S-508                 _______________________________________________

                                                   SENATE BILL NO. 5215

                        _______________________________________________

State of Washington                              50th Legislature                              1987 Regular Session

By Senator Williams

Read first time 1/20/87 and referred to Committee on Energy & Utilities.

AN ACT Relating to the utilities and transportation commission; and adding a new section to chapter 80.28 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1.  A new section is added to chapter 80.28 RCW to read as follows:

          (1) Except as provided in subsection (3) of this section, the commission shall not consider, in determining the valuation of a company's property or assets or the expenses of a company or otherwise for the purpose of setting rates, any costs of a utility plant unless that plant is used and useful as provided in RCW 80.04.250.

          (2) Except as provided in subsection (3) of this section, the commission shall not consider in determining the valuation or expenses of a company any costs of a used and useful utility plant that are in excess of the least cost alternative.

          (3) The commission may consider in determining the valuation or expenses of a company any costs that would otherwise be excluded by subsection (1) or (2) of this section if, before the plant's construction and after notice to customers of the company, the commission (a) approves construction of the plant, (b) finds that the plant is expected to be the least cost alternative, and (c) establishes a risk-sharing plan for the plant.  The risk-sharing plan shall state the method by which any costs that would otherwise be excluded by subsection (1) and (2) of this section will be allocated between the company and its customers.

          (4) As used in this section:

          (a) "Company" means electrical company, gas company, or water company.

          (b) "Least cost alternative" means the combination of generating resources, improvements in efficiency of end use, and changes in rate structure that would satisfy the demand of the company's customers at the lowest total cost.