CETA: A Brief Overview
The Clean Energy Transformation Act (CETA) applies to all electric utilities serving retailcustomers in Washington and sets specific milestones to reach the required 100% clean
electricity supply. The first milestone is in 2022, when each utility must prepare and publish aclean energy implementation plan with its own targets for energy efficiency and renewableenergy.
By 2025, utilities must eliminate coal-fired electricity from their state portfolios. The first 100%
clean standard applies in 2030. The 2030 standard is greenhouse gas neutral, which means
utilities have flexibility to use limited amounts of electricity from natural gas if it is offset byother actions. By 2045, utilities must supply Washington customers with electricity that is 100%
renewable or non-emitting, with no provision for offsets.
CETA includes safeguards to protect consumers from excessive rates or unreliable service.
Utilities may adopt a slower transition path if necessary to avoid rate shock, and they must
improve assistance programs for low-income households. The law provides for short-term
waivers of the standards if needed to protect reliability.

Many Agencies and Stakeholders
CETA is a complex law requiring transformation of an essential service, electricity. Manyagencies and stakeholders are working together to achieve its objectives. Commerce will work
closely with the Utilities and Transportation Commission (UTC), which regulates the rates andservice of investor-owned utilities. Other state agencies include the State Auditor and thedepartments of Ecology and Health.
More than 60 electric utilities must comply with CETA. Interested stakeholders include businesscustomers, low-income and vulnerable communities, consumers, environmental advocates andrenewable energy developers.

Key Roles for Commerce
CETA includes many responsibilities for Commerce. Often the additional work builds on theagency’s role in leading energy policy development and its role in the existing clean energy law,the Energy Independence Act (EIA, also known as I-937).
Assessing energy burden and energy assistance (Sec. 12). Commerce will be collecting
information on the energy assistance offered by electric utilities, the energy burden of
low-income households and the need for more assistance. Starting in 2020, we willpublish a statewide summary and evaluate the effectiveness of assistance mechanisms.
Commerce will work closely with advocates for vulnerable populations, low-income
households and utilities.

Engaging stakeholders on state energy strategy and programs (Sec. 22 and 23).
Commerce will convene two broad-based policy development groups. The Energy
Strategy Advisory Committee will review state strategies, in particular the alignment ofCETA with the state’s greenhouse gas reduction targets. The Energy and Climate Policy
Advisory Committee will review energy programs. These committees will complete workby the end of 2020.

Establishing reporting requirements for utilities (Sec. 10). By 2021, Commerce will
adopt formal rules for all electric utilities to report compliance with the planning andstandards of CETA. These reports will be aligned with existing EIA reports andrequirements to publish integrated resource plans.

Adopting cost methodology rules (Sec. 6). CETA protects customers from cost
increases of more than 2% per year. Commerce and the UTC will develop rules by 2021
to define this mechanism and the costs that count toward this limit. Commerce will
establish a greenhouse gas cost value that consumer-owned utilities will use in planningand resource decisions.

Improving wholesale market mechanisms (Sec. 13). Commerce and the UTC will
adopt rules by 2022 for verification and reporting of power transactions within thegrowing organized western wholesale market. The rules will ensure that clean energy is
not double-counted between Washington and states with carbon cap and trade programs.

Monitoring the impact of CETA on electric reliability and rates (Sec. 8). Beginningin 2024, Commerce will prepare a detailed report to the Legislature on the effects ofCETA. The report will assess both anticipated rate impacts and any effects on thereliability of the electric grid. Commerce will work closely with the UTC, utilities,regional planning and reliability organizations, as well as interested stakeholders.