WSR 12-11-131

PROPOSED RULES

UTILITIES AND TRANSPORTATION

COMMISSION

[ Docket UW-120246 -- Filed May 23, 2012, 10:25 a.m. ]

Original Notice.

Title of Rule and Other Identifying Information: WAC 480-110-205 Application of rules and 480-110-255 Jurisdiction.

Hearing Location(s): Commission Hearing Room 206, Second Floor, Richard Hemstad Building, 1300 South Evergreen Park Drive S.W., Olympia, WA 98504-7250, on July 27, 2012, at 1:30 p.m.

Date of Intended Adoption: July 27, 2012.

Submit Written Comments to: Washington Utilities and Transportation Commission, 1300 South Evergreen Park Drive S.W., P.O. Box 47250, Olympia, WA 98504-7250, e-mail records@utc.wa.gov, fax (360) 586-1150, by June 25, 2012. Please include: "Docket UW-120246" in your comments.

Assistance for Persons with Disabilities: Contact Debbie Aguilar by July 20, 2012, TTY (360) 586-8203 or (360) 664-1132.

Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: On April 26, 2012, MacKaye Harbor Water Company, Inc. (MacKaye) filed with the Washington utilities and transportation commission (commission) a petition, pursuant to RCW 34.05.330, requesting the commission initiate a rule making to amend WAC 480-110-205 Application of rules and 480-110-255 Jurisdiction, to increase the maximum average annual revenue per customer used to determine commission jurisdiction over water companies from $471 to $557. The commission currently regulates investor-owned water companies that serve one hundred or more customers, or have average annual revenue of more than $471 per customer. The commission entered Order 01 on May 17, 2012, granting the petition and directing the filing of a proposed rule making (CR-102) in accordance with RCW 34.05.330 (1)(b).

Reasons Supporting Proposal: The requested rule making is beneficial to, or requested or supported by, the small businesses that it affects. The proposed rules would benefit small water companies (less than one hundred customers in the aggregate). Such companies should not be subject to commission jurisdiction unless their size or average annual revenues justify regulation. The revenue figure in the existing rule no longer reflects an appropriate jurisdictional threshold, and revising that amount would be beneficial to the small water companies that the commission currently does not regulate.

Statutory Authority for Adoption: RCW 80.01.040, 80.04.160, and 80.04.110.

Statute Being Implemented: Not applicable.

Rule is not necessitated by federal law, federal or state court decision.

Name of Proponent: Washington utilities and transportation commission, governmental.

Name of Agency Personnel Responsible for Drafting: Penny Ingram, 1300 South Evergreen Park Drive S.W., Olympia, WA 98504, (360) 664-1249; Implementation and Enforcement: David W. Danner, 1300 South Evergreen Park Drive S.W., Olympia, WA 98504, (360) 664-1208.

No small business economic impact statement has been prepared under chapter 19.85 RCW. The proposed rules will not result in or impose any costs; therefore a small business economic impact statement is not required under RCW 19.85.030(1).

A cost-benefit analysis is not required under RCW 34.05.328. The commission is not an agency to which RCW 34.05.328 applies. The proposed rules are not significant legislative rules of the sort referenced in RCW 34.05.328(5).

May 23, 2012

David W. Danner

Executive Director

and Secretary

OTS-4795.1


AMENDATORY SECTION(Amending Docket No. UW-040375, General Order No. R-519, filed 4/4/05, effective 5/5/05)

WAC 480-110-205   Application of rules.   The rules in this chapter apply to any water company that distributes, sells, or supplies water, and that meets requirements for commission regulation or jurisdiction under RCW 80.04.010 and WAC 480-110-255 (Jurisdiction). This includes investor-owned water companies that meet the jurisdictional threshold of serving one hundred or more customers or have average revenue of more than ((four)) five hundred ((seventy-one)) fifty-seven dollars per customer per year.

[Statutory Authority: RCW 80.01.040, 80.04.160 and 80.04.010. 05-08-099 (Docket No. UW-040375, General Order No. R-519), 480-110-205, filed 4/4/05, effective 5/5/05. Statutory Authority: RCW 80.01.040, 80.04.160, 81.04.160 and 34.05.353. 05-06-051 (Docket No. A-021178 and TO-030288, General Order No. R-518), 480-110-205, filed 2/28/05, effective 3/31/05. Statutory Authority: RCW 80.01.040. 99-24-100 (Order R-467, Docket No. UW-980082), 480-110-205, filed 11/30/99, effective 12/31/99.]


AMENDATORY SECTION(Amending Docket No. UW-040375, General Order No. R-519, filed 4/4/05, effective 5/5/05)

WAC 480-110-255   Jurisdiction.   (1) The commission only regulates investor-owned water companies that:

(a) Own, operate, control, or manage one or more water systems; except that control or management does not include management by a satellite management agency as defined in chapter 70.116 RCW if the satellite management agency is not an owner of the water company.

(b) Meet jurisdictional thresholds of one hundred or more customers, or have average revenue of more than ((four)) five hundred ((seventy-one)) fifty-seven dollars per customer per year.


If a water company serves customers and has average annual revenue per customer commission regulation
99 or less $((471)) 557 or less No
99 or less more than $((471)) 557 Yes
100 or more $((471)) 557 or less Yes
100 or more more than $((471)) 557 Yes

(2) The commission does not regulate the following providers of water service:

(a) Cities, towns, or counties.

(b) Public utility districts.

(c) Water districts.

(d) Local improvement districts.

(e) Homeowner associations, cooperatives and mutual corporations, or similar entities that provide service only to their owners or members.

(f) Homeowner associations, cooperatives and mutual corporations, or similar entities that provide service to nonmembers unless they serve one hundred or more nonmembers, or charge nonmembers more than ((four)) five hundred ((seventy-one)) fifty-seven dollars average annual revenue per nonmember.

(g) Entities or persons that provide water only to their tenants as part of the business of renting or leasing.

This may include:

(i) Apartment buildings.

(ii) Mobile home parks.

(iii) Manufactured home rental communities.

(iv) Office complexes.

(v) Commercial or industrial parks.

(3) To determine jurisdiction, the commission considers only those customers receiving water. The commission does not consider customers who do not receive water, such as customers who have paid:

(a) Water-availability letter fees.

(b) Standby charges.

(c) System-readiness fees.

(d) Ready-to-serve charges.

(4) To calculate the average annual revenue per customer, the commission considers only the charges that water-receiving customers are billed on a recurring basis, other than contributions in aid of construction. For example, this includes money billed for flat-rate service or the metered base-charge and all usage charges.

(a) The commission does not include charges billed to customers who do not receive water, such as:

(i) Water availability letter fees.

(ii) Standby charges.

(iii) System-readiness fees.

(iv) Ready-to-serve charges.

(b) The commission does not consider contributions in aid of construction in determining jurisdiction. These contributions can be money, services or property. Payments can be made in a lump sum or financed over time. Examples of contributions in aid of construction include payments for:

(i) Connection to system.

(ii) Meter installation.

(iii) System buy-in.

(iv) Facilities charges.

(v) Assessments for capital plant and equipment.

(5) The following example shows how to calculate the average annual revenue per customer for two hypothetical customers. The data for each customer are provided at the end of the example:

(a) Select the most recent twelve consecutive months.


Example: February 2004 through January 2005.

(b) For each customer who received water service during the twelve-month period, add the amount the customer was billed by the water company for items other than contribution in aid of construction items.


Example: Customer A billed $340.
Customer B billed $283.

(c) For each customer who received water service during the twelve-month period, add the number of months the customer received water service.


Example: Customer A received water service for twelve months.
Customer B received water service for nine months.

(d) Total the amount billed the customers during the twelve-month period.


Example:
Billed by the Water Company During the

Twelve-Month Period

Customer A $340
Customer B + $283
Total Billed During Twelve-

Month Period

$623

(e) Total the number of months each customer received water service.


Example:
Number of Months Received Water

Service During the

Twelve-Month Period

Customer A 12
Customer B + 9
Total Months Received Water Service During the Twelve-Month Period 21

(f) Calculate the "Average Monthly Revenue Per Customer": Divide the "Total Billed During the Twelve-Month Period" by the "Total Months Received Water Service During the Twelve-Month Period."


Example:
Total Billed During the Twelve-Month Period $623
Total Months Received Water Service During the Twelve-Month Period 21
Average Monthly Revenue Per Customer $29.67

(g) Calculate the "Average Annual Revenue Per Customer": Multiply the "Average Monthly Revenue Per Customer" times 12 months.


(A) Average Monthly Revenue Per Customer $29.67
Months in a Year x 12
(B) Average Annual Revenue Per Customer $356.04

DATA USED IN THE EXAMPLE

TO CALCULATE

AVERAGE ANNUAL REVENUE PER CUSTOMER

Example --

Customer A

Standby

Charge

Ready-to-

Serve

Charge

Connection

Charge

Facilities

Charge

Meter

Base

Charge

Meter

Usage

Charge

Receive Water Service

No No Yes Yes Yes Yes
Contribution in Aid

of Construction

No No Yes Yes No No
Total
Year Month Billed
2004 February $20 $4 $24
2004 March $20 $5 $25
2004 April $20 $2 $22
2004 May $25 $5 $30
2004 June $25 $6 $31
2004 July $25 $12 $37
2004 August $25 $6 $31
2004 September $25 $4 $29
2004 October $25 $4 $29
2004 November $25 $3 $28
2004 December $25 $2 $27
2005 January $25 $2 $27
$0 $0 $0 $0 $285 $55 $340

Number of months service 12
Not Receiving Water $0
Receiving Water - Contribution in Aid of Construction $0
Receiving Water - Other than Contribution in Aid of Construction $340
Total customer billed during period $340


DATA USED IN THE EXAMPLE

TO CALCULATE

AVERAGE ANNUAL REVENUE PER CUSTOMER

Example --

Customer B

Standby

Charge

Ready-to-

Serve

Charge

Connection

Charge

Facilities

Charge

Meter

Base

Charge

Meter

Usage

Charge

Receive Water Service

No No Yes Yes Yes Yes
Contribution in Aid

of Construction

No No Yes Yes No No
Total
Year Month Billed
2004 February $7 $7
2004 March $7 $7
2004 April $12 $12
2004 May $300 $4,500 $25 $5 $4,830
2004 June $25 $4 $29
2004 July $25 $3 $28
2004 August $25 $12 $37
2004 September $25 $10 $35
2004 October $25 $15 $40
2004 November $25 $5 $30
2004 December $25 $2 $27
2005 January $25 $2 $27
$14 $12 $300 $4,500 $225 $58 $5,109

Number of months service 9
Not Receiving Water $26
Receiving Water - Contributions in Aid of Construction $4,800
Receiving Water - Other than Contribution in Aid of Construction $283
Total customer billed during period $5,109


(h) To ensure that all customers are treated equitably, the commission will impute the same rates to any customers receiving free or reduced service that apply to other customers receiving comparable service on the same system.

[Statutory Authority: RCW 80.01.040, 80.04.160 and 80.04.010. 05-08-099 (Docket No. UW-040375, General Order No. R-519), 480-110-255, filed 4/4/05, effective 5/5/05. Statutory Authority: RCW 80.01.040. 00-17-135 (General Order No. R-473, Docket No. UW-991634), 480-110-255, filed 8/21/00, effective 9/21/00; 99-24-100 (Order R-467, Docket No. UW-980082), 480-110-255, filed 11/30/99, effective 12/31/99.]

Washington State Code Reviser's Office