FINAL BILL REPORT

                                   SSB 5260

                                  C 100 L 91

                              SYNOPSIS AS ENACTED

Brief Description:  Regulating certain nonmunicipal water systems.

SPONSORS:Senate Committee on Energy & Utilities (originally sponsored by Senators Thorsness, Madsen and Barr; by request of Utilities & Transportation Commission).

SENATE COMMITTEE ON ENERGY & UTILITIES

HOUSE COMMITTEE ON ENERGY & UTILITIES

BACKGROUND:

The jurisdiction of the Utilities and Transportation Commission over water companies is limited to those serving 100 or more customers, or having average annual customer revenues of $300 or more, that otherwise meet the statutory criteria for regulation.  In making a jurisdictional decision, the UTC must include all portions of water companies having common ownership, regardless of location or corporate designation.  For all jurisdictional systems the commission sets rates, determines operating requirements, enforces standards on quality and quantity, and acts on customer complaints regarding rates and service.  The Legislature in 1989 also required the commission to exercise audit and accounting supervision or to initiate a formal complaint against any water system for hire if the commission received an administrative order from the Department of Health or the city or county where the system was located that found the system to be in violation of drinking water system standards adopted by the Board of Health or the Department of Health.  The latter provision has not been utilized by either the Department of Health or a local government to invoke commission jurisdiction, and it is unclear to the commission what actions it is to take under the language added in 1989.  Its general jurisdictional criteria for water systems have also created problems in determining whether to assert or maintain jurisdiction over water systems whose number of customers and annual revenues may fluctuate.

SUMMARY:

Water companies that are subject to Utilities and Transportation Commission regulation cannot be removed from regulation unless the commission approves.  Regulated companies whose customer number falls below 100, or whose average annual customer revenues fall below $300, may petition the commission for removal from regulation.  The commission may retain jurisdiction over such companies where it finds that the public interest requires it.

In measuring a system's customers or revenues to determine UTC jurisdiction, the commission must include all systems under common control, even if they are not under common ownership.  The term "control" is to be defined by the commission and does not include management by a satellite agency as defined in statute if the satellite agency is not an owner of the water company.

The commission's jurisdiction over substandard water systems referred to it by the Department of Health or a city or county is limited to nonmunicipal systems, and only for auditing purposes.  The commission is to provide the results of the audit to the requesting party.  The number of such companies referred to the commission in any calendar year is not to exceed 20 percent of the total number of companies subject to commission regulation.  Companies referred to the commission for such an audit are required to pay a fee in the same amount as the commission requires on an annual basis from its regulated utilities. 

The number of customers required to file a complaint against a regulated water company with regard to rates or charges is changed from 25 to either 25 customers or at least 25 percent of the company's customers. 

VOTES ON FINAL PASSAGE:

Senate      45    0

House 97    0     (House amended)

Senate      46    0     (Senate concurred)

EFFECTIVE:  July 28, 1991