On May 3, 2007, the State of Washington enacted climate change legislation, S.B. 6001, 60th Leg., 2007 Reg. Sess. (Wash. 2007) (the Bill), to reduce greenhouse gas (GHG) emissions and provide incentives for developing new sources of clean and renewable energy. Based on California’s Global Warming Solutions Act, the Bill aims to reduce overall GHG emissions in the state to 1990 levels by 2020. The Bill does not specify how targeted reductions are to be achieved; rather, it leaves it to the governor to develop policy recommendations for the legislature. In addition to emissions reduction goals, the Bill also establishes a GHG Emissions Performance Standard (EPS), which prohibits electric utilities from entering into long term power contracts, after June 30, 2008, with power plants whose GHG emissions exceed the EPS. The EPS is set at the lower of either 1,100 pounds of GHG per megawatt-hour, or the average available GHG emissions output of a new combined-cycle natural gas turbine. The Washington Department of Ecology, with the assistance of other agencies such as the Washington Utilities and Transportation Commission (WUTC), is responsible for overseeing and implementing the EPS.

Key Provisions

Section 3 establishes the GHG emissions reduction goals. In addition to reducing emissions to 1990 levels by 2020, the goal is to further reduce emissions to 25 percent below 1990 levels by 2035 and to 50 percent below 1990 levels by 2050.

Section 3 requires the Department of Ecology and the Department of Community, Trade, and Economic Development to calculate the total GHG emissions in 1990, as well as the total emissions in each major sector in 1990. Beginning in 2010, and in every even-numbered year thereafter, these departments will report the overall and sector GHG emissions totals for the previous two years.

Section 4 requires the governor to develop policy recommendations on how the state can achieve its GHG emissions reduction goals. In his recommendations, the governor must assess a number of potential policies, such as (1) a load-based cap-and-trade system; (2) carbon sequestration options, including geologic injection and forest sequestration; (3) a process for closing and replacing the highest emitting plants with newer technologies; (4) methods utilizing landfill gases and geothermal resources; and (5) improvements of regulatory and tax policies for electric utilities. Section 5 establishes the EPS, which applies to all baseload electric generation facilities that commence operation after June 30, 2008 and those facilities which are the subject of long-term financial commitments13 after June 30, 2008. Renewable energy facilities are automatically deemed to be in compliance with the EPS.

The EPS will have the practical effect of prohibiting Washington utilities from purchasing coal generated power (from either in-state or out-of-state generators) unless the GHG emissions from the facility can be permanently sequestered. Power plants can exclude GHG that are permanently injected into the earth, or sequestered in another manner, from their emissions calculations.

Section 5 directs the Energy Facility Site Evaluation Council and the Department of Ecology to develop rules to implement the EPS, including criteria for evaluating the carbon sequestration plans.

Section 7 directs the Department of Community, Trade, and Economic Development to survey the average rate of GHG emissions for new combined-cycle natural gas turbines and report the results of this survey to the legislature every five years beginning June 30, 2013.

Compliance with the EPS will be determined by WUTC, which can review compliance in either a general rate case or upon specific request by a utility. The UTC can provide a case-by-case exemption from the EPS when there is (1) a case of unanticipated electric system reliability nee