Four proposed bills examined by Enviro and Energy Committee
Feb. 19—OLYMPIA — The House Environmental and Energy Committee heard four proposed bills Feb. 13. The four bills, if passed, would have impacts on agriculture, low-income energy assistance, water system rate changes and insurance for public utility districts like the Grant PUD.
House Bill 1912 would reform fuel exemptions for agriculture organizations under the Climate Commitment Act. House Bill 1903 would establish a statewide low-income energy assistance program.
House Bill 1906 would enhance transparency and consumer protections in water system rate changes for consumers. House Bill 1842 would allow public utility districts to form, own or use captive insurers.
All of these bills are proposed legislation and have yet to pass the committee or the house. The Columbia Basin Herald will release an updated article when more information is available on the above bills.
Ag and CCA
House Bill 1912 is aimed at reforming fuel exemptions for agricultural purposes under the Climate Commitment Act. The proposed legislation seeks to establish a remittance program for exempt fuel users within the agriculture sector. The bill is an effort to respond to concerns regarding compliance costs and charting a path for enhanced support to the farming community.
Rep. Tom Dent (R-Moses Lake) who sponsored the bill, opened the hearing by explaining concerns raised by agricultural constituents.
"Finding a solution is a challenge. We know that, but we had a promise. A promise was made, and we need to find a way to keep that promise," Dent said during the hearing.
Dent emphasized the need for a simplified process to alleviate the financial burdens placed on farmers. As currently structured under the CCA, certain emissions associated with fuels used for agricultural purposes enjoy exemptions, but these provisions are set to expire after five years. House Bill 1912 seeks to extend these exemptions and provide a structured mechanism for remittances directly to fuel suppliers and exempt agricultural users.
"We are trying to find a way in how we can do this simple, easy to implement, which is why this is going to be a challenge, but I think we can do it, and we are committed to finding a solution to it," Dent said. "I want to make it perfectly clear here that what you have in front of you in this bill will change, and we know it's going to change. We know it's going to be amended because it's going to have to be to make it work, but it was the place to start. We've been working on this for quite a while, but we got to the point that we needed to drop it so we could move (it) through the system, and we will find a solution, and we will change it so it works for all of agriculture."
In the proposed legislation, the Department of Ecology would be tasked with developing specific rules to govern the remittance program. This would include providing payments to suppliers of dyed fuel—typically used in off-road agricultural applications — while ensuring that costs incurred from compliance obligations do not fall onto exempt users.
Under the bill, both the fuel suppliers and user categories must undergo a new documentation process to facilitate the remittance effectively.
The next hearing of the bill will be Feb. 20 at 8 a.m. in the House Environment and Energy Committee which is streamed on TVW. For those interested in watching the hearing visit: https://bit.ly/4hGP5Hj.
Energy assistance
House Bill 1903 had its first public hearing during the same meeting. The proposed legislation aims to establish a statewide low-income energy assistance program, addressing the energy burden experienced by many households across the state. This bill, sponsored by Reps. Sharlett Mena, D-Tacoma, Liz Berry, D-Seattle, and others, seeks to provide financial relief to the state's low-income residents facing escalating energy costs.
"Under the Clean Energy Transformation Act, electric utilities are required to offer programs and funding for energy assistance," Megan McFadden, staff representative for the committee said. She also explained that the legislation aims to enhance support for households spending more than 6% of their income on energy bills.
House Bill 1903 arrived as a follow-up to a report prepared by the Department of Commerce in November 2024, which highlighted the urgent need for a centralized energy assistance program.
"More than 270,000 low-income households in our state experience energy burden," McFadden said. "Meaning they spend more than 6% of their income on energy bills."
Mena, who introduced the bill, expressed her concerns regarding the high cost of living impacting families in her district.
"In my district, just like across the state and nation, the cost of living is really high," she said during her opening remarks. "Many families are making difficult decisions right now, deciding whether to pay the utility bill or other essentials like medical expenses and rent."
The hearing featured discussions focusing on the bill's proposed structure, which allows eligible households to apply directly for assistance and self-attest their income status, reducing barriers to access.
According to the bill, the Department of Commerce will craft rules to implement the program, ensuring low-income households are prioritized. McFadden pointed out that "the department must explore auto-enrollment of known eligible households" to streamline the assistance process, making it not only accessible but also efficient for those in need.
Some questions raised centered around the program's potential impact on utility rates. Representative Alex Ybarra (R-Quincy) asked "If this program gets put into a PUD or another utility, does that mean that the rates for everybody else are going to go up in order to pay for this program?"
McFadden responded that "the funding is intended to come from the Climate Commitment account, so it would not come from ratepayers."
House Bill 1903 has plans for the program to be operational by July 2026. As of Tuesday, there were no upcoming hearings on the bill.
Water
The second bill the committee heard was House Bill 1906, a proposed piece of legislation aimed at enhancing transparency and consumer protections in water system rates. The bill, sponsored by Representatives Steve Tharinger, D-Sequim, Tarra Shavers, D-Bremerton, Lisa Parshley, D-Olympia, and Natasha Hill, D-Spokane, seeks to introduce specific statutory standards for the Utilities and Transportation Commission in its oversight of water systems and their associated rate changes.
"I will speak a little bit about why water systems are just crucial," Tharinger said.
He then acknowledged that water is a critical need throughout the Evergreen State, but its governance is splintered.
"In this state, the Department of Ecology controls the quantity of water," he said. "The Department of Health controls the system, the quality of the water, the UTC controls the systems that provide that water and, in many states, California, for example, there's a separate agency that is the consumer advocacy agency that manages that and looks out for the consumer in this process. There are national associations that do the same."
He emphasized the importance of adequate oversight to protect consumers from soaring rate increases, which have reportedly surged between 90-220% in some areas, largely due to acquisitions and profit-maximizing strategies of private water companies, according to Tharinger.
Tharinger said the current framework lacks clarity for the UTC, the body responsible for regulating water rates. The UTC has historically operated without specific guidelines for evaluating proposed changes.
The proposed legislation aims to address several key areas, including the requirement for water systems to submit comprehensive capital improvement projects to the Department of Health at least every three years. This is in line with the efforts to enhance accountability and ensure that ratepayers are adequately informed about planned investments that might affect their bills. Additionally, the UTC would be mandated to provide justifications for any proposed returns exceeding a 5 percent threshold, with a maximum ceiling of 7 percent on overall rates of return.
The bill emphasizes consumer engagement in the rate-setting process. The bill would require water companies to notify customers regarding planned capital projects and their impacts on rates. The goal is to provide consumers with a clearer understanding of how their rates are set and the reasons for rate adjustments, Tharinger said.
Tharinger acknowledged the complexity of the legislation but maintained that it represents an advance in consumer protection.
"What this bill tries to do is put into statute guidelines for that process and strengthen the UTC's role as a consumer advocacy agency," he said.
As of Tuesday, the bill is not scheduled to be heard by the committee again.
Insurance for PUDs
HB 1842, a piece of proposed legislation intended to authorize public utility districts to create and utilize captive insurance companies, was presented in its inaugural hearing before the Environmental and Energy Committee. The bill, sponsored by Representatives Mike Steele, R-Chelan, and Stephanie Barnard, R-Pasco, seeks to enhance the financial resilience of PUDs against unpredictable market conditions.
PUDs are special-purpose districts created to provide essential services such as electricity, water and telecommunications. Captive insurance companies, which are owned by the non-insurance companies they insure, can offer alternative coverage for risks when traditional commercial insurance is insufficient.
"House Bill 1842 would expand the definition of an eligible captive insurer to include an insurance company that contracts as a participant or member of the insurance company, rather than strictly an insurance company owned by a captive insurance company," said Matt Sterling, an Olympia staffer. "This bill allows local government entities, including public utility districts, to form, own or use captive insurance companies."
Sterling said eligible captives, once established, would operate similarly to commercial insurers, generating revenues from policy premiums and settling claims.
"The intent of the bill is to provide cost-effective risk management strategies that could ultimately benefit ratepayers by stabilizing costs over time and minimizing the frequency of significant rate increases due to unforeseen claims or losses," Sterling said during the hearing.
House Bill 1842 will be heard by the House Environment and Energy Committee on Thursday at 8 a.m. For those interested in watching it visit: https://bit.ly/4i4rKyR.
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