Hydropower tax incentive bill approved by Senate

February 17, 2020

Dear Friends and Neighbors,

I am very excited to share that the State Senate tonight approved my Senate Bill 6012, a hydropower tax incentive bill that helps acknowledge hydropower’s important role in providing clean energy in Washington state. Securing improved tax treatment for hydropower has been a top legislative priority for me and hydropower supporters for the past couple of years.

The bill, approved today in an amended form, could significantly benefit Chelan County PUD and its customer-owners in the years ahead as they prepare for major modifications to existing generating units at both Rocky Reach Dam and Rock Island Dam. Representatives from Chelan County PUD have been working closely with me and our other 12^th District legislators over the past several months to craft tax incentive legislation to benefit Chelan County PUD customers and our state hydropower system.

Chelan PUD General Manager Steve Wright (right) discusses hydropower issues with Senator Reuven Carlyle (D-Seattle), chair of the Senate’s Energy, Environment and Technology Committee, and me during a recent tour of Rocky Reach Dam. Senator Carlyle and I co-sponsored the Senate amendment to Senate Bill 6012 to implement state sales tax incentives for oil-free hydropower.

Hydropower tax incentive bill receives bipartisan support and State Senate approval

Senate Bill 6012 was approved with a 39-9 vote and included a compromise amendment co-sponsored by me and Senator Reuven Carlyle (D-Seattle), to provide an exemption from the state sales tax for utilities that refurbish hydroelectric plants with oil-free turbine blades, likely to improve environmental conditions by reducing oil impacts in the Columbia River. The tax exemption, as approved by the Senate, does not apply to the local portion of the sales tax, which is an important revenue source to county governments.

My first version of Senate Bill 6012 was introduced last year as an effort to promote equal tax treatment between hydropower clean energy sources and non-hydro clean energy sources, such as wind and solar. Securing passage of a hydropower tax bill from the Senate was a “heavy lift” and has been one of the most challenging efforts of my legislative career. In the end, after over a year of discussions involving different ideas, my colleagues and I were able to come to an agreement in the Senate.

The 12^th District is home to numerous dams, including both federal and PUD projects. The Wells Hydroelectric Project, near Pateros, is owned and operated by Douglas PUD. Last session, I worked closely with Douglas PUD to secure passage of SB 5588, related to the production and distribution of PUD renewable hydrogen.

Hydropower legislation benefits from local PUD influence and a 12th District team effort

I would like to thank Chelan County PUD General Manager Steve Wright and his staff, who have been working alongside me since the beginning of the 2019 legislative session on the issue of hydropower tax treatment. Steve even traveled over to testify for SB 6012 last year before the Senate Ways and Means Committee. Working on this issue has been quite a learning experience for everyone involved. Steve was recently interviewed by local radio and asked about hydropower tax incentive legislation. You can click on this link to listen to a segment of his KPQ radio interview.

SB 6012’s legislative journey is far from over because the bill also needs to clear the House of Representatives. The bill’s revenue impacts – approximately $2 million per year – must also be accounted for in the final state supplemental operating budget. My 12^th District colleagues, Representatives Keith Goehner and Mike Steele, co-sponsored oil-free hydro legislation earlier this session in the House of Representatives. To learn more about Chelan PUD’s proposal, click here for a recent Wenatchee World article. Successful passage of the idea will be a 12th District legislative team effort, and hydropower’s success in the Legislature will require our collective support.

Thank you to the Washington PUD Association for honoring me with their “Legislative Champion” award last fall for my work on SB 5588 (renewable hydrogen) and SB 6012 (hydropower tax incentives). I am proud to support our Washington PUDs and am thankful for the progress we have made in recent years.

Senate's bipartisan approval acknowledges hydropower's benefit to clean energy 

You may recall that the Legislature approved a “100 percent clean electricity” bill last year, which was heralded among my colleagues and promoted nationally, but our state can’t achieve such a level of clean energy without our renewable hydropower. Last year’s energy bill extended tax benefits to all of the state’s other clean energy sources, so I’m thankful my colleagues are now recognizing the need to include a hydropower tax incentive as well. I will keep you informed about this legislative effort as the session progresses.

Thank you for the opportunity to serve as your state senator.

Sincerely,

Brad Hawkins

State Senator Brad Hawkins
12th Legislative District
E-mail: brad.hawkins@leg.wa.gov 

Website: senatorbradhawkins.org

107 Newhouse Building - P.O. Box 40412 | Olympia, WA 98504-0412
(360) 786-7622 or Toll-free: (800) 562-6000