Distributed energy resources (DERs) play an increasingly vital role in modernizing energy ‎systems and achieving sustainability goals. Regulatory frameworks and policy priorities in both Oregon and Washington‎ facilitate the integration of DERs into the grid. This article provides a general overview of the regulatory scheme that governs DERs in Oregon and Washington, and ‎highlights key programs and policies that promote their development and integration. Such practices ‎include revised interconnection rules, ‎emerging battery energy storage initiatives, and community solar programs.

What Is Distributed Energy Generation?‎

DERs produce electricity at or near the point of ‎consumption, and utilize technologies such as solar photovoltaic, wind turbines, ‎combined heat and power systems, and battery energy storage systems (BESS). ‎Unlike centralized generation, DER projects connect directly to lower voltage distribution ‎networks or form part of localized microgrids to improve efficiency, reduce transmission ‎losses, and facilitate energy reliability.‎

Under WAC 480-100-605, Washington defines DERs as a resource that “reduces electric demand, manages the level or timing of electricity consumption, or provides storage, electric energy, capacity, or ancillary services to an electric utility and that is located on the distribution system, any subsystem of the distribution system, or behind the customer meter, including conservation and energy efficiency.”

DERs in Oregon

Oregon Community Solar Program

The Oregon Community Solar Program, governed by OAR Chapter 860, Division 88, illustrates the state’s commitment to equitable access to renewable energy. Established in 2016, the program is administered by the Oregon Public Utilities Commission (OPUC) and provides customers of Portland General Electric, Pacific Power, and Idaho Power with the option to receive utility bill credits in exchange for subscribing to an approved community solar project. This furthers DERs by expanding access to customers who are unable to invest in their own rooftop solar system, by providing opportunities to fund community solar projects—which may take the form of a larger solar system on a business, school, or church.

Interconnection Rules Supporting DER

On March 8, 2024, OPUC adopted modernized interconnection rules under Rule 24-069. These updates are designed to simplify and accelerate the process of connecting DERs such as solar and BESS installations to the electricity grid. As they pertain to DERs, Oregon’s updated interconnection rules:

• Smart Inverters: Require all new DERs systems that apply for interconnection to utilize smart inverters compliant with IEEE 1547-2018 ‎standards, in order to ensure grid reliability and optimal DERs performance.‎ Notably, smart inverters enable the grid to accommodate increased levels of renewable energy with fewer equipment updates.
• Streamlined Screening: Replace outdated capacity screening metrics with more accurate criteria that account for the total amount of electricity a project could export to the grid. Define varying interconnection review processes that result in streamlined review for DERs projects.
• Recognition of Non-Export and Limited-Export Projects: Recognize a new class of clean-energy projects, which may include DERs, that export limited or no electricity to the grid. Oregon’s updated interconnection rules provide a tailored review process for such ‎projects, to reduce unnecessary delays.‎

Battery Energy Storage Systems That Unlock DERs Potential

BESS installations collect energy from the grid or generation facilities (such as DERs), store it using rechargeable batteries, and discharge it later to provide electricity when needed. This increases the viability of DERs projects by allowing storage of locally generated energy from DERs, which can be utilized later. BESS installations smooth out fluctuations in electricity supply and ensure a consistent power source close to the point of consumption.

Effective June 6, 2024, Oregon House Bill 4015 promotes BESS projects by establishing streamlined siting and regulatory processes. For example, HB 4015 provides BESS developers the option to have the Energy Facility Siting Council oversee the siting process. It also allows BESS projects to be constructed without a separate site certificate if they are subject to the certificate of another energy facility.

Proposed Legislation – SB 92

Introduced on January 13, 2025, Oregon Senate Bill 92 would allow a community solar project with a nameplate capacity of 5 MW or less to participate in Oregon’s Community Solar Program, among other provisions. If adopted, SB 92 will increase the program’s capacity, the flexibility of project locations, and customer subscriptions. As of February 25, 2025, SB 92 is under consideration by the Senate Energy and Environment Committee.

DERs in Washington

The Distributed Energy Resources Planning Act (HB 1126)

Passed in 2019, Washington’s Distributed Energy Resources Planning Act recognizes the proliferation of DERs in Washington and establishes a framework for utilities to integrate DERs into their planning processes and energy mix over the coming years.

The act requires utilities to identify gaps that might impede their planning processes, and make updates as needed, to accurately assess the value of DERs on their distribution systems. The act also encourages utilities to locate programs that fairly compensate utility customers for the value of their DERs projects. Furthermore, it encourages utilities to formulate a ten-year plan for distribution system improvements, including non-wire alternatives to major transmission and distribution investments, and to include DERs resources in their integrated resource plans.

Starting on January 1, 2026 and repeating every four years thereafter, the act requires the legislature to conduct a review of the state’s DERs policies, determine how many utilities are engaged in DERs planning processes, and decide whether the state’s DERs goals ought to be expanded or amended.

Washington Community Solar Program

Codified under WAC 480-103‎, Washington’s Community Solar Program establishes rules to govern community solar companies and their responsibilities to consumers, in order to expand access to shared renewable projects while ensuring consumer protection and operational transparency. The Washington Utilities and Transportation Commission oversees community solar initiatives throughout the state.

Integrated Resource Planning and DERs

Aligned with the broader goals of HB 1126, Washington also requires its utilities to incorporate DERs considerations into their Integrated Resource Planning (IRP) processes, as outlined in WAC 480-100-620, including an assessment of the costs and benefits of a variety of DERs.

For example, the Washington-based utility Avista’s 2025 Draft IRP emphasizes the growing significance of DERs in its energy strategy, and predicts an increase in customer-installed solar photovoltaic systems and BESS projects. The IRP notes that such increases will contribute to grid stability and back-up power solutions. Interestingly, Avista’s IRP also describes a proposed combined microgrid and BESS “small-scale power system,” which would operate “independently from the traditional grid to serve critical loads when source power is interrupted.”

Proposed Legislation – House Bill 1847 ‎

Introduced on February 5, 2025, House Bill 1847 ‎is aimed at “[p]rioritizing the development of distributed alternative energy resources in targeted circumstances.” HB 1847 would require utilities with more than 25,000 customers to establish annual targets for the retail sale of electricity from DERs. At a minimum, such utilities must establish a target of at least 10% of their clean-energy targets, with the goal of promoting localized energy production. As of February 25, 2025, HB 1847 is under consideration by the House Finance Committee.

Takeaways for Utilities and DERs Developers

Both Oregon and Washington have taken action to advance the integration and regulation of DERs in recent years. In Oregon, the adoption of interconnection improvements ‎streamlines the interconnection process for DERs, while programs for community solar and BESS projects open new markets and possibilities.‎ Similarly, Washington’s combination of legislative tools and programs such ‎as the Distributed Energy Resources Planning Act, its updated integrated resource planning rules, and the Community Solar Program foster conditions ‎conducive to the expansion of DERs in the coming years.

This article summarizes aspects of the law and does not constitute legal advice. For legal ‎advice with regard to your situation, you should contact an attorney.‎