AN ACT Relating to the electric utility industry; amending RCW 80.28.075; 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 as a result of federal legislation and regulatory decisions that require utilities to provide other users with nondiscriminatory access to transmission lines.

(b) It is in the interest of all Washington consumers to develop a state-wide framework that is compatible with federal developments. The goal of this new structure is to provide competitive electricity service, while maintaining existing reliability, to all of the state's residents and businesses.

(c) The state should take the first steps toward providing an orderly transition to more competitive markets for electricity.

(2) The legislature intends to:

(a) Require electric utilities to separately account for their generation, transmission, and distribution assets and operations;

(b) Require that bills for retail electric customers contain new price information; and

(c) Require new market entrants that are not existing electric utilities in the state to register with the utilities and transportation commission.

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

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

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

(3) "Control area services" means reactive power, spinning reserves, voltage control and regulation, and other related services necessary to sustain reliable delivery of electricity to a retail electric customer.

(4) "Delivery services" means the services needed to deliver electricity to a retail electric customer using the transmission, distribution, and other facilities of an electrical company or consumer-owned utility.

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

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

(7) "Electricity service supplier" means any person or entity that sells electricity to more than one retail electric customer, including but not limited to an electrical company, consumer-owned utility, aggregator, power marketer, broker, or independent power producer. The Bonneville power administration, established pursuant to 16 U.S.C. Sec. 832 et seq., or its successor, is not an electricity service supplier for purposes of this chapter.

(8) "Governing body" means the board of directors, the council of a city or town, or the commissioners of an electric cooperative, irrigation district, municipal electric utility, mutual association, or public utility district, respectively, that has the authority to set and approve rates.

(9) "Joint operating agency" means an agency organized pursuant to chapter 43.52 RCW.

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

(11) "Small consumer-owned utility" means any consumer-owned utility with twenty-five thousand or fewer meters in service or that has an average of seven or fewer customers per mile of distribution line.

NEW SECTION. Sec. 3. SEPARATE ACCOUNTING REQUIREMENTS. No later than September 1, 1998, every consumer-owned utility and electrical company shall: (1) Separately account for generation, transmission, and distribution assets and operations, according to the costs contributed by each class of customers, to facilitate the accurate assessment of the costs of such functions; and (2) restate its published rates into at least the following rate elements: Electricity; delivery services; and control area services.

NEW SECTION. Sec. 4. DISCLOSURE TO CONSUMERS. No later than October 1, 1998, every consumer-owned utility, electrical company, or electricity service supplier shall provide on a regular basis the following information to its retail electric customers: (1) A complete and accurate list of the rates for each service or product set forth in section 3(2) of this act that the customer is purchasing; (2) the rates of state and local electricity taxes, if any, paid by the customer; and (3) other price information necessary to facilitate customer choice, as determined by the commission for electrical companies and electricity service suppliers, pursuant to rules adopted under RCW 80.04.160, or by the governing body of each consumer-owned utility.

NEW SECTION. Sec. 5. SMALL UTILITIES. Small consumer-owned utilities are not required to comply with sections 3 and 4 of this act until January 1, 1999.

Sec. 6. RCW 80.28.075 and 1988 c 166 s 2 are each amended to read as follows:

Upon request by a natural gas company or an electrical company, the commission may approve a tariff that includes banded rates for any ((~~nonresidential~~)) natural gas or electric service that is subject to effective competition from energy suppliers not regulated by the utilities and transportation commission. "Banded rate" means a rate that has a minimum and maximum rate. Rates may be changed within the rate band upon such notice as the commission may order.

NEW SECTION. Sec. 7. Captions used in this act are not part of the law.

NEW SECTION. Sec. 8. 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.

NEW SECTION. Sec. 9. Sections 1 through 5 of this act constitute a new chapter in Title 80 RCW.