2462-S

AN ACT Relating to regulating cooling services as thermal heating services; amending RCW 80.62.010, 80.62.020, 80.62.030, 80.62.040, 80.62.050, 80.62.060, 80.62.070, and 80.62.080; creating a new section; and repealing RCW 80.62.900.

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

Sec. 1. RCW 80.62.010 and 1987 c 522 s 1 are each amended to read as follows:

The legislature finds that traditional utility regulation may pose unnecessary barriers to ((~~using Washington's heat sources for~~)) the provision of district ((~~heating purposes~~)) thermal energy services. The legislature further finds that regulation may be necessary to protect the interests of the public in securing adequate ((~~heating~~)) thermal energy services ((~~from these heat sources~~)) at reasonable cost. Therefore, it is the intent of the legislature and the purpose of this chapter to provide a streamlined permitting system which will encourage development and efficient utilization and distribution of ((~~heat~~)) thermal energy services while continuing to provide reasonable customer protections.

Sec. 2. RCW 80.62.020 and 1987 c 522 s 2 are each amended to read as follows:

Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.

(1) "Biomass energy system" means a system that provides for the production or collection of organic materials such as wood and agricultural residues and municipal solid waste that are primarily organic materials and the conversion or use of such material for the production of heat or substitute fuels through several processes including, but not limited to, burning, pyrolysis, or anaerobic digestion.

(2) "Geothermal heat" means the natural thermal energy of the earth.

(3) ((~~"Heat" means thermal energy.~~)) "Cooling service" means the development, production, transmission, distribution, delivery, furnishment, or sale of a chilled medium, which includes but is not limited to chilled air or water.

(4) ((~~"Heat source"~~)) "Heating service" means the development, production, transmission, distribution, delivery, furnishment, or sale of a heated medium deriving from a heat source that includes but is not limited to: (a) Any integral part of a heat production or heat rejection system of an industrial facility, cogeneration facility, or electric power generation facility((,)); (b) a geothermal well or spring((,)); (c) a biomass energy system((,)); (d) a solar collection facility((~~, and~~)); (e) a hydrothermal resource or heat extraction process; (f) natural gas-fired boiler; and (g) electric boiler.

(5) ((~~"Heat~~)) "Thermal energy supplier" means any private person, company, association, or corporation engaged or proposing to engage in developing, producing, transmitting, distributing, delivering, furnishing, or selling to or for the public ((~~heat from a heat source~~)) thermal energy services for any beneficial use other than electricity generation.

(6) "Commission" means the utilities and transportation commission.

(7) "Cogeneration facility" means any machinery, equipment, structure, process, or property, or any part thereof, installed or acquired for the primary purpose of cogeneration by a person or corporation.

(8) "Cogeneration" means the sequential generation of two or more forms of energy from a common fuel or energy source.

(9) "Waste heat" means the thermal energy which otherwise would be released to the environment from an industrial process, electric generation, or other process.

(10) "Hydrothermal resource" means the thermal energy available in wastewater, sewage effluent, wells, or other water sources, natural or man-made.

(11) "Thermal energy services" means the provision of heating services, cooling services, or both, and includes such ancillary services as energy audits, metering, billing, maintenance, and repairs.

Sec. 3. RCW 80.62.030 and 1983 c 94 s 3 are each amended to read as follows:

Notwithstanding any other provision of law, ((~~heat~~)) thermal energy suppliers are not subject to the general jurisdiction of the commission, but are only subject to the limited jurisdiction conferred to the commission by this chapter. Nothing in this chapter prohibits existing regulated public utilities from providing ((~~heat from a heat source, as defined in RCW 80.62.020~~)) thermal energy services, and thereby being eligible to seek an operating permit as a ((~~heat~~)) thermal energy supplier as provided by this chapter.

Sec. 4. RCW 80.62.040 and 1983 c 94 s 4 are each amended to read as follows:

The commission shall, within one hundred eighty days of ((~~July 24, 1983,~~)) June 1, 1996, adopt ((~~regulations~~)) rules governing application contents, customer ((~~heating~~)) thermal energy service contracts, review procedures, and fees necessary in implementing this chapter. The commission shall set the fees so that total fees collected will approximately equal the reasonable cost of supervising and regulating ((~~heat~~)) thermal energy suppliers.

Sec. 5. RCW 80.62.050 and 1983 c 94 s 5 are each amended to read as follows:

Upon application by a ((~~heat~~)) thermal energy supplier, the commission shall notify all providers of ((~~heating~~)) thermal energy services within the designated service territory of pending application, and shall issue a nonexclusive operating permit to provide ((~~heating~~)) thermal energy services within a designated service territory, as proposed by the applicant, if the commission reasonably determines:

(1) The applicant is qualified and financially responsible to provide the services for which the permit is sought;

(2) The applicant's proposed system design is adequate for that purpose; and

(3) The contract to be offered to the applicant's customers substantially complies with the requirements set forth in RCW 80.62.060.

Sec. 6. RCW 80.62.060 and 1983 c 94 s 6 are each amended to read as follows:

(1) Each ((~~heat~~)) thermal energy supplier shall enter into a contract with each customer proposed to be served pursuant to an operating permit.

(2) The terms of the contract, or any renewal, modification, termination, or expiration thereof, to be offered to each customer or class of customers, or representatives thereof, shall be subject to the approval of the commission and shall specify, but not be limited to:

(a) The period of time during which the ((~~heating~~)) thermal energy service will be provided;

(b) The rates or the formula for determining rates to be charged during the contract term; and

Sec. 7. RCW 80.62.070 and 1983 c 94 s 7 are each amended to read as follows:

In accordance with the purpose of this chapter as set forth in RCW 80.62.010, commission approval of the rates or rate formula specified in the customer ((~~heating~~)) thermal energy service contract shall not be based upon the ((~~heat~~)) thermal energy supplier's cost of providing services or its rate of return on investment, but shall be based upon the reasonableness of the proposed rates in relation to the rates charged to customers for comparable ((~~heating~~)) thermal energy services such as electric, oil, and natural gas ((~~heating~~)) thermal energy otherwise available in the proposed service territory. Any proposed rate less than eighty percent of the lowest rate of the foregoing services shall be deemed reasonable as a matter of law and shall be approved.

Sec. 8. RCW 80.62.080 and 1983 c 94 s 8 are each amended to read as follows:

The commission shall have continuing jurisdiction to regulate ((~~heat~~)) thermal energy suppliers as provided in this chapter to ensure compliance with the terms of any operating permit issued in accordance with this chapter.

NEW SECTION. Sec. 9. RCW 80.62.900 and 1983 c 94 s 9 are each repealed.

NEW SECTION. Sec. 10. This act is not intended to affect contracts entered into before the effective date of this act, nor is it intended to affect fees paid with regard to supervising the contracts.