BP BHEAD INT S [atlas:bill]

AN ACT Relating to restructuring Washington state electric utilities and opening the electricity market to retail competition; amending RCW 80.12.020, 80.12.040, 80.24.010, 80.28.020, and 80.28.050; reenacting and amending RCW 42.17.310; adding a new section to chapter 41.06 RCW; adding a new chapter to Title 80 RCW; and creating a new section.

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

NEW SECTION. Sec. 1. FINDINGS AND INTENT. (1) The legislature finds that:

(a) The electric utility industry is undergoing fundamental change. This change is in part due to federal legislation and regulatory decisions requiring utilities and other owners of transmission lines to provide nondiscriminatory access to the transmission system, and to legislation and programs in other states to open retail electricity markets to competition.

(b) Currently, few Washington citizens can choose their electricity service providers. The interests of citizens will be served by having a choice of electric services and energy providers, if basic safeguards relating to consumer protection and access are met, and if investments that preserve the reliability of the electric system and protect the environment are not undermined.

(c) The transition to a competitive retail electricity market will be significant. At a minimum, active oversight is essential:

(i) To facilitate and encourage the development of meaningful market access for all consumers and prevent unwarranted cost shifts among consumer classes;

(ii) To ensure efficient use and reliable operation of transmission and distribution facilities;

(iii) To allow utilities a fair recovery for previously and prudently incurred investments that are both unmitigable and no longer economic as a direct result of implementation of this chapter; and

(iv) To ensure minimum investment standards are met for conservation, renewable resources, energy services to low-income citizens, and other public purposes; to ensure such investments are funded in a competitively neutral manner; and to ensure that a viable funding mechanism will provide ongoing adequate investment in public purposes.

(2) The legislature intends to restructure the retail market for electricity in the state of Washington. In so doing, the legislature intends to:

(a) Provide for three means by which customers can purchase electric service and products: Through a voluntary power pool; through an electric utility, marketer, broker, or aggregator; or directly from an electricity generator;

(b) Provide for the creation of a board to oversee the transition to a competitive retail electricity market; and

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

(1) "Aggregator" means an entity that combines retail electric customers into a group for the purpose of purchasing electricity and related services.

(2) "Broker" means an entity that arranges the sale and purchase of electricity or related services between buyers and sellers, but does not take title to any of the electricity sold.

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

(4) "Consumer-owned utility" means a municipal electric utility formed under Title 35 RCW, an electric cooperative formed under chapter 23.86 RCW, a mutual corporation or association formed under chapter 24.06 RCW that sells electricity to retail electric customers, a public utility district formed under Title 54 RCW that sells electricity to retail electric customers, or an irrigation district formed under chapter 87.03 RCW that sells electricity to retail electric customers.

(5) "Electrical company" means a company owned by investors that meets the definition of RCW 80.04.010.

(6) "Electric utility" means any electrical company or consumer-owned utility that is engaged in the business of distributing electricity to retail electric customers in the state.

(7) "Electricity" means electric energy, measured in kilowatt hours, or electric capacity, measured in kilowatts.

(8) "Electricity service supplier" means any person or entity that sells electricity to more than one retail electric customer, including but not limited to electric utilities, aggregators, marketers, brokers, generators or holders of contract rights to electricity (other than marketers) that are willing to sell electricity directly to consumers, the Northwest power exchange, independent power producers, or other municipal or state authorities.

(9) "Independent system operator" means the independent system operator designated or established by the oversight board, as provided in section 4 of this act.

(10) "Marketer" means any entity that buys electricity or related services then resells the electricity or services either at wholesale or to an end-use customer.

(11) "Northwest power exchange" or "exchange" means the voluntary power pool created in section 15 of this act.

(12) "Oversight board" means the oversight board created in section 3 of this act.

(13) "Retail electric customer" means any person or entity, including but not limited to a residential, commercial, and industrial consumer, that purchases electricity for ultimate consumption and not for resale.

(14) "State" means the state of Washington.

(15) "Subscription period" means the time when a retail electric customer is a customer of the Northwest power exchange, between the ballot periods provided for in section 17 of this act.

(16) "Transition period" means the period beginning July 1, 1999, and ending no later than June 30, 2009.

(17) "Uneconomic utility investment" means generating assets, conservation investments, and contractual obligations to purchase or sell electricity that were entered into in good faith by an electric utility before December 13, 1995, and that were prudent at the time the obligations were assumed, but that are no longer economic as a direct result of implementation of this chapter. "Uneconomic utility investment" does not include costs or expenses disallowed by the commission in a prudence review or other proceeding, but only to the extent of such a disallowance, nor does it include fines or penalties as authorized by this chapter or by another statute.

NEW SECTION. Sec. 3. OVERSIGHT BOARD CREATED. To ensure that the interests of all Washington citizens are served by the development of a competitive retail electricity market, an oversight board is hereby created.

(1) The oversight board shall consist of five members: One appointed by the majority leader of the senate, one appointed by the minority leader of the senate, one appointed by the speaker of the house of representatives, one appointed by the minority leader of the house of representatives, and one appointed by the governor. All board members shall be Washington residents and electricity ratepayers. No member shall be a legislator.

(2) Oversight board members shall serve three-year terms with no limit on reappointment. Of the initial board, one member appointed by the senate majority leader and one member appointed by the speaker of the house of representatives shall serve one-year terms; the member appointed by the governor shall serve a two-year term; and the remaining members appointed by the senate majority leader and speaker of the house of representatives shall serve three-year terms.

(3) For attending meetings of the board or for attending to other business of the board, members shall be compensated in accordance with RCW 43.03.250 and shall be reimbursed for travel expenses in accordance with RCW 43.03.050 and 43.03.060.

(4) The commission shall provide staff and administrative support to the oversight board.

NEW SECTION. Sec. 4. RESPONSIBILITIES OF OVERSIGHT BOARD. The oversight board shall have the following responsibilities:

(1) To designate or establish, and to oversee, the independent system operator, the responsibilities of which are described in sections 7 through 9 of this act;

(2) To oversee the Northwest power exchange established in section 15 of this act;

(3) To establish eligibility criteria for members of the governing boards of the independent system operator and for members of the Northwest power exchange, to determine terms and other conditions for serving on those governing boards, and to appoint the members of both governing boards within six months of the effective date of this act. In fulfilling its obligations under this subsection, the oversight board shall provide for compensation and reimbursement of expenses for members of both governing boards. Once the independent system operator begins collecting charges for transmission, members of the governing board shall be compensated or reimbursed from revenues of the independent system operator. Once the Northwest power exchange begins selling electricity, members of the governing board shall be compensated or reimbursed from revenues of the exchange;

(4) To serve as an appeals board for decisions of the independent system operator governing board;

(5) To arrange for the preparation and mailing of a ballot to all retail electric customers in the state, as required under section 17 of this act, so that customers may choose their electricity service suppliers. The oversight board shall prescribe the kind of information that may be included with the ballot. In addition, the oversight board shall establish a procedure under which every customer has the opportunity, periodically at an accelerated rate, to choose a different electricity service provider. The oversight board shall determine whether customers of the Northwest power exchange who select alternative electricity service suppliers before the next ballot period will be liable for unmitigable costs incurred by the exchange in anticipation of serving those customers during the time remaining until the next ballot period;

(6) To complete its additional responsibilities and report to the legislature as required under section 5 of this act; and

(7) To perform other functions necessary to carry out the purposes of chapter . . ., Laws of 1997 (this act).

NEW SECTION. Sec. 5. DETERMINATIONS AND REPORT BY OVERSIGHT BOARD. (1) With the assistance of the commission, the oversight board shall determine the following:

(a) Appropriate jurisdictional boundaries between the independent system operator and owners of distribution facilities; definitions for generation, transmission, and distribution assets, and other relevant terms; and which transmission and distribution facilities are subject to the exclusive jurisdiction of the state;

(b) Appropriate standards for communications between an electricity service supplier's regulated and unregulated lines of business including, but not limited to, distribution services and sales of electricity and related services classified as competitive by the commission. The commission shall develop recommendations for such standards and present the recommendations to the oversight board;

(c) Appropriate standards for identifying and valuating uneconomic utility investments. In fulfilling its obligations under this subsection (1)(c), the oversight board shall determine whether expenses in mitigating impacts on utility personnel directly and negatively affected by implementation of chapter . . ., Laws of 1997 (this act) should be included in the definition of uneconomic utility investments and shall determine whether and, if so, in what manner, potential uneconomic investments of the Bonneville power administration should be identified, valuated, recovered, or otherwise provided for in a restructured electricity industry;

(d) Appropriate standards for determining whether an electric utility has made all reasonable efforts to mitigate its uneconomic utility investments. Standards for evaluating an electric utility's efforts to mitigate uneconomic utility investments shall not require the utility to impair the validity or affect the obligation of a contract existing on the effective date of this act;

(e) The total sum of costs due to unmitigable, uneconomic utility investments incurred by electric utilities. In fulfilling its obligations under this subsection (1)(e), the oversight board shall include federally mandated expenditures for fish mitigation programs as uneconomic utility investments;

(f) The most appropriate nonbypassable mechanism to allow individual electric utilities to recover, during the transition period, fifty percent of the amount of those unmitigable uneconomic utility investments the individual utility incurred. The commission shall make recommendations to the oversight board regarding any legislation necessary to authorize an electric utility, with commission approval, to issue bonds, notes, certificates of beneficial interests in trusts, or other evidences of indebtedness or ownership, that would be secured by the revenues recovered through the nonbypassable mechanism provided for in this subsection (1)(f). The recommendations shall take into account whether some uneconomic utility investments secure existing bonds, whether the value of uneconomic utility investments should be adjusted periodically, and any other matter the commission deems relevant;

(g) The specific public purposes that should receive financial support from the electricity system, and the appropriate level of funding for each. Regarding renewable resources, the oversight board shall determine how to allocate funds among new, existing, and emerging technologies, and how to allocate funds for efforts to develop a consumer-driven market for renewable generation as described in section 16(2) of this act. The oversight board shall also determine whether the overall level of funding, or allocation of the funding, should change over time and, if so, when and in what manner. In fulfilling its obligations under this subsection (1)(g), the oversight board initially shall presume a minimum investment, and a proportional allocation of that investment, consistent with the recommendations in the final report of the comprehensive review of the Northwest energy system dated December 12, 1996;

(h) The most appropriate means of ensuring adequate funding for public purposes through a flat-rate, nonbypassable charge;

(i) Any statutory changes, beyond those in chapter . . ., Laws of 1997 (this act), that are desirable to protect or educate consumers, or to ensure reliable service at affordable prices to consumers in sparsely populated areas of the state;

(j) Any statutory changes, beyond those in chapter . . ., Laws of 1997 (this act), that are necessary to carry out the purposes of this act; and

(k) Whether action is necessary to encourage the development of a market for futures contracts to allow customers to hedge against fluctuations in electricity prices.

(2) The oversight board shall form appropriate advisory committees composed of market and nonmarket participants to assist it in fulfilling its obligations under this section including, but not limited to: (a) Addressing jurisdictional issues regarding transmission and distribution; (b) developing standards for defining, identifying, valuating, and mitigating uneconomic utility investments; (c) developing an appropriate, nonbypassable mechanism to allow recovery for fifty percent of unmitigable uneconomic utility investments during the transition period; (d) defining, identifying, and determining the appropriate funding level for public purposes; and (e) developing an appropriate means of ensuring adequate funding for public purposes through a flat-rate, nonbypassable charge.

(3) By November 1, 1998, the oversight board shall report to the governor and legislature concerning its findings and activities. The report shall contain any recommendations the oversight board may have for further action, including legislation, but shall not contain proprietary business information of individual utilities, or information exempt from public disclosure under RCW 42.17.310.

NEW SECTION. Sec. 6. UNECONOMIC UTILITY INVESTMENTS. (1) Each electric utility shall provide accurate and complete written documentation of the utility's uneconomic utility investments, the value of those investments, and the utility's efforts to mitigate those investments.

(2) Using the standards to be developed as provided in section 5 of this act, the commission shall identify and quantify uneconomic utility investments for each electric utility, and determine whether the utility has made all reasonable efforts to mitigate costs attributable to those uneconomic utility investments.

(3) Fifty percent of the costs attributable to unmitigable, uneconomic utility investments shall be recovered from all customers on a nonbypassable basis during the transition period. Any costs not recovered during the transition period shall be the sole responsibility of the utility.

(4) The commission shall facilitate implementation of the nonbypassable recovery mechanism as determined by the oversight board under section 5 of this act.

NEW SECTION. Sec. 7. RESPONSIBILITIES OF INDEPENDENT SYSTEM OPERATOR. (1) An independent system operator shall ensure efficient use and reliable operation of the transmission grid consistent with achievement of planning and operating reserve criteria no less stringent than those established by the Western systems coordinating council and the North American electric reliability council. The independent system operator shall be operated on a nonprofit basis.

(2) The independent system operator shall participate in all relevant federal energy regulatory commission proceedings. To the extent filings at the federal energy regulatory commission are necessary, the independent system operator shall ensure the filings request confirmation of the relevant provisions of this chapter and seek the authority needed to give the independent system operator the ability to secure generating and transmission resources necessary to guarantee achievement of planning and operating reserve criteria no less stringent than those established by the Western systems coordinating council and the North American electric reliability council.

(3) The independent system operator shall adopt inspection, maintenance, repair, and replacement standards for the transmission facilities under its control no later than March 31, 1999. The standards, which shall be performance or prescriptive standards, or both, as appropriate, for each substantial type of transmission equipment or facility, shall provide for high quality, safe, and reliable service. In adopting its standards, the independent system operator shall consider: Cost, local geography and weather, applicable codes, national electric industry practices, sound engineering judgment, and experience. The independent system operator shall also adopt standards for reliability and safety during periods of emergency and disaster. The independent system operator shall require each transmission facility owner or operator to report annually on its compliance with the standards. The report shall be made available to the public.

(4) The governing board of the independent system operator may hire staff to carry out its duties under this chapter. The staff shall be exempt from the provisions of chapter 41.06 RCW. The commission shall provide office space for the staff and accounting and administrative support.

(5) The governing board of the independent system operator may form appropriate technical advisory committees composed of market and nonmarket participants to advise the independent system operator governing board on issues including, but not limited to, rules, protocols, and operating procedures.

NEW SECTION. Sec. 8. OUTAGES. The independent system operator shall perform a review following a major outage that affects at least ten percent of the customers of the entity providing the local distribution service. The review shall address the cause of the major outage, the response time and effectiveness, and whether the transmission facility owner or operator's operation and maintenance practices enhanced or undermined the ability to restore service efficiently and in a timely manner. If the independent system operator finds that the operation and maintenance practices of the transmission facility owner or operator prolonged the response time or were responsible for the outage, the independent system operator may order appropriate sanctions, subject to the federal energy regulatory commission approving that authority, if such approval is necessary.

NEW SECTION. Sec. 9. REPORT BY INDEPENDENT SYSTEM OPERATOR. The independent system operator, in consultation with the Washington State University cooperative extension service, the commission, the Western systems coordinating council, and concerned regulatory agencies in other western states, shall, within six months after the federal energy regulatory commission approval of the independent system operator, provide a report to the governor and appropriate committees of the legislature that does the following:

(1) Conducts an independent review and assessment of Western systems coordinating council operating reliability criteria;

(2) Quantifies the economic cost of major transmission outages relating to the Pacific intertie and other important high voltage lines that carry power both into and from the state;

(3) Identifies the range of cost‑effective options that would prevent or mitigate the consequence of major transmission outages;

(4) Identifies communication protocols that may be needed to be established to provide advance warning of incipient problems;

(5) Identifies the need for additional generation reserves and other voltage support equipment, if any, or other resources that may be necessary to carry out its functions;

(6) Identifies transmission capacity additions that may be necessary at certain times of the year or under certain conditions;

(7) Assesses the adequacy of current and prospective institutional provisions for the maintenance of reliability;

(8) Identifies mechanisms to enforce transmission right of way maintenance; and

(9) Contains recommendations regarding cost‑effective improvements to the reliability of electric system.

NEW SECTION. Sec. 10. RELIABILITY OF THE DISTRIBUTION SYSTEM. (1) The commission shall ensure that distribution facilities needed to maintain the reliability of the electric supply remain available and operational, consistent with maintaining open competition and avoiding an over-concentration of market power. To determine whether the facility needs to remain available and operational, the commission shall utilize standards that are no less stringent than the Western systems coordinating council and North American electric reliability council standards for planning reserve criteria.

(2) The commission shall adopt inspection, maintenance, repair, and replacement standards for the distribution systems of electric utilities no later than March 31, 1999. The standards, which shall be performance or prescriptive standards, or both, as appropriate, for each substantial type of distribution equipment or facility, shall provide for high quality, safe, and reliable service.

(3) In setting its standards, the commission shall consider: Cost, local geography and weather, applicable codes, national electric industry practices, sound engineering judgment, and experience. The commission shall also adopt standards for operation, reliability, and safety during periods of emergency and disaster. The commission shall require each electric utility to report annually on its compliance with the standards. That report shall be made available to the public.

(4) The commission shall conduct a review to determine whether the standards prescribed in this section have been met. If the commission finds that the standards have not been met, the commission may order appropriate sanctions, including penalties in the form of rate reductions or monetary fines. The review shall be performed after every major outage. Any money collected pursuant to this subsection shall be used to provide additional funding for the public purposes identified by the oversight board under section 5 of this act.

NEW SECTION. Sec. 11. NONDISCRIMINATION IN DISTRIBUTION. After July 1, 1999, an electric utility shall: (1) Provide to other electricity service suppliers comparable access to information about its distribution facilities, metering, and aggregate loads, as it would to its own divisions or affiliates; and (2) refrain from granting to its generating or transmission operations any access to or information about its distribution facilities that is not provided to other electricity service suppliers.

NEW SECTION. Sec. 12. DISTRIBUTION RATES. (1) Every electric utility shall offer unbundled rates, terms, and conditions for the use of its distribution facilities and for ancillary services.

(2) Every electric utility shall submit periodic reports to the commission on costs the utility incurred in maintaining, upgrading, or expanding its distribution facilities.

(3) The commission shall set rates for the use of distribution facilities and ancillary services. Subject to the limitation set forth in this subsection (3), in setting distribution rates, the commission shall allow a nine percent rate of return to electrical companies, and costs only to consumer-owned utilities. Nothing in this section requires or authorizes the commission to set rates for the use of distribution facilities and ancillary services that would impair the ability of an electric utility to perform fully its covenants with holders from time to time of its bonds, notes, or other evidence of indebtedness, or to perform fully its covenants contained in agreements that secure the payment of bonds, notes, or other evidence of indebtedness of any other municipal corporation or joint operating agency.

(4) The commission shall ensure that an electric utility's distribution costs, including but not limited to overhead attributable to distribution facilities and ancillary services, are allocated accurately among the various classes of customers without shifting costs from one class to another.

NEW SECTION. Sec. 13. SEPARATION OF ASSETS AND OPERATIONS. (1) No later than January 1, 1999, every electric utility shall administratively and functionally separate its generation, transmission, distribution, and other assets and operations to accurately allocate the costs of utility functions, and to allow for fair and accurate pricing of unbundled services. Communications between an electric utility's regulated and unregulated lines of business, including but not limited to distribution services and sales of electricity and related services classified as competitive by the commission, shall comply with the standards developed under section 5(1)(b) of this act.

(2) After July 1, 1999, the commission shall not set the rates, terms, or conditions for the sale of electricity by electrical utilities. An electricity service supplier that owns no generating assets or distribution facilities in the state shall not be considered an electrical company or a public service company under Title 80 RCW, but shall be subject to the requirements of sections 17 through 21 of this act.

NEW SECTION. Sec. 14. SEPARATE ACCOUNTS. (1) Any electric utility engaged in selling electricity in the state, or related services that have been classified as competitive by the commission, shall keep separate accounts, as prescribed by the commission, of the utility's capital employed in such business, and of the utility's revenues and operating expenses arising from such business.

(2) For the purpose of setting distribution rates: (a) The capital employed in selling electricity or related competitive services shall not constitute a part of the fair value of the electric utility's property; and (b) the revenues from and operating expenses of such business shall not constitute a part of the operating expenses and revenues of the electric utility.

NEW SECTION. Sec. 15. NORTHWEST POWER EXCHANGE CREATED. An independent, voluntary power pool, to be known as the Northwest power exchange, is hereby created. The exchange shall commence selling electricity on July 1, 1999, and cease selling electricity within six months of the time that less than ten percent of the electricity purchased in the state is purchased from the exchange. The exchange shall be governed by a board meeting the criteria established by the oversight board created under section 3 of this act. The exchange shall not own any electricity-generating resources.

NEW SECTION. Sec. 16. RESPONSIBILITIES OF THE NORTHWEST POWER EXCHANGE. (1) The Northwest power exchange shall provide an efficient competitive auction, open to all electricity suppliers on a nondiscriminatory basis, through which the exchange shall purchase power for resale to retail electric customers.

(2) Initially, one percent of the electricity purchased for resale by the exchange shall be from renewable resource technologies, including, but not limited to, facilities that use the following energy sources to generate electricity: Solar, wind, geothermal, solid fuel biomass, whole waste tire combustion, municipal solid waste that does not consist primarily of products originally manufactured from fossil fuels, gas from anaerobic digestion of biological wastes, and hydropower with a generating capacity of thirty megawatts or less. The proportion of electricity the exchange purchases from renewable resource technologies shall increase over time, at a rate and in amounts to be determined by the Northwest power exchange governing board in consultation with the oversight board created under section 3 of this act. Electricity from renewable resource technologies shall be dispatched first.

(3) The Northwest power exchange shall provide an efficient competitive auction, open to all providers of metering services on a nondiscriminatory basis, through which the exchange shall purchase metering services on behalf of the retail electric customers of the exchange, including a mechanism for leveling fluctuations in the cost of electricity and related services provided for in subsection (6) of this section.

(4) The Northwest power exchange shall provide an efficient competitive auction, open to all electricity suppliers on a nondiscriminatory basis, through which the exchange shall purchase the power necessary to maintain the reliability of the electricity delivery system, as determined by the independent system operator based on the exchange's total retail electricity load.

(5) The Northwest power exchange shall sell electricity to retail electric customers at a price sufficient to recover all costs of the exchange, but shall be operated on a nonprofit basis.

(6) Prior to July 1, 1999, the exchange shall develop a means of leveling fluctuations in the cost of electricity and related services between ballot periods. The means shall ensure that:

(a) During the first year of operation of the exchange, an increase in the cost to exchange customers for electrical service does not exceed ten percent above the average state-wide residential rate for electrical service as of July 1, 1999, adjusted for inflation using the consumer price index for all urban consumers (CPI-U) published by the United States department of labor bureau of labor statistics, United States city average, all items; and

(b) During subsequent years, an increase in the cost to exchange customers for electrical service does not exceed ten percent above the rate charged during the preceding year, adjusted for inflation using the consumer price index for all urban consumers (CPI-U) published by the United States department of labor bureau of labor statistics, United States city average, all items.

(7) The governing board of the Northwest power exchange may hire staff to carry out its duties under this chapter. The staff shall be exempt from the provisions of chapter 41.06 RCW. The commission shall provide office space for the staff and accounting and administrative support.

(8) The governing board of the Northwest power exchange may form appropriate technical advisory committees comprised of market and nonmarket participants to advise the governing board on relevant issues.

NEW SECTION. Sec. 17. BALLOTS. (1) By January 1, 1999, ballots shall be distributed to all retail electric customers in the state. Ballots must be returned by March 1, 1999. Beginning January 1, 2000, as long as the Northwest power exchange exists, customers shall have the opportunity, periodically at an accelerated rate, to select, in writing, a different electricity service supplier.

(2) Different ballots may be prepared for different classes of customers. Options listed on a ballot must include all electricity service suppliers willing to provide the customer's electrical service.

(3) Any customer that fails to select an electricity service supplier by March 1, 1999, shall be a customer of the Northwest power pool.

(4) No one shall authorize a change in electricity service supplier for any residential or small commercial customer until the consumer has received an information package fully explaining the nature and effect of the change and has authorized, in writing, the change.

NEW SECTION. Sec. 18. AGGREGATION. (1) Aggregation of customer electrical load is authorized for all customer classes, including, but not limited to, residential or small commercial customers. Aggregation may be accomplished by private market aggregators, cities, counties, special districts, or on any other basis made available by market opportunities and agreed to in writing by individual customers.

(2) A public agency that serves as a community aggregator on behalf of residential customers must offer the opportunity to purchase electricity to all residential customers within the agency's jurisdiction.

NEW SECTION. Sec. 19. CONSUMER INFORMATION. (1) After October 1, 1998, any person or entity that sells electricity to a retail electric customer shall disclose each component of an electrical bill as follows:

(a) The total charges attributable to the electricity;

(b) The total charges attributable to the delivery of the electricity to the customer;

(d) The total charges attributable to uneconomic utility investments identified and quantified as provided under section 6 of this act.

(2) Electricity service suppliers shall provide conspicuous notice that if a customer elects to purchase electricity from another supplier, the customer will continue to be liable for payment of the charges for public purposes and uneconomic utility investments. The commission may require additional information.

(3) Prior to December 1, 1998, the commission, in conjunction with electric utilities, shall devise and implement a customer education program to inform consumers of the changes to the electric industry. The program shall provide information that will assist consumers in making appropriate choices regarding their electric service. Every electric utility shall cooperate with the commission in devising and implementing the consumer education program.

NEW SECTION. Sec. 20. REGISTRATION PROCEDURES FOR CERTAIN ELECTRICITY SERVICE SUPPLIERS. (1) Any person or entity that is not an electric utility conducting business in the state as of January 1, 1999, and that intends to sell electricity after July 1, 1999, to more than one retail electric customer shall register with the commission prior to delivering electricity to customers in the state.

(2) The registration shall be on a form prescribed by the commission and shall contain such information as the commission may by rule require, but must include as a minimum: (a) The name and address of the person or entity; (b) the name and address of its registered agent, if any; (c) the name, address, and title of each officer or director, if any; (d) its most current balance sheet; (e) its latest annual report, if any; and (f) a description of the services it intends to offer. Prior to January 1, 1999, the commission shall create a standard application form for applicants to comply with this section.

(3) The commission may require as a precondition to registration the procurement of a performance bond sufficient to cover any advances or deposits the applicant may collect from its retail electric customers, or it may order that such advances or deposits be held in escrow or trust.

(4) The commission may deny registration to any applicant that:

(a) Does not provide information required by this section or by commission rules;

(b) Fails to provide a performance bond, if required;

(d) Does not possess adequate technical competency to perform the proposed service;

(e) Does not have adequate ability to respond to customer questions and complaints; or

(f) Does not otherwise meet the requirements of this section.

(5) The commission shall take action to approve or issue a notice of hearing concerning any application for registration within thirty days after receiving the application. The commission may deny an application after a hearing.

NEW SECTION. Sec. 21. CONSUMER PROTECTION. (1) Any electricity service supplier offering to sell electricity to retail electric customers shall, at the time of the offering, provide the potential customer with a written notice describing the price, terms, and conditions of the service, an explanation of the applicability and amount of the charges for public purposes and uneconomic utility investments, and a notice describing the potential customer's right to rescind the contract. The commission shall assist electricity service suppliers in developing the notice. The commission may require inclusion of additional information that would be useful to the customer.

(2) A contract to purchase electric service is effective only if in writing and signed by the customer and electricity service supplier.

(3)(a) In addition to any other right to revoke an offer, residential and small commercial customers have the right to cancel a contract for electric service until midnight of the third business day after the day on which the customer signs an agreement or offer to purchase.

(b) Cancellation occurs when the customer gives written notice of cancellation to the electricity service supplier at the address specified in the agreement or offer.

(c) Notice of cancellation, if given by mail, is effective when deposited in the mail properly addressed with postage prepaid.

(d) Notice of cancellation given by the customer need not take the particular form as provided in the contract or offer to purchase and, however expressed in writing, is effective if it indicates the intention of the customer not to be bound by the contract.

(4) A consumer damaged by a violation of this section by an electricity service supplier is entitled to recover all of the following: (a) Actual damages; (b) reasonable attorneys' fees and court costs; (c) exemplary damages, in the amount the court deems proper, for intentional or willful violations; and (d) equitable relief as the court deems proper.

(5) The rights, remedies, and penalties established by this section are in addition to the rights, remedies, or penalties established under any other law.

(6) Nothing in this section abrogates any authority of the attorney general to enforce existing law.

Sec. 22. RCW 42.17.310 and 1996 c 305 s 2, 1996 c 253 s 302, 1996 c 191 s 88, and 1996 c 80 s 1 are each reenacted and amended to read as follows:

(1) The following are exempt from public inspection and copying:

(a) Personal information in any files maintained for students in public schools, patients or clients of public institutions or public health agencies, or welfare recipients.

(b) Personal information in files maintained for employees, appointees, or elected officials of any public agency to the extent that disclosure would violate their right to privacy.

(c) Information required of any taxpayer in connection with the assessment or collection of any tax if the disclosure of the information to other persons would (i) be prohibited to such persons by RCW 82.32.330 or (ii) violate the taxpayer's right to privacy or result in unfair competitive disadvantage to the taxpayer.

(d) Specific intelligence information and specific investigative records compiled by investigative, law enforcement, and penology agencies, and state agencies vested with the responsibility to discipline members of any profession, the nondisclosure of which is essential to effective law enforcement or for the protection of any person's right to privacy.

(e) Information revealing the identity of persons who are witnesses to or victims of crime or who file complaints with investigative, law enforcement, or penology agencies, other than the public disclosure commission, if disclosure would endanger any person's life, physical safety, or property. If at the time a complaint is filed the complainant, victim or witness indicates a desire for disclosure or nondisclosure, such desire shall govern. However, all complaints filed with the public disclosure commission about any elected official or candidate for public office must be made in writing and signed by the complainant under oath.

(f) Test questions, scoring keys, and other examination data used to administer a license, employment, or academic examination.

(g) Except as provided by chapter 8.26 RCW, the contents of real estate appraisals, made for or by any agency relative to the acquisition or sale of property, until the project or prospective sale is abandoned or until such time as all of the property has been acquired or the property to which the sale appraisal relates is sold, but in no event shall disclosure be denied for more than three years after the appraisal.

(h) Valuable formulae, designs, drawings, and research data obtained by any agency within five years of the request for disclosure when disclosure would produce private gain and public loss.

(i) Preliminary drafts, notes, recommendations, and intra-agency memorandums in which opinions are expressed or policies formulated or recommended except that a specific record shall not be exempt when publicly cited by an agency in connection with any agency action.

(j) Records which are relevant to a controversy to which an agency is a party but which records would not be available to another party under the rules of pretrial discovery for causes pending in the superior courts.

(k) Records, maps, or other information identifying the location of archaeological sites in order to avoid the looting or depredation of such sites.

(l) Any library record, the primary purpose of which is to maintain control of library materials, or to gain access to information, which discloses or could be used to disclose the identity of a library user.

(m) Financial information supplied by or on behalf of a person, firm, or corporation for the purpose of qualifying to submit a bid or proposal for (i) a ferry system construction or repair contract as required by RCW 47.60.680 through 47.60.750 or (ii) highway construction or improvement as required by RCW 47.28.070.

(n) Railroad company contracts filed prior to July 28, 1991, with the utilities and transportation commission under RCW 81.34.070, except that the summaries of the contracts are open to public inspection and copying as otherwise provided by this chapter.

(o) Financial and commercial information and records supplied by private persons pertaining to export services provided pursuant to chapter 43.163 RCW and chapter 53.31 RCW, and by persons pertaining to export projects pursuant to RCW 43.23.035.

(p) Financial disclosures filed by private vocational schools under chapters 28B.85 and 28C.10 RCW.

(q) Records filed with the utilities and transportation commission or attorney general under RCW 80.04.095 that a court has determined are confidential under RCW 80.04.095.

(r) Financial and commercial information and records supplied by businesses or individuals during application for loans or program services provided by chapters 43.163, 43.160, 43.330, and 43.168 RCW, or during application for economic development loans or program services provided by any local agency.

(s) Membership lists or lists of members or owners of interests of units in timeshare projects, subdivisions, camping resorts, condominiums, land developments, or common-interest communities affiliated with such projects, regulated by the department of licensing, in the files or possession of the department.

(t) All applications for public employment, including the names of applicants, resumes, and other related materials submitted with respect to an applicant.

(u) The residential addresses and residential telephone numbers of employees or volunteers of a public agency which are held by the agency in personnel records, employment or volunteer rosters, or mailing lists of employees or volunteers.

(v) The residential addresses and residential telephone numbers of the customers of a public utility contained in the records or lists held by the public utility of which they are customers.

(w)(i) The federal social security number of individuals governed under chapter 18.130 RCW maintained in the files of the department of health, except this exemption does not apply to requests made directly to the department from federal, state, and local agencies of government, and national and state licensing, credentialing, investigatory, disciplinary, and examination organizations; (ii) the current residential address and current residential telephone number of a health care provider governed under chapter 18.130 RCW maintained in the files of the department, if the provider requests that this information be withheld from public inspection and copying, and provides to the department an accurate alternate or business address and business telephone number. On or after January 1, 1995, the current residential address and residential telephone number of a health care provider governed under RCW 18.130.140 maintained in the files of the department shall automatically be withheld from public inspection and copying unless the provider specifically requests the information be released, and except as provided for under RCW 42.17.260(9).

(x) Information obtained by the board of pharmacy as provided in RCW 69.45.090.

(y) Information obtained by the board of pharmacy or the department of health and its representatives as provided in RCW 69.41.044, 69.41.280, and 18.64.420.

(z) Financial information, business plans, examination reports, and any information produced or obtained in evaluating or examining a business and industrial development corporation organized or seeking certification under chapter 31.24 RCW.

(aa) Financial and commercial information supplied to the state investment board by any person when the information relates to the investment of public trust or retirement funds and when disclosure would result in loss to such funds or in private loss to the providers of this information.

(bb) Financial and valuable trade information under RCW 51.36.120.

(cc) Client records maintained by an agency that is a domestic violence program as defined in RCW 70.123.020 or 70.123.075 or a rape crisis center as defined in RCW 70.125.030.

(dd) Information that identifies a person who, while an agency employee: (i) Seeks advice, under an informal process established by the employing agency, in order to ascertain his or her rights in connection with a possible unfair practice under chapter 49.60 RCW against the person; and (ii) requests his or her identity or any identifying information not be disclosed.

(ee) Investigative records compiled by an employing agency conducting a current investigation of a possible unfair practice under chapter 49.60 RCW or of a possible violation of other federal, state, or local laws prohibiting discrimination in employment.

(ff) Business related information protected from public inspection and copying under RCW 15.86.110.

(gg) Financial, commercial, operations, and technical and research information and data submitted to or obtained by the clean Washington center in applications for, or delivery of, program services under chapter 70.95H RCW.

(hh) Information and documents created specifically for, and collected and maintained by a quality improvement committee pursuant to RCW 43.70.510, regardless of which agency is in possession of the information and documents.

(ii) Personal information in files maintained in a data base created under RCW 43.07.360.

(jj) Customer-usage records of an agency that distributes electricity to retail electric consumers.

(kk) Financial or commercial information furnished to or developed by an agency as part of a proposal, bid, or negotiation for electricity or related services.

(2) Except for information described in subsection (1)(c)(i) of this section and confidential income data exempted from public inspection pursuant to RCW 84.40.020, the exemptions of this section are inapplicable to the extent that information, the disclosure of which would violate personal privacy or vital governmental interests, can be deleted from the specific records sought. No exemption may be construed to permit the nondisclosure of statistical information not descriptive of any readily identifiable person or persons.

(3) Inspection or copying of any specific records exempt under the provisions of this section may be permitted if the superior court in the county in which the record is maintained finds, after a hearing with notice thereof to every person in interest and the agency, that the exemption of such records is clearly unnecessary to protect any individual's right of privacy or any vital governmental function.

(4) Agency responses refusing, in whole or in part, inspection of any public record shall include a statement of the specific exemption authorizing the withholding of the record (or part) and a brief explanation of how the exemption applies to the record withheld.

Sec. 23. RCW 80.12.020 and 1981 c 117 s 1 are each amended to read as follows:

No public service company shall sell, lease, assign or otherwise dispose of the whole or any part of its franchises, properties or facilities whatsoever, which are necessary or useful in the performance of its duties to the public, and no public service company shall, by any means whatsoever, directly or indirectly, merge or consolidate any of its franchises, properties or facilities with any other public service company, without having secured from the commission an order authorizing it so to do: PROVIDED, That this section shall not apply to any sale, lease, assignment or other disposal of such franchises, properties or facilities to a special purpose district as defined in RCW 36.96.010, city, county, or town.

After July 1, 1999, this section does not apply to the generating assets of any electrical company.

Sec. 24. RCW 80.12.040 and 1961 c 14 s 80.12.040 are each amended to read as follows:

No public service company shall, directly or indirectly, purchase, acquire, or become the owner of any of the franchises, properties, facilities, capital stocks or bonds of any other public service company unless authorized so to do by the commission. Nothing contained in this chapter shall prevent the holding of stocks or other securities heretofore lawfully acquired or prohibit, upon the surrender or exchange of said stocks or other securities pursuant to a reorganization plan, the purchase, acquisition, taking or holding by the owner of a proportionate amount of the stocks or other securities of any new corporation organized to take over at foreclosure or other sale, the property of the corporation the stocks or securities of which have been thus surrendered or exchanged. Any contract by any public service company for the purchase, acquisition, assignment or transfer to it of any of the stocks or other securities of any other public service company, directly or indirectly, without the approval of the commission shall be void and of no effect.

After July 1, 1999, this section does not apply to the generating assets of any electrical company.

Sec. 25. RCW 80.24.010 and 1994 c 83 s 1 are each amended to read as follows:

Every public service company subject to regulation by the commission shall, on or before the date specified by the commission for filing annual reports under RCW 80.04.080, file with the commission a statement on oath showing its gross operating revenue from intrastate operations for the preceding calendar year or portion thereof and pay to the commission a fee equal to one-tenth of one percent of the first fifty thousand dollars of gross operating revenue, plus two-tenths of one percent of any gross operating revenue in excess of fifty thousand dollars: PROVIDED, That the fee shall in no case be less than one dollar.

The percentage rates of gross operating revenue to be paid in any year may be decreased by the commission for any class of companies subject to the payment of such fees, by general order entered before March 1st of such year, and for such purpose such companies shall be classified as follows:

Electrical, gas, water, telecommunications, and irrigation companies shall constitute class one. Every other company subject to regulation by the commission, for which regulatory fees are not otherwise fixed by law shall pay fees as herein provided and shall constitute additional classes according to kinds of businesses engaged in.

Any payment of the fee imposed by this section made after its due date shall include a late fee of two percent of the amount due. Delinquent fees shall accrue interest at the rate of one percent per month.

After July 1, 1999, the regulatory fees of electrical companies shall not be based on revenue from generating assets.

Sec. 26. RCW 80.28.020 and 1961 c 14 s 80.28.020 are each amended to read as follows:

Whenever the commission shall find, after a hearing had upon its own motion, or upon complaint, that the rates or charges demanded, exacted, charged or collected by any gas company, electrical company or water company, for gas, electricity or water, or in connection therewith, or that the rules, regulations, practices or contracts affecting such rates or charges are unjust, unreasonable, unjustly discriminatory or unduly preferential, or in any wise in violation of the provisions of the law, or that such rates or charges are insufficient to yield a reasonable compensation for the service rendered, the commission shall determine the just, reasonable, or sufficient rates, charges, regulations, practices or contracts to be thereafter observed and in force, and shall fix the same by order.

After July 1, 1999, this section does not apply to the rates and charges for electricity sold by electrical companies to retail electric customers.

Sec. 27. RCW 80.28.050 and 1961 c 14 s 80.28.050 are each amended to read as follows:

Every gas company, electrical company and water company shall file with the commission and shall print and keep open to public inspection schedules in such form as the commission may prescribe, showing all rates and charges made, established or enforced, or to be charged or enforced, all forms of contract or agreement, all rules and regulations relating to rates, charges or service, used or to be used, and all general privileges and facilities granted or allowed by such gas company, electrical company or water company.

After July 1, 1999, this section does not apply to the rates and charges for electricity sold by electrical companies to retail electric customers.

NEW SECTION. Sec. 28. A new section is added to chapter 41.06 RCW to read as follows:

In addition to the exemptions under RCW 41.06.070, the provisions of this chapter do not apply to staff of the independent system operator exempt under section 7(4) of this act or to staff of the Northwest power exchange exempt under section 16(7) of this act.

NEW SECTION. Sec. 29. CAPTIONS. Captions used in this act do not constitute part of the law.

NEW SECTION. Sec. 30. Sections 1 through 21 of this act constitute a new chapter in Title 80 RCW.

NEW SECTION. Sec. 31. SEVERABILITY. If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.