AN ACT Relating to
exempting thermal energy companies from utilities and transportation commission
authority; amending RCW 39.35C.080; adding a new section to chapter 80.04 RCW;
creating a new section; and repealing RCW 80.62.010, 80.62.020, 80.62.030,
80.62.040, 80.62.050, 80.62.060, 80.62.070, 80.62.080, 80.62.900, and
80.62.910.
BE IT ENACTED BY THE
LEGISLATURE OF THE STATE OF WASHINGTON:
NEW SECTION. Sec.
1. (1) The legislature
finds:
(a) The Washington
utilities and transportation commission has the authority to regulate district
heating suppliers on the basis of financial solvency, system design integrity,
and reasonableness of contract rates and rate formulas under chapter 80.62 RCW;
(b) Consumers have
competitive alternatives to thermal energy companies for space heating and
cooling and ancillary services;
(c) Consumers have
recourse against thermal energy companies for unfair business practices under
the consumer protection act; and
(d) Technology and
marketing opportunities have advanced since the enactment of chapter 80.62 RCW
to make the provision of cooling services, as well as heating services, an
economical option for consumers.
(2) The legislature
declares that the public health, safety, and welfare does not require the
regulation of thermal energy companies by the Washington utilities and
transportation commission.
NEW SECTION. Sec.
2. A new section is added
to chapter 80.04 RCW to read as follows:
(1) Nothing in this
title shall authorize the commission to make or enforce any order affecting
rates, tolls, rentals, contracts or charges for service rendered, or the
adequacy or sufficiency of the facilities, equipment, instrumentalities, or buildings,
or the reasonableness of rules or regulations made, furnished, used, supplied,
or in force affecting any district thermal energy system owned and operated by
any thermal energy company.
(2) For the purposes of
this section:
(a) "Thermal
energy company" means any private person, company, association,
partnership, joint venture, or corporation engaged in or proposing to engage in
developing, producing, transmitting, distributing, delivering, furnishing, or
selling to or for the public thermal energy services for any beneficial use
other than electricity generation;
(b) "District
thermal energy system" means any system that provides thermal energy for
space heating, space cooling, or process uses from a central plant, and that
distributes the thermal energy to two or more buildings through a network of
pipes;
(c) "Thermal
energy" means heat or cold in the form of steam, heated or chilled water,
or any other heated or chilled fluid or gaseous medium; and
(d) "Thermal
energy services" means the provision of thermal energy from a district
thermal energy system and includes such ancillary services as energy audits,
metering, billing, maintenance, and repairs related to thermal energy.
NEW SECTION. Sec.
3. The following acts or
parts of acts are each repealed:
(1) RCW 80.62.010 and 1987 c 522 s 1 &
1983 c 94 s 1;
(2) RCW 80.62.020 and 1987 c 522 s 2 &
1983 c 94 s 2;
(3) RCW 80.62.030 and 1983 c 94 s 3;
(4) RCW 80.62.040 and 1983 c 94 s 4;
(5) RCW 80.62.050 and 1983 c 94 s 5;
(6) RCW 80.62.060 and 1983 c 94 s 6;
(7) RCW 80.62.070 and 1983 c 94 s 7;
(8) RCW 80.62.080 and 1983 c 94 s 8;
(9) RCW 80.62.900 and 1983 c 94 s 9; and
(10) RCW 80.62.910 and 1983 c 94 s 10.
Sec. 4. RCW 39.35C.080 and 1991
c 201 s 9 are each amended to read as follows:
It is the intention of
chapter 201, Laws of 1991 that the state and its agencies are compensated
fairly for the energy provided to utilities from cogeneration at state facilities.
Such compensation may include revenues from sales of electricity or thermal
energy to utilities, lease of state properties, and value of thermal energy
provided to the facility. It is also the intent of chapter 201, Laws of 1991
that the state and its agencies be accorded the opportunity to compete on a
fair and reasonable basis to fulfill a utility's new resource acquisition needs
when selling the energy produced from cogeneration projects at state facilities
through energy purchase agreements.
(1)(a) The energy
office and state agencies may participate in any utility request for resource
proposal process, as either established under the rules and regulations of the
utilities and transportation commission, or by the governing board of a public utility
district, municipal utility, cooperative, or mutual.
(b) If a local utility
does not have a request for resource proposal pending, the energy office or a
state agency may negotiate an equitable and mutually beneficial energy purchase
agreement with that utility.
(2) To ensure an
equitable allocation of benefits to the state and its agencies, the following
conditions shall apply to energy purchase agreements negotiated between
utilities and state agencies:
(a) An energy purchase
agreement shall be approved by both the energy office and the affected state
agency.
(b) The energy office
and the state agency shall work together throughout the planning and
negotiation process for energy purchase agreements, unless the energy office
determines that its participation will not further the purposes of this
section.
(c) Before approving an
energy purchase agreement, the energy office shall review the proposed
agreement for its technical and economic feasibility, the degree of certainty
of benefits, the degree of financial risk assumed by the state and/or the state
agency, the benefits offered to the state and/or state agency, and other such
factors as the energy office deems prudent. The energy office shall approve an
energy purchase agreement unless it finds that such an agreement would not
result in an equitable allocation of costs and benefits, in which case the
transaction shall be disapproved.
(3)(a) The state or
state agency shall comply with and shall be bound by applicable avoided cost
schedules, electric power wheeling charges, interconnection requirements,
utility tariffs, and regulatory provisions to the same extent it would be
required to comply and would be bound if it were a private citizen. The state
shall neither seek regulatory advantage, nor change regulations, regulatory
policy, process, or decisions to its advantage as a seller of cogenerated
energy. Nothing contained in chapter 201, Laws of 1991 shall be construed to
mandate or require public or private utilities to wheel electric energy
resources within or beyond their service territories. Nothing in chapter 201,
Laws of 1991 authorizes any state agency or school district to make any sale of
energy or waste heat ((as defined by RCW 80.62.020(9))) beyond the
explicit provisions of chapter 201, Laws of 1991. Nothing contained in chapter
201, Laws of 1991 requires a utility to purchase energy from the state or a
state agency or enter into any agreement in connection with a cogeneration
facility.
(b) The state shall
neither construct, nor be party to an agreement for developing a cogeneration
project at a state facility for the purpose of supplying its own electrical
needs, unless it can show that such an arrangement would be in the economic
interest of the state taking into account the cost of (i) interconnection
requirements, as specified by the local electric utility, (ii) standby charges,
as may be required by the local electric utility, and (iii) the current price
of electricity offered by the local electric utility. If the local electric
utility can demonstrate that the cogeneration project may place an undue burden
on the electric utility, the energy office or the state agency shall attempt to
negotiate a mutually beneficial agreement that would minimize the burden upon
the ratepayers of the local electric utility.
(4) Any party to an
energy purchase agreement may, within thirty days of any decision made pursuant
to subsection (2)(c) of this section to disapprove the agreement made pursuant
to this section, request an independent reviewer who is mutually agreeable to
all parties to review the decision. The parties shall within thirty days of
selection submit to the independent reviewer documentation supporting their
positions. The independent reviewer shall render advice regarding the validity
of the disapproval within an additional thirty days.
(5) For the purposes
of this section, "waste heat" means the thermal energy that otherwise
would be released to the environment from an industrial process, electric
generation, or other process.
