Changes in the Senate –
The striker makes some projects and facilities upgrades by energy-intensive trader exposed industries eligible and ineligible for treatment as clean energy projects under the bill, and makes some other changes summarized by staff at the end of it. The changes made by the first amendment in Ways and Means are summarized by staff at the end of it. The second amendment limits EITE’s clean energy projects to those that reduce emissions faster than the rate of decline of the free allowances EITEs are receiving under CETA, and specifies that various land use and permitting decisions for clean energy projects will be handled through the expedited judicial review process for energy facility site evaluation council certifications rather than going to the Pollution Control Hearings Board.

In the House – Passed
Had a hearing in the House Committee on Environment and Energy  January 19th. Replaced by a substitute, amended, and passed out of committee February 9th. Referred to Appropriations and had a hearing there on February 21st. Replaced by a second substitute, amended, and passed out of committee February 23rd. Referred to Rules. Replaced by a striker on the floor, amended, and passed by the House March 3rd.

Changes in the Senate –
The striker makes certain projects and upgrades by energy-intensive trade exposed facilities eligible and ineligible for treatment as clean energy projects under the bill’s provisions, and makes some other changes summarized by staff at the end of it.

Changes in the House –
There’s a staff summary of the changes made by the substitute on the first couple of pages of it; the amendment would require consultation with rural stakeholders and two reports on a variety of potential impacts and benefits of anticipated changes in the state’s energy system, including the siting of facilities through the Energy Facility Site Evaluation Council and recommendations on ways to “more equitably distribute costs and benefits to rural communities.” The striker merely directs counties to not prohibit the installation of evaluation equipment needed in planning wind and solar projects rather than specifying various limits on county’s requirements for permitting those, and makes other minor changes which are summarized by staff at the end of it. The floor amendment allows the projects and upgrades by energy intensive trade exposed industries included as clean energy manufacturing projects in the striker to count if they “assist” in meeting cap and invest obligations, rather then meeting them.

2nd Substitute –
The changes made by this are summarized by staff at the beginning of it, and the changes made by the amendment are summarized at the beginning of that.

Summary –
The bill would create an Interagency Clean Energy Siting Coordinating Council, co-chaired by the Departments of Commerce and Ecology, with participation by a long list of agencies. The chairs would assign staff in each agency to lead the Council’s work and provide ongoing updates to the Governor and appropriate committees of the Legislature. The Council would identify actions to improve siting and permitting of projects for wind and solar energy, transmission, green electrolytic and renewable hydrogen, alternative jet fuels, battery and pumped storage of clean energy, and the manufacturing of clean energy products. Its work would include a through review of the recommendations of the 2022 Low Carbon Energy Facility Siting Improvement Study, creating implementation plans and timelines, and making recommendations for needed funding or policy changes. The Council would also track Federal efforts to improve clean energy project siting and permitting, including potential Federal funding; identify agency actions to improve coordination across state, local, and federal processes or to pursue supportive funding; conduct outreach to parties with interests in clean energy siting and permitting for ongoing input on how to improve agency processes and actions; and establish work groups as needed to focus on specific energy types or specific geographies for project siting. It might create advisory committees to inform this work; it would support the creation and annual updating by the Governor’s Office of Indian Affairs of a list of contacts at tribes and tribal preferences regarding outreach about clean energy project siting and permitting. It would provide an annual report to the Governor and appropriate committees of the Legislature summarizing progress on efficient, effective, and responsible siting and permitting of clean energy projects; areas of additional work; resource needs; and any needed policy changes.

The Council would also advise Commerce on contracting with an independent third party to evaluate state agency siting and permitting processes and related Federal and state requirements; identify successful models for siting and permitting projects in other states; develop recommendations for improving these processes, including potential policy changes and funding; and report on the evaluation and recommendations by July 1, 2024. The Council would develop a consolidated clean energy application similar to the joint aquatic resources permit application for at least the state permits for clean energy projects, and would explore developing a consolidated permit for them. Ecology would lead these efforts, with updates on them to the Governor and Legislature due by July 1, 2024. It would engage with Federal agencies and local governments to explore including various applications or permits in consolidated versions. It would be authorized to design a single application for multiple clean energy project types, separate applications for individual clean energy technologies, or an application for related resources. A consolidated permit process would have to identify criteria or conditions that had to be met for projects to use it, and Ecology would be authorized to analyze those conditions as part of a nonproject review.

The bill would create a way for applicants to apply to Commerce for designation as a clean energy project of statewide significance, and would have Ecology implement and assist with a fully coordinated permitting process for those as an alternative to applying for expedited permitting through the State Energy Facility Site Evaluation Council. Applications for the designation would have to include an explanation of how the project is expected to contribute to the state’s achievement of its greenhouse gas emission limits, and is consistent with the State Energy Strategy. They’d also need an explanation of any contribution it’s expected to make to other state requirements for clean energy and greenhouse gas emissions; an explanation of how it’s expected to contribute to the state’s economic development goals; a plan for meaningful engagement with tribes having interests on or near the site; a description of potential community benefits and impacts from the project, a plan for meaningful community engagement in its development, and an explanation of how the applicant might use a legal document specifying the benefits the developer agrees to fund or furnish in exchange for community support of a project. Commerce would approve or deny a one-time application for a project, assessing whether it provided the explanations above, had sufficient need for coordinated state assistance, had been reviewed through a nonproject environmental review process, or a least-conflict siting process for pumped solar that the bill establishes, and was consistent with the recommendations of those; and considering its anticipated positive or adverse impacts on environmental and public health. The department would have to consider information in an application demonstrating meaningful tribal outreach and engagement “favorably” in deciding whether to approve it.

Designated clean energy project of statewide significance would be assigned a Commerce staff navigator to assist with the initial project assessment and with the coordinated permitting process, if the project proponent chose to use that. The navigator would also convene appropriate partners from state and local government, private entities, nongovernmental organizations, and others to support successful completion of the project; and work with each of those to expedite their actions in moving the project forward.

Ecology would manage the coordinated permitting process. (The proponent of a designated project who chose to use this would have to reimburse the department for the costs of supporting its permitting.) It would conduct an initial assessment of the amount of coordination each project needed, considering its complexity, size, and the experience of those involved. It would address the expected type of environmental review; the anticipated state and local permits, approvals, forms and requirements; information needs and issues of concern of each participating agency; time required for the SEPA review and permit decisions by each participating agency given the greatest possible efficiencies achievable through any concurrent studies and with any consolidated applications, hearings, and comment periods. This would have to be provided to the proponent and the public within sixty days. Ecology would also ensure the proponent had been informed of all information needed to apply for permits; facilitate communication between proponents and staff to promote timely permit decisions and adherence to agreed schedules; verify completion of administrative review and permit procedures among agencies; assist in resolving any conflict or inconsistency among permit requirements and conditions; consult with potentially affected tribes and potentially affected overburdened communities according to the bill’s requirements; and coordinate with jurisdictions to assist with fulfilling their local permitting requirements. The Department would convene a work plan meeting for the project with the other parties relevant to its permitting, reviewing permitting processes and estimating timelines, with full attention to achieving the maximum efficiencies possible. It would create and maintain a shared coordinated permitting process schedule; parties would have to notify Ecology of the reasons for any delays and offer potential solutions or an amended timeline.

The bill requires early, meaningful, and individual consultation by Ecology with any affected tribe on a variety of potential project impacts on rights or resources, independent of and in addition to, any public participation process required by state law or a state agency. The department would also be required to identify overburdened communities that might be affected by a designated project participating in the process, and to verify that they’d been meaningfully engaged in a timely manner by participating agencies, and that their comments had been considered in determining potential impacts.

Counties and cities with designated clean energy projects of statewide significance in their jurisdictions would be required to enter into an agreement with Ecology and the project proponents for expediting the completion of projects. They’d have to expedite processing of permits for the project’s design and construction; environmental review; and requests for needed street, right-of-way, or easement vacations. They’d have to make local officials or planning staff available to serve on the navigator’s team to move the project forward; develop and follow a plan for consultation with potentially affected tribes; and carry out any other actions Ecology identified as needed for the coordinated permitting process. Local governments would not be allowed to require these applicants for these electrical energy projects to demonstrate their necessity or utility, other than as part of the public information required by Federal agencies as part of some applications.

The bill would have the WSU Energy Program conduct a least-conflict pumped storage siting process for the state, including ample opportunities for self-identified stakeholders to participate, to identify areas where there’s the least amount of conflict about sites. (It might include considering the colocation of pumped storage with wind or solar energy generation.) The project would develop a public map and associated GIS data layers by June 30th, 2025, highlighting those areas; it would not include any information tribes identified as sensitive, though that would be used to inform the project.

Ecology would be required to develop nonproject environmental impact statements, in consultation with various stakeholders, on the probable significant adverse environmental impacts of green electrolytic or renewable hydrogen projects, and of solar projects in the Columbia Basin. These would include related mitigation measures. Proponents of such projects would have to incorporate these impact analyses in a coordinated project-level review process, and the lead agency conducting a project-level environmental review of one of those would have to adopt that nonproject impact statement to identify and mitigate project-level probable significant impacts, “where appropriate.” However, the agency would also have to review and update that analysis, if that were needed, and would have to address any probable significant impacts that were not analyzed in the nonproject statement and identify any avoidance, minimization, and mitigation measures specific to the project for those impacts.