S-2149

AN ACT Relating to the electric utility industry; amending RCW 80.12.020, 80.12.040, 80.24.010, 80.28.020, 80.28.050, and 80.28.075; reenacting and amending RCW 42.17.310; 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 cost of electricity is an important monthly expenditure for many households and is of increasing significance to businesses and industries, which compete in a sophisticated interstate and international marketplace. Restructuring the electrical utility industry in the manner described in this chapter will provide for more consumer choice and will provide an orderly transition from regulation to a more efficient and competitive environment.

(b) Many of the changes now underway in the electrical utility industry have occurred as a result of federal legislation and regulatory decisions that require utilities to open up their transmission lines to other users on a nondiscriminatory basis.

(c) It is in the interests of all Washington consumers to have a state-wide framework that is compatible with federal developments. The goal of this new structure is to provide competitive, low-cost, and reliable electric service to all of the state's residents and businesses.

(2) The legislature intends to:

(a) Permit new entities, including power marketers and others, to sell electricity directly to retail electric customers;

(b) Impose on electric utilities an obligation, similar to a common carrier, to provide nondiscriminatory and nonpreferential service in operating electric distribution facilities;

(d) Retain local control over publicly owned utilities and cooperatives that distribute electricity to retail customers;

(e) Establish procedures and deadlines for utilities;

(f) Ensure that the benefits of a competitive market are enjoyed by all customer classes;

(g) Provide electric utilities with a reasonable opportunity to recover a portion of their uneconomic utility investments during a five-year period;

(h) Ensure that all retail electric customers of electric utilities pay their fair share of uneconomic utility investments;

(i) Deregulate the pricing of electric generation for electrical companies after July 1, 1999, to allow sellers and buyers to negotiate transactions;

(j) Maintain regulation of rates for local distribution facilities and control area services, and prohibit a utility from shifting unrelated costs onto the rates of its distribution facilities and control area services;

(k) Permit customers to aggregate or pool their purchases;

(l) Adopt consumer information provisions to ensure that all customers receive itemized bills with unbundled rates;

(m) Provide retail electric customers with sufficient information to enable them to compare and select among products and services in the electricity market;

(n) Ensure that electric utilities receive fair and sufficient compensation for fulfilling their obligations; and

(o) Preserve Washington's low-cost electricity resources for the benefit of Washington's consumers. All customers should have access to basic and affordable electricity service regardless of whether they choose to participate in a competitive market. No customer should be made worse off with respect to rates or service in place on the effective date of this act if they choose not to participate in the competitive market.

NEW SECTION. Sec. 2. SHORT TITLE. This chapter shall be known and may be cited as the electric customer choice act.

NEW SECTION. Sec. 3. DEFINITIONS. The definitions in this section apply throughout this chapter unless the context clearly indicates otherwise.

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

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

(3) "Consumer-owned utility" means a municipal electric utility formed under Title 35 RCW, a public utility district formed under Title 54 RCW, a cooperative formed under chapter 23.86 RCW, or a mutual corporation or association formed under chapter 24.06 RCW.

(4) "Conservation" means a reduction in the consumption of electricity as a result of increases or improvements in the efficiency of energy use, production, or distribution. Conservation includes, but is not limited to, demand-side management programs that encourage changes in the consumption patterns of residential, commercial, and industrial customers.

(5) "Control area services" means scheduling, reactive power, spinning reserves, voltage control and regulation, and other related services necessary to sustain reliable delivery of electricity.

(6) "Direct access" means the right of all retail electric customers and electricity service suppliers to interconnect with or use, or both, distribution facilities on a nondiscriminatory basis to transport electricity from any source by or on behalf of any retail electric customer. "Direct access" is also known as "retail wheeling."

(7) "Direct service industry" means a company identified in section 5(d)(4)(A) of the Pacific Northwest electric power planning and conservation act (P.L. 96-501), as enacted on December 5, 1980.

(8) "Distribution facilities" means the equipment and infrastructure used to deliver electricity to retail electric customers, except a transmission facility.

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

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

(11) "Electric utility" means any electrical company, public utility district, electric cooperative or mutual association, municipal electric utility, irrigation district, port district, or any other entity that is authorized and engaged in the business of distributing electricity to retail electric customers in the state.

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

(13) "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, independent power producers, or other municipal or state authorities.

(14) "Generating asset" means the plant and equipment used to generate electricity.

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

(16) "Interconnection" means the physical connection of the distribution facilities of the electric utility to the facilities of the retail electric customer to allow the safe and reliable transfer of electricity from the distribution system to the facilities of the retail electric customer.

(17) "Irrigation district" means a municipal corporation engaged in the business of distributing electrical energy pursuant to chapter 87.03 RCW.

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

(19) "Load" means the amount of electricity delivered or required by a retail electric customer at a specific point of delivery.

(20) "Mid-Columbia resources" means the following hyrdroelectric generating projects licensed by the federal energy regulatory commission: Priest Rapids, including Wanapum and Priest Rapids developments, Rock Island, Rocky Reach, and Wells.

(21) "Mitigation" means to reduce stranded investment through contract negotiations, buyouts, buydowns, and other cost control or cost containment measures.

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

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

(24) "Replacement power services" means electricity and control area services provided in an emergency or temporary basis to replace the loss of electricity load or control area services provided by an electricity services supplier, or to cover that portion of a retail electricity customer's load that exceeds electricity load provided by an electricity service supplier.

(25) "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.

(26) "Small utility" means any electrical cooperative, municipal electric utility, or public utility district with twenty-five thousand or fewer meters in service or that has seven or fewer customers per mile of distribution line.

(27) "Standard offer rate" means the rate at which an electrical company is required to provide default bundled service under section 11 of this act.

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

(29) "Stranded investment" means all legitimate, prudently incurred, and verifiable expenditures by electrical companies in generation assets that would have been recoverable but for the implementation of retail competition by this chapter, and that cannot be mitigated by the electric utility making the expenditures.

(30) "Transition charge" means a charge or fee that recovers uneconomic utility investment in accordance with the provisions of this chapter and that is levied only during the transition period on the bill of a retail electric customer who is interconnected with an electric utility.

(31) "Transition period" means the period beginning July 1, 1999, and ending no later than June 30, 2004, except that: (a) For uneconomic utility investment attributable to any contract with the Bonneville Power Administration, the transition period ends on the earlier of June 30, 2009, or five years after the date on which the liabilities of the electric utility under the contract, if any, are finally established; and (b) for uneconomic utility investment financed by municipal debt instruments having a maturity of fifteen years or more, the transition period ends no later than June 30, 2009.

(32) "Transmission facility" means plant and equipment used to transmit electricity in interstate commerce, and (a) for electrical companies, plant and equipment whose rates, terms, and conditions are subject to the exclusive jurisdiction of the federal energy regulatory commission; and (b) for consumer-owned utilities, plant and equipment whose costs are recorded in accounts of the federal energy regulatory commission uniform system of accounts.

(33) "Undue market power" means the unfair or improper exercise of influence to increase or decrease the availability and price of a service or product in a manner that materially impairs the operation of competitive markets.

(34) "Uneconomic licensing costs" means that portion of the costs of any mid-Columbia resource which, due to compliance with the endangered species act and federal energy regulatory commission licensing process, is no longer economic due to the implementation of this chapter.

(35) "Uneconomic utility investment" means generating assets, conservation investments, and contractual obligations that were entered into in good faith by an electric utility before the effective date of this section, and that were prudent at the time the obligations were assumed, but that are no longer economic as a result of implementation of this chapter. In addition, "uneconomic utility investment" includes costs incurred to comply with the provisions of this chapter, but 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 authorized by this chapter or by another statute.

(36) "Utility obligation costs" are any costs incurred by an electric utility under or in connection with any investments made or contracts executed by the electric utility in or in connection with fulfilling its service obligation to a retail electric customer pursuant to sections 6 and 8 of this act.

NEW SECTION. Sec. 4. RIGHTS OF CUSTOMERS. (1)(a) Every retail electric customer has the right no later than July 1, 1999, to: (i) Choose the electricity service supplier to serve its load; and (ii) choose the quality and nature of electricity service, including but not limited to different product and pricing options, from the electricity service suppliers.

(b) If a retail electric customer has either a connected load in excess of two megawatts, or aggregates its load with that of other retail electric customers so that the sum of such loads exceeds two megawatts, the retail customer may choose more than one electric service suppliers to serve all or a portion of its load.

(2) If the schedules for implementing the requirements of this chapter, including but not limited to the deadlines for commission rulemaking, are delayed for any reason, the July 1, 1999, deadline is not postponed and shall remain in effect.

(3) No later than July 1, 1999, every retail electric customer has the right to interconnect with or use, or both, the distribution facilities of any electric utility on a nondiscriminatory basis to transport electricity from any electricity service supplier to the customer at rates that comply with section 9 of this act.

NEW SECTION. Sec. 5. RIGHTS AND OBLIGATIONS OF ELECTRICITY SERVICE SUPPLIERS. (1) By July 1, 1999, every electricity service supplier has the right to interconnect with or use, or both, the distribution facilities of an electric utility on a nondiscriminatory basis to transport electricity from any source to any retail electric customer at rates that comply with section 9 of this act.

(2) Every electricity service supplier has the obligation to comply with interconnection, scheduling, and metering requirements established by an electric utility for use of its distribution facilities pursuant to its obligations under section 22 of this act and to meet the registration and billing information requirements under sections 21 and 24 of this act.

(3) 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, and the commission shall assert no jurisdiction over its actions and transactions, except for the registration provisions in sections 21 and 24 of this act and to investigate market power abuses pursuant to section 26 of this act.

NEW SECTION. Sec. 6. DEFAULT SUPPLIER. (1) If a retail electric customer has not chosen a new electricity service supplier no later than July 1, 1999, the existing electric utility shall continue as that customer's supplier and shall maintain its obligation to serve that customer, pursuant to section 8 of this act.

(2) If an electric utility incurs utility obligation costs in order to fulfill its obligation to serve a retail electric customer pursuant to this chapter, and the retail electric customer subsequently elects to receive some or all of its electricity from one or more other suppliers subsequent to the expiration of the transition period, the electric utility may assess such retail electric customer a charge for utility obligation costs that could not be mitigated by the electric utility through the exercise of reasonable efforts.

(3) Nothing in this chapter diminishes or reduces the existing electric utilities' statutory obligation to low-income residential customers, including but not limited to the restrictions on termination of service contained in RCW 80.28.010, 35.21.300 and 54.16.285.

NEW SECTION. Sec. 7. NEW CUSTOMERS. A new customer of any electric utility has the same right as an existing customer to interconnect with or use, or both, the utility's distribution facilities so long as physical capability is not jeopardized. The utility shall only charge rates for such service that do not unduly discriminate against or grant preferential treatment to the new customer in the use of its facilities.

NEW SECTION. Sec. 8. STATUTORY OBLIGATION TO SERVE. (1) After July 1, 1999, or when an electric utility adopts direct access tariffs, whichever is sooner, an electric utility's statutory obligation to serve retail electric customers is modified as follows:

(a) For a retail electric customer that chooses to continue purchasing all components of its electric service from the electric utility, the utility remains obligated to provide all components of electric service to the customer.

(b) For a retail electric customer that chooses to purchase electricity from other suppliers, the electric utility has an obligation to provide direct access and control area services, pursuant to this chapter.

(c) For a retail electric customer that chooses to purchase a portion of its service, including electricity or unbundled products, from the electric utility and a portion from other suppliers, the electric utility is obligated to: (i) Continue providing the level of service that the customer chooses to purchase from electric utility; and (ii) provide direct access and control area services for the portion that is provided by other suppliers.

(2) If a retail electric customer who purchases direct access service decides, at a later date, to purchase electricity from the electric utility, the utility shall provide such service only upon reasonable notice and at its full cost. It is not required to provide such service at its standard offer rate.

(3) Each retail electric customer is required to provide the electric utility that provides it with distribution services with prior written notice of any change in the customer's type of service or the electric service supplier serving the retail electrical customer's load. The utility shall set the notice period, and the notice period must be the minimum necessary, consistent with the utility's operational capabilities.

NEW SECTION. Sec. 9. REGULATION OF RATES FOR DISTRIBUTION FACILITIES AND CONTROL AREA SERVICES. (1) Every electric utility shall offer unbundled rates, terms, and conditions for the use of its distribution facilities and for control area services and replacement power services. Every retail electric customer that is interconnected is obligated to purchase control area services from the electric utility to which it is interconnected.

(2) The commission shall set rates for the use of electrical company distribution facilities and control area services and replacement power services that are just, fair, reasonable, and sufficient. The commission shall ensure that the utility's costs, including but not limited to overhead directly attributable to distribution facilities and control area services, are allocated fairly among the various classes of customers according to their contribution to these costs. Nothing in this subsection prevents the commission from approving incentive or performance-based ratemaking to reduce such costs.

(3) The governing body of a public utility district, municipal electric utility, or electric cooperative shall set rates for the use of distribution facilities and control area services and replacement power services that are based on cost of service principles and are nonpreferential and nondiscriminatory. Such rates may include the costs of bond insurance, payment agreements, and other financial instruments used to secure payment of municipal debt instruments issued for generation, transmission, and distribution facilities. The governing body shall ensure that the utility's costs, including but not limited to overhead directly attributable to distribution facilities and control area services, are allocated fairly among the various classes of customers according to their contribution to these costs. Nothing in this subsection prevents the governing body from approving incentive or performance-based ratemaking to reduce such costs.

(4) Every retail electric customer of any electrical company has the option to purchase and install its own metering and interconnection facilities that meet standards and specifications required by the commission. The commission shall adopt rules to set standards and specifications for metering and interconnection equipment.

NEW SECTION. Sec. 10. LIMITATION ON COMMISSION AUTHORITY. After July 1, 1999, the commission shall not set the rates, terms, or conditions for the sale of electricity from generating assets owned by electrical companies. If, however, an electrical company offers direct access prior to that date, the commission may accelerate the deregulation of generating assets to match the date the company offers direct access. Nothing in this section reduces or limits the commission's authority to review electrical company rates for distribution facilities and control area services, or to set the standard offer rate in section 11 of this act.

NEW SECTION. Sec. 11. STANDARD OFFER RATE FOR FULL REQUIREMENTS SERVICE. (1) The legislature intends for every electrical company to offer a standard offer rate for retail customers who choose to continue to purchase fully bundled electricity service from the company.

(2) After July 1, 1999, or after the date direct access is offered, the electrical company shall offer a rate for fully bundled electricity service for each class of utility customer. The rate shall be capped at the cost of providing service from utility owned, or controlled, resources on the effective date of this act and adjusted appropriately for inflation and productivity improvements.

(3) The commission shall review and set standard offer rates that are fair, just, reasonable, and sufficient.

NEW SECTION. Sec. 12. RIGHT TO INTERCONNECT. In addition to rights under existing statute, every retail electric customer has the right to self-generate or to purchase or otherwise use electricity directly from generators located at their load and to interconnect with transmission and distribution facilities.

NEW SECTION. Sec. 13. RECIPROCITY. (1) Each electric utility is authorized, subject to the terms and conditions of this chapter, to provide retail electric service, including but not limited to electricity and control area services, to any retail electric customer, without regard to the location of the retail electric customer and without regard to electric utility service areas.

(2) The decision by an electric utility to provide retail electric service outside the area it served on the effective date of this section is discretionary and, in the case of consumer-owned utilities, must be approved by the governing body of the consumer-owned utility.

(3) An electric utility located outside of Washington state may not serve a retail customer in Washington state after July 1, 1999, unless the electric utility provides to electric utilities located in Washington state reciprocal access to the retail customers that it serves.

NEW SECTION. Sec. 14. OBLIGATION TO MITIGATE. Every electric utility has an obligation to mitigate uneconomic utility investments through contract negotiations, buy outs, buy downs, and other cost control or cost containment measures.

NEW SECTION. Sec. 15. IMPLEMENTATION PLANS. (1) By July 1, 1998, each electrical company shall prepare and submit to the commission an implementation plan with the following elements: (a) The proposed tariffs, terms, and conditions for standard offer service, direct access, control area services, and replacement power services; (b) the identification of uneconomic utility investments, if any; (c) the steps the electrical company has taken to mitigate the impacts of any uneconomic utility investments; (d) the proposed calculation of transition charges, if any; and (e) the separation of generation, transmission, and distribution assets and operations to assess the costs of utility functions and to allow for fair pricing of unbundled services.

(2) By July 1, 1998, each public utility district, municipal electric utility, and electric cooperative shall submit an implementation plan to its governing body that contains the elements of subsection (1)(a) through (e) of this section.

(3) By June 1, 1999, the commission shall accept or modify the implementation plan to ensure that the nondiscriminatory and nonpreferential terms of direct access are implemented. The commission shall hold one or more public hearings before taking final action on the implementation plan.

(4) By June 1, 1999, the governing body of a public utility district, municipal electric utility, or electric cooperative shall approve an implementation plan, including the tariffs, to ensure that the nondiscriminatory and nonpreferential terms of direct access are implemented. The governing body shall hold one or more public hearings before taking final action on the implementation plan.

NEW SECTION. Sec. 16. METHODOLOGY FOR ASSESSING UNECONOMIC UTILITY INVESTMENTS. (1) By January 1, 1998, the governing body of a public utility district, municipal electric utility, or electric cooperative shall determine whether or not it has any uneconomic utility investments. If it finds that it has such investments, the governing body shall hold one or more public, evidentiary hearings in which it shall adopt a methodology to: (a) Establish the net market value of the electric utility's entire portfolio of generating assets, conservation investments, and contractual obligations, when considered as a group; and (b) allocate uneconomic utility investments fairly and accurately among various customer classes without shifting costs from one class to another.

(2) The tariffs, terms, and conditions for direct access and control area services and the transition charges, if any, adopted pursuant to sections 15 and 17 of this act may be reviewed and revised annually by the commission or the governing body, as appropriate.

(3) The governing body of a public utility district, municipal electric utility, or electric cooperative shall allow the utility to recover in a transition charge the costs of its portfolio of uneconomic utility investments, if any, that cannot be mitigated, as determined to the governing body.

NEW SECTION. Sec. 17. COMPARABILITY. After July 1, 1999, or when an electric utility offers direct access, whichever is sooner, the utility shall, subject to customer confidentiality requirements: (1) Make available to electricity service suppliers comparable access to information about its distribution facilities, metering, aggregate loads, and scheduling, 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 made available to electricity service suppliers and retail electric customers.

NEW SECTION. Sec. 18. TRANSITION COSTS. By January 1, 1998, the commission shall study the extent of electric company stranded investment and develop a proposal to address these investments, to become effective no earlier than July 1, 1998. The study must recommend a mechanism that allows electric companies a reasonable opportunity to recover stranded investments that were prudently incurred as part of the electric company's obligation to serve, including incentives to mitigate any stranded investment. The study must be submitted to the energy and utilities committees of the house of representatives and the senate.

NEW SECTION. Sec. 19. The legislature finds that programs exist to address the needs of low-income persons in paying for essential energy services, and that these programs are at risk in a more competitive energy market. Therefore, the legislature directs the commission, with the assistance of the department of community, trade, and economic development, to study the appropriate ways to develop a universal electricity service fund. The study must be completed by January 1, 1999, and include recommended methods of collection and distribution of funds. The study must be submitted to the energy and utilities committees of the house of representatives and the senate.

NEW SECTION. Sec. 20. By January 1, 1998, the office of the attorney general shall study and recommend procedures and guidelines intended to assure consumer protection in a more competitive electricity market. The study must include, but is not limited to, standards for consumer comparisons, consumer complaint procedures, and recommended requirements for marketing and consumer agreements to be offered and executed only in written form. The study must be submitted to the energy and utilities committees of the house of representatives and the senate.

NEW SECTION. Sec. 21. REGISTRATION PROCEDURES FOR CERTAIN ELECTRICITY SERVICE SUPPLIERS. (1) Every electricity service supplier that is not an electric utility or joint operating agency conducting business in the state as of January 1, 1999, and that intends to sell electricity after July 1, 1999, to retail electricity customers shall register with the commission prior to delivering electricity to customers in the state.

(2) The registration must be on a form prescribed by the commission and must contain such information as the commission may by rule require, but must include as a minimum: (a) The name and address of the company; (b) the name and address of its registered agent; (c) its most current balance sheet; (d) its latest annual report, if any; and (e) 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) Within thirty days of receiving an application, the commission shall decide whether or not the applicant meets the qualifications in this section.

(4) The commission may deny registration to any electricity service supplier that: (a) Does not provide information required by this section or by commission rules; (b) fails to provide a performance bond, if required; (c) does not possess adequate financial resources to provide the proposed service; (d) does not possess adequate technical competency to perform its contractual agreements and obligations; (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 may approve an application with or without a hearing but shall deny an application only after a hearing.

(6) The commission may require as a precondition to registration the procurement of a performance bond sufficient to cover any advances or deposits the electricity service supplier may collect from its retail electric customers, or it may order that such advances or deposits be held in escrow or trust. By July 1, 1998, the commission shall adopt final rules pursuant to RCW 80.04.160 to implement this subsection.

(7) The commission has the authority to receive and investigate complaints from retail electric customers regarding the quality and reliability of service provided by registered electricity service suppliers.

(8) Every electricity service supplier subject to the registration provisions in this section shall obey, observe, and comply with any order of the commission. The commission has the authority to impose civil penalties pursuant to RCW 80.04.387 for violations of this section.

(9) The commission after a hearing may issue an order suspending a registration of an electricity service supplier if it finds that such an order: (a) Is in the public interest; and (b) is based on complaints from retail electric customers that show a pattern of violations of the consumer protection act, chapter 19.86, or if the electricity service supplier's business practices jeopardize the reliability of electricity service to retail electric customers.

(10) Nothing in this section prohibits the attorney general or an injured private party from exercising its right to obtain relief under sections 27 and 28 of this act.

NEW SECTION. Sec. 22. RELIABILITY. (1) Every electric utility is obligated to maintain the integrity of its distribution facilities and provide safe, reliable service to all retail electric customers. Nothing in this chapter reduces or diminishes the statutory or contractual obligations of electric utilities to maintain the reliability of their distribution facilities and other infrastructure or equipment used to deliver electricity, and the right of the electric utilities to receive fair, just, reasonable, and sufficient compensation for use of these facilities and fulfillment of this obligation.

(2) To ensure the safe and reliable operation of distribution facilities, the governing body of every public utility district, municipal electric utility, and electric cooperative is authorized to establish tariffs, regulations, and policies to govern the conditions under which electricity service suppliers and retail electric customers may install meters and interconnect with the electric utility's distribution facilities.

(3) To ensure the safe and reliable operation of distribution facilities owned or operated by electrical companies, the commission is authorized to approve tariffs, regulations, and policies to govern the conditions under which electricity service suppliers and retail electric customers may install meters and interconnect with the electrical company's distribution facilities.

(4) The matters addressed by tariffs, regulations, and policies adopted under this section may include, but are not limited to, the following: (a) Equipment specifications for meters and interconnection facilities; (b) design, installation, and operating standards for meters and interconnection facilities; (c) methods for determining where interconnections and meters can be located; (d) the ongoing obligation of electricity service suppliers or retail electric customers to add protective equipment to equipment; (e) the obligation of electricity service suppliers and retail electric customers to grant the electric utility access to the meters and interconnection facilities to read the meters and conduct necessary tests; (f) the obligation of the electricity service suppliers or retail electric customer to pay costs incurred by the electric utility that are directly attributable to the requested interconnection; and (g) the liability of the electricity service supplier or retail electric customer for loss or damage to the electric utility's distribution facilities attributable to an action by the electrical service supplier or retail electric customer.

(5) No electrical service supplier or retail electric customer shall construct, own, or operate transmission or distribution facilities that are parallel with or duplicative of transmission or distribution facilities owned, operated, or planned by an electric utility.

(6) Whenever requested by an electricity service provider or a retail electric customer, the electric utility shall promptly upgrade, expand, or construct new distribution or transmission facilities needed to provide retail electric service or direct access to a retail electric customer located within the area served by the electric utility's distribution facilities.

(7) The commission, with the assistance of the department of community, trade, and economic development, shall periodically report on electric system reliability throughout the state. System reliability can be measured by evaluating the operations and maintenance budget level, the system average duration interruption, the system average frequency interruption, and reportable accident and incident rates under the federal occupational safety and health act and the Washington industrial safety and health act.

NEW SECTION. Sec. 23. CONSUMER RIGHTS. (1) Each retail electric customer who is solicited by an electricity service supplier must, at the time of the offering, be provided with written notice explaining: (a) The price, terms, and conditions of the transaction; (b) the applicability and amount of any other charges imposed or authorized by law; (c) the customer's right to cancel the contract, pursuant to subsection (2) of this section; and (d) the terms and conditions of the applicable wheeling contract, as required by law. The commission may require disclosure of additional information by rule.

(2) In addition to other remedies available by law, a retail electric customer may cancel a contract with an electricity service supplier until midnight of the third business day after the day on which the customer signs an agreement or offer to purchase. The commission may specify by rule what constitutes a valid notice of cancellation.

(3) No electricity service supplier shall make any change or authorize any other electricity service supplier to make a change in electricity service supplier for any retail electric customer without first obtaining the express written consent of such customer.

NEW SECTION. Sec. 24. BILLING PROCEDURES. (1) Every bill to a retail electric customer from an electricity service supplier must contain, among other things: (a) A complete and accurate list of the rates and amount due for each unbundled service or product that the customer is purchasing; (b) the rates and amount of state and local taxes, if any, imposed on the customer; (c) standard pricing terms to permit meaningful comparison between suppliers; (d) identification of generation resource kind, mix, and other characteristics; and (e) other price information necessary to facilitate the ability of customers to make choices between suppliers, as determined by the commission pursuant to rules adopted under RCW 80.04.160 for all service using the distribution facilities of electrical companies, and by the appropriate governing body for all service using distribution facilities of all other electric utilities.

(2) All retail electric customers have the right to receive a separate bill from an electricity service supplier that provides products and services. With the permission of the retail electric customer and the electricity service supplier, an electric utility, at its option, may consolidate the bill for all electric services in a single statement. The utility, however, shall not be required to forward payment to an electricity service supplier for services it provided to a retail electric customer before the utility has received payment for those services from the customer.

(3) By July 1, 1998, the commission shall adopt uniform rules pursuant to RCW 80.04.160 to protect the confidentiality of individual customer-usage records of electrical companies that offer direct access and of electricity service suppliers that receive a registration pursuant to section 21 of this act.

NEW SECTION. Sec. 25. RESTRUCTURING REQUIREMENTS FOR SMALL UTILITIES. (1) No later than October 1, 2001, every retail electric customer of a small utility has the right to: (a) Choose one or more electricity service suppliers to serve all or a portion of its load; and (b) choose the quality and nature of electricity service, including but not limited to different product and pricing options from one or more electricity service suppliers.

(2) A small utility may, at the discretion of its governing body, call for a vote of its customers in 1999 for the purpose of deciding if the distribution company will or will not open its service area to competition. Such vote, if held at a cooperative, must be in accordance with its articles of incorporation and bylaws; if a public utility district, in accordance with procedures outlined in chapter 54.40 RCW; or, if a municipal electric company, in accordance with procedures outlined in chapter 35.21 RCW. If customers vote in favor of opening the service area to competition, the utility shall meet the requirements of subsection (1)(a) and (b) of this section within one hundred eighty days of the date of the vote. If customers vote against opening the service area to competition, the distribution company shall hold a second vote in 2001. If customers vote in favor of opening the service area to competition, the distribution company shall meet the requirements of subsection (1)(a) and (b) of this section within one hundred eighty days of the date of the vote. If customers vote a second time against opening the service area to competition, the distribution company is not obligated to hold another vote unless ten percent of its customers petition in favor of such a vote, in which case the utility shall be obligated to conduct a vote within three hundred sixty-five days. If the customers vote in favor of opening the service area to competition, the utility shall meet the requirements of subsection (1)(a) and (b) of this section within one hundred eighty days of the date of the vote.

(3) A small utility that does not open its service area to competition may not sell electricity to a retail electric customer of any other electric utility.

(4) Nothing in this section restricts the ability of a small utility to open its system to competition sooner than October 1, 2001.

(5) Any person or entity injured by an electrical distribution company's failure to comply with this section has the right to file suit in superior court for an order requiring compliance with this section.

NEW SECTION. Sec. 26. COMMISSION AUTHORITY TO INVESTIGATE MARKET POWER ABUSE. Upon receiving a complaint from a retail electric customer, the commission has the authority to investigate whether any electrical company or an electrical service supplier, except for a public utility district, municipal electric utility, or electric cooperative, has exercised undue market power with respect to the sale of electricity, or has in any other way violated the requirements of this chapter. The commission shall make a finding based on its investigation, prescribe remedies, or, if warranted, refer the case to the attorney general's office for further investigation or action under the consumer protection act, chapter 19.86 RCW.

NEW SECTION. Sec. 27. APPLICABILITY OF THE CONSUMER PROTECTION ACT. (1) The acts and practices covered by this chapter vitally affect the public interest, the electricity bills of consumers, and the competitive position of businesses and industries. The legislature finds that certain acts and practices are unreasonable in relation to the development of competitive markets for electricity and are injurious to the public interest. The legislature therefore intends for certain provisions of the consumer protection act, chapter 19.86 RCW, to apply to certain actions and transactions of electric utilities and electricity service suppliers.

(2) Every electricity service supplier that is subject to section 21 of this act that markets, promotes, or sells electricity to retail electric customers shall comply with RCW 19.86.020 prohibiting unfair methods of competition and unfair or deceptive acts.

(3) For the purposes of establishing an exemption under RCW 19.86.170, any actions or transactions after July 1, 1999, relating to the sale of electricity from generating assets shall not be deemed otherwise permitted, prohibited, or regulated by the commission.

NEW SECTION. Sec. 28. PRIVATE RIGHT OF ACTION. Any person or entity injured by an electricity service provider's failure to comply with this chapter has the right to file suit in superior court for an order requiring compliance with this chapter.

NEW SECTION. Sec. 29. VOLUNTARY AGREEMENTS. Nothing in this chapter restricts the ability of electric utilities to fulfill their obligations under voluntary agreements that designate boundaries for service areas as authorized by chapter 54.48 RCW. The signing of such agreements does not restrict or limit the obligation of the electric utility to offer direct access service and control area services and otherwise comply with this chapter. Service area agreements that conflict with the purposes and provisions of this chapter and that restrict the ability of an electric utility to sell electricity in another utility's service territory are no longer in the public interest. To the extent that existing agreements restrict or limit the ability of an electric utility to sell in another's territory, and one or more parties to the agreement is an electrical company, the commission shall initiate proceedings as soon as practicable to limit the effect of such agreements to boundary lines for distribution facilities.

NEW SECTION. Sec. 30. IMPOSITION OF CONSERVATION AND RENEWABLE ENERGY CHARGE. Beginning on July 1, 1999, every retail electricity customer and direct service industry shall pay a nonbypassable, three percent charge on its total electricity bill. The three percent charge constitutes the maximum total amount that may be levied for such purposes in rates or charges on retail electricity customers. If an electric utility chooses to expend more than three percent of its previous calendar year revenues on system benefits, these costs shall be allocated to the generation portion of its services and shall be plainly stated for customers on any utility billing statements.

NEW SECTION. Sec. 31. LEGISLATIVE TASK FORCE TO EXAMINE COLLECTION PROCEDURES. By December 1, 1997, the senate and house of representatives energy and utilities committees shall study and recommend ways to collect the nonbypassable charge from all retail electric customers in the state. The study shall examine, among other things: (1) Simplified and equitable collection procedures; (2) ways to protect individual customer records and other confidential information related to the imposition of the charge; (3) alternative criteria, other than revenue, that electric cooperatives with low customer density may use in collecting the conservation and renewable energy charge; and (4) the methods of calculation and the duration of the credits authorized by section 34 of this act for customers with large loads.

NEW SECTION. Sec. 32. EXPENDITURE OF FUNDS. (1) One hundred percent of the total funds collected in section 30 of this act shall be retained and used by the electric utility for conservation or renewable energy programs, except that: (a) The utility may disperse up to eighteen percent of such funds to organizations that have a contractual agreement with the department of community, trade, and economic development to provide low-income weatherization programs for eligible retail electricity customers; (b) the utility may invest no more than eighteen percent of the funds in a nonprofit, energy efficiency alliance that funds regional market transformation activities for conservation; and (c) no more than fifteen percent of such funds may be used for research, development, and demonstration projects, including but not limited to, funds dedicated to the Washington technology center, created pursuant to RCW 28B.20.285, and the Spokane intercollegiate research and technology institute, created pursuant to RCW 28B.10.060. Investments in renewable energy programs may include: (i) The direct investment in renewable energy power plants, including but not limited to plants undertaken by a joint operating agency; or (ii) the reduction of production costs from renewable energy power plants offered to retail electric customers through direct access with other electricity service suppliers.

(2) Any consumer-owned utility may aggregate its expenditures with other utilities by participating in a joint operating agency or other group. In such circumstances, the standards for compliance in this chapter apply to the joint operating agency or group and not to the individual participating utility.

(3) A direct service industry shall: (a) Expend the funds collected by the charge in compliance with this section, as if it were an electric utility; or (b) contract with one or more utilities to expend funds according to the provisions in this section.

NEW SECTION. Sec. 33. REPORTING REQUIREMENTS. (1) The legislature intends to create a reporting requirement for electric utilities and other parties to document expenditures of funds raised by the conservation and renewable energy charge. The reports are intended to be summary documents only and are not meant to impose onerous requirements on those entities required to prepare them.

(2) Every electrical company shall prepare and submit an annual report to the commission summarizing its activities and expenditures relating to its conservation and renewable energy programs. The commission shall develop rules for uniform reporting requirements.

(3) The governing board of every consumer-owned utility shall prepare and submit an annual report to the secretary of state summarizing its activities and expenditures relating to the conservation and renewable energy programs. The secretary of state shall develop rules for uniform reporting requirements.

(4) The energy-efficiency alliance that receives electric utility funds shall submit an annual report to the state auditor summarizing its activities and expenditures relating to conservation and energy-efficiency programs.

(5) Each retail electric customer that expends funds and receives a credit under section 34 of this act shall prepare and submit an annual report to the department of revenue summarizing its activities and expenditures relating to conservation and energy-efficiency programs.

(6) The department of community, trade, and economic development shall submit a biennial report to the legislature summarizing its low-income weatherization activities and expenditures.

NEW SECTION. Sec. 34. CREDITS FOR CUSTOMERS WITH LARGE LOADS. (1) A retail electric customer with an annual load of more than eight million seven hundred sixty thousand kilowatt hours is eligible to take a credit against the nonpassable charge authorized in section 32(1) of this act for conservation investments made at a facility it owns or operates in the state. However, no credit shall be allowed for expenditures for low-income weatherization authorized by section 32(1)(a) of this act and for the nonprofit energy efficiency alliance authorized by section 32(1)(b) of this act.

(2) A retail electric customer with an annual load of more than eight million seven hundred sixty thousand kilowatt hours is eligible to take a credit against the nonpassable charge authorized in section 32(2) of this act for investments made in renewable energy power plants.

NEW SECTION. Sec. 35. EVALUATION BY LEGISLATURE. On or before July 1, 2002, the legislature shall conduct an evaluation of: (1) The level of funding and the cost-effectiveness of the measures and activities taken to date; and (2) the ongoing need for the conservation and renewable energy charge. The evaluation must also identify and discuss alternative funding mechanisms for these programs.

NEW SECTION. Sec. 36. TERMINATION OF CHARGE. The conservation and renewable energy charge, authorized by section 30 of this act, terminates no later than July 1, 2009.

NEW SECTION. Sec. 37. OPTIONAL TARIFFS. The commission shall authorize new optional rate schedules and tariffs, including new service offerings, that accurately reflect the loads, locations, conditions of service, cost of service, and market opportunities of customer classes and subclasses of an electrical company.

NEW SECTION. Sec. 38. For a period of ten years commencing six months after the completion of the federal energy regulatory commission licensing process for each mid-Columbia resource, the electric service providers that own or are contractually entitled to receive electrical output from a mid-Columbia resource may collect as a part of its distribution service charge any uneconomic licensing cost attributable to such mid-Columbia resource.

NEW SECTION. Sec. 39. Nothing in this chapter shall require a governing body to set rates for the use of distribution facilities and control area services that, in the judgment of such governing body, would impair the ability of the public utility district, municipal electric utility, or electric cooperative to perform fully its covenants with holders from time to time of its bonds, notes, or other evidences of indebtedness

Sec. 40. 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:

AGENCY RECORDS. (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. 41. RCW 80.12.020 and 1981 c 117 s 1 are each amended to read as follows:

REMOVAL OF RESTRICTIONS ON CERTAIN PROPERTY TRANSFERS. 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. 42. RCW 80.12.040 and 1961 c 14 s 80.12.040 are each amended to read as follows:

REMOVAL OF RESTRICTIONS ON CERTAIN PROPERTY ACQUISITIONS. 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. 43. RCW 80.24.010 and 1994 c 83 s 1 are each amended to read as follows:

REGULATORY FEES. 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 or registration 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, but shall include revenue derived from standard offer rates adopted pursuant to section 11 of this act.

Sec. 44. RCW 80.28.020 and 1961 c 14 s 80.28.020 are each amended to read as follows:

COMMISSION HEARINGS. 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, except for standard offer rates adopted pursuant to section 11 of this act.

Sec. 45. RCW 80.28.050 and 1961 c 14 s 80.28.050 are each amended to read as follows:

COMMISSION TARIFFS. 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.

Sec. 46. 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. 47. Captions used in this act are not part of the law.

NEW SECTION. Sec. 48. 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. 49. Sections 1 through 39 of this act constitute a new chapter in Title 80 RCW.