(1) The legislature finds that large combination utilities are subject to a range of reporting and planning requirements as part of the clean energy transition. The legislature further finds that current natural gas integrated resource plans under development might not yield optimal results for timely and cost-effective decarbonization. To reduce regulatory barriers, achieve equitable and transparent outcomes, and integrate planning requirements, the commission may consolidate a large combination utility's planning requirements for both gas and electric operations, including consolidation into a single integrated system plan that is approved by the commission.
(2)(a) By July 1, 2025, the commission shall complete a rule-making proceeding to implement consolidated planning requirements for gas and electric services for large combination utilities that may include plans required under: (i) RCW
19.280.030; (ii) RCW
19.285.040; (iii) RCW
19.405.060; (iv) RCW
80.28.380; (v) RCW
80.28.365; (vi) RCW
80.28.425; and (vii) RCW
80.28.130. The commission may extend the rule-making proceeding for 90 days for good cause shown. The large combination utilities' filing deadline required in subsection (4) of this section will be extended commensurate to the rule-making extension period set by the commission. Subsequent planning requirements for future integrated system plans must be fulfilled on a timeline set by the commission. Large combination utilities that file integrated system plans are no longer required to file separate plans that are required in an integrated system plan. The statutorily required contents of any plan consolidated into an integrated system plan must be met by the integrated system plan.
(b) In its order adopting rules or issuing a policy statement approving the consolidation of planning requirements, the commission shall include a compliance checklist and any additional guidance that is necessary to assist the large combination utility in meeting the minimum requirements of all relevant statutes and rules.
(3) Upon request by a large combination utility, the commission may issue an order extending the filing and reporting requirements of a large combination utility under RCW
19.405.060 and
19.280.030, and requiring the large combination utility to file an integrated system plan pursuant to subsection (4) of this section if the commission finds that the large combination utility has made public a work plan that demonstrates reasonable progress toward meeting the standards under RCW
19.405.040(1) and
19.405.050(1) and achieving equity goals. The commission's approval of an extension of filing and reporting requirements does not relieve the large combination utility from the obligation to demonstrate progress towards meeting the standards under RCW
19.405.040(1) and
19.405.050(1) and the interim targets approved in its most recent clean energy implementation plan. Commission approval of an extension under this section fulfills the large combination utilities statutory filing deadlines under RCW
19.405.060(1).
(4) By January 1, 2027, and on a timeline set by the commission thereafter, large combination utilities shall file an integrated system plan demonstrating how the large combination utilities' plans are consistent with the requirements of this chapter and any rules and guidance adopted by the commission, and which:
(a) Achieve the obligations of all plans consolidated into the integrated system plan;
(b) Provide a range of forecasts, for at least the next 20 years, of projected customer demand that takes into account econometric data and addresses changes in the number, type, and efficiency of customer usage;
(c) Include scenarios that achieve emissions reductions for both gas and electric operations equal to at least their proportional share of emissions reductions required under RCW
70A.45.020;
(d) Include scenarios with emissions reduction targets for both gas and electric operations for each emissions reduction period that account for the interactions between gas and electric systems;
(e) Achieve two percent of electric load annually with conservation and energy efficiency resources, unless the commission finds that a higher target is cost-effective. However, the commission may accept a lower level of achievement if it determines that the requirement in this subsection (4)(e) is neither technically nor commercially feasible during the applicable emissions reduction period;
(f) Assess commercially available conservation and efficiency resources, including demand response and load management, to achieve the conservation and energy efficiency requirements in (e) of this subsection, and as informed by the assessment for conservation potential under RCW
19.285.040 for the planning horizon consistent with (b) of this subsection. Such an assessment may include, as appropriate, opportunities for development of combined heat and power as an energy and capacity resource, demand response and load management programs, and currently employed and new policies and programs needed to obtain the conservation and efficiency resources. The value of recoverable waste heat resulting from combined heat and power must be reflected in analyses of cost-effectiveness under this subsection;
(g) Achieve annual demand response and demand flexibility equal to or greater than 10 percent of winter and summer peak electric demand, unless the commission finds that a higher target is cost-effective. However, the commission may accept a lower level of achievement if it determines that the requirement in this subsection (4)(g) is neither technically nor commercially feasible during the applicable emissions reduction period;
(h) Achieve all cost-effective electrification of end uses currently served by natural gas identified through an assessment of alternatives to known and planned gas infrastructure projects, including nonpipeline alternatives, rebates and incentives, and geographically targeted electrification;
(i) Include low-income electrification programs that must:
(i) Include rebates and incentives to low-income customers and customers experiencing high energy burden for the deployment of high-efficiency electric-only heat pumps in homes and buildings currently heating with wood, oil, propane, electric resistance, or gas;
(ii) Provide demonstrated material benefits to low-income participants including, but not limited to, decreased energy burden, the addition of air conditioning, and backup heat sources or energy storage systems, if necessary to protect health and safety in areas with frequent outages, or improved indoor air quality;
(iii) Enroll customers in energy assistance programs or provide bill assistance;
(iv) Provide dedicated funding for electrification readiness;
(v) Include low-income customer protections to mitigate energy burden, if electrification measures will increase a low-income participant's energy burden; and
(vi) Coordinate with community-based organizations in the gas or electrical company's service territory including, but not limited to, grantees of the department of commerce, community action agencies, and community-based nonprofit organizations, to remove barriers and effectively serve low-income customers;
(j) Accept as proof of eligibility for energy assistance enrollment in any means-tested public benefit, or low-income energy assistance program, for which eligibility does not exceed the low-income definition set by the commission pursuant to RCW
19.405.020;
(k) Assess the potential for geographically targeted electrification including, but not limited to, in overburdened communities, on gas plant that is fully depreciated or gas plant that is included in a proposal for geographically targeted electrification that requires accelerating depreciation pursuant to RCW
80.86.060(1) for the gas plant subject to such electrification proposal;
(l) Assess commercially available supply side resources, including a comparison of the benefits and risks of purchasing electricity or gas or building new resources;
(m) Assess nonpipeline alternatives, including geographically targeted electrification and demand response, as an alternative to replacing aging gas infrastructure or expanded gas capacity. Assessments must involve, at a minimum:
(i) Identifying all known and planned gas infrastructure projects, including those without a fully defined scope or cost estimate, for at least the 10 years following the filing;
(ii) Estimating programmatic expenses of maintaining that portion of the gas system for at least the 10 years following the filing; and
(iii) Ranking all gas pipeline segments for their suitability for nonpipeline alternatives;
(n) Assess distributed energy resources that meets the requirements of RCW
19.280.100;
(o) Provide an assessment and 20-year forecast of the availability of and requirements for regional supply side resource and delivery system capacity to provide and deliver electricity and gas to the large combination utility's customers and to meet, as applicable, the requirements of chapter
19.405 RCW and the state's greenhouse gas emissions reduction limits in RCW
70A.45.020. The delivery system assessment must identify the large combination utility's expected needs to acquire new long-term firm rights, develop new, or expand or upgrade existing, delivery system facilities consistent with the requirements of this section and reliability standards and take into account opportunities to make more effective use of existing delivery facility capacity through improved delivery system operating practices, conservation and efficiency resources, distributed energy resources, demand response, grid modernization, nonwires solutions, and other programs if applicable;
(p) Assess methods, commercially available technologies, or facilities for integrating renewable resources and nonemitting electric generation including, but not limited to, battery storage and pumped storage, and addressing overgeneration events, if applicable to the large combination utility's resource portfolio;
(q) Provide a comparative evaluation of supply side resources, delivery system resources, and conservation and efficiency resources using lowest reasonable cost as a criterion;
(r) Include a determination of resource adequacy metrics for the integrated system plan consistent with the forecasts;
(s) Forecast distributed energy resources that may be installed by the large combination utility's customers and an assessment of their effect on the large combination utility's load and operations;
(t) Identify an appropriate resource adequacy requirement and measurement metric consistent with prudent utility practice in implementing RCW
19.405.030 through
19.405.050;
(u) Integrate demand forecasts, resource evaluations, and resource adequacy requirements into a long-range assessment describing the mix of supply side resources and conservation and efficiency resources that will meet current and projected needs, including mitigating overgeneration events and implementing RCW
19.405.030 through
19.405.050, at the lowest reasonable cost and risk to the large combination utility and its customers, while maintaining and protecting the safety, reliable operation, and balancing of the energy system of the large combination utility;
(v) Include an assessment, informed by the cumulative impact analysis conducted under RCW
19.405.140, of: Energy and nonenergy benefits and the avoidance and reductions of burdens to vulnerable populations and highly impacted communities; long-term and short-term public health and environmental benefits, costs, and risks; and energy security and risk;
(w) Include a 10-year clean energy action plan for implementing RCW
19.405.030 through
19.405.050 at the lowest reasonable cost, and at an acceptable resource adequacy standard;
(x) Include an analysis of how the integrated system plan accounts for:
(i) Model load forecast scenarios that consider the anticipated levels of zero emissions vehicle use in a large combination utility's service area, including anticipated levels of zero emissions vehicle use in the large combination utility's service area provided in RCW
47.01.520, if feasible;
(ii) Analysis, research, findings, recommendations, actions, and any other relevant information found in the electrification of transportation plans submitted under RCW
80.28.365; and
(iii) Assumed use case forecasts and the associated energy impacts, which may use the forecasts generated by the mapping and forecasting tool created in RCW
47.01.520;
(y) Establish that the large combination utility has:
(i) Consigned to auction for the benefit of ratepayers the minimum required number of allowances allocated to the large combination utility for the applicable compliance period pursuant to RCW
70A.65.130, consistent with the climate commitment act, chapter
70A.65 RCW, and rules adopted pursuant to the climate commitment act; and
(ii) Prioritized, to the maximum extent permissible under the climate commitment act, chapter
70A.65 RCW, revenues derived from the auction of allowances allocated to the utility for the applicable compliance period pursuant to RCW
70A.65.130, first to programs that eliminate the cost burden for low-income ratepayers, such as bill assistance, nonvolumetric credits on ratepayer utility bills, or electrification programs, and second to electrification programs benefiting residential and small commercial customers;
(z) Propose an action plan outlining the specific actions to be taken by the large combination utility in implementing the integrated system plan following submission; and
(aa) Report on the large combination utility's progress towards implementing the recommendations contained in its previously filed integrated system plan.
(5) In evaluating the lowest reasonable cost of decarbonization measures included in an integrated system plan, large combination utilities must apply a risk reduction premium that must account for the applicable allowance ceiling price approved by the department of ecology pursuant to the climate commitment act, chapter
70A.65 RCW. For the purpose of this chapter, the risk reduction premium is necessary to ensure that a large combination utility is making appropriate long-term investments to mitigate against the allowance and fuel price risks to customers of the large combination utility.
(6) The clean energy action plan must:
(a) Identify and be informed by the large combination utility's 10-year cost-effective conservation potential assessment as determined under RCW
19.285.040, if applicable;
(b) Establish a resource adequacy requirement;
(c) Identify the potential cost-effective demand response and load management programs that may be acquired;
(d) Identify renewable resources, nonemitting electric generation, and distributed energy resources that may be acquired and evaluate how each identified resource may be expected to contribute to meeting the large combination utility's resource adequacy requirement;
(e) Identify any need to develop new, or expand or upgrade existing, bulk transmission and distribution facilities and document existing and planned efforts by the large combination utility to make more effective use of existing transmission capacity and secure additional transmission capacity consistent with the requirements of subsection (4)(o) of this section; and
(f) Identify the nature and possible extent to which the large combination utility may need to rely on alternative compliance options under RCW
19.405.040(1)(b), if appropriate.
(7) A large combination utility shall consider the social cost of greenhouse gas emissions, as determined by the commission pursuant to RCW
80.28.405, when developing integrated system plans and clean energy action plans. A large combination utility must incorporate the social cost of greenhouse gas emissions as a cost adder when:
(a) Evaluating and selecting conservation policies, programs, and targets;
(b) Developing integrated system plans and clean energy action plans; and
(c) Evaluating and selecting intermediate term and long-term resource options.
(8) Plans developed under this section must be updated on a regular basis, on intervals approved by the commission.
(9)(a) To maximize transparency, the commission may require a large combination utility to make the utility's data input files available in a native format. Each large combination utility shall publish its final plan either as part of an annual report or as a separate document available to the public. The report may be in an electronic form.
(b) Nothing in this subsection limits the protection of records containing commercial information under RCW
80.04.095.
(10) The commission shall establish by rule a cost test for emissions reduction measures achieved by large combination utilities to comply with state clean energy and climate policies. The cost test must be used by large combination utilities under this chapter for the purpose of determining the lowest reasonable cost of decarbonization and electrification measures in integrated system plans, at the portfolio level, and for any other purpose determined by the commission by rule.
(11) The commission must approve, reject, or approve with conditions an integrated system plan within 12 months of the filing of such an integrated system plan. The commission may for good cause shown extend the time by 90 days for a decision on an integrated system plan filed on or before January 1, 2027, as such date is extended pursuant to subsection (2)(a) of this section.
(12) In determining whether to approve the integrated system plan, reject the integrated system plan, or approve the integrated system plan with conditions, the commission must evaluate whether the plan is in the public interest, and includes the following:
(a) The equitable distribution and prioritization of energy benefits and reduction of burdens to vulnerable populations, highly impacted communities, and overburdened communities;
(b) Long-term and short-term public health, economic, and environmental benefits and the reduction of costs and risks;
(c) Health and safety concerns;
(d) Economic development;
(e) Equity;
(f) Energy security and resiliency;
(g) Whether the integrated system plan:
(i) Would achieve a proportional share of reductions in greenhouse gas emissions for each emissions reduction period on the gas and electric systems;
(ii) Would achieve the energy efficiency and demand response targets in subsection (4)(e) and (g) of this section;
(iii) Would achieve cost-effective electrification of end uses as required by subsection (4)(h) of this section;
(iv) Results in a reasonable cost to customers, and projects the rate impacts of specific actions, programs, and investments on customers;
(v) Would maintain system reliability and reduces long-term costs and risks to customers;
(vi) Would lead to new construction career opportunities and prioritizes a transition of natural gas and electricity utility workers to perform work on construction and maintenance of new and existing renewable energy infrastructure; and
(vii) Describes specific actions that the large combination utility plans to take to achieve the requirements of the integrated system plan.
