FINAL BILL REPORT

                 SHB 1975

PARTIAL VETO

                         C 230 L 97

                     Synopsis as Enacted

Brief Description:  Regulating public ownership of coal‑fired thermal electric generating facilities.

Sponsors:  By House Committee on Energy & Utilities (originally sponsored by  Representatives DeBolt, Morris, Benson and Sullivan).

House Committee on Energy & Utilities

Senate Committee on Energy & Utilities

Background:  Current statutes authorize cities of the first class, public utility districts (PUDs), and joint operating agencies (JOAs) to enter into agreements to own shares in jointly held high voltage transmission facilities, capacity rights in those facilities, and in any kind of electric generating plants and facilities.  The agreements may include related common facilities, and the planning, financing, acquisition, construction, operation, and maintenance of the plants and facilities.  The agreements must give a city, PUD, or JOA a percentage ownership of any common facility, and of the electrical output, equal to the percentage of the money furnished, or the value of property supplied, by the city, PUD, or JOA, to acquire or construct the facility.

Cities are explicitly authorized to participate in agreements for the use of, as well as an undivided ownership of, such plants and facilities with:  (1) each other; (2) rural electric cooperatives in any state; (3) municipal corporations, utility districts, or other political subdivisions in any state; (4) any agency of the United States authorized to generate or transmit electricity; and (5) investor-owned utilities (IOUs) under the jurisdiction of the regulatory commission of any state.

Public utility districts and JOAs are explicitly authorized to enter into agreements for an undivided ownership of such plants and facilities.  However, PUDs and JOAs may enter into such agreements with fewer kinds of entities.  They may enter into agreements with:  (1) each other and cities of the first class; (2) rural electric cooperatives; and (3) IOUs under the jurisdiction of the Washington Utilities and Transportation Commission or the Oregon Public Utility Commission.  Unlike cities, PUDs and JOAs are not expressly authorized to enter into such agreements with IOUs from states other than Washington or Oregon.

No statute expressly authorizes cities, PUDs, or JOAs to enter into such agreements with power marketers.

Two municipal utilities (of cities of the first class) and two PUDs are part owners of the Centralia Steam Plant, which is a coal-fired thermal electrical generating facility placed in operation prior to July 1, 1975.  The other four owners are IOUs under the jurisdiction of  Washington or Oregon utility commissions.

The lack of explicit authorization for PUDs to enter into ownership agreements with IOUs from states other than Washington and Oregon, and for either PUDs or cities to enter into such agreements with power marketers, limits the ability of any owner of the Centralia Steam Plant to sell its interest in the plant.

Summary:  Cities of the first class, PUDs, and JOAs are authorized to enter into agreements for an undivided ownership of a coal-fired thermal electric generating plant and facility placed in operation before July 1, 1975.  Cities of the first class may enter into agreements for the use of such facilities.  The agreements may include related common facilities, and the planning, financing, acquisition, construction, operation, and maintenance of the plant and facility.

The agreements must give a city, PUD, or JOA a percentage ownership of any common facility, and of the electrical output, equal to the percentage of the money furnished, or the value of property supplied, by the city, PUD, or JOA to acquire or construct the facility.

The cities, PUDs, and JOAs may enter into the agreements with: (1) each other; (2) rural electric cooperatives; (3) IOUs under the jurisdiction of the regulatory commission of  any state regulatory commission; and (4) any power marketer under the jurisdiction of the Federal Energy Regulatory Commission.  Other political subdivisions in any state and agencies of the United States authorized to generate or transmit electricity are not included in the list of entities with which cities may enter into such agreements.

Votes on Final Passage:

House970

Senate430

Effective:July 27, 1997

Partial Veto Summary:  The emergency clause is removed.