SB 5570 — Authorizing electric utilities to establish energy efficiency revolving loan programs.

S-3680.6S-0862.1 SUBSTITUTE SENATE BILL 5570 State of Washington 68th Legislature 20242023 Regular Session By Senate Environment, Energy & Technology (originally sponsored by Senators Lovelett, Trudeau, Hasegawa, Keiser, Nguyen, Nobles, Pedersen, Randall, Rolfes, Saldaña, Valdez, and C.

Wilson)Wilson READRead FIRSTfirst TIMEtime 01/22/24.01/26/23.

ANReferred ACT Relating to authorizingCommittee consumer-ownedon utilitiesEnvironment, toEnergy establish& energyTechnology. efficiency revolving loan programs;

AN ACT Relating to authorizing electric utilities to establish energy efficiency revolving loan programs;

addingand creating a new sectionsection. to chapter 82.04 RCW;

creating new sections;

and providing expiration dates.

(1) The legislature finds that energynearly efficiencyall improvementslow-income mayhouseholds be costly and although they will pay backtheir the up-front costs over time in reduced utility bills,bills manydirectly, householdsas doeither notthey haveown thetheir capitalhomes or accessoccupy torental lendershomes atwhere reasonablethey ratesare toresponsible makefor theseutility investments.bills.

Energy efficiency improvements may be costly and although they will pay back the up-front costs over time in reduced utility bills, many households do not have the capital or access to lenders at reasonable rates to make these investments.

(2) Therefore, the legislature intends to establish a grant program within the department of commerce to provide funding for consumer-ownedelectric utilities that choose to establish loan programs for residential energy efficiency improvements that are structured to overcome the barriers of more traditional financing.

As consumer-electric owned utilities have a regular relationship with their customers p.

1 SSBSB 5570 relationship with their customers through monthly billings and maintenance of their supply infrastructure, they are well-positionedwell positioned to inform their customers of this potential financing mechanism to lower their utility bills while doing their part in the transition to a cleaner energy system.

(3) Furthermore, the legislature recognizes that federal funding may be used to provide similar benefits to households that cannot afford the upfront costs of energy efficiency upgrades but do not meet the income qualification of certain state programs.

Thus, the legislature encourages the department of commerce to leverage federal funding to provide residential energy efficiency resources to moderate-income households whose adjusted income is more than 80 percent of the median family income adjusted for family size.

(1) Subject to the availability of amounts appropriated for this specific purpose, the residentialelectric utility energy efficiency capitalization grant program is created within the department.

The purpose of the program is to enable consumer-ownedelectric utilities to provide residential loan options that create energy efficiency opportunities for eligiblelow-income and moderate-income households.

Energy efficiency includes audits,weatherization upgrades,projects, and retrofits, such as insulation upgradesupgrades, and window replacement, and repairs needed to achieve energy savingssavings. and improve the comfort of buildings.

(2) Each consumer-ownedelectric utility may apply to the department to receive funding to establish an energy efficiency revolving loan program.

(3) AAn consumer-ownedelectric utility's program must include the following elements:

(a) Priority for loans must be given to properties in overburdened communities,communities withas additionalidentified considerationby for regions of the statestate's thatenvironmental experiencehealth disproportionatelydisparities highmap; levels of air contaminants and pollutants related to wildfire smoke;

(e) A robustlist consumerof protectionparticipating plancontractors thatmust alignsbe withidentified guidelinesand developedprovided byas thepart department,of includingthe information about choosing a program thatapplication meetsprocess; a customer's budget;

(f) Either a separate billing system or an on-bill repayment program must be provided for participating customers;

and (g) An energy efficiency revolving loan account.

The moneys in the account must be used solely to fulfill commitments arising under this act.

All loan repayment moneys must be deposited into this account.

(4) An electric utility may choose to contract with a third party to implement a program, provided the third party acts in accordance with the requirements under this section.

2 SSBSB 5570 (f)(5) AElectric listutilities ofmay participatingoffer contractorsdifferent mustloan beprograms identifieddepending andon providedthe ascustomer partneeds ofand thecircumstances, programincluding applicationthe process;following:

(g)(a) EitherDeferred aloans separatefor billingincome-qualified systemcustomers orthat anown on-billand repaymentoccupy programtheir musthome. be provided for participating customers;

and (h) A plan for informing and educating residential customers about the program.

(4) A consumer-owned utility must establish an energy efficiency revolving loan account.

The moneys in the account must be used solely to fulfill commitments arising under this section.

All loan repayment moneys must be deposited into the account.

(5) A consumer-owned utility may choose to contract with a third party to implement a program, provided the third party acts in accordance with the requirements under this section.

(6) Consumer-owned utilities may offer different loan programs for eligible households depending on the customer needs and circumstances, including the following:

(a) Deferred loans for customers who own and occupy their home.

and (ii) Customers to qualify based on payment history with the consumer-ownedelectric utility;

(7)(6) AAn consumer-ownedelectric utility may claim conservation savings from cost-effectivecost- effective measures financed through an energy efficiency revolving loan program and apply these savings toward achieving its conservation acquisition targets under chapter 19.285 RCW.

(8)(7) At least annually, any consumer-ownedelectric utility receiving funding under this section must report to the department their p.program costs and the number of customers who received program loans.

3(8) SSBThe 5570department programmust costs,adopt estimatedrules energyto efficiencyimplement savings,this andsection. the number of customers who received program loans.

(9) Consumer-ownedThe utilitiesdefinitions mayin retainthis upsubsection toapply fivethroughout percentthis ofsection fundsunless received by the departmentcontext forclearly administrativerequires costsotherwise. associated with the program.