Subject of Possible Rule Making: The Washington utilities and transportation commission (commission) commences this inquiry to examine whether the commission should consider adopting new regulations relating to the acquisition of renewable resources by Washington's investor-owned electric utilities. In addition to exploring the possible adoption of rules, the commission will examine other means of policy expression on this general subject, including a possible interpretative and policy statement under RCW 34.05.230(1).

     Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 80.01.040, 80.04.160, 34.05.220, and 34.05.230.

     Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: Chapter 19.285 RCW sets renewable portfolio standards for Washington investor-owned electric utilities. Specifically, RCW 19.285.060 charges the commission with the determination of an investor-owned utility's compliance with the provisions of chapter 19.285 RCW, which includes the acquisition of renewable resources. The commission believes that utility-specific proceedings, with their narrow sets of circumstances, may not be the proper vehicle for the commission to consider a full range of policy options.

     Specifically, the commission will review and discuss, with the participation and assistance of utilities, representatives of ratepayers, and other stakeholders:

     •     The progress of investor-owned utilities in meeting the renewable portfolio standards set by the Energy Independence Act (Initiative 937), chapter 19.285 RCW;

     •     Whether the existing statutory and regulatory frameworks impede compliance with renewable portfolio standards requirements;

     •     Whether the statutory and regulatory frameworks should encourage acquisition of renewable resources in excess of that required by the renewable portfolio standards;

     •     Whether the commission should consider adopting rules or new regulatory practices that would provide incentives for utilities and customers to acquire renewable resources; and

     •     Whether the commission should propose any legislative changes relative to incentives for acquisition of renewable resources by utilities and customers.

     The commission intends to include in the inquiry consideration of externalities associated with nonrenewable resources that may impact utility and commission decision making, the impact of encouraging acquisition of renewable resources on other rate-making practices including evaluation of a utility's rate of return, and the impact of further development of renewable resources on consumer rates.

     Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: Under E2SHB 2658, signed into law on April 1, 2010, and pursuant to a directive from the governor, the Washington department of commerce will develop an energy strategy for the state of Washington. Pursuant to section 401 of that legislation, the legislature found "... the world has started the transition to a clean energy economy, with significant improvements in energy efficiency and investments in new clean and renewable energy resources and technologies ... this transition may increase or decrease energy costs and efforts should be made to mitigate cost increases." The commission envisions working closely with the department of commerce in the development of the state's energy strategy as well as in this inquiry.

     Process for Developing New Rule:      Agency study; and the commission will ask for initial written comments, and will provide the opportunity for participation in two work sessions as well as opportunities for additional comments.

     Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication. Interested persons may file comments with the Executive Director and Secretary, Washington Utilities and Transportation Commission, P.O. Box 47250, 1300 South Evergreen Park Drive S.W., Olympia, WA 98504-7250, phone (360) 664-1174, fax (360) 586-1150, by 5:00 p.m., Friday, June 11, 2010.

     WRITTEN COMMENTS AND STAKEHOLDER WORK SESSIONS: Written comments may be submitted to the commission at the address given above and should be filed with the commission no later than July 22, 2010. Reply comments may be filed no later than August 5, 2010. There also will be opportunity to participate in at least two work sessions, on June 22, 2010, and August 18, 2010, related to this inquiry. A proposed "statement of issues" may be submitted by June 11, 2010, by interested parties for the commission to consider during the work sessions. Notice of these work sessions, and other opportunities to participate, will be distributed by notice to persons wishing to be included on the service list and posted on the commission's web site.

     The commission requests that comments be provided in electronic format to enhance public access, for ease of providing comments, to reduce the need for paper copies, and to facilitate quotations from the comments. Comments may be submitted via the commission's web portal at www.utc.wa.gov/e-filing or by e-mail to the commission's records center at records@utc.wa.gov. Please include:

     •     The docket number of this proceeding (UE-100849).

     •     The commenting party's name.

     •     The title and date of the comment or comments.

     An alternative method for submitting comments may be by mailing/delivering an electronic copy on a 3 1/2-inch, IBM-formatted, high-density disk, using Adobe Acrobat pdf format or in Word 97 or later. Include all of the information requested above. The commission will post on the commission's web site all comments that are provided in electronic format. The web site is located at www.utc.wa.gov/100849. If you are unable to file your comments electronically or to submit them on a disk, the commission will always accept a paper document.

     Information about the schedule and other aspects of the rule making, including comments, will be posted on the commission's web site as it becomes available. If you wish to receive further information on this rule making you may (1) call the commission's records center at (360) 664-1234, (2) e-mail the commission at <records@utc.wa.gov>, or (3) mail written comments to the address above to the attention of David W. Danner, executive director and secretary. When contacting the commission, please refer to Docket UE-100849 to ensure that you are placed on the appropriate service list. Questions may be addressed to Danny Kermode, (360) 664-1253 or e-mail at dkermode@utc.wa.gov.

May 19, 2010

David W. Danner

Executive Director and Secretary

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