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. The Department of Ecology (Ecology) has adopted rules that spell out the elements of the environment whose impacts must be considered in a SEPA checklist and any subsequent SEPA environmental review. If an initial review of the checklist and supporting documents results in a determination that the government decision has a probable significant adverse environmental impact, known as a threshold determination, the proposal must undergo a more comprehensive environmental analysis in the form of an environmental impact statement. If the SEPA review process identifies significant adverse environmental impacts, the lead agency may deny a government decision or may require mitigation for identified environmental impacts.
Under the SEPA laws and in the SEPA rules adopted by Ecology, certain proposals or agency actions are exempt from the SEPA requirements, including the installation of an electric vehicle battery charging station and the installation of accessory solar energy generation equipment on or attached to existing structures, if it does not expand the existing footprint or size of a building.
Open Space and Land Use Taxation Act.
All property is subject to a property tax each year based on the property's highest and best use, unless a specific exemption is provided by law. The Washington Constitution authorizes agricultural, timber, and open space lands to be valued on the basis of their current use rather than fair market value. Two programs of current use valuation have been established: one program for forest lands and a second program that includes open space lands, farm and agricultural lands, and timber lands (Open Space Program). To qualify for the Open Space Program, farm and agricultural lands must be 20 or more acres and devoted primarily to commercial agricultural purposes or enrolled in the federal Conservation Reserve Program. Parcels of land less than 20 acres devoted primarily to agriculture may qualify for the Current Use Valuation Program if certain income tests are met. Farm and agricultural land also includes certain incidental uses compatible with agricultural purposes, including wetland preservation, provided such use does not exceed 20 percent of the classified land.
If the property no longer satisfies the criteria for classification, the county assessor notifies the owner in writing that the property will be removed from the program. When the property is removed from its current use classification, back taxes plus interest must be paid, plus an additional 20 percent penalty. For properties in the Open Space Program, back taxes represent the tax benefit received over the most recent seven years. There are some exceptions to the requirement for payment of back taxes and penalties.
Distributed Energy Priorities.
Certain facilities and activities are determined to be distributed energy priorities (DEP), including:
Agrivoltaics facilities must meet certain criteria in order to qualify as a DEP, including that the facility must:
State Environmental Policy Act.
Ecology must evaluate, in light of the goals of the Clean Energy Transformation Act (CETA) and state greenhouse gas emission limits, the appropriateness of SEPA tools to expedite environmental review processes for DEP and the construction of structures 1,000 square feet or smaller for solar energy generation unlikely to have significant adverse environmental impacts. For each category of projects, Ecology may:
In adopting rules, Ecology must consider specified factors, including federal agency guidance, rules, and best management practices, and must consider input from specified parties. Ecology must aspire to finalize the SEPA rules on these topics by January 1, 2028.
Land on which an agrivoltaics facility is located may be considered agricultural or open space land for purposes of the Open Space and Land Use Taxation Act. The addition of an agrivoltaics facility does not constitute a reclassification, withdrawal, or removal of lands under the Open Space and Land Use Taxation Act, and thus does not require the payment of seven years of back taxes plus interest and a 20 percent penalty.
As compared to the original bill, the substitute bill:
(In support) This bill is the start of a conversation about how to reduce the land use pressures of clean energy siting in Eastern Washington. This is a large proposal with a lot of moving parts. The goal is to make it easier to site clean energy on rooftops, landfills, highways, and lower-impact locations. It supports distributed energy production, but also electric storage batteries and electric load shifting and demand response that can help achieve the state's clean energy goals. Distributed energy is more expensive than utility-scale, but has a host of other benefits, including lower environmental and community impacts. State agencies have resources that can be repurposed for distributed energy production. Agrivoltaics is a way of siting solar facilities in agricultural areas that can support energy production and agriculture simultaneously, while sometimes even improving agricultural productivity of the land. Some of the alternative energy resources have more concerning potential environmental impacts than others, and the bill should instead focus on the distributed energy priorities that have lower impacts. The target for utilities to acquire a minimum amount of low-impact distributed energy will be an important driver of development of this type of energy infrastructure. San Juan County is trying to site a solar facility on its landfill, in order to allow for energy independence and to make the most use of limited available land.
(Opposed) Utilities are already deep into planning and implementation to achieve aggressive clean energy requirements under the CETA. Requiring distributed energy acquisition will make it more challenging and expensive to achieve the CETA requirements, and undercuts the central obligation for utilities to provide cost-effective and reliable energy. The 10 percent requirement, with strong penalties, for utilities to acquire distributed energy will increase ratepayer costs without achieving any benefits. Utilities should consider the benefits of distributed energy in planning for clean energy, but not be required to acquire a minimum and arbitrary percentage of distributed energy. Utilities are currently trying to deploy distributed energy where it is cost effective and makes sense, but distributed energy is more expensive and needs to be relied on thoughtfully. There are components of the proposal that are helpful to utilities, such as the SEPA exemption for projects unlikely to have significant environmental impacts, and requiring state agencies to make assets available for clean energy development. An interim conversation around this policy, and around the obligations of the CETA, is warranted.
(Other) Other policy mechanisms might be more effective at encouraging utilities to acquire distributed energy resources. The Department of Natural Resources has some concerns about how the obligations to develop resources, and the ambiguous language around it, could conflict with constitutional obligations with respect to its management of lands held in trust.
(In support) Representative Beth Doglio, prime sponsor; Bill Will, Washington Solar Energy Industries Association; Charlee Thompson, NW Energy Coalition; and Councilmember Justin Paulsen, San Juan County.
Second Substitute House Bill compared to the Substitute House Bill as recommended by the Environment and Energy Committee:
(In support) The State of Washington is trying to figure out how to build a clean energy future and to learn how to best utilize land in this state. This bill helps protect agricultural lands and makes it easier to build distributed energy projects throughout the state. This bill attempts to shift the pressures of clean energy siting from eastern to western Washington. This bill ensures that farmers will not lose their open space classifications if distributed energy projects are built on their land.
(Opposed) None.
Representative Beth Doglio, prime sponsor.