Snohomish County Public Utility District No. 1

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I-937 Compliance

On May 31, 2016, Snohomish County PUD submitted its progress report to the Washington State Department of Commerce for its compliance for conservation and renewable resources pursuant to the Energy Independence Act (EIA), adopted by Washington state voters in 2006.

The EIA enacted a renewable portfolio standard (RPS), commonly referred to as “Initiative 937,” which requires Washington state electric utilities serving 25,000 or more customers to:

  • Undertake all cost-effective energy conservation; and
  • Obtain a specified portion of their electricity from new renewable resources and allows for three different compliance methods described below.

Snohomish PUD reported that it achieved energy conservation in the amount of 225,069 megawatt-hours (MWh) for calendar years 2014 to 2015, which exceeded the PUD’s 2014-2015 biennial conservation target of 116,508 MWh.

For renewable resources, Initiative 937 provides three different methods by which a utility can demonstrate it is compliant with the RPS standard and the amount of renewable resources a utility must include in its power supply portfolio to serve its customers:

  • Compliance Method 1 – Renewables Target: A qualifying utility must serve its load with a certain percentage or target of eligible renewable generation by a certain date. The targets are 3% of load by 2012, 9% by 2016 and 15% by 2020; or
  • Compliance Method 2 – No Load Growth/1% Investment: A qualifying utility can demonstrate compliance if it can show it has experienced minimal or no load growth over a three-year period; has only acquired renewable energy or has offset non-renewable energy with renewable energy credits (RECs); and has invested at least 1% of its total retail revenue requirement in renewable energy or RECs; or
  • Compliance Method 3 – Incremental Resource Cost /4% Investment: A qualifying utility can demonstrate compliance if the utility can demonstrate it has invested at least four percent of its total annual retail revenue requirement on the incremental cost of renewable resources that meet the RPS. Under this compliance method, a utility calculates the incremental cost of its renewable resources that satisfy the RPS compared to an alternate or non-renewable resource or resources.

For purposes of the 2016 Mid-Year Report, Snohomish PUD elected the incremental resource or 4% investment method. The PUD’s investment in renewable energy for calendar year 2016 is approximately $34.34 million or 5.8% of its total annual retail revenue requirement. Therefore, the PUD’s incremental resource cost exceeds the 4% investment level, which is approximately equivalent to $23.69 million. The Revised Code of Washington Chapter 19.285, Section 050 states that a qualifying utility will be considered in compliance with the annual target created in the EIA for a given year if the utility invested four percent (4%) of its total annual retail revenue requirement on the incremental costs of eligible renewable resources, renewable energy certificates (RECs) or a combination of the two.

The PUD also has acquired sufficient RECs and renewable energy as of January 1, 2016 to comply with the 9% renewables target in 2016. The PUD is currently investigating which compliance method will result in the lowest cost for its customers for the 2016 compliance period.

Supporting documents to the reports listed above are available upon request or can be viewed at the Department of Commerce's website (click here).