Initiative Measure No. 2066 concerns regulating energy services, including natural gas and electrification. This measure would repeal or prohibit certain laws and regulations that discourage natural gas use and/or promote electrification, and require certain utilities and local governments to provide natural gas to eligible customers.
Should this measure be enacted into law?
[ ] Yes
[ ] No
The Secretary of State is not responsible for the content of statements or arguments (WAC 434-381-180).
Written by the Office of the Attorney General
Earlier this year, the Washington Legislature passed a law that regulates Puget Sound Energy (PSE), a large utility that provides gas and electricity to customers. That law is known as the “Washington Decarbonization Act.”
The Decarbonization Act consolidates PSE’s numerous reporting and planning requirements into a single plan, which must be submitted to the Washington Utilities and Transportation Commission (UTC). The plan must forecast customer energy demand and provide proposals for reducing greenhouse gas emissions from its operations. PSE’s plan must explain how it will transition from natural gas to electricity in a cost-effective way and how it will coordinate with local utilities when it targets an area for further electrification.
In deciding whether to accept or reject the plan, the UTC must consider whether it reduces greenhouse gas emissions, meets energy efficiency targets, and results in a reasonable cost to customers.
The Decarbonization Act further prohibits PSE from offering customers rebates or incentives to buy appliances that use natural gas. Instead, PSE must educate its customers about the benefits of transitioning to electricity and the availability of rebates or incentives for energy efficient electric appliances.
The Decarbonization Act also sets requirements for how the UTC determines rates for PSE customers. For example, it would change how the UTC must calculate the depreciation of gas plants when determining rates.
If approved, Initiative Measure No. 2066 would repeal or amend certain provisions of the Decarbonization Act. Specifically, Initiative Measure No. 2066 would prohibit PSE rate plans that restrict access to gas service and any planning requirements that render gas service cost-prohibitive. It would allow PSE to offer rebates to purchase natural gas appliances or equipment and PSE would not be required to educate customers about the benefits of electrification or the availability of rebates for energy efficient appliances. It would also remove requirements that PSE target certain areas for electrification and coordinate with local utilities to further electrification.
Written by the Office of Financial Management
For more information visit www.ofm.wa.gov/ballot
If voters approve Initiative 2066, there will be a net increase in state costs for rulemaking activities at state agencies of approximately $29,100. There could be an increase in state revenues due to gas utilities needing to purchase additional carbon auction allowances and increased public utility tax revenue, but the amount of increased revenue is unknown. Local governments will have increased costs to redo some Growth Management Act planning work, but the total costs of doing so are indeterminate. Two cities that operate gas utilities could have increased costs for carbon auction allowances, but those costs are also indeterminate.
Department of Ecology
Under the Climate Commitment Act, the Department of Ecology administers the Cap-and-Invest Program, which sets a cap on overall carbon emissions in the state and requires businesses to obtain carbon emission allowances equal to their covered greenhouse gas emissions. Under the program, any gas utility that is responsible for 25,000 metric tons or more of carbon dioxide-equivalent emissions per year is required to acquire emissions allowances equal to its emissions. Gas utilities currently receive free emission allowances to help ease the cost burden of transitioning away from fossil fuels. In 2024, the utilities receive emission allowances.
| Agency | SFY 2025 | SFY 2026 | SFY 2027 | SFY 2028 | SFY 2029 |
|---|---|---|---|---|---|
| State Building Code Council | $5,400 | $43,700 | $0 | $0 | $0 |
| Utilities and Transportation Commission | ($20,000) | $0 | $0 | $0 | $0 |
| TOTAL | ($14,600) | $43,700 | $0 | $0 | $0 |
You deserve the choice to use clean and efficient natural gas for heating and cooking. The state and big energy companies are striking deals to ban natural gas service from all homes and businesses. I-2066 protects your ability to use natural gas – giving you control over your energy choices.
Gas bans will impact everybody, whether you own or rent your home. They drive up energy bills, which is devastating for people with low and fixed incomes. Current law requires homeowners to pay all conversion costs to switch from gas to electric appliances – an average of $40,000/home. Nobody should ever be forced to switch to all-electric appliances. Voting “Yes” on I-2066 stops forced conversions and lets people choose for themselves whether they want gas or electric appliances at home.
Thousands of businesses rely on natural gas. Countless restaurants, breweries, cultural cuisines, manufacturers, and others require gas to make the world-class food and products Washington is known for. I-2066 keeps these businesses open, protects jobs, and brings down costs for consumers.
Protect access to heating and cooking when the power goes out. Corporate energy companies have notified customers they will cut electricity when (not if) the electric grid is overloaded, even in the cold, dark winter. Washington needs clean and reliable natural gas to stay warm and cook. Vote “Yes!”
2066 would mean more expensive energy bills. It would require utility companies to continue investing in outdated technology and aging infrastructure, and the costs would be passed onto families and businesses. Voting “No” will make energy more affordable, protecting all Washingtonians, including seniors and families living on low incomes.
2066 would roll back sensible modern standards that make homes and businesses more energy efficient. Efficient buildings lower utility bills and help the power stay on during storms, extreme weather, and increasing heat waves. Voting “No” will lower costs for families, keep people safe, keep homes comfortable, and ensure a reliable power supply.
2066 would undermine our path to clean energy and weaken our Clean Air Act, threatening health protections against harmful air pollution. It would prohibit local communities and utility companies from making responsible plans to reduce the use of dirty fossil fuels. The time to start planning is now: Voting “No” will keep us on the path to cleaner, more affordable energy.
2066 is part of a nationwide effort by fossil fuel corporations and well-funded interest groups who want to make as much money as possible while Washington families pay higher energy bills. Voting “No” will prevent powerful interests from increasing their profits at our expense. 2066 is bad for Washington.
I-2066 is very simple. It protects your choice to have natural gas service. The opposition wants to confuse you. They don’t mention natural gas because they know it’s a popular consumer choice. They want to ban this clean energy source and have you pay the costs. What will you do when the power goes out? Gas bans are already happening, so vote “Yes” on I-2066 to protect the option of gas for heating and cooking.
State law already guarantees people can have natural gas if they want it. The powerful interest groups paying for 2066 will say anything to make money off of us. What this confusing initiative would actually do is stop towns, cities, and counties from making decisions that work best for their communities. It would raise costs, threaten energy efficiency, and harm families. That’s why nurses, small businesses, and builders say vote “No” to protect energy affordability.
Contact: (360) 352-7800; contact@protectenergychoice.com; ProtectEnergyChoice.com
Contact: (206) 981-3896; info@no2066.org; www.no2066.org
Language in double parentheses with a line through it is existing state law; it will be taken out of the law if this measure is approved by voters.
Underlined language does not appear in current state law but will be added to the law if this measure is approved by voters.
Initiative Measure No. 2066
AN ACT Relating to promoting energy choice by protecting access to gas for Washington homes and businesses; amending RCW 80.28.110, 35.92.050, 80.28.425, 80.—.---, 19.27A.020, 19.27A.025, and 19.27A.045; adding a new section to chapter 35.21 RCW; adding a new section to chapter 36.01 RCW; adding a new section to chapter 70A.15 RCW; creating a new section; repealing RCW 80.—.---, 80.—.---, and 80.—.---; and repealing 2024 c 351 ss 1 and 21 (uncodified).
BE IT ENACTED BY THE PEOPLE OF THE STATE OF WASHINGTON:
(1) The people find that having access to natural gas enhances the safety, welfare, and standard of living of all people in Washington. The people further find that preserving Washington’s gas infrastructure and systems will promote energy choice, security, independence, and resilience throughout the state. Natural gas is a convenient and important necessity because it:
(2) Unfortunately, due to recent policy and corporate decisions, the people’s ability to make choices about their energy sources is at risk. Therefore, the people determine that access to gas and gas appliances must be preserved for Washington homes and businesses, by strengthening utilities’ obligation to provide natural gas to customers who want it, and by preventing regulatory actions that will limit access to gas.
RCW 80.28.110 and 2024 c 348 s 6 are each amended to read as follows:
(1) Every gas company, electrical company, wastewater company, or water company, engaged in the sale and distribution of gas, electricity, or water, or the provision of wastewater company services, shall, upon reasonable notice, furnish to all persons and corporations who may apply therefor and be reasonably entitled thereto, suitable facilities for furnishing and furnish all available gas, electricity, wastewater company services, and water as demanded, except that:
(2) Every gas company or large combination utility shall provide natural gas to all persons and corporations in their service area or territory that demand, apply for, and are reasonably entitled to receive, natural gas under this section, even if other energy services or energy sources may be available.
RCW 35.92.050 and 2022 c 292 s 405 are each amended to read as follows:
(1) A city or town may also construct, condemn and purchase, purchase, acquire, add to, alter, maintain, and operate works, plants, facilities for the purpose of furnishing the city or town and its inhabitants, and any other persons, with gas, electricity, green electrolytic hydrogen as defined in RCW 54.04.190, and other means of power and facilities for lighting, including streetlights as an integral utility service incorporated within general rates, heating, fuel, and power purposes, public and private, with full authority to regulate and control the use, distribution, and price thereof, together with the right to handle and sell or lease, any meters, lamps, motors, transformers, and equipment or accessories of any kind, necessary and convenient for the use, distribution, and sale thereof; authorize the construction of such plant or plants by others for the same purpose, and purchase gas, electricity, or power from either within or without the city or town for its own use and for the purpose of selling to its inhabitants and to other persons doing business within the city or town and regulate and control the use and price thereof.
(2) A city or town that furnishes natural gas shall provide natural gas to those inhabitants that demand, apply for, and are reasonably entitled to receive, natural gas under this section, even if other energy services or energy sources may be available.
RCW 80.28.425 and 2024 c 351 s 18 are each amended to read as follows:
(1) Beginning January 1, 2022, every general rate case filing of a gas or electrical company must include a proposal for a multiyear rate plan as provided in this chapter. The commission may, by order after an adjudicative proceeding as provided by chapter 34.05 RCW, approve, approve with conditions, or reject, a multiyear rate plan proposal made by a gas or electrical company or an alternative proposal made by one or more parties, or any combination thereof. The commission’s consideration of a proposal for a multiyear rate plan is subject to the same standards applicable to other rate filings made under this title, including the public interest and fair, just, reasonable, and sufficient rates. In determining the public interest, the commission may consider such factors including, but not limited to, environmental health and greenhouse gas emissions reductions, health and safety concerns, economic development, and equity, to the extent.
Such factors affect the rates, services, and practices of a gas or electrical company regulated by the commission.
The commission may approve, disapprove, or approve with modifications any proposal to recover from ratepayers up to five percent of the total revenue requirement approved by the commission for each year of a multiyear rate plan for tariffs that reduce the energy burden of low-income residential customers including, but not limited to:
(a) If it approves a multiyear rate plan, the commission shall separately approve rates for each of the initial rate year, the second rate year and, if applicable, the third rate year, and the fourth rate year. (b) The commission shall ascertain and determine the fair value for rate-making purposes of the property of any gas or electrical company that is or will be used and useful under RCW 80.04.250 for service in this state by or during each rate year of the multiyear rate plan. For the initial rate year, the commission shall, at a minimum, ascertain and determine the fair value for rate-making purposes of the property of any gas or electrical company that is used and useful for service in this state as of the rate effective date. The commission may order refunds to customers if property expected to be used and useful by the rate effective date when the commission approves a multiyear rate plan is in fact not used and useful by such a date. (c) The commission shall ascertain and determine the revenues and operating expenses for rate-making purposes of any gas or electrical company for each rate year of the multiyear rate plan. (d) In ascertaining and determining the fair value of property of a gas or electrical company pursuant to (b) of this subsection and projecting the revenues and operating expenses of a gas or electrical company pursuant to (c) of this subsection, the commission may use any standard, formula, method, or theory of valuation reasonably calculated to arrive at fair, just, reasonable, and sufficient rates. (e) If the commission approves a multiyear rate plan with a duration of three or four years, then the electrical company must update its power costs as of the rate effective date of the third rate year. The proceeding to update the electrical company’s power costs is subject to the same standards that apply to other rate filings made under this title.
Subject to subsection (5) of this section, the commission may by order establish terms, conditions, and procedures for a multiyear rate plan and ensure that rates remain fair, just, reasonable, and sufficient during the course of the plan.
Notwithstanding subsection (4) of this section, a gas or electrical company is bound by the terms of the multiyear rate plan approved by the commission for each of the initial rate year and the second rate year. A gas or electrical company may file a new multiyear rate plan in accordance with this section for the third rate year and fourth rate year, if any, of a multiyear rate plan.
If the annual commission basis report for a gas or electrical company demonstrates that the reported rate of return on rate base of the company for the 12-month period ending as of the end of the period for which the annual commission basis report is filed is more than .5 percent higher than the rate of return authorized by the commission in the multiyear rate plan for such a company, the company shall defer all revenues that are in excess of .5 percent higher than the rate of return authorized by the commission for refunds to customers or another determination by the commission in a subsequent adjudicative proceeding. If a multistate electrical company with fewer than 250,000 customers in Washington files a multiyear rate plan that provides for no increases in base rates in consecutive years beyond the initial rate year, the commission shall waive the requirements of this subsection provided that such a waiver results in just and reasonable rates.
The commission must, in approving a multiyear rate plan, determine a set of performance measures that will be used to assess a gas or electrical company operating under a multiyear rate plan. These performance measures may be based on proposals made by the gas or electrical company in its initial application, by any other party to the proceeding in its response to the company’s filing, or in the testimony and evidence admitted in the proceeding. In developing performance measures, incentives, and penalty mechanisms, the commission may consider factors including, but not limited to:
Nothing in this section precludes any gas or electrical company from making filings required or permitted by the commission.
The commission shall align, to the extent practical, the timing of approval of a multiyear rate plan of an electrical company submitted pursuant to this section with the clean energy implementation plan of the electrical company filed pursuant to RCW 19.405.060.
The provisions of this section may not be construed to limit the existing rate-making authority of the commission.
The commission may require a large combination utility as defined in RCW 80.—.--- (section 2, chapter 351, Laws of 2024) to incorporate the requirements of this section into an integrated system plan established under RCW 80.—.--- (section 3, chapter 351, Laws of 2024).
The commission shall not approve, or approve with conditions, a multiyear rate plan that requires or incentivizes a gas company or large combination utility to terminate natural gas service to customers.
The commission shall not approve, or approve with conditions, a multiyear rate plan that authorizes a.
(4) By January 1, 2027, and on a timeline set by the commission thereafter, large combination utilities shall file an integrated system plan demonstrating how the large combination utilities’ plans are consistent with the requirements of this chapter and any rules and guidance adopted by the commission, and which:
(a) Achieve the obligations of all plans consolidated into the integrated system plan;
(b) Provide a range of forecasts, for at least the next 20 years, of projected customer demand that takes into account econometric data and addresses changes in the number, type, and efficiency of customer usage;
(c) Include scenarios that achieve emissions reductions for both gas and electric operations equal to at least their proportional share of emissions reductions required under RCW 70A.45.020;
(d) Include scenarios with emissions reduction targets for both gas and electric operations for each emissions reduction period that account for the interactions between gas and electric systems;
(e) Achieve two percent of electric load annually with conservation and energy efficiency resources, unless the commission finds that a higher target is cost-effective. However, the commission may accept a lower level of achievement if it determines that the requirement in this subsection (4)(e) is neither technically nor commercially feasible during the applicable emissions reduction period;
(f) Assess commercially available conservation and efficiency resources, including demand response and load management, to achieve the conservation and energy efficiency requirements in (e) of this subsection, and as informed by the assessment for conservation potential under RCW 19.285.040 for the planning horizon consistent with (b) of this subsection. Such an assessment may include, as appropriate, opportunities for development of combined heat and power as an energy and capacity resource, demand response and load management programs, and currently employed and new policies and programs needed to obtain the conservation and efficiency resources. The value of recoverable waste heat resulting from combined heat and power must be reflected in analyses of cost-effectiveness under this subsection;
(g) Achieve annual demand response and demand flexibility equal to or greater than 10 percent of winter and summer peak electric demand, unless the commission finds that a higher target is cost-effective. However, the commission may accept a lower level of achievement if it determines that the requirement in this subsection (4)(g) is neither technically nor commercially feasible during the applicable emissions reduction period;
(h) Include low-income electrification programs that must:
(i) Include rebates and incentives to low-income customers and customers experiencing high energy burden for the deployment of high-efficiency electric-only heat pumps in homes and buildings currently heating with wood, oil,
Establish that the large combination utility has:
Propose an action plan outlining the specific actions to be taken by the large combination utility in implementing the integrated system plan following submission;
Report on the large combination utility’s progress towards implementing the recommendations contained in its previously filed integrated system plan.
In evaluating the lowest reasonable cost of decarbonization measures included in an integrated system plan, large combination utilities must apply a risk reduction premium that must account for the applicable allowance ceiling price approved by the department of ecology pursuant to the climate commitment act, chapter 70A.65 RCW. For the purpose of this chapter, the risk reduction premium is necessary to ensure that a large combination utility is making appropriate long-term investments to mitigate against the allowance and fuel price risks to customers of the large combination utility.
The clean energy action plan must:
A large combination utility shall consider the social cost of greenhouse gas emissions, as determined by the commission pursuant to RCW 80.28.405, when developing integrated system plans and clean energy action plans. A large combination utility must incorporate the social cost of greenhouse gas emissions as a cost adder when:
Plans developed under this section must be updated on a regular basis, on intervals approved by the commission.
To maximize transparency, the commission may require a large combination utility to make the utility’s data input files available in a native format. Each large combination utility shall publish its final plan either as part of an annual report or as a separate document available to the public. The report may be in an electronic form.
The commission shall establish by rule a cost test for emissions reduction measures achieved by large combination utilities to comply with state clean energy and climate policies. The cost test must be used by large combination utilities under this chapter for the purpose of determining the lowest reasonable cost of decarbonization and low-income electrification measures in integrated system plans, at the portfolio level, and for any other purpose determined by the commission by rule.
The commission must approve, reject, or approve with conditions an integrated system plan within 12 months of the filing of such an integrated system plan. The commission may for good cause shown extend the time by 90 days for a decision on an integrated system plan filed on or before January 1, 2027, as such date is extended pursuant to subsection (2)(a) of this section.
In determining whether to approve the integrated system plan, reject the integrated system plan, or approve the integrated system plan with conditions, the commission must evaluate whether the plan is in the public interest, and includes the following:
The equitable distribution and prioritization of energy benefits and reduction of burdens to vulnerable populations, highly impacted communities, and overburdened communities;
Long-term and short-term public health, economic, and environmental benefits and the reduction of costs and risks;
Health and safety concerns;
Economic development;
Equity;
Energy security and resiliency;
Whether the integrated system plan:
(12) The commission shall not approve, or approve with conditions, an integrated system plan that requires or incentivizes a large combination utility to terminate natural gas service to customers.
(13) The commission shall not approve, or approve with conditions, an integrated system plan that authorizes a large combination utility to require a customer to involuntarily switch fuel use either by restricting access to natural gas service or by implementing planning requirements that would make access to natural gas service cost-prohibitive.
(1) The state building code council in the department of enterprise services shall adopt rules to be known as the Washington state energy code as part of the state building code.
(2) The council shall follow the legislature’s standards set forth in this section to adopt rules to be known as the Washington state energy code. The Washington state energy code shall be designed to:
(a) Construct increasingly energy efficient homes and buildings (that help achieve the broader goal of building zero fossil-fuel greenhouse gas emission homes and buildings) by the year 2031;
(b) Require new buildings to meet a certain level of energy efficiency, but allow flexibility in building design, construction, and heating equipment efficiencies within that framework; and
(c) Allow space heating equipment efficiency to offset or substitute for building envelope thermal performance.
(3) The Washington state energy code may not in any way prohibit, penalize, or discourage the use of gas for any form of heating, or for uses related to any appliance or equipment, in any building.
(4) The Washington state energy code shall take into account regional climatic conditions. One climate zone includes: Adams, Asotin, Benton, Chelan, Columbia, Douglas, Ferry, Franklin, Garfield, Grant, Kittitas, Klickitat, Lincoln, Okanogan, Pend Oreille, Skamania, Spokane, Stevens, Walla Walla, Whitman, and Yakima counties. The other climate zone includes all other counties not listed in this subsection. The assignment of a county to a climate zone may not be changed by adoption of a model code or rule. Nothing in this section prohibits the council from adopting the same rules or standards for each climate zone.
(5) The Washington state energy code for residential buildings shall be the 2006 edition of the Washington state energy code, or as amended by rule by the council.
(6) The minimum state energy code for new nonresidential buildings shall be the Washington state energy code, 2006 edition, or as amended by the council by rule.
(7) (a) Except as provided in (b) of this subsection, the Washington state energy code for residential structures shall preempt the residential energy code of each city, town, or county in the state of Washington.
(b) The state energy code for residential structures does not preempt a city, town, or county’s energy code for residential structures which exceeds the requirements of the state energy code and which was adopted by the city, town, or county prior to March 1, 1990. Such cities, towns, or counties may not subsequently amend their energy code for residential structures to exceed the requirements adopted prior to March 1, 1990.
(8) The state building code council shall consult with the department of enterprise services as provided in RCW 34.05.310 prior to publication of proposed rules. The director of the department of enterprise services shall recommend to the state building code council any changes necessary to conform the proposed rules to the requirements of this section.
(9) The state building code council shall evaluate and consider adoption of the international energy conservation code in Washington state in place of the existing state energy code.
(10) The definitions in RCW 19.27A.140 apply throughout this section.
(1) The minimum state energy code for new and renovated nonresidential buildings, as specified in this chapter, shall be the Washington state energy code, 1986 edition, as amended. The state building code council may, by rule adopted pursuant to chapter 34.05 RCW, RCW 19.27.031, and RCW 19.27.---, 19.27.---, and 19.27.--- (sections 6, 7, and 8, chapter 170, Laws of 2024), amend that code’s requirements for new nonresidential buildings provided that:
(a) Such amendments increase the energy efficiency of typical newly constructed nonresidential buildings; and
(b) Any new measures, standards, or requirements adopted must be technically feasible, commercially available, and developed to yield the lowest overall cost to the building owner and occupant while meeting the energy reduction goals established under RCW 19.27A.160.
(2) In considering amendments to the state energy code for nonresidential buildings, the state building code council shall establish and consult with a technical advisory group in accordance with RCW 19.27.--- (section 7, chapter 170, Laws of 2024) including representatives of appropriate state agencies, local governments, general contractors, building owners and managers, design professionals, utilities, and other interested and affected parties.
(3) Decisions to amend the Washington state energy code for new nonresidential buildings shall be made prior to December 15th of any year and shall not take effect before the end of the regular legislative session in the next year. Any disputed provisions within an amendment presented to the legislature shall be approved by the legislature before going.