BP BHEAD INT S [atlas:bill]

AN ACT Relating to retail electrical customers; amending RCW 42.30.110, 54.16.040, 54.16.070, 54.16.090, 54.16.180, 54.24.020, 54.24.030, 54.24.050, and 54.24.090; adding a new chapter to Title 18 RCW; and creating new sections.

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

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

(a) Electricity is a basic and fundamental need of all residents;

(b) Currently Washington's consumer-owned and investor-owned distribution utilities offer consumers a high degree of reliability and service quality while providing some of the lowest rates in the country; and

(c) Consumer protection, system reliability, service quality, and low-cost electricity rates could be at risk if the restructuring of the retail electricity industry occurs.

(2) The legislature intends to:

(a) Preserve the benefits of consumer protection, system reliability, high service quality, and low-cost rates in the event of the restructuring of the retail electrical industry;

(b) Ensure that all retail electrical customers have the same level of rights and protections;

(d) Provide for increased protections for consumers against potential unscrupulous business practices that may occur in the marketing of electricity products or services in a restructured environment.

NEW SECTION. Sec. 2. 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 distribution utility" means an electricity distribution utility that is 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, an irrigation district formed under chapter 87.03 RCW, or a mutual corporation or association formed under chapter 24.06 RCW.

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

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

(5) "Electricity distribution utility" means a consumer-owned or investor-owned utility that is authorized and engaged in the business of distributing electricity to retail electric customers in the state.

(6) "Electricity supplier" means a person or entity that sells electricity directly to more than one retail electric customer, including, but not limited to, electric utilities, aggregators, marketers, brokers, or independent power producers to be distributed by the customer's electricity distribution utility. Electricity suppliers do not include electricity distribution utilities unless the utilities are authorized to sell electricity to retail electric customers who are served by another electricity distribution utility.

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

(8) "Investor-owned distribution utility" means an electricity distribution utility owned by investors that meets the definition of an electrical company as defined in RCW 80.04.010.

(9) "Proprietary customer information" means (a) information that relates to the source and amount of electricity used by a customer, a customer's payment history, and household data that is made available by the customer solely by virtue of the utility-customer or supplier-customer relationship; and (b) information contained in a customer's bill.

(10) "Retail electric customer" means a person or entity that purchases electricity for ultimate consumption and not for resale.

NEW SECTION. Sec. 3. Each retail electric customer in this state has the right to receive the following disclosures from the electricity distribution utility that provides electricity service to the customer:

(1) An explanation of any applicable credit and deposit requirements, including the means by which credit may be established, the conditions under which a deposit may be required, the amount of any deposit, interest paid on the deposit, and the circumstances under which the deposit will be returned or forfeited.

(2) A complete, itemized listing of all rates and charges for which the customer is responsible, including charges, if any, to terminate service.

(3) An explanation of the metering or measurement policies and procedures, including the process for verifying the reliability of the meters or measurements and adjusting bills upon discovery of errors in the meters or measurements.

(4) An explanation of bill payment policies and procedures, including due dates and applicable late fees.

(5) An explanation of the payment arrangement options available to customers, including budget payment plans and the availability of home heating assistance from government and private sector organizations.

(6) An explanation of the method by which customers must give notice of their intent to discontinue service, the circumstances under which service may be discontinued by the utility, the conditions that must be met by the utility prior to discontinuing service, and how to avoid disconnection.

(7) An explanation of the utility's policies governing the confidentiality of proprietary customer information, including the circumstances under which the information may be disclosed and ways in which customers can control access to the information.

(8) An explanation of the methods by which customers may make inquiries to and file complaints with the utility, and the utility's procedures for responding to and resolving complaints and disputes, including a customer's right to complain about an investor-owned distribution utility to the commission and appeal a decision by a consumer-owned utility to the governing body of the consumer-owned utility.

(9) An annual report containing the following information for the previous calendar year:

(a) A general description of the electricity distribution utility's customers, including the number of residential, commercial, and industrial customers served by the electric distribution utility, and the amount of electricity consumed by each customer class stated as a percentage of the total utility load;

(b) A summary of the average electricity rates for each customer class stated in cents per kilowatt hour, and the date of the electricity distribution utility's last general rate increase or decrease;

(c) An explanation of the fuel mix used by the electricity distribution utility to serve its retail electric customers, shown as a pie chart where each resource comprising five percent or more of the total fuel mix is separately listed, and including the air emissions of sulfur dioxide, nitrogen oxide, and carbon dioxide per kilowatt hour for each source of generation in the fuel mix, relative to the regional average emissions per kilowatt hour for each resource. When all or a portion of the electricity is supplied without regard to a particular source of generation, then the electricity distribution utility shall disclose the average level of air emissions for all generators within the western systems coordinating council;

(d) An explanation of the amount invested by the electricity distribution utility in conservation, renewable resources, and low-income weatherization and assistance programs, and the source of funding for the investments; and

(e) An explanation of the amount of federal, state, and local taxes collected and paid by the electricity distribution utility, including the amounts collected by the electricity distribution utility but paid directly by retail electric customers.

(10) A prominent disclosure of the following statements: "YOUR BILL INCLUDES CHARGES FOR ELECTRICITY, DELIVERY SERVICES, GENERAL ADMINISTRATION AND OVERHEAD, METER READING, TAXES, CONSERVATION EXPENSES, AND OTHER ITEMS." and (a) For investor-owned distribution utilities: "YOUR RATES ARE REVIEWED BY THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION (WUTC) BEFORE THEY BECOME EFFECTIVE. WE WILL SEND YOU AN ADVANCE NOTICE OF ANY PUBLIC HEARINGS SCHEDULED BY THE WUTC THAT MAY AFFECT YOUR RATES." or (b) For consumer-owned distribution utilities: "YOUR RATES ARE SET BY . . .[name of the governing body of the consumer-owned distribution utility]. . . WE WILL SEND YOU AN ADVANCE NOTICE OF ANY PUBLIC HEARING SCHEDULED BY . . .[name of the governing body of the consumer-owned distribution utility]. . . THAT MAY AFFECT YOUR RATES."

NEW SECTION. Sec. 4. (1) An electricity distribution utility shall provide the disclosures required in section 3 (1) through (9) of this act to retail electric customers at the following times:

(a) At the time service is established;

(b) At least thirty days prior to the effective date of any changes to the policies and procedures adopted by the utility under section 5 or 6 of this act;

(c) At least once a year after the adoption of the policies and procedures by the utility under section 5 or 6 of this act; and

(d) At any time upon request of the customer.

(2) The disclosures required in section 3(10) of this act shall be displayed in a prominent location on all billing statements sent to retail electric customers.

(3) Required disclosures shall be provided in writing using plain language that is understandable to an ordinary customer and presented in a form that is clear and conspicuous.

NEW SECTION. Sec. 5. (1) Not later than October 1, 1998, each investor-owned distribution utility shall adopt consumer protection policies and procedures to implement the disclosure requirements of this chapter and any related commission rules, whether the rules are currently existing or adopted under this section. An investor-owned distribution utility shall file its policies and procedures with the commission and may modify the policies and procedures from time to time, subject to the approval of the commission.

(2) Not later than September 1, 1998, the commission shall adopt rules necessary for investor-owned distribution utilities to comply with the requirements of this chapter.

NEW SECTION. Sec. 6. (1) Not later than October 1, 1998, the governing body of each consumer-owned distribution utility shall adopt consumer protection policies and procedures to implement the disclosure requirements of this chapter. The policies and procedures shall be adopted only after one or more public meetings on the matter have been held. A consumer-owned distribution utility shall file its policies and procedures with the department along with a summary of the public meetings held on the policies and procedures. A consumer-owned distribution utility may modify the policies and procedures from time to time, subject to the approval of the utility's governing body after a public meeting on the matter.

(2) Upon request of the governing body of a consumer-owned distribution utility, the department, the attorney general, and the commission shall provide technical assistance to a consumer-owned distribution utility in the development of its policies and procedures.

NEW SECTION. Sec. 7. Not later than December 1, 1998, the department shall report to the legislature on the consumer protection policies and procedures adopted by consumer-owned distribution utilities under this chapter. The report shall summarize the policies and procedures adopted, including areas where the policies and procedures were consistent among the consumer-owned distribution utilities and areas where the policies and procedures were inconsistent among the consumer-owned distribution utilities. The report shall also summarize the level of public participation reported by the consumer-owned distribution utilities during the development of the policies and procedures.

NEW SECTION. Sec. 8. The utilities and transportation commission and the department of community, trade, and economic development shall jointly study the following issues:

(1) The current and potential future impacts on wholesale and retail electricity prices in Washington resulting from the enactment of the federal energy policy act of 1992, P.L. 102-486;

(2) In the absence of state legislation allowing retail electric customers in the state to have choices among electricity suppliers, the current and potential future impacts on:

(a) The prices of retail electricity for residential, commercial, and industrial customers in the state, including the types of cost-shifting that may occur by electricity distribution utilities between and among customer classes;

(b) The reliability and service quality of electricity service in the state;

(d) The level of investment by local electric utilities in conservation, renewable resources, and low-income weatherization and energy assistance programs in the state; and

(3) Assuming a model of electricity industry restructuring that allows residential and small commercial customers access to a portfolio of electricity options from their electric distribution utility, and large commercial and industrial customers with individual or aggregated loads of one average megawatt or larger direct access to electricity offered by electricity suppliers, the potential future impacts on:

(a) The prices of retail electricity in the state for residential, commercial, and industrial customers, including ways to define, measure, detect, control, deter, and sanction cost-shifting by electricity distribution utilities;

(b) The reliability of electricity service in the state, including ways to maintain the integrity of the state's distribution systems and protect the safety of maintenance and operation workers of the systems;

(c) The service quality of electricity service in the state, including ways to define, measure, detect, control, deter, and sanction service quality problems; and

(d) The level of investment by local electric utilities in conservation, renewable resources, and low-income weatherization and energy assistance programs in the state, including ways to fairly, efficiently, and effectively maintain support for these programs.

The utilities and transportation commission and the department of community, trade, and economic development shall report the results of this study to the legislature and the governor no later than November 15, 1998.

NEW SECTION. Sec. 9. Sections 10 through 16 of this act apply to electricity suppliers that are authorized to market, promote, sell, or provide electricity to retail electric customers as a product separate from the distribution services provided by the customers' electricity distribution utilities. However, nothing in this chapter shall be construed to provide electricity suppliers the authority to market, promote, sell, or provide electricity to retail electric customers as products separate from the distribution services provided by electricity distribution utilities.

NEW SECTION. Sec. 10. (1) An electricity supplier that makes an oral solicitation to sell electricity directly to a retail electric customer for distribution by the customer's electricity distribution utility shall disclose as part of the oral solicitation the following information:

(a) The average price for various usage patterns, based on regional load profiles;

(b) Notice that the price is for generation only and that additional rates and charges will apply from the customer's electricity distribution utility;

(d) The fuel mix used to supply the product, except that when the electricity will be supplied without regard to a particular source of generation, then the electricity supplier shall disclose the average level of air emissions for all generators within the western systems coordinating council; and

(e) Any other material terms or conditions of the sale.

(2) Prior to selling electricity to a retail electric customer for distribution by the customer's electricity distribution utility, an electricity supplier shall disclose the following information in writing to the customer:

(a) The electricity supplier's policies and procedures regarding the consumer protection issues for which disclosure is required under section 3 of this act;

(b) The terms and conditions for which disclosure is required under subsection (1) of this section;

(c)(i) The fuel mix used to supply the product, shown as a pie chart where each resource comprising five percent or more of the total fuel mix is separately listed; and

(ii) The air emissions of sulfur dioxide, nitrogen oxide, and carbon dioxide per kilowatt hour for each source of generation in the fuel mix, relative to the regional average emissions per kilowatt hour for each resource. When the electricity will be supplied without regard to a particular source of generation, then the electricity supplier shall disclose the average level of air emissions for all generators within the western systems coordinating council;

(d) An explanation of whether the rates or charges are fixed or variable and, if variable, a description of the formula by which those rates or charges may change; and

(e) A description of any other products or services to be provided by the electricity supplier, if any, other than electricity.

(3) Required disclosures under this section shall be provided using plain language that is understandable to ordinary customers and presented in a form that is clear and conspicuous.

NEW SECTION. Sec. 11. (1) Prior to engaging in the business of selling or advertising to sell electricity directly to a retail electric customer for distribution by the customer's electricity distribution utility, an electricity supplier shall establish a customer service facility or other means to receive and respond to customer complaints and inquiries regarding service. The facility shall be adequately staffed daily from at least 7 a.m. until 7 p.m. and be reachable by a toll-free number.

(2) The customer service facility or other means shall, at a minimum, receive and respond to:

(a) Reports of interruption of service at any time of day;

(b) Inquiries from customers regarding billing amounts and practices;

(c) Requests for information regarding the price, product information, and terms of service provided by the electricity supplier;

(d) Inquiries regarding conservation efforts, if any, made by the electricity supplier;

(e) Requests for appealing a decision of the electricity supplier.

(3) There shall be no charge for use of the facility or other means.

NEW SECTION. Sec. 12. (1) An agreement between an electricity supplier and a retail electric customer for the purchase and sale of electricity may only be made in writing.

(2) No electricity supplier shall change, or request or authorize any other entity to change, a retail electric customer's electricity product or supplier unless and until the submitting electricity supplier has obtained the customer's written or electronic authorization and provided verification of the authorization to the current electricity supplier and electricity distribution utility.

(3) Retail electric customers are not obligated for unauthorized charges resulting from an unwritten purchase and sale agreement or an unlawful charge, and electricity suppliers may not bill customers for the charges.

(4) An electricity supplier is liable to a retail electric customer for liquidated damages in the amount of one hundred dollars for each unauthorized change.

NEW SECTION. Sec. 13. It is an unfair or deceptive act or practice and a violation of this section for any electricity supplier to place a commercial telephone solicitation to any residence that will be received before 8:00 a.m. or after 5:00 p.m. at the retail electric customer's local time, notwithstanding the provisions of chapter 19.158 RCW.

NEW SECTION. Sec. 14. (1) Any person making an express or implied claim concerning an electricity product must, at the time the claim is made, possess and rely upon a reasonable basis substantiating the claim.

(2) An electricity supplier making an expressed or implied claim relating to any aspect of an electricity product included in the disclosures required under section 10 of this act may substantiate the claims with the information required to be disclosed under those sections.

(3) Electricity suppliers may make express or implied marketing claims relating to their projected performance if, at the time the claim is made, they possess and rely upon a reasonable basis for substantiating the claim. If the actual performance differs from the projected performance in a material way during any six-month period that an agreement is in effect, the electricity service provider shall provide the retail electric customer, in a timely manner, with a brief, written explanation for the difference and a notice that as a result of the difference, the customer has the right to change suppliers without incurring any transfer charge.

NEW SECTION. Sec. 15. (1) All electricity distribution utilities and electricity suppliers shall protect the confidentiality of proprietary information of, and relating to, retail electric customers. An electricity distribution utility or electricity supplier that receives or obtains proprietary customer information from another electricity distribution utility or electricity supplier for the purposes of providing retail electric service shall use the information only for such a purpose, and shall not use the information for its own marketing efforts.

(2) Except as required by law or with the approval of the customer, an electricity distribution utility or electricity supplier that receives or obtains proprietary customer information by virtue of its provision of electricity or related services shall only use, disclose, or permit access to individually identifiable proprietary customer information as necessary to the provision of electricity service. Nothing in this subsection shall be construed to prohibit an electricity distribution utility or electricity supplier from using, disclosing, or permitting access to proprietary customer information obtained from its customers to initiate, render, bill, or collect for electricity and related services.

(3) An electricity distribution utility or electricity supplier shall disclose proprietary customer information, upon affirmative written request by the customer, to any person designated by the customer.

(4) An electricity distribution utility or electricity supplier that receives or obtains proprietary customer information by virtue of its provision of electricity or related services may use, disclose, or permit access to aggregate customer information other than for the purposes described in subsection (2) of this section. An electricity distribution utility may use, disclose, or permit access to aggregate customer information other than for the purposes described in subsection (2) of this section only if it provides the information to other electricity suppliers on reasonable and nondiscriminatory terms and conditions upon reasonable request of the suppliers. For the purposes of this subsection, "aggregate information" means collective data that relates to a group or category of services or customers, from which individual customer identities and characteristics have been removed. Aggregate information shall not be released without permission of the affected customers when the information concerns a group of customers that is small enough to reveal the probable usage, billing, or payment behavior of any individual members of the customer group. There is a rebuttable presumption that a customer group with less than twenty-five members meets this criteria.

NEW SECTION. Sec. 16. (1) It is an unfair or deceptive act or practice and a violation of this section for any electricity supplier to engage in the following conduct:

(a) Failing to disclose in a clear and conspicuous manner, before a retail electric customer authorizes payment for an electricity product offered:

(i) The information required in section 10 of this act;

(ii) All material restrictions, limitations, or conditions to purchase, receive, or use the products or services that are the subject of the sales offer; and

(iii) In any one-time price inducements, all material restrictions, limitations, or conditions to receive or redeem the inducement that is the subject of the sales offer;

(b) Misrepresenting, directly or by implication, any of the following:

(i) The information required in section 10 of this act;

(ii) All material restrictions, limitations, or conditions to purchase, receive, or use the products or services that are the subject of the sales offer;

(iii) In any one-time price inducements, all material restrictions, limitations, or conditions to receive or redeem the inducement that is the subject of the sales offer; or

(iv) An electricity supplier's affiliation with, or endorsement by, any government or third-party organization; or

(2) For the purposes of this section, an electricity supplier includes any person authorized by the electricity supplier to market, promote, or sell electricity or other related services.

NEW SECTION. Sec. 17. (1) The acts and practices covered by sections 10 through 16 of this act vitally affect the public interest, the electricity bills of consumers, and the competitive positions of businesses and industries for the purposes of applying chapter 19.86 RCW, the consumer protection act. Unfair or deceptive methods of marketing, promoting, selling, and providing electricity and ancillary services are unreasonable in relation to the development of competitive markets for power and are injurious to the public interest.

(2) Every electricity supplier that markets, promotes, sells, or provides electricity directly to retail electric customers for delivery by the customer's electricity distribution utility must comply with the requirements of sections 10 through 16 of this act. Failure to comply with these sections constitutes an unfair or deceptive act or practice for the purposes of applying chapter 19.86 RCW, the consumer protection act.

(3) Any actions or transactions after the effective date of this act, related to the marketing, promoting, selling, or the provision of electricity directly to retail electric customers for delivery by the customer's electricity distribution utility shall not be deemed otherwise permitted, prohibited, or regulated by the commission for the purposes of establishing an exemption under RCW 19.86.170, and shall be deemed to be acting in trade or commerce for the purposes of applying chapter 19.86 RCW, the consumer protection act.

NEW SECTION. Sec. 18. The utilities and transportation commission shall exercise its best efforts to reach agreement with the federal energy regulatory commission as to the respective jurisdiction of the utilities and transportation commission and the federal energy regulatory commission regarding the transmission and distribution of electricity in Washington state. By December 1, 1998, the commission shall report to the legislature on the results of such efforts.

Sec. 19. RCW 42.30.110 and 1989 c 238 s 2 are each amended to read as follows:

(1) Nothing contained in this chapter may be construed to prevent a governing body from holding an executive session during a regular or special meeting:

(a) To consider matters affecting national security;

(b) To consider the selection of a site or the acquisition of real estate by lease or purchase when public knowledge regarding such consideration would cause a likelihood of increased price;

(c) To consider the minimum price at which real estate will be offered for sale or lease when public knowledge regarding such consideration would cause a likelihood of decreased price. However, final action selling or leasing public property shall be taken in a meeting open to the public;

(d) To review negotiations on the performance of publicly bid contracts when public knowledge regarding such consideration would cause a likelihood of increased costs;

(e) To consider, in the case of an export trading company, financial and commercial information supplied by private persons to the export trading company;

(f) To receive and evaluate complaints or charges brought against a public officer or employee. However, upon the request of such officer or employee, a public hearing or a meeting open to the public shall be conducted upon such complaint or charge;

(g) To evaluate the qualifications of an applicant for public employment or to review the performance of a public employee. However, subject to RCW 42.30.140(4), discussion by a governing body of salaries, wages, and other conditions of employment to be generally applied within the agency shall occur in a meeting open to the public, and when a governing body elects to take final action hiring, setting the salary of an individual employee or class of employees, or discharging or disciplining an employee, that action shall be taken in a meeting open to the public;

(h) To evaluate the qualifications of a candidate for appointment to elective office. However, any interview of such candidate and final action appointing a candidate to elective office shall be in a meeting open to the public;

(i) To discuss with legal counsel representing the agency matters relating to agency enforcement actions, or to discuss with legal counsel representing the agency litigation or potential litigation to which the agency, the governing body, or a member acting in an official capacity is, or is likely to become, a party, when public knowledge regarding the discussion is likely to result in an adverse legal or financial consequence to the agency;

(j) To consider, in the case of the state library commission or its advisory bodies, western library network prices, products, equipment, and services, when such discussion would be likely to adversely affect the network's ability to conduct business in a competitive economic climate. However, final action on these matters shall be taken in a meeting open to the public;

(k) To consider, in the case of the state investment board, financial and commercial information when the information relates to the investment of public trust or retirement funds and when public knowledge regarding the discussion would result in loss to such funds or in private loss to the providers of this information;

(l) To discuss arrangements for the sale, purchase, or exchange of electric energy or capacity or rights thereto or related products or services when such a discussion would be likely to adversely affect the public agency's ability to conduct business in a competitive economic climate.

(2) Before convening in executive session, the presiding officer of a governing body shall publicly announce the purpose for excluding the public from the meeting place, and the time when the executive session will be concluded. The executive session may be extended to a stated later time by announcement of the presiding officer.

Sec. 20. RCW 54.16.040 and 1955 c 390 s 5 are each amended to read as follows:

A district may purchase, within or without its limits, electric current for sale and distribution within or without its limits, and construct, condemn and purchase, purchase, acquire, add to, maintain, conduct, and operate works, plants, transmission and distribution lines and facilities for generating electric current, operated either by water power, steam, or other methods, within or without its limits, for the purpose of furnishing the district, and the inhabitants thereof and any other persons, including public and private corporations, within or without its limits, with electric current for all uses, with full and exclusive authority to sell and regulate and control the use, distribution, rates, service, charges, and price thereof, free from the jurisdiction and control of the utilities and transportation commission, in all things, together with the right to purchase, handle, sell, or lease motors, lamps, transformers and all other kinds of equipment and accessories necessary and convenient for the use, distribution, and sale thereof: PROVIDED, That the commission shall not supply water to a privately owned utility for the production of electric energy, but may supply, directly or indirectly, to an instrumentality of the United States government or any publicly or privately owned public utilities which sell electric energy or water to the public, any amount of electric energy or water under its control, and contracts therefor shall extend over such period of years and contain such terms and conditions for the sale thereof as the commission of the district shall elect((; such contract shall only be made pursuant to a resolution of the commission authorizing such contract, which resolution shall be introduced at a meeting of the commission at least ten days prior to the date of the adoption of the resolution)): PROVIDED FURTHER, That it shall first make adequate provision for the needs of the district, both actual and prospective.

Sec. 21. RCW 54.16.070 and 1991 c 74 s 1 are each amended to read as follows:

(1) A district may contract indebtedness or borrow money for any corporate purpose on its credit or on the revenues of its public utilities, and to evidence such indebtedness may issue general obligation bonds or revenue obligations or other evidences of indebtedness; may issue and sell local utility district bonds of districts created by the commission, and may purchase with surplus funds such local utility district bonds, and may create a guaranty fund to insure prompt payment of all local utility district bonds. A district may grant security interests in or otherwise pledge or encumber properties, rights, and interests to secure its bonds or other obligations. The general obligation bonds shall be issued and sold in accordance with chapter 39.46 RCW. A district is authorized to establish lines of credit or make other prearranged agreements, or both, to borrow money with any financial institution.

(2) Notwithstanding subsection (1) of this section, such revenue obligations and local utility district bonds may be issued and sold in accordance with chapter 39.46 RCW.

Sec. 22. RCW 54.16.090 and 1969 c 106 s 7 are each amended to read as follows:

A district may enter into any contract or agreement with the United States, or any state, municipality, or other utility district, or any department of those entities, or with any cooperative, mutual, consumer-owned utility, nonprofit corporation, limited liability company, partnership, or with any investor-owned utility or with an association or instrumentality of any of such ((~~utilities~~)) entities, for carrying out any of the powers authorized by this title.

For the purpose of carrying out any of its obligations or exercising any of its powers, a district may create, be a member of, and otherwise participate in the formation, function, and operation of any entity described in this section. Members of the district's commission and district employees may serve as directors and officers of such entities, with or without additional compensation for services, as the formation documents of such an entity may provide.

It may acquire by gift, devise, bequest, lease, or purchase, real and personal property necessary or convenient for its purposes, or for any local district therein.

It may make contracts, employ engineers, attorneys, and other technical or professional assistance; print and publish information or literature; advertise or promote the sale and distribution of electricity or water and do all other things necessary to carry out the provisions of this title.

It may advance funds, jointly fund or jointly advance funds for surveys, plans, investigations, or studies as set forth in RCW 54.16.010, including costs of investigations, design and licensing of properties and rights of the type described in RCW 54.16.020, including the cost of technical and professional assistance, and for the advertising and promotion of the sale and distribution of electricity or water.

Sec. 23. RCW 54.16.180 and 1994 c 81 s 78 are each amended to read as follows:

A district may sell ((~~and~~)), convey, lease, grant security interests in, or otherwise pledge, encumber, or dispose of all or any part of its works, plants, systems, utilities and properties((~~, after proceedings and approval by the voters of the district, as provided for the lease or disposition of like properties and facilities owned by cities and towns~~)): PROVIDED, That ((~~the affirmative vote of three-fifths of the voters~~)) except as otherwise provided in chapters 54.08 and 54.32 RCW, in no event shall all or substantially all of the assets of a utility of a district be sold or permanently disposed of to any private person or entity without the approval of three-fifths of the electors of the district voting at an election ((~~on the question of approval of a proposed sale, shall be necessary to authorize such sale~~)) held for such a purpose: PROVIDED FURTHER, That a district may sell, convey, lease or otherwise dispose of all or any part of the property owned by it, located outside its boundaries, to another public utility district, city, town or other municipal corporation without the approval of the voters; or may sell, convey, lease, or otherwise dispose of to any person or public body, any part, either within or without its boundaries, which has become unserviceable, inadequate, obsolete, worn out or unfit to be used in the operations of the system and which is no longer necessary, material to, and useful in such operations, without the approval of the voters: PROVIDED FURTHER, That a public utility district located within a county with a population of from one hundred twenty-five thousand to less than two hundred ten thousand may sell and convey to a city of the first class, which owns its own water system, all or any part of a water system owned by said public utility district where a portion of it is located within the boundaries of such city, without approval of the voters upon such terms and conditions as the district shall determine: PROVIDED FURTHER, That a public utility district located in a county with a population of from twelve thousand to less than eighteen thousand and bordered by the Columbia river may, separately or in connection with the operation of a water system, or as part of a plan for acquiring or constructing and operating a water system, or in connection with the creation of another or subsidiary local utility district, may provide for the acquisition or construction, additions or improvements to, or extensions of, and operation of a sewage system within the same service area as in the judgment of the district commission is necessary or advisable in order to eliminate or avoid any existing or potential danger to the public health by reason of the lack of sewerage facilities or by reason of the inadequacy of existing facilities: AND PROVIDED FURTHER, That a public utility district located within a county with a population of from one hundred twenty-five thousand to less than two hundred ten thousand bordering on Puget Sound may sell and convey to any ((~~city of or town [city or town]~~)) city or town with a population of less than ten thousand all or any part of a water system owned by said public utility district without approval of the voters upon such terms and conditions as the district shall determine. Public utility districts are municipal corporations for the purposes of this section and the commission shall be held to be the legislative body and the president and secretary shall have the same powers and perform the same duties as the mayor and city clerk and the resolutions of the districts shall be held to be ordinances within the meaning of the statutes governing the sale, lease, or other disposal of public utilities owned by cities and towns.

Sec. 24. RCW 54.24.020 and 1959 c 218 s 3 are each amended to read as follows:

Whenever the commission of a public utility district((~~, organized pursuant to chapter 1 of the Laws of 1931 (sections 11605 et seq. of Remington's Revised Statutes)~~)) shall deem it advisable that the district purchase, purchase and condemn, acquire, or construct any public utility, or make any additions or betterments thereto or extensions thereof, or to carry out other lawful district purposes, the commission shall provide therefor by resolution, which shall specify and adopt the system ((or)), plan, or activities proposed and declare the estimated cost thereof, as near as may be, including as part of such cost funds necessary for working capital for the operation of such public utility by the district and for the payment of the expenses incurred in the acquisition or construction thereof, and shall specify whether general obligation bonds or revenue obligations are to be issued to defray such cost and the amount of such general obligation bonds or revenue obligations.

The commissioners may provide in such resolution that any additional works, plants, or facilities subsequently acquired or constructed by the district for the same uses, whether or not physically connected therewith, shall be deemed additions or betterments to or extensions of such public utility.

Sec. 25. RCW 54.24.030 and 1983 c 167 s 147 are each amended to read as follows:

(1) Whenever the commission shall deem it advisable to issue revenue obligations for the purpose of defraying the cost or part of the cost of such public utility or any additions or betterments thereto or extensions thereof, or to carry out other lawful district purposes, it shall have power as a part of such plan and system to create a special fund or funds for the purpose of defraying the cost of such public utility, or additions or betterments thereto or extensions thereof, into which special fund or funds it may obligate and bind the district to set aside and pay a fixed proportion of the gross revenues of such public utility, and all additions or betterments thereto or extensions thereof, or any fixed amount out of, and not exceeding a fixed proportion of such revenues, or a fixed amount without regard to any fixed proportion, or an amount of such revenues equal to a fixed percentage of the aggregate principal amount of revenue obligations at any time issued against the special fund or funds, and to issue and sell revenue obligations payable as to both principal and interest only out of such fund or funds.

Such revenue obligations shall bear such date or dates, mature at such time or times, be in such denominations, be in such form, either coupon or registered, as provided in RCW 39.46.030, or both, carry such registration privileges, be made transferable, exchangeable, and interchangeable, be payable in such medium of payment, at such place or places, and be subject to such terms of redemption as the commission shall by resolution determine.

Any resolution or resolutions authorizing the issuance of any revenue obligations maturing in not exceeding six years from the date thereof (hereinafter in this section referred to as "short term obligations") may contain, in addition to all other provisions authorized by this title, and as an alternate method for the payment thereof, provisions which shall be a part of the contract with the holders of the short term obligations thereby authorized as to:

(a) Refunding the short term obligations at or prior to maturity and, if so provided, outstanding bonds by the issuance of revenue bonds of the district either by the sale of bonds and application of the proceeds to the payment of the short term obligations and outstanding bonds or by the exchange of bonds for the short term obligations;

(b) Satisfying, paying, or discharging the short term obligations at the election of the district by the tender or delivery of revenue bonds of the district in exchange therefor: PROVIDED, That the aggregate principal amount of bonds shall not exceed by more than five percent the aggregate principal amount of the short term obligations, to satisfy, pay, or discharge said short term obligations for which the bonds are tendered or delivered;

(c) Exchanging or converting the short term obligations at the election of the owner thereof for or into the bonds of the district: PROVIDED, That the aggregate principal amount of the bonds shall not exceed by more than five percent the aggregate principal amount of the short term obligations to be exchanged for or converted into bonds;

(d) Pledging bonds or other evidences of indebtedness of the district as collateral to secure payment of the short term obligations and providing for the terms and conditions of the pledge and the manner of enforcing the pledge, which terms and conditions may provide for the delivery of the bonds in satisfaction of the short term obligations: PROVIDED, That the aggregate principal amount of the bonds or other evidences of indebtedness pledged shall not exceed by more than five percent the aggregate principal amount of the short term obligations to secure said short term obligations for which they are pledged;

(e) Depositing bonds or other evidences of indebtedness in escrow or in trust with a trustee or fiscal agent or otherwise providing for the issuance and disposition of the bonds as security for carrying out any of the provisions in any resolution adopted pursuant to this section and providing for the powers and duties of the trustee, fiscal agent, or other depositary and the terms and conditions upon which the bonds are to be issued, held and disposed of;

(f) Any other matters of like or different character which relate to any provision or provisions of any resolution adopted pursuant to this section.

A district shall have power to make contracts for the future sale from time to time of revenue obligations by which the purchasers shall be committed to purchase such revenue obligations from time to time on the terms and conditions stated in such contract; and a district shall have power to pay such consideration as it shall deem proper for such commitments.

(2) Notwithstanding subsection (1) of this section, such revenue obligations may be issued and sold in accordance with chapter 39.46 RCW.

Sec. 26. RCW 54.24.050 and 1983 c 167 s 149 are each amended to read as follows:

Any resolution creating any such special fund or authorizing the issue of revenue obligations payable therefrom, or by such alternate method of payment as may be provided therein, shall specify the title of such revenue obligations as determined by the commission and may contain covenants by the district to protect and safeguard the security and the rights of the owners thereof, including covenants as to, among other things:

(1) The purpose or purposes to which the proceeds of sale of such obligations may be applied and the use and disposition thereof;

(2) The use and disposition of the gross revenues of the public utility, and any additions or betterments thereto or extensions thereof, the cost of which is to be defrayed with such proceeds, including the creation and maintenance of funds for working capital to be used in the operation of the public utility and for renewals and replacements to the public utility;

(3) The amount, if any, of additional revenue obligations payable from such fund which may be issued and the terms and conditions on which such additional revenue obligations may be issued;

(4) The establishment and maintenance of adequate rates and charges for electric energy, water, and other services, facilities, and commodities sold, furnished, or supplied by the public utility;

(5) The operation, maintenance, management, accounting, and auditing of the public utility;

(6) The terms and prices upon which such revenue obligations or any of them may be redeemed at the election of the district;

(7) Limitations upon the right to dispose of such public utility or any part thereof without providing for the payment of the outstanding revenue obligations; ((~~and~~))

(8) The grant of security interests in or the pledge or encumbrance of property, rights, or interests of the district to secure revenue obligations; and

(9) The appointment of trustees, depositaries, and paying agents to receive, hold, disburse, invest, and reinvest all or any part of the income, revenues, receipts, and profits derived by the district from the operation, ownership, and management of its public utility.

Sec. 27. RCW 54.24.090 and 1970 ex.s. c 56 s 79 are each amended to read as follows:

Whenever any district shall have outstanding any utility revenue obligations, the commission shall have power by resolution to provide for the issuance of funding or refunding revenue obligations with which to take up and refund such outstanding revenue obligations or any part thereof at the maturity thereof or before maturity if the same be by their terms or by other agreement subject to call for prior redemption, with the right in the commission to include various series and issues of such outstanding revenue obligations in a single issue of funding or refunding revenue obligations, and to issue refunding revenue obligations to pay any redemption premium payable on the outstanding revenue obligations being funded or refunded. Such funding or refunding revenue obligations shall be payable only out of a special fund created out of the gross revenues of such public utility, and shall only be a valid claim as against such special fund and the amount of the revenues, property, rights, or interests of such utility pledged to such fund. Such funding or refunding revenue obligations shall in the discretion of the commission be exchanged at par for the revenue obligations which are being funded or refunded or shall be sold in such manner, at such price and at such rate or rates of interest as the commission shall deem for the best interest of the district. Said funding or ((~~refunding [revenue]~~)) revenue obligations shall except as specifically provided in this section, be issued in accordance with the provisions with respect to revenue obligations in chapter 182, Laws of 1941 set forth.

NEW SECTION. Sec. 28. Nothing in RCW 42.30.110, 54.16.040, 54.16.070, 54.16.090, 54.16.180, 54.24.020, 54.24.030, 54.24.050, or 54.24.090 shall be construed to expand the authority of a district to condemn property not necessary to serve customers within the boundaries of the district.

NEW SECTION. Sec. 29. Sections 1 through 6 and 9 through 12 of this act constitute a new chapter in Title 18 RCW.

NEW SECTION. Sec. 30. 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.