Electric Transmission Development, Ownership, and Operation in Washington.
Transmission lines are high-voltage electrical lines that carry large amounts of electricity over long distances. Investor-owned and consumer-owned electric utilities, including joint operating agencies, may build, own, and operate electric transmission lines. These utilities may also enter into agreements with each other to own electrical transmission facilities. The federal Bonneville Power Administration (BPA) owns and operates the majority of electric transmission lines in the state and across the Pacific Northwest.
Electric Utility Transmission Planning.
Electric utilities are encouraged to participate and contribute to statewide or multiutility planning activities through transmission planning processes. To improve the planning and development of transmission capacity, they must consult with federal, interstate, and voluntary industry organizations with a role in the bulk power transmission system.
All investor-owned and consumer-owned electric utilities in the state with more than 25,000 customers must develop integrated resource plans (IRPs). All other electric utilities in the state, including those that essentially receive all their power from the BPA must file either an IRP or a less-detailed resource plan. An IRP must include an assessment and 20-year forecast of the availability of and requirements for regional generation and transmission capacity to provide and deliver electricity to the utility's customers as well as to meet state clean energy and emissions reduction requirements. The transmission assessment must identify the utility's expected needs to acquire new long-term firm rights, develop new, or expand or upgrade existing transmission facilities. If an electric utility operates transmission lines rated 115,000 volts or greater, the transmission assessment must consider opportunities to make more effective use of the existing transmission capacity.
When identifying any need to develop new, expand, or upgrade existing bulk transmission and distribution facilities, utilities must document existing and planned efforts to make more effective use of the existing transmission capacity and secure additional transmission capacity.
Clean Energy Transformation Act Transmission Corridors Work Group.
The Clean Energy Transformation Act (CETA) requires Washington's electric utilities to meet 100 percent of their retail electric load using non-emitting and renewable resources by January 1, 2045. The CETA requires electric utilities to eliminate coal-fired resources from their allocation of electricity by December 31, 2025, and make all retail sales of electricity greenhouse gas neutral by January 1, 2030.
Under the CETA, the Energy Facility Site Evaluation Council (EFSEC) convened a Transmission Corridors Work Group (TCWG) to review the need for new or upgraded transmission facilities to meet Washington's renewable energy goals; identify where transmission and distribution facilities may need to be enhanced or constructed; identify environmental review options; and recommend ways to expedite review of transmission projects without compromising required environmental and cultural protection.
The TCWG issued its final report in October 2022 and identified several key themes including regional and interregional planning, staff resources in state agencies, enhanced resources for tribes, and pre-application planning and coordination.
State Environmental Policy Act.
The State Environmental Policy Act (SEPA) establishes a review process for state and local governments to identify environmental impacts that may result from governmental decisions, such as the issuance of permits or the adoption of land-use plans. The SEPA environmental review process involves a project proponent or the lead agency completing an environmental checklist to identify and evaluate probable environmental impacts. Government decisions that the SEPA checklist process identifies as having significant adverse environmental impacts must then undergo a more comprehensive environmental analysis in the form of an environmental impact statement. SEPA provides categorical exemptions to remove specific types of projects from review.
Utilities and Transportation Commission Authorization for Rate of Return on Utility Investments.
The Utilities and Transportation Commission (UTC) is a three-member commission with broad authority to regulate the rates, services, and practices of a variety of businesses in the state, including investor-owned gas and electrical companies. The UTC must ensure rates charged by these companies are fair, just, reasonable, and sufficient. The UTC initiates a general rate proceeding if a company requests a change in its authorized rate of return.
The UTC is authorized to allow an incentive rate of return of up to 2 percent for investor-owned electric utilities on capital expenditures for electric vehicle supply equipment through 2030. The investments cannot increase the retail revenue requirement of the utility more than 0.25 percent and must be deployed for the benefit of ratepayers.
The UTC must allow a 2 percent incentive rate of return on investment for energy efficiency programs if priority is given to senior citizens and low-income citizens. The UTC may allow an incentive rate of return on investment in additional energy efficiency programs, including, but not limited to, tree planting programs and cool roof programs.
Washington Electric Transmission Authority.
The Washington Electric Transmission Authority (Authority) is created. The Authority must employ an executive director, who must be appointed by the board of directors (Board) with an affirmative vote of at least five members. The executive director serves a three-year term, that may be extended by one year. The executive director must employ staff to accomplish the purposes of the Authority.
The purpose of the Authority is to:
The Authority must also seek to protect cultural and natural resources, avoid impacts to overburdened communities and vulnerable populations, support good jobs, maximize the use of existing rights-of-way for transmission development, and mitigate wildfire risk.
The Authority may own electric transmission equipment and systems, and such ownership may not exceed the extent and duration necessary or useful to promote the public interest. Before becoming an owner or partial owner of transmission facilities, the Authority must develop and publish a plan identifying the public purpose of ownership, the conditions that would make ownership no longer necessary, and a plan to divest the Authority of ownership as soon as economically prudent.
The Authority may also:
The Authority is not required to sell to the highest bidder, but before selling a project that is not part of a partnership agreement, the Authority must adopt criteria in rule for developing a transparent process including by issuing a competitive request for proposals, evaluating proposals, and selecting a project buyer.
When selling a project, the Authority must also adopt criteria in rule to determine when the Authority would continue developing or operating a project after receiving bids on a request for proposal if it determines that it is in the best interest of the public to continue owning the project.
The Authority may adopt criteria in rule for an initial local investment commitment fee and annual local investment commitment fee for high-voltage projects that the Authority develops, owns, or sells under this act. Rulemaking must provide that the fees are distributed among counties, cities, towns, and tribes in proportion to the project's impact, and are appurtenant to the project such that the assessed fees are transferred with the title if the project is sold.
The Authority must report on its activities, including an operating and financial statement for the previous fiscal year, to the Governor and Legislature by December 1, 2025, and annually every September 1 thereafter.
Transmission Needs Assessment and System Enhancement Roadmap.
The Department of Commerce (Commerce) must develop a 20-year needs assessment to identify inefficiencies and deficits in the existing transmission system by October 30, 2026. The Authority must update the needs assessment every five years thereafter. The needs assessment must do the following:
Commerce must develop a roadmap by October 30, 2026, that identifies specific actions and corresponding timelines to meet the needs identified in the needs assessment. The roadmap must prioritize actions based on the following criteria:
All nonfederal providers of transmission in Washington must endeavor to provide as much information as Commerce requires for the first needs assessment and roadmap, and to the Authority for the subsequent needs assessment, except when it would reveal critical state transmission assets or sensitive proprietary commercial information. The BPA is encouraged to provide information for the needs assessment and roadmap as well. Confidential information provided by transmission providers must be kept confidential by Commerce or the Authority, only used in the aggregate for the needs assessment and roadmap, and is not subject to disclosure under the Public Records Act. Commerce or the Authority may not use this information to originate or develop projects already being developed by such transmission providers.
Additional Commerce Responsibilities.
In addition to developing the first needs assessment and roadmap, Commerce must:
Board of Directors for the Authority.
To advise the Authority, a nine-member Board is created. Membership includes the Director of Commerce, or a director's designee, and the remaining members appointed by the Governor with one each representing the following:
No Board member may represent an owner or operator of an electric generating or transmission facility. After the initial staggered appointments, each Governor appointee must serve four-year terms. Decisions require a simple majority vote of all the members on the Board. The Board must elect its own chair from the membership for a two-year period and meet quarterly. Commerce must staff the Board.
When developing the needs assessment, Commerce may consult with the Board about using existing transmission plans developed by regional or federal entities.
State Environmental Policy Act Exemption.
A categorical exemption from SEPA is provided for the following utility-related actions, as long as these actions are not for underwater power lines:
For a categorically exempt transmission line project, the utility must notify the Department of Archaeology and Historic Preservation (DAHP) and each federally recognized Indian tribe with usual and accustomed areas and ceded treaty areas, where the right-of-way exists before beginning the project. A consultation must allow the utility to determine that there are no existing archaeological, cultural, or tribal resources in the right-of-way. The DAHP may require a survey in coordination with the affected federally recognized Indian tribe, must ensure that the consultation occurs, and determine whether archaeological, cultural, or tribal resources are identified in an existing right-of-way. If any such resources are identified, the DAHP must ensure that the utility accounts for and protects the resources as provided under law. Information provided by the federally recognized Indian tribe must be kept confidential and exempt from public disclosure.
Incentives for Electric Transmission Investments.
In establishing rates for each investor-owned electric utility (IOU), the Utilities and Transportation Commission (UTC) may allow an incentive rate of return on investment of capital expenditures for GETs and reconductoring with advanced conductors deployed for the benefit of ratepayers on transmission owned and operated by an IOU through December 31, 2040. The UTC must consider and may adopt other policies to encourage increased deployment of electric transmission infrastructure.
For GETs or reconductoring investments, an increment of up to 2 percent may be added to the rate of return on common equity allowed on the company's other investments with demonstrated benefits to ratepayers. The incentive applies only to projects which have been installed after July 1, 2025, and may be earned only for 15 years.
By December 31, 2029, the UTC must report to the Legislature on the use of any incentives used for investments in GETs and reconductoring with advanced conductors, the quantifiable impacts of the incentives on electric transmission deployment, and any recommendations to the Legislature about further utility investments in electric transmission.
Accounts.
The Electric Transmission Operating Account (Operating Account) and the Electric Transmission Capital Account (Capital Account) are created in the State Treasury. Revenues to the Operating Account consist of appropriations made by the Legislature, federal funds, gifts, or grants from the private sector or foundations, and other sources. Moneys in the Operating Account may be spent only after appropriation, and for operating cost purposes consistent with purposes of the Authority.
Revenues to the Capital Account consist of all moneys received for the acquisition, sale, management, and administration of the Authority's duties for electric transmission projects and all other revenue related to electric transmission projects created or acquired. The Capital Account may also receive appropriations made by the Legislature, federal funds, gifts, grants, and endowments from public or private sources. Moneys in the Capital Account may be spent only after appropriation. The Authority's executive director, or the director's designee, may authorize expenditures from the Capital Account to reimburse management costs incurred by the Authority on electric transmission projects, for the acquisition of interests in land or property to be managed as projects, and for all other nonoperating costs.
As compared to the original bill, the substitute bill does the following:
(In support) We need to make significant investments in new transmission corridors and existing infrastructure. This bill will help by improving project timelines with SEPA by encouraging utilities to do improvements with the incentive rate of return piece, and taking risk away from building new projects by establishing the Authority. The model for the Authority is based on the Colorado Electric Transmission Authority and other states. This would make transmission upgrades easier which is faster and cheaper than building new transmission. The bill will improve grid reliability, help achieve the Clean Energy Transformation Act targets, and help maintain affordable rates. This will improve the state and regional transmission system. The advisory board membership should include representation from natural resources and tribes. It may seem counterintuitive to add another layer to transmission planning but it is smart to give the state another avenue to serve Washington people and achieve Washington policy goals. This would help reduce the risk of capital deployment. The SEPA categorical exemption language will help workers get on site quickly. The SEPA provisions should be appropriately scoped. This will help identify high-benefit and low-harm sites and compensate for impacts. Stakeholders would like a tribal checklist to be aware of tribal concerns upfront. This will ensure transmission respects tribal sovereignty. Jobs are lost when these projects aren't built. Labor provisions should be included. There should be worker qualification and safety standards in the bill since transmission is high voltage.
(Opposed) There are concerns with the use of eminent domain and the allowance for the state to own and operate transmission. There is opposition to the section that gives utilities an incentive rate of return for investments they are already incentivized to make because this will likely lead to increased rates for ratepayers.
(Other) The challenge is the timeline for getting a project to construction, not the planning process. The main issue with electrical transmission is permitting. Permitting is the most complex piece and can take up to 10 years. There is concern that this is not addressing the core issue. The Authority would have the same challenges with getting projects off the ground. The state shouldn't own, develop, or operate transmission facilities. The scope of the Authority is overly broad. We want to avoid duplication and conflict with federally mandated transmission processes. There could be a benefit from having another entity working on transmission. The Authority is worth considering. We support the establishment of a transmission authority. A number of other states have successful authorities that facilitate transmission development. This shouldn't compete with transmission owners but should complement their work. The existing regional groups should be doing planning; instead, the state should be encouraged to participate in those. The SEPA language should reflect federal rules that were recently adopted. The inclusion of distributed distribution and microgrids appears to allow the office to operate like a utility. There should be similar incentives for consumer-owned utilities as those provided for investor-owned utilities. The SEPA exemption should be amended to allow for slightly wider rights-of-way because reconductoring can require taller towers.
(In support) Representative Alex Ramel, prime sponsor; Emily Moore, Sightline Institute; Cassie Bordelon, Climate Jobs WA ; Matthew Hepner, Certified Electrical Workers of WA; Casey MacLean, Renewable NW; Jason Hudson, IBEW Local 77; Maya Gillett; Nadine Nadow, Conservation Northwest; Altinay Karasapan, Climate Solutions; and Caitlin Krenn, Washington Conservation Action.