OLYMPIA (Wash.) – A bill providing the first comprehensive change in the state’s energy regulatory policy since the 19th century has passed the House of Representatives.
Rep. Jeff Morris (D-Mt. Vernon) introduced the bill (HB 2839) because rapidly evolving technology is taking its toll on utility and gas companies as they plan for future energy production and billing under the traditional “volumetric” billing process.
“Distributive energy production, energy efficient appliances, electric vehicles and many other advances mean the current way of doing business will result in less money being sent to utilities for the same amount of ‘sticks and wires’ infrastructure it takes to get less electricity to customers,” Morris said. “We need to allow regulators to look at new ways to regulate producers so they can adapt to new industry dynamics.”
“I’ve been leading a dialogue on this issue with utilities for the last several sessions. I’m pleased Puget Sound Energy and other regulated utilities have finally woken up to the change happening with their customers. Their business model is dying,” Morris said. “A good number of government-owned utilities still need to move past denial and towards acceptance.”
The bill directs the Utilities and Transportation Commission (UTC) to adopt “alternative forms of regulation” (AFOR) that “enable efficient use of the electrical or natural gas system and utility operations,” according to the bill. Morris said the bill is also designed to change regulations regarding how utilities are paid for delivering on innovation and outcomes customers want instead of a how much electricity they sell consumers.
The bill also uses a “greenhouse gas adder” of $40 per metric ton of such gases emitted to recognize that reduced carbon dioxide is an outcome customers want. Utility and gas companies are required to use this potential added cost when determining their energy generation portfolios. The more greenhouse gases emitted, the more these production entities pay, so the adder provides an incentive to plan for more efficient, less polluting energy sources.
“This is a revolutionary change in how energy regulation, and energy production planning, will take place going forward,” Morris said. “We give utilities and gas companies some room through alternative regulations to catch up to new technology, as well as an incentive to cut greenhouse gas emissions.”
The bill now heads to the Senate for consideration.