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
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(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
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(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
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(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
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(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
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(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
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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
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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
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(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
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(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
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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
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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
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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
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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
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