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Washington's Attorney General Will Address I-937 Conservation Requirements

July 17, 2013 posted by Eric Christensen

Yesterday, the office of Washington Attorney General Bob Ferguson issued a notice that it will provide a formal opinion on several legal questions that are critical to determining how Washington utilities comply with Initiate 937's requirement that they acquire all "cost-effective, reliable and feasible" energy conservation. Those wishing to comment must notify the Attorney General by August 14. In addition to the more well-known requirements for utilities to meet specific targets for the purchase of renewable energy, I-937, also known as the "Washington Energy Independence Act," requires utilities with more than 25,000 customers to plan and implement energy conservation programs on a two-year cycle. Beginning in 2010, and every two years thereafter, a covered utility must publish a plan identifying its "acheivable cost-effective conservation potential," set a target for conservation for the two-year period, then implement a plan to achieve the conservation target. The Attorney General's opinion will address several specific legal questions that affect how utilities identify cost-effective conservation and how energy conservation achievements are quantified. Because I-937 provides for penalties of $50 per megawatt-hour for each megawatt-hour a utility falls short of its conservation goals, clear answers to how conservation savings are to be calculated are essential for I-937 compliance. The specific questions to be addressed in the Attorney General's opinion arise from ambiguous phrasing in I-937, which was adopted in 2006 as a result of a citizen's initiative. The law provides that utilities are to use "methodologies consistent with those used by" the Northwest Power and Conservation Council in "its most recently published regional power plan." A number of utilities have concluded that this phrase refers to the Fifth Power Plan, which was adopted by the Council in 2005, and therefore was the "most recently published regional power plan" when I-937 was adopted in 2006. Others have argued, however, that the phrasing was intended to refer to power plans as they are updated by the Council, and the Sixth Power Plan, adopted in 2010 is therefore the currently-operative document. The Attorney General's formal opinion, which was requested by Washington State Auditor Troy Kelley, will address this question in a several different contexts. The Attorney General's opinions, while not controlling in Washington courts, are generally accorded great weight. In particular, the State Auditor, who is charged with determining I-937 compliance by Washington's publicly-owned utilities, is likely to follow the Attorney General's opinion. The Attorney General's opinion on this issue is therefore of considerable importance to Washington utilities subject to I-937. If you have any questions about I-937, energy conservation, Washington state government, or the issues discussed here, please contact a member of GTH's Energy, Telecommunications, and Utilities practice group. We have decades of experience with renewable energy, conservation, and other unique aspects of the Pacific Northwest's unique electric power industry, and regularly provide I-937 compliance advice to Washington utilities.