Senate committee approves Hawkins bill providing tax parity for hydropower

A recently introduced bill by 12th District Sen. Brad Hawkins that seeks to put hydroelectric power on equal tax footing with other renewable energy sources has cleared a key legislative hurdle.

The Senate Ways and Means Committee yesterday approved Senate Bill 6012. The proposal would add hydropower as a qualifying renewable energy source that receives a renewable energy sales and use tax exemption. The exemption could apply to the state portion of the sales and use taxes for machinery and equipment utilized in the replacement of hydroelectric generating units, which are currently planned or underway for many of the Mid-Columbia public utility district hydroelectric facilities, such as those owned by Chelan, Grant, and Douglas PUDs. The estimated savings in sales taxes could be over $22 million to those PUDs over the 10 years’ length of the tax exemptions in Hawkins’ proposal.

Yesterday, the committee held a public hearing on SB 6012 and approved it with an amendment that hydro operators qualifying for the tax exemption would need to demonstrate that their hydro investments resulted in additional electricity output. During his testimony on the bill, Hawkins told the panel his proposal is about the fundamental issue of fairness and equal treatment.

“Our state prides itself in clean energy and has extended tax preferences to everything but hydropower – wind, solar, geothermal, biomass, tidal, you name it. But not hydropower,” said Hawkins. “Hydropower provides a significant amount of reliability. We can’t even contemplate being a 100 percent clean energy state without hydropower. If we are going to provide tax preferences for all of our other energy sources, then I think the time is now to also provide this tax preference to hydropower.” 

Chelan Public Utility District General Manager Steve Wright testified in favor of SB 6012, as did officials with Tacoma Power, International Brotherhood of Electrical Workers, Washington Public Utility Districts Association, Avista, and Cowlitz PUD. Another 41 people signed up in support of the bill but did not testify.    

Hawkins’ bipartisan proposal now goes to the Senate Rules Committee, the final hurdle before a full Senate vote. The state operating budget, not yet finalized, would need to consider the bill’s fiscal impact if approved.

(Editor’s note: Here is a link to TVW’s coverage of the testimony on SB 6012 yesterday.)