BP BHEAD INT S [atlas:bill]

AN ACT Relating to establishing a moratorium on bypassing the facilities of local electric utilities; adding a new chapter to Title 80 RCW; providing an expiration date; and declaring an emergency.

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

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

(1) The inappropriate shifting of costs of the electric system between or among customers does not constitute fair and efficient competition, is contrary to the public interest, and should be avoided;

(2) The threat of uneconomic bypass is real and immediate. Several companies are presently making concerted efforts to bypass their local utilities, and shift costs to other customers;

(3) In order to preserve options for legislative action, protect all customers against unfair cost shifting, and promote continued investment needed for reliability and system improvements, the status quo in the electric utility industry should be maintained for a reasonable period until comprehensive legislative policy is enacted to protect consumers and guarantee fair and efficient competition. However, a comprehensive legislative policy must be adopted within five years;

(4) A moratorium on bypassing the facilities of local electric utilities will preserve the status quo; and

(5) An exception to the moratorium on bypassing the facilities of local electric utilities is warranted for customers who reimburse costs that they would otherwise shift to other customers by bypassing the facilities of their local electric utility.

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

(1) "Bypassing the facilities of a local electric utility" means the transmitting or distributing of electricity to customer premises or facilities by a person who, as of January 1, 1999, had not provided these services to the premises or facilities and where an electric utility that had provided these services before January 1, 1999, is willing and able to provide services under its normal terms and conditions of service or otherwise.

(2) "Electric utility" includes an electric company subject to the jurisdiction of the Washington utilities and transportation commission, a municipal corporation or special district that owns or operates any electric plant or service, municipal electric utility, public utility district, and cooperative or mutual electric company.

(3) "Person" means an individual, company, corporation, municipal corporation, governmental district, agency of government, partnership, association, limited liability company, or other form of entity and includes an electric utility.

(4) "Public utility regulatory policies act (PURPA) costs" means the above-market portion of costs, as determined under section 4(2) of this act, incurred under contracts for the output of electric cogeneration plants owned or operated by nonutility generators.

NEW SECTION. Sec. 3. There is established a moratorium on bypassing the facilities of local electric utilities. During this moratorium: (1) No electric utility or any other person may offer or provide facilities or services for bypassing the facilities of a local electric utility and no person may bypass the facilities of a local electric utility; and (2) no electric utility or any other person may apply for permits for, construct, or have constructed on its behalf or for its use or benefit any electric line or other facility for the transmission or distribution of electricity that will be used to bypass the facilities of a local electric utility.

NEW SECTION. Sec. 4. (1) An electric utility may establish a cost-shifting reimbursement fee as provided in this section. A person who pays a cost-shifting reimbursement fee is exempt from the moratorium imposed by section 3 of this act. A cost-shifting reimbursement fee shall recover the following items related to the person:

(a) The fair value of bypassed transmission and distribution facilities;

(b) Past, present, and future charges for conservation, PURPA costs, and for other public purposes;

(c) The difference, if any, between the state and local taxes payable after bypass and the state and local taxes that would be payable if the person continued to be served by the local electric utility; and

(d) Any other costs that may be shifted to other customers as a result of bypassing the facilities of the electric utility, as determined by the Washington utilities and transportation commission in the case of an electric utility subject to its jurisdiction or by the governing body of an electric utility not subject to the jurisdiction of the commission.

(2) PURPA costs shall be the amount, if any, by which the payments by the electrical company for the remaining duration of all of its agreements for the purchase of the output of electric cogeneration plants owned or operated by nonutility generators (taking into account existing mitigation of such payments in effect as of the date of determination of PURPA costs for a specific person) exceeds the market value of electricity during the remaining duration of the agreements, determined monthly by using the Dow Jones mid columbia, or a comparable successor market index, monthly average market price of electricity.

(3) Costs related to a person shall be based on the amount of electricity previously transmitted or distributed to the person and the previous charges paid by such a person.

(4) An electric company subject to the jurisdiction of the Washington utilities and transportation commission that proposes to establish a cost-shifting reimbursement fee for a specific customer shall make a filing setting forth the proposed fee. Within sixty days after the date of filing, the Washington utilities and transportation commission shall approve the fee if it finds that the fee conforms to the requirements of this chapter. If the commission finds that the proposed fee does not conform to the requirements of this chapter, it shall specify any changes required to conform to the requirements of this chapter. The company may submit a revised proposed fee and the review and approval process of this subsection shall recommence.

(5) The amount of a cost-shifting reimbursement fee of a municipal electric utility, public utility district, or cooperative or mutual company shall be established in accordance with rules adopted by its governing board.

(6) An electric utility shall be entitled to and shall recover the full amount of its investments and costs identified in subsection (1)(a) and (b) of this section related to a person who bypasses its transmission and distribution facilities. Exemption from the moratorium created in section 3 of this act shall constitute a contract between the person so exempted and the electric utility that the person will pay the cost-shifting reimbursement fee until such costs are fully recovered. The person shall pay the cost-shifting reimbursement fee directly to the electric utility. The utility shall forward the portions of the fee identified in subsection (1)(c) of this section to state or local taxing authorities as directed by the Washington utilities and transportation commission or the governing board and shall make the disposition of the portion of the fee identified in subsection (1)(d) of this section as directed in the order of the commission or governing board determining such costs.

NEW SECTION. Sec. 5. The Washington utilities and transportation commission may bring an action in the superior court for Thurston county for an injunction against any act that may adversely affect an electric utility subject to its jurisdiction where such an act violates or may result in a violation of section 3 of this act. An electric utility that is adversely affected by an act that violates or that may result in a violation of section 3 of this act may bring an action in the superior court for the county in which its principal office is located for an injunction against such an act.

NEW SECTION. Sec. 6. Section 3 of this act expires June 30, 2004.

NEW SECTION. Sec. 7. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately.

NEW SECTION. Sec. 8. Sections 1 through 7 of this act constitute a new chapter in Title 80 RCW.