SB 5401
In CommitteeSenate
Wholesale power purchases
Concerning wholesale power purchases by electric utilities under the Washington clean energy transformation act.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill requires Washington’s electric utilities to fully phase out coal-based power by December 31, 2025, while allowing recovery of related costs through rates. It updates definitions in the Clean Energy Transformation Act to clarify what counts as coal power, renewable energy, and related resources — especially for short-term power purchases and transmission infrastructure — and strengthens enforcement mechanisms.
- Requires all electric utilities to eliminate coal-fired resources from their electricity supply by December 31, 2025.
- Allows utilities to recover prudently incurred decommissioning and remediation costs for coal plants through regulated rates.
- Mandates accelerated depreciation schedules for coal-fired resources and qualified transmission lines, requiring full depreciation by December 31, 2025.
- Clarifies when electricity purchases from the Bonneville Power Administration are *not* considered coal-fired resources — specifically for short-term (≤3 months or ≤6 months for seasonal reliability) or unknown-source purchases.
- Expands definitions to clarify what counts as 'coal-fired resource', 'biomass energy', 'renewable resources', and 'energy transformation projects' — including electric vehicle infrastructure, home weatherization, and renewable natural gas.
- Requires utilities to comply with the coal phaseout or face administrative penalties under existing law (RCW 19.405.090).
Who is affected
- Electric utilities — Electric utilities (both investor-owned and consumer-owned) must phase out coal-based power by the end of 2025 and may recover certain costs through rates; they also face penalties for noncompliance.
- Electric customers, especially low-income households — Consumers may see changes in electricity rates due to recovery of decommissioning costs and potential investments in clean energy programs; low-income households may benefit from expanded energy assistance.
- State agencies (e.g., Department of Commerce, Utilities and Transportation Commission) — State agencies like the Department of Commerce, Utilities and Transportation Commission, and State Auditor will have expanded roles in oversight, rate-setting, and auditing related to clean energy transitions.
- Bonneville Power Administration — Bonneville Power Administration may see continued or adjusted power transactions with utilities, especially regarding coal-related power purchases excluded from the definition of 'coal-fired resource' under specific conditions.
Pro/Con Analysis
Stronger case for benefits
Potential Benefits (5)
The 2025 coal phaseout deadline eliminates the last major source of carbon-intensive electricity in Washington, significantly reducing greenhouse gas emissions and air pollutants (e.g., SO₂, NOₓ, particulates) that disproportionately affect vulnerable communities near coal plants and transmission corridors — especially in the Puget Sound and Columbia Basin regions.
EnvironmentPeopleRef: Sec. 2(1)(a) (coal phaseout deadline) and Sec. 1(7)(b)(ii) (exclusion of facilities subject to RCW 80.80.040(3)(c))The bill explicitly includes home weatherization, EV charging infrastructure, and renewable natural gas in 'energy transformation projects' — and defines 'low-income' broadly (≤80% AMI or ≤200% FPL) — enabling utilities to fund programs that directly reduce energy burden for low- and moderate-income households.
HousingPeopleRef: Sec. 1(15), (18), (24) (expansive definitions of 'energy assistance', 'energy transformation projects', and 'low-income')By expanding eligible 'energy transformation projects' to include agricultural bioenergy and renewable natural gas infrastructure, the bill supports rural jobs and new markets for farm waste — though benefits are likely concentrated among larger agribusinesses and utility-scale developers rather than small farms.
Business & EmploymentPeopleRef: Sec. 2(1)(a) and Sec. 1(18)(vi) (agricultural bioenergy and renewable natural gas projects)The bill’s alignment with environmental justice goals — by defining 'highly impacted communities' and mandating coal phaseout — reduces exposure to air pollution in overburdened areas, particularly communities of color and near industrial zones like the Puget Sound and Columbia River corridor.
Public SafetyPeopleRef: Sec. 1(22) ('Highly impacted community' definition) and Sec. 2(1)(a) (coal phaseout)Allowing rate recovery for decommissioning costs — while increasing short-term rates — helps ensure orderly, predictable retirement of coal plants, avoiding sudden rate spikes or service disruptions; combined with expanded energy assistance definitions, this supports vulnerable customers during the transition.
FinancialLean peopleRef: Sec. 2(1)(b) (rate recovery for decommissioning) and Sec. 1(15) (energy assistance definition)
Potential Concerns (5)
Utilities may recover prudently incurred decommissioning and remediation costs through regulated rates, and accelerated depreciation schedules may allow faster rate recovery — but this shifts costs to ratepayers in the short term, especially during the 2025 transition year, and may disproportionately affect low-income households who spend a higher share of income on electricity.
FinancialLean industryRef: Sec. 2(1)(a), (2); Sec. 1(29) (definition of 'Qualified transmission line')The bill allows utilities to purchase short-term power (≤3 or ≤6 months) from unknown or Bonneville sources — including coal-generated power — under specific reliability exceptions, potentially undermining the 2025 coal phaseout goal and exposing consumers to continued air pollution and associated health risks if utilities overuse these loopholes.
Public SafetyIndustryRef: Sec. 2(1)(a) (coal phaseout deadline) and Sec. 1(7)(b)(i) (exemptions for short-term purchases)Accelerated depreciation and rate recovery provisions primarily benefit investor-owned utilities by reducing their financial risk during plant retirement, but may reduce incentives for utilities to minimize decommissioning costs — potentially inflating costs passed to ratepayers.
Business & EmploymentLean industryRef: Sec. 2(1)(b) and Sec. 2(2) (rate recovery and accelerated depreciation)The provision allowing utilities to recover undepreciated investment in *any* retired fossil fuel resource — not just coal — creates a broad financial safety net for utilities that could be used to recover costs from retiring natural gas plants, potentially increasing future ratepayer obligations and delaying broader decarbonization.
FinancialLean industryRef: Sec. 2(3) (allowance for undepreciated investment recovery for fossil fuel assets)The Bonneville exemption allows utilities to continue sourcing coal-generated electricity indirectly through the federal agency — as long as the coal origin wasn’t known *at contract signing* — which weakens the bill’s environmental intent and may perpetuate coal dependence in the short term.
EnvironmentIndustryRef: Sec. 1(7)(b)(iii) (exemption for Bonneville purchases except where source is known to be coal at time of contract)
Who Is Most Affected
Investor-owned utilities (e.g., PSE, Avista) benefit from reduced financial risk via rate recovery and accelerated depreciation, but face compliance deadlines and potential penalties — net positive impact due to cost pass-through and regulatory certainty.
Low-income and vulnerable households may benefit from expanded energy assistance and reduced air pollution, but face higher electricity bills during the 2025 transition unless assistance programs are well-funded and targeted.
The Bonneville Power Administration gains flexibility to continue coal-adjacent transactions without violating the letter of the law, but may face reputational and regulatory scrutiny if coal-derived power remains a significant part of its supply.
Rural communities and agribusinesses may benefit from new markets for bioenergy and renewable natural gas, but small-scale farmers may lack capital to participate in utility-funded programs without third-party support.
State agencies (Commerce, UTC, Ecology) gain expanded oversight and enforcement roles, increasing their policy influence but also administrative burden — net neutral to slightly positive.