H-2497.2
HOUSE BILL 2253
State of Washington 68th Legislature 2024 Regular Session
By Representatives Hackney, Doglio, Ryu, Orwall, Duerr, Berry, Ramel,
Paul, Springer, Macri, Bergquist, Pollet, and Tharinger
Read first time 01/09/24. Referred to Committee on Environment &
Energy.
1 AN ACT Relating to fair access to community solar; amending RCW
2 80.28.370, 80.28.375, and 82.16.182; adding new sections to chapter
3 80.28 RCW; and creating a new section.
4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
5 NEW SECTION. Sec. 1. (1) The legislature finds that stimulating
6 local investment in solar projects continues to be an important part
7 of the state energy strategy by helping to increase energy
8 independence from fossil fuels, reduce energy burden, promote
9 economic development, hedge against the effects of climate change,
10 create more energy equity, and attain environmental benefits. The
11 legislature finds that the vast majority of Washingtonians still do
12 not have access to the benefits of solar energy. The legislature
13 intends to stimulate the deployment of community solar projects for
14 the benefit of all Washingtonians.
15 (2) The legislature intends to facilitate community solar bill
16 crediting options that can help the state cost-effectively meet the
17 mandates in the Washington state energy code and that are consistent
18 with the goals of the state energy strategy.
19 (3) The legislature intends to enable and incentivize community
20 solar development in the built environment and on preferred sites,
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 1 which can reduce transmission and distribution system infrastructure
2 costs and clean energy siting conflicts.
3 (4) The legislature finds that participation of low-income
4 customers in solar projects is consistent with the goals and intent
5 of the energy assistance provisions of chapter 19.405 RCW, the
6 Washington clean energy transformation act.
7 (5) The legislature finds that offering energy assistance through
8 renewable energy programs, including community solar, at a discount
9 to low-income customers is consistent with the goal and intent of RCW
10 80.28.068.
11 (6) The legislature finds that participation of low-income
12 customers in community solar projects will support the state by
13 capitalizing on the opportunity created by the federal inflation
14 reduction act. The federal inflation reduction act modifies and
15 extends federal solar tax credits through 2035 and structures them to
16 incentivize investment in disadvantaged and low-income communities
17 and ensure newly created jobs are good paying jobs. This policy is
18 intended to ensure the full benefits of the federal inflation
19 reduction act's provisions for low-income inclusion are realized by
20 enabling fair access to community solar to all Washingtonians.
21 Sec. 2. RCW 80.28.370 and 2017 3rd sp.s. c 36 s 10 are each
22 amended to read as follows:
23 The definitions in this section apply throughout this section and
24 RCW 80.28.375 and sections 3 through 6 of this act unless the context
25 clearly requires otherwise.
26 (1) (("Community solar company" means a person, firm, or
27 corporation, other than an electric utility or a community solar
28 cooperative, that owns a community solar project and provides
29 community solar project services to project participants.
30 (2) "Community solar project" means a solar energy system that
31 has a direct current nameplate generating capacity that is no larger
32 than one thousand kilowatts.
33 (3) "Community solar project services" means the provision of
34 electricity generated by a community solar project, or the provision
35 of the financial benefits associated with electricity generated by a
36 community solar project, to multiple project participants, and may
37 include other services associated with the use of the community solar
38 project such as system monitoring and maintenance, warranty
39 provisions, performance guarantees, and customer service.
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 1 (4) "Electric utility" means a consumer-owned utility or
2 investor-owned utility as those terms are defined in RCW 19.280.020.
3 (5) "Project participant" means a customer who enters into a
4 lease, power purchase agreement, loan, or other financial agreement
5 with a community solar company in order to obtain a beneficial
6 interest in, other than direct ownership of, a community solar
7 project.
8 (6) "Solar energy system" means any device or combination of
9 devices or elements that rely upon direct sunlight as an energy
10 source for use in the generation of electricity.)) "Community solar
11 bill credit" means a monetary credit for electricity generated by a
12 community solar project, in proportion to a community solar project
13 subscriber's portion of the community solar project's kilowatt-hour
14 output, and allocated to a community solar project subscriber's
15 electricity bill on the utility's monthly billing cycle.
16 (2)(a) "Community solar program" means a program that allows for
17 the development of community solar projects and provide customers of
18 a utility with the option of accessing the benefits produced by the
19 community solar projects.
20 (b) "Community solar program" includes the programs established
21 in section 3 of this act and others developed by electric utilities.
22 (3)(a) "Community solar project" means one or more solar
23 photovoltaic energy systems that provides project subscribers a
24 community solar bill credit and:
25 (i) Has an alternating current nameplate generating capacity that
26 is no larger than 5,000 kilowatts unless a larger size is approved by
27 the utility serving the site of the project;
28 (ii) Is located in the state and is directly connected to an
29 electric utility's distribution system;
30 (iii) Has a minimum of three subscribers and a single customer
31 does not own or subscribe to more than 49 percent of the generating
32 capacity of the project;
33 (iv) Is not located on the same parcel as another community solar
34 project, unless the parcel is considered a preferred site.
35 (b) Projects with an alternating current nameplate capacity
36 larger than 1,000 kilowatts must utilize prevailing wage labor for
37 their construction.
38 (4) "Community solar project manager" means an entity that owns
39 or operates one or more community solar projects.
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 1 (5) "Community solar project services" means the provision of the
2 financial benefits associated with electricity generated by a
3 community solar project, to multiple project subscribers, and may
4 include other services associated with the use of the community solar
5 project such as leasing land, system monitoring and maintenance,
6 warranty provisions, performance guarantees, accounting, reporting,
7 and customer service.
8 (6) "Community solar subscription manager" means an entity that:
9 (a) Markets community solar projects or otherwise provides
10 community solar-related services under its own brand name;
11 (b) Performs any administrative actions to connect or enroll
12 customers with community solar projects; or
13 (c) Manages interactions relating to subscribers between a
14 community solar project manager and an electric utility.
15 (7) "Consumer-owned utility" means a municipal electric utility
16 formed under Title 35 RCW, a public utility district formed under
17 Title 54 RCW, an irrigation district formed under chapter 87.03 RCW,
18 a cooperative association formed under chapter 23.86 RCW, or a mutual
19 corporation or association formed under chapter 24.06 RCW, that is
20 engaged in the business of distributing electricity to more than one
21 retail electric customer in the state.
22 (8) "Electric utility" means a consumer-owned utility or
23 investor-owned utility as those terms are defined in RCW 19.280.020.
24 (9) "Low-income" means household incomes as defined by the
25 commission, provided that the definition may not exceed the higher of
26 80 percent of area median household income or 200 percent of the
27 federal poverty level, adjusted for household size, and subscribers
28 may be considered low income for the purposes of this program if they
29 are a retail electric customer that is enrolled in a low-income
30 program facilitated by the state or federal government, or enrolled
31 in a low-income energy program facilitated by the electric utility,
32 or enrolled in a federal, state, or local income assistance program,
33 or are verifiable low-income multifamily housing, or as determined by
34 the commission, or any verification method authorized by the United
35 States department of treasury for the qualified low-income economic
36 benefit project investment tax credit adder under P.L. 117-169
37 section 13103(2)(c).
38 (10) "Low-income service provider" has the same meaning as
39 defined in RCW 82.16.182.
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 1 (11) "Net-crediting" means the process in which an electric
2 utility includes both the community solar subscription cost and the
3 community solar bill credit on the subscriber's electric bill.
4 (12) "Preferred site" means rooftops, parking structures,
5 existing impervious surfaces, landfills, brownfields, previously
6 developed sites, irrigation canals and ponds, stormwater collection
7 ponds, industrial areas, solid waste facilities, land or structures
8 owned by a metropolitan housing authority, solar projects that
9 intentionally integrate with agricultural operations, projects owned
10 by tribes, the department of natural resources properties identified
11 for solar development, and other sites that do not displace critical
12 habitat or productive farmland as defined by state and county
13 planning processes.
14 (13) "Prevailing wage" means the wage rate as identified in
15 chapter 39.12 RCW.
16 (14) "Renewable energy credit" has the same meaning as defined in
17 RCW 19.285.030.
18 (15) "Solar photovoltaic energy system" means any device or
19 combination of devices or elements that rely upon direct sunlight as
20 an energy source for use in the generation of electricity.
21 (16) "Subscriber" means a retail customer of an electric utility
22 who enters into a contractual agreement for part of a community solar
23 project or who has an ownership interest in a community solar project
24 that results in community solar bill credits being applied to that
25 customer's electricity bill.
26 (17) "Subscription" means a portion of the output from or
27 capacity of a community solar project located in an electric
28 utility's territory purchased from a community solar project manager.
29 (18) "Unsubscribed energy" means the bill credits not allocated
30 to a subscriber that accrue if a community solar project is not fully
31 subscribed in any given month.
32 NEW SECTION. Sec. 3. A new section is added to chapter 80.28
33 RCW to read as follows:
34 (1) A community solar project manager or community solar
35 subscription manager must:
36 (a) Collect information regarding the financial benefits realized
37 by low-income subscribers and low-income service provider
38 subscribers;
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 1 (b) Administer the project in a transparent manner that allows
2 for fair and nondiscriminatory opportunities for participation; and
3 (c) Provide each subscriber with a disclosure form containing all
4 material terms and conditions of participation in the project.
5 (2)(a) Each subscriber's monthly community solar bill credit must
6 be applied to the subscriber's next retail electric bill and may
7 offset all costs on the monthly retail electric bill. Any unused bill
8 credit must be rolled forward on the subscriber's utility account
9 until fully allocated to the subscriber's bill or the termination of
10 the subscriber's utility account.
11 (b) If the community solar project manager or community solar
12 subscription manager amends the community solar project's subscriber
13 list, the changes must be reflected on the following month's retail
14 electric bills.
15 (3) Electric utilities must reasonably allow for the transfer and
16 portability of subscriptions, including allowing a subscriber to
17 retain a subscription if the subscriber moves within the same
18 electric utility's service territory.
19 (4) Electric utilities may not change a subscriber's applicable
20 customer class because of the subscriber's subscription to a
21 community solar project.
22 (5) A community solar project manager may enter into a net-
23 crediting program on behalf of an eligible customer. The net-
24 crediting agreement should outline payment terms from the electric
25 utility to the community solar project manager. The electric utility
26 may impose a net-crediting fee on the community solar project
27 manager, capped at one percent of the subscription fee. Retail
28 electric bills subjected to net-crediting must display the
29 subscriber's subscription fee and furnish the subscriber with a net-
30 credit equivalent to the total bill credit value for the generation
31 period, deducting the subscription fee.
32 (6) At least 50 percent of each electric utility's community
33 solar generating capacity must be subscribed by low-income
34 subscribers, low-income service provider subscribers, or both low-
35 income subscribers and low-income service provider subscribers.
36 (a) The commission or a consumer-owned utility's governing board
37 may amend the required low-income subscriber level no sooner than 10
38 years after the adoption of program rules, provided that the
39 percentage is not less than the utility's percentage of low-income
40 ratepayers at the time of the most recent United States census.
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 1 (b) Community solar capacity or generation allocated to low-
2 income subscribers and low-income service provider subscribers are
3 exempt from community solar program-related administrative fees.
4 (c) Community solar projects that receive the low-income credit
5 rate adder must maintain their low-income subscriber threshold for
6 the project's lifetime.
7 (7) Renewable energy credits associated with the generation of
8 electricity by a community solar project must be retired on behalf of
9 the subscriber.
10 (8)(a) The commission must adopt a community solar bill credit
11 valuation methodology that recognizes and incorporates the factors
12 that community solar projects bring to the electrical grid,
13 including:
14 (i) The value of the electricity;
15 (ii) The value of the project to transmission and distribution
16 capacity, deferred transmission and distribution investments,
17 deferred generation investments and added generation capacity,
18 voltage, reduced system losses, reduced line losses, and ancillary
19 services;
20 (iii) The value of the project to grid reliability and
21 resilience;
22 (iv) The value of environmental attributes, greenhouse gas
23 emissions reductions, methane leakage reductions, public health, and
24 energy security; and
25 (v) Other factors associated with locally produced electricity as
26 determined by the commission.
27 (b) The community solar bill credit valuation must provide
28 additional value for community solar projects when: (i) The majority
29 of the project's nameplate capacity is subscribed by low-income
30 subscribers or low-income service provider subscribers; (ii) the
31 project is owned by or serves tribal communities; and (iii) the
32 project incorporates energy storage.
33 (9) The community solar bill credit valuation must:
34 (a) Ensure the ability to finance, develop, and maintain
35 community solar projects;
36 (b) Maximize the value that ratepayers, subscribers, and host
37 communities receive from projects;
38 (c) Be updated annually or biannually; and
39 (d) Include an annual escalator.
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 1 (10) The commission or consumer-owned utility's governing body
2 may adopt a rate for an electric utility to use in crediting a
3 subscriber's electric bill other than the rate described in
4 subsection (8) of this section if they have good cause to adopt the
5 different rate.
6 (11) The commission must adopt a valuation methodology for
7 unsubscribed energy. Unsubscribed energy may be rolled forward on a
8 community solar project account until the end of the following
9 calendar year and allocated by a community solar project manager or
10 community solar subscription manager to subscribers at any time
11 during that period. At the end of that period, any undistributed bill
12 credit must be compensated to the community solar project manager.
13 (12) Nothing in this section may be construed as intending to
14 preclude persons from investing in or possessing an ownership
15 interest in a community solar project or from applying for and
16 receiving federal investment tax credits.
17 NEW SECTION. Sec. 4. A new section is added to chapter 80