wa-law.org > bill > 2025-26 > HB 1673 > Original Bill
The legislature finds that Washington has committed to decarbonizing its electricity system so that it is carbon neutral by 2030 and carbon free by 2045. Achieving those goals includes retiring coal and gas resources, adding new generation from renewable and nonemitting resources, and leveraging energy storage technologies. At the same time, demand for electricity is increasing significantly due to the electrification of vehicles, home heating and cooling, and manufacturing, and the expansion of the information services sector in Washington. There are significant federal, state, and private investments in clean energy development, including wind, solar, and battery storage, that support decarbonization goals and supply new electrical load. However, Washington's existing transmission system is outdated and lacks the capacity to support the growing demand for clean electricity.
The legislature also finds that extreme weather events and changes to seasonal highs and lows puts new strain on the existing transmission system and threatens reliability. Extreme weather events such as high-speed winds, floods, freezing, and heat domes can damage grid infrastructure and cause disruptions to the power supply. Warmer summers and colder winters increase the need for heating and cooling and thereby intensify and extend periods of peak demand.
The legislature further finds that to maintain reliability and build resilience, Washington's transmission system needs to be expanded and upgraded to access diverse portfolios of clean and reliable energy across the region, including solar resources in the southwest and wind resources across the mountain west. A more robust and updated transmission system will support affordability and reliability goals by enabling the efficient dispatch of least-cost resources across the region.
Therefore, it is the intent of the legislature to create the Washington electric transmission office to improve transmission capacity, reliability, and efficiency by engaging in long-term planning; providing development services; coordinating siting and permitting; leveraging research; and engaging with utilities, transmission developers, local jurisdictions, state agencies, regional entities, the federal government, and affected communities. The legislature intends for the office to achieve the following goals:
Improve reliability and resilience, including during extreme weather events;
Increase access to low-cost renewable energy;
Achieve clean electricity requirements and greenhouse gas emissions limits;
Support economic growth; and
Maintain affordable energy rates.
The legislature intends to initially set up the Washington electric transmission office within the department of commerce in order to leverage existing energy policy expertise and administrative support. However, upon guidance from the office and the electric transmission advisory board, the legislature may decide to separate it from the department and establish it as an independent authority in the future.
The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
"Advisory board" means the electric transmission advisory board.
"Department" means the department of commerce.
"Grid-enhancing technologies" means hardware and software that increases the capacity of electrical lines and improves the efficiency, reliability, and safety of the grid. Grid-enhancing technologies include, but are not limited to, dynamic line rating systems, advanced power flow control systems, and optimization software.
"Office" means the Washington electric transmission office.
"Reconductoring with advanced conductors" means replacing the existing electric conductor with a conductor that has a direct current electrical resistance at least 10 percent lower than existing conductors of a similar diameter on the system and may include rebuilding support structures or other associated facilities.
The Washington electric transmission office is established within the department.
The purpose of the office is to:
Support the expeditious and efficient expansion of new electric transmission lines within the state that are prudent and needed investments to serve Washington customers;
Support the development of community microgrids, distributed energy resources, and energy conservation;
Pursue cost-effective nonwire alternatives to increase the capacity of existing electrical infrastructure;
Be a statewide resource for developing and coordinating upgrades to existing transmission lines;
Collaborate with electric utilities, local jurisdictions, regional entities, and the federal government to develop interstate and regional transmission resources;
Facilitate access to regional wholesale markets; and
Support community and economic development.
To the greatest extent practicable, the office shall seek to:
Protect cultural and natural resources;
Avoid impacts to overburdened communities and vulnerable populations;
Support good jobs;
Maximize the use of existing rights-of-way for transmission development; and
Mitigate wildfire risk.
The director of the department shall appoint a director of the office, who may employ staff as necessary to carry out the office's duties as prescribed by this act, subject to the availability of amounts appropriated for this specific purpose.
The electric transmission advisory board is created to advise the office on the transmission needs assessment and transmission system enhancement roadmap required under section 5 of this act and other policies that are consistent with the purposes of this chapter.
The seven members of the advisory board are as follows:
The director of the department, or the director's designee;
One member appointed by the governor with special knowledge of the public utility industry, as evidenced by a college degree or by experience, at least five years of which must be with the electric utility industry;
One member appointed by the governor with knowledge of land use planning and law;
One member appointed by the governor with expertise in clean energy development;
One member appointed by the governor with expertise in ratepayer protection;
One member appointed by the governor representing utility workers with expertise in building electrical transmission; and
One member appointed by the governor with experience financing large infrastructure projects.
No member must represent a person that owns or operates electric generating or transmission facilities.
Members of the advisory board appointed by the governor shall serve four-year terms. However, the governor must stagger the terms of six of the initial appointees for terms of one, two, and three years. At the end of the term, these members may be reappointed by the governor, or the governor may choose to appoint a new member.
Decisions of the advisory board require a simple majority vote of all the members on the board.
Members of the advisory board must elect a chair from among its membership to serve for a two-year period.
The advisory board must meet at least quarterly.
The office must provide staff support to the advisory board.
Members of the advisory board must receive reimbursement for travel expenses as provided by RCW 43.03.050 and 43.03.060.
The office must:
Develop a 20-year transmission needs assessment that identifies inefficiencies and deficits in the existing transmission system.
The needs assessment must:
Identify high-priority corridors that are needed to meet current and forecasted transmission demand, including whether new transmission lines could be built on existing rights-of-way;
Identify investments in existing transmission lines, such as grid-enhancing technologies and reconductoring with advanced conductors, to alleviate the need for new transmission lines;
Identify and evaluate nonwire alternatives that can reduce the need to build new transmission lines, such as demand response, energy storage, and energy efficiency; and
Align with the state energy strategy as defined in RCW 43.21F.025.
When developing the needs assessment, the office may consult the advisory board about using existing transmission plans developed by regional or federal entities.
The office must complete the first needs assessment by June 30, 2026, and then complete a needs assessment every five years thereafter;
Develop a transmission system enhancement roadmap that identifies specific actions and corresponding timelines to meet the needs identified in the transmission needs assessment.
The transmission system enhancement roadmap must prioritize actions based on the following criteria:
The capacity for the project to cost-effectively help meet Washington's clean electricity targets;
The least cost to ratepayers;
The least impact to natural and cultural resources on tribal lands; and
The least environmental impact.
The office must complete the first transmission system enhancement roadmap along with the transmission needs assessment by June 30, 2026, and then update the roadmap every two years thereafter;
Provide assistance to local governments and tribal governments that are permitting the construction and operation of electric transmission projects including, but not limited to, easily accessible information on advanced technologies in Washington;
Consult with bond counsel to identify the appropriate state bonding authority needed to improve capacity to develop electric transmission in Washington, including identifying the activities to be funded by electric transmission bonds. By October 1, 2026, the office must prepare request legislation to establish bonding authority for the office;
Submit a report of the office's activities to the governor and to the appropriate committees of the legislature by December 1, 2025, and annually every September 1st thereafter. The report may include legislative recommendations for providing additional authorities the office needs to expand electric grid capacity and reliability.
The office may:
Adopt rules as necessary to implement this chapter;
Exercise the power of eminent domain as outlined under the provisions of chapter 8.04 RCW only for land acquisition necessary to secure rights-of-way for new transmission corridors;
Enter into contracts and agreements;
Solicit and receive and expend gifts, grants, and donations;
Apply for and accept federal loans;
Enter into partnerships with public or private entities;
Engage in transmission planning activities with entities within and outside the state of Washington;
Lease, purchase, accept donations of, or otherwise own, hold, improve, or use any property;
Sell, lease, exchange, or otherwise dispose of any property;
Own electric transmission equipment and systems;
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Select a qualified transmission builder or operator, as defined by the office in rule, to build, finance, plan, acquire, maintain, and operate an electric transmission project;
Before developing or operating a project, the office must adopt criteria in rule for when the office may proceed to construction and operator as a builder and operator of last resort if there is not sufficient interest from existing utilities or independent transmission developers in developing infrastructure determined to be necessary to meet the goals of the office under this act; and
Sell a state-owned electric transmission project at any stage of development.
The office may sell a project to a utility serving customers in the state of Washington, a joint operating agency formed under RCW 43.52.360, the Bonneville power administration, an independent transmission developer, or an independent system operator.
Before selling a project, the office must adopt criteria in rule for developing a transparent process, issuing a competitive request for proposals, evaluating proposals, and selecting a project developer.
The office is not required to sell to the highest bidder. The office must adopt criteria in rule to determine when the office would continue developing or operating a project after receiving bids on a request for proposals if it determines, after a thorough internal examination, that it is in the best interest of the public to continue owning the project.
The electric transmission operating account is created in the state treasury. All receipts from appropriations made by the legislature, federal funds, or gifts or grants from the private sector or foundations and other sources must be deposited in the account. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used only for operating cost purposes consistent with this chapter.
The electric transmission capital account is created in the state treasury. All moneys received for the acquisition, sale, management, and administration of the office's duties under this chapter for electric transmission projects including, but not limited to, proceeds from the sale of land and/or improvements, interest earned on investments in the account, and all other revenue related to electric transmission projects created or acquired pursuant to this chapter must be deposited into the account. The account is authorized to receive fund transfers and appropriations from the general fund, as well as gifts, grants, and endowments from public or private sources as may be made from time to time. Moneys in the account may be spent only after appropriation. Expenditures from the account may be used by the director, or the director's designee, to reimburse management costs incurred by the office on electric transmission projects, for the acquisition of interests in land or other real property to be managed as electric transmission projects, and for all other nonoperating cost purposes consistent with this chapter.
Except where doing so would reveal critical state transmission assets, all nonfederal providers of transmission in Washington state must provide to the office as much information as the office deems necessary for conducting the transmission needs assessment and transmission system enhancement roadmap outlined in section 5 of this act.
The Bonneville power administration is encouraged to provide all necessary information to the office to conduct the transmission needs assessment and transmission system enhancement roadmap outlined in section 5 of this act.
Information provided to the office by transmission providers that is determined to be confidential by such transmission providers must be kept confidential by the office, used only in the aggregate for the transmission needs assessment and transmission system enhancement roadmap, and is not subject to disclosure under chapter 42.56 RCW.
The following utility-related actions are categorically exempt from compliance with this chapter as long as the actions occur within existing rights-of-way:
Upgrading or rebuilding an existing transmission line by reconductoring the line with advanced conductors as defined in section 2 of this act; and
Upgrading an existing transmission line with grid-enhancing technologies as defined in section 2 of this act.
For a project that is categorically exempt under section 10 of this act, the utility must notify the department of archaeology and historic preservation created in chapter 43.334 RCW and each federally recognized Indian tribe with usual and accustomed areas in the area where the right-of-way exists before commencing the project. The purpose of the consultation required under this section is to allow the utility to determine that there are no existing archaeological, cultural, or tribal resources in the right-of-way. The department of archaeology and historic preservation must ensure that consultation with such tribes occurs, and must determine if archaeological, cultural, or tribal resources are identified in an existing right-of-way. If any such resources are identified, the department of archaeology and historic preservation must ensure that the utility accounts for and protects the resources under chapter 27.53 RCW.
In establishing rates for each electrical company regulated under this title, the commission may allow an incentive rate of return on investment through December 31, 2040, on capital expenditures for grid-enhancing technologies and reconductoring with advanced conductors as defined in section 2 of this act that are deployed for the benefit of ratepayers on transmission owned and operated by the electrical company. The commission must consider and may adopt other policies to encourage increased deployment of electric transmission infrastructure improvements that increase the capacity of existing transmission infrastructure.
An incentive rate of return on investment under this section may be allowed only if the company chooses to pursue capital investments in grid-enhancing technologies or reconductoring with advanced conductors. In the case of an incentive rate of return on investment allowed under this section, an increment of up to two percent may be added to the rate of return on common equity allowed on the company's other investments.
The incentive rate of return on investment authorized in subsection (2) of this section applies only to projects which have been installed after July 1, 2025.
The incentive rate of return on investment increment pursuant to this section may be earned only for a period up to the depreciable life of the investment as defined in the depreciation schedules approved by the commission for review.
By December 31, 2027, the commission must provide an interim report to the appropriate committees of the legislature with recommendations on policies to encourage increased deployment of electric transmission infrastructure improvements that increase the capacity of existing transmission infrastructure as described in subsection (1) of this section. The commission must consider options to develop and include grid modernization performance metrics in performance-based ratemaking in the interim report.
By December 31, 2029, the commission must report to the appropriate committees of the legislature on the use of any incentives allowed under this section, the quantifiable impacts of the incentives on electric transmission deployment, and any recommendations to the legislature about further utility investments in electric transmission.
In establishing rates for each electrical company regulated under this title, the commission may allow a rate of return on investments made to upgrade transmission lines owned and operated by the Bonneville power administration where the electrical company has exclusive use to the transmission service provided on such lines.
(1) All earnings of investments of surplus balances in the state treasury shall be deposited to the treasury income account, which account is hereby established in the state treasury.
(1) All earnings of investments of surplus balances in the state treasury shall be deposited to the treasury income account, which account is hereby established in the state treasury.