administrative penalty imposed by the department under this section.40 p. 9 E3SHB 1257.PL (13) Upon request by the department, each county assessor must1 provide property data from existing records to the department as2 necessary to implement this section.3 (14) By January 15, 2022, and each year thereafter through 2029,4 the department must submit a report to the governor and the5 appropriate committees of the legislature on the implementation of6 the state energy performance standard established under this section.7 The report must include information regarding the adoption of the8 ANSI/ASHRAE/IES standard 100-2018 as an initial model, the financial9 impact to building owners required to comply with the standard, the10 amount of incentives provided under sections 4 and 5 of this act, and11 any other significant information associated with the implementation12 of this section.13 NEW SECTION. Sec. 4. A new section is added to chapter 19.27A14 RCW to read as follows:15 (1) The department must establish a state energy performance16 standard early adoption incentive program consistent with the17 requirements of this section.18 (2) The department must adopt application and reporting19 requirements for the incentive program. Building energy reporting for20 the incentive program must be consistent with the energy reporting21 requirements established under section 3 of this act.22 (3) Upon receiving documentation demonstrating that a building23 owner qualifies for an incentive under this section, the department24 must authorize each applicable entity administering incentive25 payments, as provided in section 6 of this act, to make an incentive26 payment to the building owner. When a building is served by more than27 one entity offering incentives or more than one type of fuel,28 incentive payments must be proportional to the energy use intensity29 reduction of each specific fuel provided by each entity.30 (4) An eligible building owner may receive an incentive payment31 in the amounts specified in subsection (6) of this section only if32 the following requirements are met:33 (a) The building is either: (i) A covered commercial building34 subject to the requirements of the standard established under section35 3 of this act; or (ii) a multifamily residential building where the36 floor area exceeds fifty thousand gross square feet, excluding the37 parking garage area;38 p. 10 E3SHB 1257.PL (b) The building's baseline energy use intensity exceeds its1 applicable energy use intensity target by at least fifteen energy use2 intensity units;3 (c) At least one electric utility, gas company, or thermal energy4 company providing or delivering energy to the covered commercial5 building is participating in the incentive program by administering6 incentive payments as provided in section 6 of this act; and7 (d) The building owner complies with any other requirements8 established by the department.9 (5)(a) An eligible building owner who meets the requirements of10 subsection (4) of this section may submit an application to the11 department for an incentive payment in a form and manner prescribed12 by the department. The application must be submitted in accordance13 with the following schedule:14 (i) For a building with more than two hundred twenty thousand15 gross square feet, beginning July 1, 2021, through June 1, 2025;16 (ii) For a building with more than ninety thousand gross square17 feet but less than two hundred twenty thousand and one gross square18 feet, beginning July 1, 2021, through June 1, 2026; and19 (iii) For a building with more than fifty thousand gross square20 feet but less than ninety thousand and one gross square feet,21 beginning July 1, 2021, through June 1, 2027.22 (b) The department must review each application and determine23 whether the applicant is eligible for the incentive program and if24 funds are available for the incentive payment within the limitation25 established in section 5 of this act. If the department certifies an26 application, it must provide verification to the building owner and27 each entity participating as provided in section 6 of this act and28 providing service to the building owner.29 (6) An eligible building owner that demonstrates early compliance30 with the applicable energy use intensity target under the standard31 established under section 3 of this act may receive a base incentive32 payment of eighty-five cents per gross square foot of floor area,33 excluding parking, unconditioned, or semiconditioned spaces.34 (7) The incentives provided in subsection (6) of this section are35 subject to the limitations and requirements of this section,36 including any rules or procedures implementing this section.37 (8) The department must establish requirements for the38 verification of energy consumption by the building owner and each39 p. 11 E3SHB 1257.PL participating electric utility, gas company, and thermal energy1 company.2 (9) The department must provide an administrative process for an3 eligible building owner to appeal a determination of an incentive4 eligibility or amount.5 (10) By September 30, 2025, and every two years thereafter, the6 department must report to the appropriate committees of the7 legislature on the results of the incentive program under this8 section and may provide recommendations to improve the effectiveness9 of the program.10 (11) The department may adopt rules to implement this section.11 NEW SECTION. Sec. 5. A new section is added to chapter 19.27A12 RCW to read as follows:13 The department may not issue a certification for an incentive14 application under section 4 of this act if doing so is likely to15 result in total incentive payments under section 4 of this act in16 excess of seventy-five million dollars.17 NEW SECTION. Sec. 6. A new section is added to chapter 19.27A18 RCW to read as follows:19 (1)(a) Each qualifying utility must administer incentive payments20 for the state energy performance standard early adoption incentive21 program established in section 4 of this act on behalf of its22 customers who are eligible building owners of covered commercial23 buildings or multifamily residential buildings, consistent with the24 requirements of this section. Any thermal energy company, electric25 utility, or gas company not otherwise required to administer26 incentive payments may voluntarily participate by providing notice to27 the department in a form and manner prescribed by the department.28 (b) Nothing in this subsection (1) requires a qualifying utility29 to administer incentive payments for the state energy performance30 standard early adoption incentive program established in section 4 of31 this act for which the qualifying utility is not allowed a credit32 against taxes due under this chapter.33 (2) An entity that administers the payments for the incentive34 program under this section must administer the program in a manner35 that is consistent with the standard established and any rules36 adopted by the department under sections 3 and 4 of this act.37 p. 12 E3SHB 1257.PL (3) Upon receiving notification from the department that a1 building owner has qualified for an incentive payment, each entity2 that administers incentive payments under this section must make3 incentive payments to its customers who are eligible building owners4 of covered commercial buildings or multifamily residential buildings5 who qualify as provided under this section and at rates specified in6 section 4(6) of this act. When a building is served by more than one7 entity administering incentive payments, incentive payments must be8 proportional to the energy use intensity reduction of the9 participating entities' fuel.10 (4) The participation by an entity in the administration of11 incentive payments under this section does not relieve the entity of12 any obligation that may otherwise exist or be established to provide13 customer energy efficiency programs or incentives.14 (5) An entity that administers the payments for the incentive15 program under this section is not liable for excess payments made in16 reliance on amounts reported by the department as due and payable as17 provided under section 4 of this act, if such amounts are later found18 to be abnormal or inaccurate due to no fault of the business.19 NEW SECTION. Sec. 7. This section is the tax preference20 performance statement for the tax preference contained in section 8,21 chapter . . ., Laws of 2019 (section 8 of this act). This performance22 statement is only intended to be used for subsequent evaluation of23 the tax preference. It is not intended to create a private right of24 action by any party or be used to determine eligibility for25 preferential tax treatment.26 (1) The legislature categorizes this tax preference as one27 intended to induce implementation of building energy efficiency28 measures, as indicated in section 4 of this act.29 (2) It is the legislature's specific public policy objective to30 increase energy efficiency and the use of renewable fuels that reduce31 the amount of greenhouse gas emissions in Washington. It is the32 legislature's intent to provide a credit against the taxes owing by33 utilities under chapter 82.16 RCW for the incentives provided for the34 implementation by eligible building owners of energy efficiency and35 renewable energy measures.36 (3) If a review finds that measurable energy savings have37 increased in covered commercial buildings for which building owners38 are receiving an incentive payment from a qualifying utility, then39 p. 13 E3SHB 1257.PL the legislature intends to extend the expiration date of the tax1 preference.2 (4) In order to obtain the data necessary to perform the review3 in subsection (3) of this section, the joint legislative audit and4 review committee may refer to the number of building owners receiving5 an incentive payment from qualifying utilities taking the public6 utility tax preference under section 8 of this act, the amount of the7 incentive payment, and the energy use intensity reduction of the8 buildings as a result of the incentive program, as reported by the9 department of commerce.10 NEW SECTION. Sec. 8. A new section is added to chapter 82.1611 RCW to read as follows:12 (1) Subject to the requirements of this section, a light and13 power business or a gas distribution business is allowed a credit14 against taxes due under this chapter in an amount equal to:15 (a) Incentive payments made in any calendar year under section 416 of this act; and17 (b) Documented administrative cost not to exceed eight percent of18 the incentive payments.19 (2) The credit must be taken in a form and manner as required by20 the department.21 (3) Credit must be claimed against taxes due under this chapter22 for the incentive payments made and administrative expenses incurred.23 Credit earned in one calendar year may not be carried backward but24 may be claimed against taxes due under this chapter during the same25 calendar year and for the following two calendar years. The credit26 may not exceed the tax that would otherwise be due under this27 chapter. Refunds may not be granted in the place of a credit.28 (4)(a) Except as provided in (c) of this subsection, any business29 that has claimed credit in excess of the amount of credit the30 business earned under subsection (1) of this section must repay the31 amount of tax against which the excess credit was claimed.32 (b) The department must assess interest on the taxes due under33 this subsection. Interest must be assessed at the rate provided for34 delinquent excise taxes under chapter 82.32 RCW, retroactively to the35 date the credit was claimed, and accrues until the taxes against36 which the credit was claimed are repaid. The department must provide37 written notice of the amount due under this subsection and that the38 amount due must be paid within thirty days of the date of the notice.39 p. 14 E3SHB 1257.PL The department may not impose penalties as provided in chapter 82.321 RCW on taxes due under this subsection unless the amount due is not2 paid in full by the due date in the notice.3 (c) A business is not liable for excess credits claimed in4 reliance on amounts reported to the business by the department of5 commerce as due and payable as provided under section 4 of this act,6 if such amounts are later found to be abnormal or inaccurate due to7 no fault of the business.8 (5) The amount of credit taken under this section and the9 identity of a business that takes the credit is not confidential10 taxpayer information under RCW 82.32.330 and is subject to11 disclosure.12 (6) This section expires June 30, 2032.13 Sec. 9. RCW 19.27A.140 and 2011 1st sp.s. c 43 s 245 are each14 amended to read as follows:15 The definitions in this section apply to RCW 19.27A.130 through16 19.27A.190 and 19.27A.020 unless the context clearly requires17 otherwise.18 (1) "Benchmark" means the energy used by a facility as recorded19 monthly for at least one year and the facility characteristics20 information inputs required for a portfolio manager.21 (2) "Conditioned space" means conditioned space, as defined in22 the Washington state energy code.23 (3) "Consumer-owned utility" includes a municipal electric24 utility formed under Title 35 RCW, a public utility district formed25 under Title 54 RCW, an irrigation district formed under chapter 87.0326 RCW, a cooperative formed under chapter 23.86 RCW, a mutual27 corporation or association formed under chapter 24.06 RCW, a port28 district formed under Title 53 RCW, or a water-sewer district formed29 under Title 57 RCW, that is engaged in the business of distributing30 electricity to one or more retail electric customers in the state.31 (4) "Cost-effectiveness" means that a project or resource is32 forecast:33 (a) To be reliable and available within the time it is needed;34 and35 (b) To meet or reduce the power demand of the intended consumers36 at an estimated incremental system cost no greater than that of the37 least-cost similarly reliable and available alternative project or38 resource, or any combination thereof.39 p. 15 E3SHB 1257.PL (5) "Council" means the state building code council.1 (6) "Embodied energy" means the total amount of fossil fuel2 energy consumed to extract raw materials and to manufacture,3 assemble, transport, and install the materials in a building and the4 life-cycle cost benefits including the recyclability and energy5 efficiencies with respect to building materials, taking into account6 the total sum of current values for the costs of investment, capital,7 installation, operating, maintenance, and replacement as estimated8 for the lifetime of the product or project.9 (7) "Energy consumption data" means the monthly amount of energy10 consumed by a customer as recorded by the applicable energy meter for11 the most recent twelve-month period.12 (8) "Energy service company" has the same meaning as in RCW13 43.19.670.14 (9) "Enterprise services" means the department of enterprise15 services.16 (10) "Greenhouse gas" and "greenhouse gases" includes carbon17 dioxide, methane, nitrous oxide, hydrofluorocarbons,18 perfluorocarbons, and sulfur hexafluoride.19 (11) "Investment grade energy audit" means an intensive20 engineering analysis of energy efficiency and management measures for21 the facility, net energy savings, and a cost-effectiveness22 determination.23 (12) "Investor-owned utility" means a corporation owned by24 investors that meets the definition of "corporation" as defined in25 RCW 80.04.010 and is engaged in distributing either electricity or26 natural gas, or both, to more than one retail electric customer in27 the state.28 (13) "Major facility" means any publicly owned or leased29 building, or a group of such buildings at a single site, having ten30 thousand square feet or more of conditioned floor space.31 (14) "National energy performance rating" means the score32 provided by the energy star program, to indicate the energy33 efficiency performance of the building compared to similar buildings34 in that climate as defined in the United States environmental35 protection agency "ENERGY STAR® Performance Ratings Technical36 Methodology."37 (15) "Net zero energy use" means a building with net energy38 consumption of zero over a typical year.39 p. 16 E3SHB 1257.PL (16) "Portfolio manager" means the United States environmental1 protection agency's energy star portfolio manager or an equivalent2 tool adopted by the department of enterprise services.3 (17) "Preliminary energy audit" means a quick evaluation by an4 energy service company of the energy savings potential of a building.5 (18) "Qualifying public agency" includes all state agencies,6 colleges, and universities.7 (19) "Qualifying utility" means a consumer-owned or investor-8 owned gas or electric utility that serves more than twenty-five9 thousand customers in the state of Washington.10 (20) "Reporting public facility" means any of the following:11 (a) A building or structure, or a group of buildings or12 structures at a single site, owned by a qualifying public agency,13 that exceed ten thousand square feet of conditioned space;14 (b) Buildings, structures, or spaces leased by a qualifying15 public agency that exceeds ten thousand square feet of conditioned16 space, where the qualifying public agency purchases energy directly17 from the investor-owned or consumer-owned utility;18 (c) A wastewater treatment facility owned by a qualifying public19 agency; or20 (d) Other facilities selected by the qualifying public agency.21 (21) "State portfolio manager master account" means a portfolio22 manager account established to provide a single shared portfolio that23 includes reports for all the reporting public facilities.24 (22) "Building owner" has the same meaning as defined in section25 2 of this act.26 (23) "Covered commercial building" has the same meaning as27 defined in section 2 of this act.28 Sec. 10. RCW 19.27A.170 and 2009 c 423 s 6 are each amended to29 read as follows:30 (1) On and after January 1, 2010, qualifying utilities shall31 maintain records of the energy consumption data of all nonresidential32 and qualifying public agency buildings to which they provide service.33 This data must be maintained for at least the most recent twelve34 months in a format compatible for uploading to the United States35 environmental protection agency's energy star portfolio manager.36 (2) On and after January 1, 2010, upon the written authorization37 or secure electronic authorization of a nonresidential building owner38 or operator, a qualifying utility shall upload the energy consumption39 p. 17 E3SHB 1257.PL data for the accounts specified by the owner or operator for a1 building to the United States environmental protection agency's2 energy star portfolio manager in a form that does not disclose3 personally identifying information.4 (3) In carrying out the requirements of this section, a5 qualifying utility shall use any method for providing the specified6 data in order to maximize efficiency and minimize overall program7 cost. Qualifying utilities are encouraged to consult with the United8 States environmental protection agency and their customers in9 developing reasonable reporting options.10 (4) Disclosure of nonpublic nonresidential benchmarking data and11 ratings required under subsection (5) of this section will be phased12 in as follows:13 (a) By January 1, 2011, for buildings greater than fifty thousand14 square feet; and15 (b) By January 1, 2012, for buildings greater than ten thousand16 square feet.17 (5) Based on the size guidelines in subsection (4) of this18 section, a building owner or operator, or their agent, of a19 nonresidential building shall disclose the United States20 environmental protection agency's energy star portfolio manager21 benchmarking data and ratings to a prospective buyer, lessee, or22 lender for the most recent continuously occupied twelve-month period.23 A building owner or operator, or their agent, who delivers United24 States environmental protection agency's energy star portfolio25 manager benchmarking data and ratings to a prospective buyer, lessee,26 or lender is not required to provide additional information regarding27 energy consumption, and the information is deemed to be adequate to28 inform the prospective buyer, lessee, or lender regarding the United29 States environmental protection agency's energy star portfolio30 manager benchmarking data and ratings for the most recent twelve-31 month period for the building that is being sold, leased, financed,32 or refinanced.33 (6) Notwithstanding subsections (4) and (5) of this section,34 nothing in this section increases or decreases the duties, if any, of35 a building owner, operator, or their agent under this chapter or36 alters the duty of a seller, agent, or broker to disclose the37 existence of a material fact affecting the real property.38 (7) An electric or gas utility that is not a qualifying utility39 must either offer the upload service specified in subsection (2) of40 p. 18 E3SHB 1257.PL this section or provide customers who are building owners of covered1 commercial buildings with consumption data in an electronic document2 formatted for direct upload to the United States environmental3 protection agency's energy star portfolio manager. Within sixty days4 of receiving a written or electronic request and authorization of a5 building owner, the utility must provide the building owner with6 monthly energy consumption data as required to benchmark the7 specified building.8 (8) For any covered commercial building with three or more9 tenants, an electric or gas utility must, upon request of the10 building owner, provide the building owner with aggregated monthly11 energy consumption data without requiring prior consent from tenants.12 (9) Each electric or gas utility must ensure that all data13 provided in compliance with this section does not contain personally14 identifiable information or customer-specific billing information15 about tenants of a covered commercial building.16 NEW SECTION. Sec. 11. A new section is added to chapter 80.2817 RCW to read as follows:18 Each gas company must identify and acquire all conservation19 measures that are available and cost-effective. Each company must20 establish an acquisition target every two years and must demonstrate21 that the target will result in the acquisition of all resources22 identified as available and cost-effective. The cost-effectiveness23 analysis required by this section must include the costs of24 greenhouse gas emissions established in section 15 of this act. The25 targets must be based on a conservation potential assessment prepared26 by an independent third party and approved by the commission.27 Conservation targets must be approved by order by the commission. The28 initial conservation target must take effect by 2022.29 NEW SECTION. Sec. 12. (1) The legislature finds and declares30 that:31 (a) Renewable natural gas provides benefits to natural gas32 utility customers and to the public; and33 (b) The development of renewable natural gas resources should be34 encouraged to support a smooth transition to a low carbon energy35 economy in Washington.36 (2) It is the policy of the state to provide clear and reliable37 guidelines for gas companies that opt to supply renewable natural gas38 p. 19 E3SHB 1257.PL resources to serve their customers and that ensure robust ratepayer1 protections.2 NEW SECTION. Sec. 13. A new section is added to chapter 80.283 RCW to read as follows:4 (1) A natural gas company may propose a renewable natural gas5 program under which the company would supply renewable natural gas6 for a portion of the natural gas sold or delivered to its retail7 customers. The renewable natural gas program is subject to review and8 approval by the commission. The customer charge for a renewable9 natural gas program may not exceed five percent of the amount charged10 to retail customers for natural gas.11 (2) The environmental attributes of renewable natural gas12 provided under this section must be retired using procedures13 established by the commission and may not be used for any other14 purpose. The commission must approve procedures for banking and15 transfer of environmental attributes.16 (3) As used in this section, "renewable natural gas" includes17 renewable natural gas as defined in RCW 54.04.190. The commission may18 approve inclusion of other sources of gas if those sources are19 produced without consumption of fossil fuels.20 NEW SECTION. Sec. 14. A new section is added to chapter 80.2821 RCW to read as follows:22 (1) Each gas company must offer by tariff a voluntary renewable23 natural gas service available to all customers to replace any portion24 of the natural gas that would otherwise be provided by the gas25 company. The tariff may provide reasonable limits on participation26 based on the availability of renewable natural gas and may use27 environmental attributes of renewable natural gas combined with28 natural gas. The voluntary renewable natural gas service must include29 delivery to, or the retirement on behalf of, the customer of all30 environmental attributes associated with the renewable natural gas.31 (2) For the purposes of this section, "renewable natural gas"32 includes renewable natural gas as defined in RCW 54.04.190. The33 commission may approve inclusion of other sources of gas if those34 sources are produced without consumption of fossil fuels.35 NEW SECTION. Sec. 15. A new section is added to chapter 80.2836 RCW to read as follows:37 p. 20 E3SHB 1257.PL For the purposes of section 11 of this act, the cost of1 greenhouse gas emissions resulting from the use of natural gas,2 including the effect of emissions occurring in the gathering,3 transmission, and distribution of natural gas to the end user is4 equal to the cost per metric ton of carbon dioxide emissions, using5 the two and one-half percent discount rate, listed in table 2,6 Technical Support Document: Technical update of the social cost of7 carbon for regulatory impact analysis under Executive Order 12866,8 published by the interagency working group on social cost of9 greenhouse gases of the United States government, August 2016. The10 commission must adjust the costs established in this section to11 reflect the effect of inflation.12 NEW SECTION. Sec. 16. A new section is added to chapter 80.2813 RCW to read as follows:14 The commission must monitor the greenhouse gas emissions15 resulting from natural gas and renewable natural gas delivered by16 each gas company to its customers, relative to a proportionate share17 of the state's greenhouse gas emissions reduction goal. The18 commission must report to the governor by January 1, 2020, and every19 three years thereafter, an assessment of whether the gas companies20 are on track to meet a proportionate share of the state's greenhouse21 gas emissions reduction goal. The commission may rely on reports22 submitted by gas companies to the United States environmental23 protection agency or other governmental agencies in complying with24 this section.25 Sec. 17. RCW 19.27A.025 and 1991 c 122 s 3 are each amended to26 read as follows:27 (1) The minimum state energy code for new nonresidential28 buildings shall be the Washington state energy code, 1986 edition, as29 amended. The state building code council may, by rule adopted30 pursuant to chapter 34.05 RCW, amend that code's requirements for new31 nonresidential buildings provided that:32 (a) Such amendments increase the energy efficiency of typical33 newly constructed nonresidential buildings; and34 (b) Any new measures, standards, or requirements adopted must be35 technically feasible, commercially available, and ((cost-effective to36 building owners and tenants)) developed to yield the lowest overall37 p. 21 E3SHB 1257.PL cost to the building owner and occupant while meeting the energy1 reduction goals established under RCW 19.27A.160.2 (2) In considering amendments to the state energy code for3 nonresidential buildings, the state building code council shall4 establish and consult with a technical advisory committee including5 representatives of appropriate state agencies, local governments,6 general contractors, building owners and managers, design7 professionals, utilities, and other interested and affected parties.8 (3) Decisions to amend the Washington state energy code for new9 nonresidential buildings shall be made prior to December 15th of any10 year and shall not take effect before the end of the regular11 legislative session in the next year. Any disputed provisions within12 an amendment presented to the legislature shall be approved by the13 legislature before going into effect. A disputed provision is one14 which was adopted by the state building code council with less than a15 two-thirds majority vote. Substantial amendments to the code shall be16 adopted no more frequently than every three years.17 Sec. 18. RCW 19.27.540 and 2009 c 459 s 16 are each amended to18 read as follows:19 (1) The building code council shall adopt rules for electric20 vehicle infrastructure requirements. Rules adopted by the state21 building code council must consider applicable national and22 international standards and be consistent with rules adopted under23 RCW 19.28.281.24 (2)(a) Except as provided in (b) of this subsection, the rules25 adopted under this section must require electric vehicle charging26 capability at all new buildings that provide on-site parking. Where27 parking is provided, the greater of one parking space or ten percent28 of parking spaces, rounded to the next whole number, must be provided29 with wiring or raceway sized to accommodate 208/240 V 40-amp or30 equivalent electric vehicle charging. Electrical rooms serving31 buildings with on-site parking must be sized to accommodate the32 potential for electrical equipment and distribution required to serve33 a minimum of twenty percent of the total parking spaces with 208/24034 V 40-amp or equivalent electric vehicle charging. Load management35 infrastructure may be used to adjust the size and capacity of the36 required building electric service equipment and circuits on the37 customer facilities, as well as electric utility owned38 infrastructure, as allowed by applicable local and national39 p. 22 E3SHB 1257.PL electrical code. For accessible parking spaces, the greater of one1 parking space or ten percent of accessible parking spaces, rounded to2 the next whole number, must be provided with electric vehicle3 charging infrastructure that may also serve adjacent parking spaces4 not designated as accessible parking.5 (b) For occupancies classified as assembly, education, or6 mercantile, the requirements of this section apply only to employee7 parking spaces. The requirements of this section do not apply to8 occupancies classified as residential R-3, utility, or miscellaneous.9 (c) The required rules required under this subsection must be10 implemented by July 1, 2021.11 --- END --- p. 23 E3SHB 1257.PL