Part One of this series outlines the success and shortcomings of early clean energy regulation, specifically renewable portfolio standards. Part Two introduced a case study of updated clean energy regulation, namely the Washington (WA) Clean Energy Transformation Act (CETA). Part Three continues to provide insight into CETA. This post details how CETA will be implemented and how the goal of 100% carbon free energy by 2045 will be achieved by Washington utilities.
Included In This Series
- Early Clean Energy Regulation: Where Renewable Portfolio Standards Fell Short
- Clean Energy Regulation Updated: Case Study of the Washington (WA) Clean Energy Transformation Act
- Implementing Updated Clean Energy Regulation: WA CETA Case Study
Implementing CETA
CETA requires a series of strategic planning documents from utilities, see Figure 1. These strategic documents are meant to be wide-ranging and to encourage utilities to integrate equity and climate throughout all aspects of the business. The documents required by CETA include: an Integrated Resource Plan (IRP) which includes a Clean Energy Action Plan (CEAP), and a Clean Energy Implementation Plan (CEIP). The strategic documents are to be updated at prescribed times and identify roadmaps, actions, and targets for energy efficiency (EE), demand response (DR) and demand flexibility, and renewable energy.
Figure 1 CETA strategic planning document requirements
Integrated Resource Plan
An IRP is a roadmap to meet forecasted energy demand using both supply and demand side resources to ensure reliable service to customers in the most cost-effective way[1]. An IRP is required for all utilities with more than 25,000 customers. Progress reports must be produced by Washington utilities every two years and the IRP must be updated every four years.
CETA requires that IRPs include an assessment of conservation and efficiency resources. IRPs must also assess benefits and reductions of burdens to vulnerable populations and highly impacted communities; public health and environmental benefits, costs, and risks; and energy security and risk. This focus on equity is aligned with a trend of states increasingly “recognizing equity as a goal of utility regulation, going beyond traditionally stated objectives to ensure that electricity systems are reliable, safe, and fairly priced”[2]. As a result, utilities are required to look differently at their business. They now need to consider the wider impact of energy prices, and choices on communities and society at large.
The utility’s IRP must include a CEAP. The ten-year CEAP identifies conservation, demand response (DR), renewable energy (RE) resources, needed infrastructure upgrades, and more.
The CEAP must be informed by the utility’s cost-effective conservation potential assessment. It must identify potential cost-effective demand response and load management programs. The utility should also consider the social cost of greenhouse gas emissions. The (adjusted) social cost of carbon is provided by the Washington Utilities and Transportation Commission (WA UTC).
Clean Energy Implementation Plan
The four-year CEIP proposes specific targets for energy efficiency, demand response and demand flexibility, and renewable energy. CEIPs must demonstrate that all customers benefit from the transition to clean energy through equitable distribution of benefits. Additionally, that must ensure that no customer or class of customers is unreasonably harmed by any resulting increases in cost of utility supplied electricity. CEIPs were required to be provided by large Washington utilities by January 1, 2022. The CEIPs from Avista, Pacific Power, and Puget Sound Energy can be found on the UTC website.
The Impact
The impact of CETA on WA utilities is already being seen through the creation of equity advisor groups (EAGs) and customer benefit indicators (CBIs), as well as through the issuance of innovative requests for information/proposal.
Equity Advisory Groups
Equity advisory groups (EAG) were established by Washington’s Investor-Owned Utilities (IOUs). EAGs aim to give a variety of customers a voice in the utility decision-making process. For example, Avista’s EAG was formed to: “ensure customers are benefitting from the transition to clean energy through the equitable distribution of energy and nonenergy benefits and reduced energy burdens to communities and populations that have been identified as highly impacted by fossil fuel pollution and climate change.” Avista’s EAG focuses on members who are:
- Older adults,
- Economically disadvantaged,
- Living with disability,
- Black, Indigenous, and People of Color (BIPOC)
- Have an interest in environmental justice,
- Are associated with public health,
- Reside on tribal land,
- Live in affordable housing, or
- Are members of marginalized community or population.
Customer Benefit Indicators
CETA requires that utility CEIP’s include Customer Benefit Indicators (CBIs), as well as weighting factors for consideration of non-energy benefits. This represents a shift in how utilities make decisions. Historically, utilities made decisions based on energy. CBIs require that utilities look beyond energy benefits and consider non-energy benefits, especially those targeting vulnerable and highly-impacted populations, termed “named communities”.
PacifiCorp’s CBIs, as seen in their CEIP, can be seen Table 1.
| CBI | Benefit Categories | Metric(s) |
| Culturally and linguistically responsive outreach and program communication | · Reduction of burdens · Non-energy benefit |
· Outreach in non-English languages · Percentage of responses to surveys in Spanish |
| Community-focused efforts and investments | · Non-energy benefit · Reduction of burden · Public health |
· Workshops on energy related programs · Headcount of staff supporting program delivery in Washington who are women, minorities, and/or can show disadvantage[3] · Number of public charging stations in named communities |
| Participation in company energy and efficiency programs and billing assistance programs | · Cost reduction· Reduction of burden · Non-energy benefit · Energy benefit |
· Number of households/businesses, including named communities, who participate in company energy/efficiency programs · Percentage of households that participate in billing assistance programs · Number of households/businesses who participate/enroll in demand response, load management, and behavioral programs |
| Efficiency of housing stock and small businesses, including low-income housing | · Energy benefit | · Number of households and small businesses that participate in company energy/efficiency programs · Energy efficiency expenditures[4] |
| Renewable energy resources and emissions | · Environmental | · Amount of renewables/non-emitting resources serving Washington · Washington allocated greenhouse gas emission from Washington allocated resources |
| Households experiencing high energy burden | · Cost Reduction · Reduction of burden |
Number of customers experiencing high energy burden by: highly impacted communities, vulnerable populations, low-income bill assistance (LIBA) and Low-Income Weatherization participants, and other residential customers |
| Indoor air quality | · Public health · Non-energy benefit |
· Number of households using wood as primary or secondary heating · Non-electric to electric conversions for Low-Income Weatherization program |
| Frequency and duration of energy outages | · Energy resiliency · Risk reduction · Energy benefit |
·SAIDI, SAIFI, and CAIDI[5] at area level including and excluding major events |
Table 1: CBIs
Demand Flexibility
Utilities are exploring innovative ways to meet their demand response targets established as part of CETA. For instance, Puget Sound Energy (PSE) released in 2021 a request for information for Distributed Energy Resources (DERs) which included demand response. PSE also developed the requirements for a Virtual Power Plant (VPP).
In 2022, PSE released a Targeted DER request for proposal (RFP). The DER RFP seeks: bids from respondents to collectively supply a minimum of 129 MW of DERs by 2025 and 522 MW by 2031 to PSE. This includes procurement of distribution interconnected solar PV generation (includes ground and rooftop solar PV), Battery Energy Storage System (“BESS”), and DR located within PSE’s service area.
Conclusion
WA’s CETA represents an evolution of clean energy regulation. It goes beyond the kilowatt-hour focus of renewable portfolio standards (RPS). It requires electric utilities to consider climate, equity, and infrastructure. It highlights the opportunities for energy efficiency and demand flexibility. The reductions in fossil fuel use that will arise from CETA will improve the health of communities, drive economic development, create jobs, and enable the state to achieve its long-term climate goals. CETA regulates the maintenance of affordable rates and reliable service. It also requires an equitable distribution of the benefits from the transition to clean energy for all utility customers.
Edo enables utilities to provide data driven energy efficiency and demand flexibility programs for commercial customers. Contact us for further information about how we can help you achieve your clean energy regulation goals.
[1] https://blog.aee.net/understanding-irps-how-utilities-plan-for-the-future
[2] https://emp.lbl.gov/webinar/advancing-equity-utility-regulation
[3] In this metric, program delivery is defined as related to energy efficiency programs, with exception to the low income weatherization program.
[4] Energy efficiency expenditures include customer, partner, and direct install incentive payments and exclude all other administrative or program costs.
[5] System Average Interruption Duration Index (SAIDI), System Average Interruption Frequency Index (SAIFI), Customer Average Interruption Duration Index (CAIDI)