BP BHEAD INT S [atlas:bill]

AN ACT Relating to studying and developing recommendations for the restructuring of the electric energy industry; creating new sections; and providing an expiration date.

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

NEW SECTION. Sec. 1. INTENT. The state of Washington is affected by national, regional, and state-wide changes that are transforming the nature of the electric power industry. These changes have profound implications for Washington's economy and environment. The legislature finds that:

(1) The interests of the citizens of Washington will be served by having access to a choice of electric services and energy providers, provided that basic safeguards relating to consumer protection and access are met and investments that preserve the electric system reliability and environmental protection are not undermined.

(2) The transition to a competitive retail electricity market requires that investments in conservation, renewable resources, and low-income service be made in a competitively neutral manner and, further, that minimum investment standards for these purposes are necessary and desirable as the industry becomes more competitive.

(3) Electricity is an essential service and should be reasonably accessible and affordable to all consumers, regardless of income or geographic location. The unique circumstances and value of small, rural electric systems should be taken into account as industry restructuring moves forward.

It is the intent of this act to begin the comprehensive restructuring of the retail sale of energy in the state of Washington.

NEW SECTION. Sec. 2. DEFINITIONS. The definitions in this section apply throughout this act unless the context clearly requires otherwise.

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

(2) "Department" means the department of community, trade, and economic development.

(3) "Direct service industrial customer" has the same meaning as the term is defined in section 3(8) of the Pacific Northwest electric power plan and conservation act, P.L. 96-501.

(4) "Electric cooperative" means a cooperative or association organized under chapter 23.86 or 24.06 RCW.

(5) "Electricity distributer" means an electrical company, electric cooperative, irrigation district, municipal electric utility, public utility district, or public service company engaged in the business of providing distribution services to retail customers.

(6) "Electricity service supplier" means any person or entity that sells electricity to one or more retail customers, including but not limited to electrical companies, electric cooperatives, irrigation districts, municipal electric utilities, public utility districts, aggregators, marketers, brokers, independent power producers, public service companies, or other municipal or state authorities.

(7) "Irrigation district" means a district authorized by chapter 87.03 RCW.

(8) "Municipal electric utility" means a city or town that owns and operates an electric utility authorized by chapter 35.92 RCW.

(9) "Pilot program" means an experimental program, rate, or tariff designed to elicit information concerning the cost-effectiveness, marketing, design, evaluation, or cost structure of the provision of distribution and electricity by electrical distribution companies and electricity service suppliers.

(10) "Public utility district" means a district authorized by chapter 54.04 RCW that sells electricity to retail customers.

(11) "Retail customer" means any person or entity that purchases electricity for ultimate consumption and not for resale.

(12) "Task force" means the task force created in section 3 of this act.

NEW SECTION. Sec. 3. TASK FORCE ON ELECTRIC SYSTEM RESTRUCTURING. (1) There is created a task force on electric system restructuring. The task force shall recommend measures needed for the Washington component of a regional and national restructured electric system that will:

(a) Recognize the multiple uses, benefits, and claims on our natural rivers;

(b) Preserve low-cost power for Washington consumers;

(d) Fairly distribute the cost of past investments that are uneconomic in today's market;

(e) Build into the competitive structure system benefits, including reliability and safety of electric service, environmental quality, conservation of electricity, encouragement of renewable resources, and affordable service;

(f) Substantially implement the recommendations contained in the final report of the comprehensive review of the northwest energy system dated December 12, 1996.

(2) The task force shall consist of seven members: One from each legislative caucus, appointed by the senate majority leader and the speaker of the house of representatives, as appropriate, and three members appointed by the governor. The governor shall appoint the chair from among the members of the task force, but the chair must be a member of the majority legislative caucus in either the senate or the house of representatives.

(3) The senate, the house of representatives, the office of the governor, the commission, the department, and the department of revenue shall provide staff support to the task force, as appropriate.

(4) Meetings of the full task force shall be open to the public. Task force members shall make appropriate efforts to inform affected interest groups and the general public, regarding the issue of restructuring and the progress of the task force. This subsection does not prevent members of the task force from meeting with each other in nontask force meetings or forums.

(5) The task force may establish work groups of knowledgeable or affected persons to advise the task force on components of its work plan. The task force shall seek information and opinions from diverse interests, including, but not limited to, public power, private power, smaller rural utilities, large consumers, direct service industries, small consumers, nonutility power providers, the gas industry, conservation groups, renewable resource providers, the environmental community, low-income groups, local governments, the office of public counsel of the attorney general's office, and the Washington office of the Northwest power planning council.

NEW SECTION. Sec. 4. RESPONSIBILITIES OF THE TASK FORCE. The task force created in section 3 of this act shall:

(1) Recommend mechanisms and steps needed to ensure competitive access by energy service providers over the distribution facilities operated by electricity distributers by July 1, 1999, or as soon thereafter as reasonably practicable;

(2) Recommend ways to ensure the safety and reliability of the electric power system;

(3) Develop guidelines for determining and fairly distributing the costs of past investments that are no longer economically competitive;

(4) Identify changes to electrical companies' obligation to serve retail customers made necessary through the mechanisms identified in subsections (1) and (3) of this section;

(5) Develop uniform billing standards to assist customers and electrical service providers in comparing available services;

(6) Recommend ways to ensure that electricity service is reasonably accessible and affordable to all customers;

(7) Recommend the most appropriate means to ensure adequate funding for conservation, renewable resources, and low-income weatherization consistent with the final report of the comprehensive review of the northwest energy system dated December 12, 1997;

(8) Identify mechanisms and steps needed to establish a uniform state-wide system benefits charge to ensure accomplishment of the minimum standard on a state-wide basis;

(9) Address special needs of rural electricity customers;

(10) Take into account state, regional, and national roles of responsibility and cooperation;

(11) Take such other steps, including drafting legislation, as are needed to accomplish the purposes and tasks set forth in this act.

NEW SECTION. Sec. 5. The task force shall report to the governor and the legislature by December 1, 1997, concerning its activities, draft legislation, and any recommendations for further action.

NEW SECTION. Sec. 6. PILOT PROGRAMS. In order to obtain information about the likely effects of restructuring the electric industry, the legislature:

(1) Encourages pilot programs between retail customers and electrical companies under the commission's rate jurisdiction;

(2) Encourages governing bodies of public utility districts, municipal electric utilities, and electric cooperatives to undertake pilot programs with retail electric customers under their rate jurisdiction;

(3) Encourages the commission and governing bodies to provide to the task force results of information learned from the pilot programs.

NEW SECTION. Sec. 7. STUDY OF MINIMUM INVESTMENT STANDARD. The department shall undertake a study of ways to achieve a minimum state-wide standard of investment in local conservation resources, renewable resources, renewable research and development, regional market transformation, and low-income weatherization. For the purposes of this section, the minimum standard is presumed to equal three percent of total electricity expenditures. The department shall consult with and obtain necessary information from electrical distribution companies, electricity service suppliers, direct service industrial customers, and others in developing its study. The department shall report the results of its study to the task force by September 1, 1997.

NEW SECTION. Sec. 8. ACCESS AND AFFORDABILITY. On or before September 1, 1997, the department shall provide recommendations to the task force concerning mechanisms for ensuring that electricity service is reasonably accessible and affordable to all customers, including low-income and rural customers. The department shall consult with utilities, low-income customer advocates, rural customer advocates, the office of the attorney general, the commission, and others in developing its recommendations.

NEW SECTION. Sec. 9. CAPTIONS NOT LAW. Captions used in this act are not part of the law.

NEW SECTION. Sec. 10. This act expires March 1, 1998.