In 2006, the government of Washington State introduced an energy efficiency obligation for all sectors except transport using electricity. Obligated parties include public, municipally owned and investor-owned utilities with more than 25 000 customers in Washington must meet "all cost-effective electricity conservation." Utilities establish five- and ten-year outlooks, and two-year targets to meet "all cost-effective electricity conservation." Average of about 1.4% incremental electricity savings per year. Conservation target for 2014-15 for all 17 obligated utilities amounted to 1 480 450 MWh over two years. Eligible energy efficiency measures include any reduction in energy consumption resulting from increases in the efficiency of energy use, production, or distribution. Includes end-use energy efficiency, highefficiency customer-side co-generation for own use; transmission and distribution system efficiency; production efficiency. Savings calculations are based on deemed savings, unless a utility can demonstrate that a company-developed savings value is more appropriate than a regional value. Obligated parties report to Regulator on goals and savings achieved, and are audited for compliance by the Washington State Auditor. Savings must be measured using the Northwest Power and Conservation Council's deemed savings database, unless the utility can demonstrate that that a company developed savings value is more appropriate than a regional value. Utilities pay a penalty of USD 50 for each MWh of shortfall, adjusted annually (since 2007) to account for inflation and GDP. The utility has three months to notify customers of the fined amount and reasons for missing the target. Pass-through of penalty cost to consumers is subject to administrative approval. Penalties are collected into a special fund, and can only be spent on renewable energy development and conservation at public facilities, local government facilities, community colleges, or state universities.