An Act Creating Standard Offer Contracts was introduced into the Washington State House of Representatives January 5, 2010 and was heard by the Committee on Technology, Energy, and Communication on January 11th.
HB 2536 was introduced by Representatives John McCoy (D-38th), Maralyn Chase (D-32nd), and Jeff Morris (D-40th). McCoy is Chair of the Committee on Technology, Energy, and Communication. Chase is Vice Chair of the Committee on Environmental Health. And Morris is Speaker Pro Tempore.
The bill contains provisions reported previously, see Washington State House Committee Chair Outlines FIT Bill.
HB 2536, like many similar bills introduced across the US in the past two years seems focused solely on solar PV by severely limiting project size. HB 2536 limits project size to no more than 2 MW. Though the bill includes all renewable technologies, it is likely that no wind, geothermal, or biomass plants will be built under its overly restrictive provisions. Such provisions primarily benefit solar PV at the expense of other technologies.
Ontario has no limit on project size except for solar PV, which is limited to 10 MW. There are no project size limits in Germany. Spain limits project size to 50 MW.
Among its provisions, HB 2536 directs the Utilities and Transportation Commission (UTC) to calculate the average cost of generation plus a 10% rate of return from
- Installed capital costs;
- Fixed and variable operation and management expenses;
- Fuel costs;
- Cost of financing;
- Land costs or leases;
- Insurance;
- Transmission and interconnection costs;
- Net capacity factors; and
- Estimated project life and projected generation degradation.
The bill also directs the UTC to set tariffs that are “reasonable and fair” to the generator, the ratepayer, and the utilities.
In a significant improvement over California’s AB 1106 and Vermont’s feed-in tariff program, chairman McCoy’s bill creates separate tariffs for each of three size classes or “tiers”
- <10 kW,
- >10 kW<300 kW, and
- >300 kW<2,000 kW.
California’s AB 1106 sets one tier for projects from 1 MW to 5 MW. All projects less than 1 MW receive the 1 MW tariff. Recently passed SB 32 directs California’s PUC to set tariffs based on the “value” of the electricity to the system for projects up to 5 MW.
The bill includes both investor-owned utilities and “consumer-owned utilities”. The latter are typically Public Utility Districts in rural areas of the state. Rural utilities complained at the hearing that they would be unfairly burdened by the presumed cost of the program. Though HB 2536 spreads costs of the program across all ratepayer classes within a utility, there is no equalization or balancing provision among utilities as in Germany.
A workshop is scheduled to discuss this and other issues.