Auditor’s Office effort spurs clarification of Energy Independence Act rules

Wind TurbinesIn 2017, our Office requested clarification of the rules electric utilities must follow to calculate retail sales growth. That effort has led the state to change how utilities are to show they qualify for one of the other ways utilities can meet the renewable energy requirement of the Energy Independence Act (Act).

The Act requires electric utilities with at least 25,000 customers to use renewable energy for part of their electricity supply. A utility whose retail power sales have not grown may choose to use a compliance method that allows it to use or invest in less renewable energy than the law would otherwise allow. The utility could continue to use the energy it purchased from resources such as hydroelectric, nuclear or fossil fuel.

Under the new rule, which took effect June 11, a utility calculates its average retail electricity sales over the most recent three years. It compares this average to the amount of electricity it sold in the year just before the three-year period started.

Previously, the rule required utilities to compare two years of sales while the law required them to calculate the sales reduction as an average over three years.

During our energy compliance examinations, we could see instances when a utility was eligible under the law, but not under the rule. This created confusion and uncertainty for our Office, and for utilities.

“We approached and met with the public electric utilities to discuss the rule and how we could apply it consistent with the law. As a result, we wrote to the Department of Commerce, seeking clarification,” said Thomas Bernard, the Auditor’s Office Energy Program Manager.

In response, the Department of Commerce opened an inquiry and held a stakeholder workshop to consider whether a rule change was needed, and later revised the calculation rule.

For more information, please contact Thomas Bernard at Thomas.Bernard@sao.wa.gov or (360) 676-2165 ext. 109.