No-growth Cost Cap Rule Adopted Effective July 2018

The Washington Department of Commerce adopted a rule amendment taking effect July 2018 that changes the standard for a utility that chooses to use the no-growth cost cap to meet its renewable requirement under the Energy Independence Act (also known as EIA or I-937).

The EIA requires that utilities use eligible renewable energy for a portion of their electricity supplies. It includes an alternative compliance method available only to utilities whose retail power sales have not grown. The rule change affects the specific method of determining load growth

Commerce started the rulemaking process at the request of the State Auditor, who had raised questions about the calculation method that had been in place since 2008. The revised method was supported by multiple utilities and interested stakeholders.

Under the new method, a utility may qualify for no-growth of its retail electricity sales, averaged over the most recent three years, do not exceed its retail electricity sales in the year before this three-year period. All of the sales quantities must be statistically adjusted to remove the effect of unusually cold or hot temperatures on electricity demand.

If a utility meets the no-growth standard, it may choose to use less renewable energy and more fossil fuel energy than the law would otherwise allow.

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