Washington State House Committee Chair Outlines FIT Bill

December 17, 2009

By Paul Gipe

The chairman of Washington State House committee on Technology, Energy, and Communication has outlined his plans for a bill on feed-in tariffs in the next legislative session. On December 4, 2009, Chairman John McCoy outlined the features he expects to see in a bill calling for Standard Offer Contracts (SOC) in Washington State.

Washington State had previously pioneered the use of production-based incentives in the US for residential-size solar and wind systems that qualify for the state's net-metering program. The state's program has been in existence for several years and was modified and extended in the last legislative session.

The current program pays $0.30 USD/kWh (€0.20/kWh) for solar PV and $0.12 USD/kWh (€0.08/kWh) for wind systems up to 25 kW through 2020. However, the program includes substantial bonus payments for products built instate. Controversially, the bonuses for solar PV add up to more than $1 USD/kWh for systems that meet all the state requirements. This is substantially more than that offered in Ontario for residential rooftop solar PV.

Unfortunately, Chairman McCoy is proposing a very low project size cap of only 2 MW for all renewables. While 2 MW may not be severely limiting to solar PV or biogas projects, it is severely restrictive for wind, geothermal, and wave energy. Because the infrastructure costs are so great, it is unlikely that any one will ever install only one wind turbine offshore. Similarly, geothermal projects are often in the hundreds of megawatts.

Chairman McCoy's key SOC design features are summarized below.

• Includes all renewables
• Onshore and offshore wind
• Geothermal generation
• Solar PV and solar thermal
• Hydro
• Wave energy
• Biomass and Biogas
• Project size cap: 2 MW
• Program cap: 5% of 2007 peak load
• Contract term: 20 years
• Tariffs based on the average cost of generation plus a 10% rate of return
• Tariffs must be "reasonable and fair" to both the generator and the ratepayer
• Periodic review: Every three years
• Program costs integrated into the rate base
• Provisions for low-income ratepayers
• Interconnection within
  • <10 kW: 60 days
  • <300 kW: 180 days
  • <2 MW: 360 days
• Choice between SOC and net-metering
• Renewable Energy Credits retained by generator

See Washington State Sets New Performance Incentive for 2009--SB 6170 doubled the base rate from $0.15/kWh to $0.30/kWh. The "multipliers" used in the Washington State system act on this new base rate. . .

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