AN ACT Relating to electric suppliers; and adding a new chapter to Title 54 RCW.

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

NEW SECTION. Sec. 1. The purpose of this chapter is to further the public interest, welfare, and safety, by prohibiting suppliers of electric utility services from duplicating electric facilities, prohibiting the pirating of customers of another supplier, prescribing certain procedures having the intention of encouraging investment in permanent facilities, minimizing unnecessary construction, and otherwise encouraging cooperation between suppliers of electrical service. The legislature declares that it is in the public interest that cooperation of suppliers of electrical service be fostered and encouraged by limiting or eliminating certain pernicious practices and circumstances.

NEW SECTION. Sec. 2. Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Public utility" means an electric utility regulated by the Washington utilities and transportation commission.

(2) "Cooperative" means a cooperative corporation furnishing electric service in the state of Washington to its consumer-members who own and operate the cooperative and includes a mutual corporation furnishing electric service in the state of Washington to its shareholders.

(3) "Municipality" means any municipal corporation or quasi-municipal corporation, including public utility districts, furnishing electric service to its citizens in the state of Washington.

(4) "Supplier" means any public utility, cooperative, mutual corporation, or municipality supplying or intending to supply electric service to a consumer.

(5) "Electric service" mean electricity furnished to an ultimate consumer by a supplier.

(6) "Consumer" is any person, firm, corporation, or other entity that has received, is receiving, or intends to receive electric service at a specific service entrance, or at the premises thereof.

(7) "Service entrance" means the entrance of electric service from facilities of the supplier to the service equipment or utilization equipment of the consumer. In determining "service entrance" reference shall be made to the definition of "entrance of the service to the service equipment or utilization equipment" as defined in the national electrical code of 1987.

(8) "New service entrance" means a service entrance or premises not previously served with electricity. A change, improvement, replacement, enlargement, or change in location of a service entrance shall not be deemed a new service entrance if utilized to serve any service, utilization equipment, or premises previously served with electricity from a former service entrance, but for this chapter shall be deemed a former service entrance. A change in consumer shall not be construed to make an existing service entrance or premises thereof a new service entrance. A change, enlargement, or other modification of service or utilization equipment served from an existing service entrance shall not be construed to make it a new service entrance.

(9) "Transmission line" means any electric line of a supplier for carrying a voltage of sixty-nine KV or more.

(10) "Service line" means any electric line of a supplier for carrying less than sixty-nine KV and used or capable of use to provide electric services for a consumer.

(11) "Existing service line" means any electric service line in existence at the time of the event in question and constructed to supply one or more existing consumers that could be lawfully served by that supplier under this chapter. It shall not mean any service line constructed to obtain an advantage under this chapter, or to evade its purpose or terms.

(12) Premises of an electric service entrance shall include all contiguous property under one ownership upon which a service entrance is located.

(13) "Service area" means an area where an electrical supplier has existing service lines and has furnished electric service, and where another supplier has not previously had service lines providing electric service.

(14) A project under common ownership, or common control, such as business parks, industrial parks, shopping centers, housing developments, and similar projects, shall be deemed to be one premises under this chapter.

(15) "Just compensation" means (a) the present-day reproduction cost, new, of the facilities being acquired, less depreciation computed on a thirty-five-year straight line basis, plus (b) an amount equal to the diminution in value of facilities which were constructed to service or support the acquired facilities, but which will be made useless, redundant, oversized, or excess to the reasonable requirements of the supplier to serve the system of the supplier outside of the condemned, annexed, or newly incorporated area, the computation being based upon the present day reproduction cost, new, of such facilities, less depreciation computed on a thirty-five-year straight line basis, plus (c) an amount equal to the cost of constructing any necessary facilities to reintegrate the system of the supplier outside of the condemned, annexed, or newly incorporated area after detaching the portion within the condemned, annexed, or newly incorporated area, plus (d) an amount payable annually on the anniversary date of the severance for ten years following the severance, equal in amount to twenty-five percent of the gross revenues received from power sales to consumers of electric power within the geographic area served by the supplier prior to condemnation, annexation, or incorporation this amount to be in lieu of all other sums or consequential damages otherwise payable upon acquisition.

NEW SECTION. Sec. 3. No electric supplier may construct or extend facilities, nor make any electric connections, nor permit any connections to be made to any of its facilities for the purpose of supplying electric service, nor may it supply or furnish electric service to any electric service entrance, nor the premises thereof, that is then or had at any time previously been connected for electric service to facilities of another electric supplier without the written consent of such other electric supplier if (1) the other electric supplier is then or was previously the last supplier, lawfully connected to the electric service entrance or the premises thereof, and (2) the other electric supplier is willing and able to provide adequate electric service.

NEW SECTION. Sec. 4. (1) In the event more than one electric supplier is willing and able to provide adequate electric service to a consumer at any new electric service entrance or premises thereof, an agreement under chapter 54.48 RCW shall govern; in the absence of an agreement under chapter 54.48 RCW covering the service entrance or premises thereof, the following rules shall govern:

(a) If no electric supplier has an existing service line within one thousand three hundred and twenty feet of the new service entrance, the consumer shall have the right of choice of supplier.

(b) If only one electric supplier has an existing service line within one thousand three hundred and twenty feet of the new service entrance, that supplier shall have the right to serve the consumer at the new service entrance.

(c) If more than one electric supplier has an existing service line within one thousand three hundred and twenty feet of the new service entrance, the supplier whose existing service line is nearest the new service entrance shall have the right to serve the consumer at the new service entrance.

(d) If more than one electric supplier has an existing service line within one thousand three hundred and twenty feet of the new service entrance and the existing service lines are equidistant from the new service entrance, then the consumer shall have the right of choice of supplier.

(e) To discourage the prebuilding of facilities for the purpose of becoming artificially the nearest party to anticipated entrances, only existing service lines which are or were constructed to serve actual and existing consumers at the time of construction shall be considered in the application of these rules.

(2) No electric supplier may construct or extend facilities, nor make any electric connections, nor permit any connection to be made from any of its facilities to any new service entrance nor may it supply electric service to any new service entrance in violation of this chapter or rules adopted pursuant to it without the written consent of any electric supplier with a prior right, under either an agreement under chapter 54.48 RCW or this chapter, to serve the consumer at the new service locations.

NEW SECTION. Sec. 5. The provisions of this chapter are in addition to those in chapter 54.48 RCW. The provisions of an agreement made between two electric suppliers pursuant to chapter 54.48 RCW, whether made prior to or subsequent to the effective date of this section, shall supersede any provision in this chapter.

NEW SECTION. Sec. 6. In the event an area is included as a result of incorporation or annexation within the boundaries of a city or town after the effective date of this section, any public utility and any cooperative organized for the purpose of furnishing electric service to its members or consumers only, furnishing electric service or operating electric facilities in such area before such inclusion, shall, unless the city or town acquire such facilities pursuant to section 7 of this act, and subject to sections 3 and 4 of this act, have the right to continue and extend the furnishing of electric services in the area, and to use public streets, alleys, and thoroughfares, or such portion of the annexed area as is designated on the recorded plat for the installation of utilities, for such purpose. The public utility or cooperative shall comply with all lawful and reasonable safety requirements and the laws of the state of Washington and nondiscriminatory ordinances of the city or town as to the manner of constructing and maintaining electrical facilities therein.

NEW SECTION. Sec. 7. (1) In the event the annexing city or town has been furnishing electric service to its residents at the time of the annexation, or thereafter commences the furnishing of such service to its residents, nothing in this chapter prevents the city or town from extending its service to the annexed or incorporated area upon the payment of just compensation to such public utility or cooperative serving such area before annexation, for any property, real or personal, including damages to the remainder of the system, if any, of such cooperative or public utility, used in distribution, transmission or supply of electric energy to such area before annexation. As used in this section, just compensation includes consideration of new installations necessarily made between the time of annexation or incorporation and final settlement.

(2) If the annexed area was previously served by a cooperative, no extension may be made by the city or town except upon the following conditions:

(a) Until the terms and conditions of such extension, including just compensation, have been finally determined by voluntary agreement between the annexing city or town and the servicing cooperative; or

(b) In the event that such voluntary agreement cannot be made within ninety days of the date of incorporation or annexation of such territory served by the cooperative, then the city or town may, if so determined by unanimous vote of its governing body, submit to the qualified electors of such city or town upon a special ballot to be voted upon at the next regular election of such city or town, the question "Shall portions of the .......... of .......... , Washington, which have heretofore been served electrical energy by .......... become a part of the electrical system of the!sc ,1@be!sc ,3(city or town)!sc ,3@ee!sc ,1of .......... , Washington? Said areas are generally known and described as follows: (Insert description)."

(3) A majority of the votes cast on the special ballot shall be in favor of the proposition in order to approve the transaction on the part of the city or town. Upon approval by the city or town, the cooperative shall promptly submit either by mail or at an annual or special meeting to its members the question of whether the board of such cooperative shall be authorized to sell its facilities in the affected area to the city or town upon payment of just compensation, to be agreed upon, or if agreement is not reached, upon compensation determined as provided for in this section. A two-thirds majority of the votes cast at the cooperative election shall be in favor of the proposition in order to approve the transaction on the part of the cooperative. At least fifteen days before the vote by the members of the cooperative association, the association shall submit to the city or town a list of members eligible to vote and the city or town may submit to the members a written statement of the reasons for the transfer to electric service by the city or town. No transfer may occur unless the voters of both the city or town and the cooperative approve the proposal by the majorities stated in this subsection.

(4) If agreement cannot be reached upon the amount of just compensation, the matter shall be submitted to the superior court of a county adjacent to the county wherein the city or town is located for the purpose of fixing and determining the amount of just compensation. The court may appoint not more than two experts to advise the court, and the costs of the action, including fees of such experts, shall be taxed equally to the parties.

(5) Either party may appeal from the decision of the court in the same manner that other appeals are taken. No transfer of facilities may be made until the amount of compensation has been finally determined and paid.

NEW SECTION. Sec. 8. Before the extension of lines or service into the service area of a public utility district or an electrical cooperative, a public utility district, cooperative, or public utility proposing to extend its lines shall bargain in good faith pursuant to the terms of chapter 54.48 RCW. In the absence of agreement between the concerned parties, the lines shall not be extended so as to duplicate service already available and existing within a service area. In the event of condemnation by a public utility district of property or facilities of a cooperative or public utility, the price to be paid shall be just compensation.

NEW SECTION. Sec. 9. Nothing contained in this chapter may be construed to:

(1) Grant the Washington utilities and transportation commission jurisdiction over cooperatives or municipalities;

(2) Apply to controversies between two or more public utilities;

(3) Preclude any electric supplier from extending electric service to its own property or facilities or to another electric supplier for resale, provided any line extension made under this subsection shall not be considered in determining the rights of suppliers to serve new service entrances under section 4 of this act.

NEW SECTION. Sec. 10. (1) Any consumer of electricity who feels aggrieved with his or her present electric service may apply to the superior court of the county of his or her residence for an order to show cause why he or she should not be permitted to change supplier. If the court finds and concludes that the electric service is inadequate and will not likely be made adequate or that the rates are unreasonable and will not likely be made reasonable, the court may authorize the change to the new supplier.

(2) The present and prospective electric suppliers shall both be made parties to any suit under this section.

(3) This section and any order issued under it shall not be construed to grant any franchise or right to a public utility or cooperative to commence electric service within a municipality where it does not already have a franchise or right.

(4) This chapter applies as between electric service suppliers and shall not be construed to effect or impair the contractual rights, duties, and obligations between a cooperative and its members. The right of a cooperative to set the terms and conditions of termination of membership of its members is retained.

NEW SECTION. Sec. 11. (1) An electric supplier whose rights under this chapter are violated or threatened with violation shall be entitled to injunctive relief against the violator upon proper complaint and proof in accordance with Washington rules of civil procedure in superior court, against the other electric supplier and any other person responsible for the violation.

(2) In any suit for injunctive relief, findings and conclusions by the court that any rules under this chapter have been violated or threatened to be violated shall require findings and conclusions by the court of actual or threatened irreparable injury as to the electric supplier whose rights are violated or threatened with violation as a basis for equitable relief.

(3) The injunctive relief to be granted under this section for violation of this chapter shall be negative in form, enjoining further acts in violation of rules; shall be affirmative in form in requiring removal of any electric connections, facilities, or equipment that constitute the violation; and may be any combination thereof necessary to enforce compliance with this chapter.

(4) Any aggrieved party may also pursue any other remedy provided by law, including compensatory and consequential damages.

(5) The prevailing party in any such action shall be entitled to its reasonable attorneys' fees.

NEW SECTION. Sec. 12. A public utility district is fulfilling its public purpose in making electrical service available to its electors by entering into agreements with electrical cooperatives for the sale of electricity to such cooperative whereby the effect of such agreement will be the indirect provision of public utility district electricity to the public utility district electors at a rate less than the electrical cooperative can provide the same to the electors. Upon request of an electrical cooperative serving electors of a public utility district, that public utility district shall bargain in good faith with any electrical cooperative serving the electors of that public utility district, and the public utility district is hereby authorized and encouraged to enter into agreements with such electrical cooperatives whereby public utility district electrical energy is provided only to the electors of the public utility district through the cooperative at a price equal to:

(1) The price for such electrical service that would be charged to like customers of the public utility district; plus

(2) Such reasonable surcharge as may be reflected by any increased cost of serving the electors receiving such electrical service, such as distance and geographical, geological, and demographic factors, which may be applicable to the electors receiving such service; plus

(3) Such margin, not to exceed seven percent, as is reasonable under the circumstances for the cooperative after taking into account its investment in plant and equipment, at current reproduction cost new less straight-line depreciation;

(4) In no event may the rate to such customers exceed the rate charged by the cooperative to its like customers.

NEW SECTION. Sec. 13. This chapter may be known and cited as the electric supplier stabilization act.

NEW SECTION. Sec. 14. Sections 1 through 13 of this act shall constitute a new chapter in Title 54 RCW.

NEW SECTION. Sec. 15. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.