Legislators contemplated a number of significant changes to the broader energy policy landscape this legislative session, balancing Washington’s ambitious goal to transition away from fossil fuel reliance by 2045 with this year’s considerable state budget constraints. The items most directly affecting cities centered on practical changes to existing law aimed at encouraging ongoing work on emissions reductions and climate resilience and incentivizing small to mid-scale clean energy projects.

HB 1543 created flexibility in the state’s Clean Buildings Performance Standard (CBPS). The bill allows the Department of Commerce to develop alternative compliance standards, consistent with national energy efficiency standards, and to grant extensions for building owners who need more time to meet the standards due to circumstances beyond their control.

As a reminder to readers, the Legislature adopted the Clean Buildings Act in 2019 to reduce greenhouse gas emissions and energy consumption in large commercial and multifamily residential buildings. Mandatory compliance with the performance standard applies to buildings of 20,000 sq. ft. or larger, with compliance deadlines phasing in beginning June 1, 2026.

The bill also provides new exemptions for schools facing financial hardship, public hospitals that lack the debt capacity to cover the cost of compliance, and situations where meeting the Standard would impair the historic integrity of the building or national security interests.

In other good news for cities, funding for AWC’s energy audit grant (funded by Climate Commitment Act revenues in the capital budget, SB 5195), was extended through FY 2026. This will allow AWC to continue assisting cities with large commercial buildings in conducting energy audits, thereby taking the first steps towards compliance with the CBPS.

SB 5445 makes changes to a different area of law, creating additional incentives for a new list of distributed energy priorities (DEPs) under the Energy Independence Act. DEPs include renewable energy projects within existing easements or rights of way or existing transmission corridors, those located above irrigation ditches, reservoirs, or parking lots, or at a transportation facility or landfill, and agrivoltaics projects. Utilities that develop projects or engage in “accelerated energy conservation” are eligible for renewable energy credits (RECs) equivalent to four times the facility’s output under the Act. The bill also creates new SEPA exemptions for some DEP project types.

State budgets provided grants through the Department of Commerce to continue moving the clean energy transition forward. The capital budget (SB 5195) provides $10M in grants to local governments (and other public entities) to support energy retrofits to public buildings that result in energy and operational cost savings. Twenty percent of the funding is dedicated to cities and towns with a population of 5,000 residents or less. The operating budget (SB 5167) sets aside $5 million for grants to cities and other public entities to support the siting and permitting of clean energy projects.

Finally, two bills of interest did not pass but stakeholder work is expected to continue on both, and they are likely to return before the Legislature. HB 1015 allows cities to require an owner of a single-family residence to obtain a home energy performance report and make it publicly available prior to advertising the home for sale. The Department of Commerce would develop a standardized form for the reports, which would need to be prepared by a qualified home energy auditor certified through the U.S. Department of Energy. HB 1458 was Washington’s first attempt to tie the concept of embodied carbon emissions to a building performance standard, to create another pathway through which building owners may reduce emissions. Embodied carbon is the amount of greenhouse gas emissions associated with the production stages, including extraction, transport, and manufacturing, of a product’s, or material's, life.