HOUSE BILL REPORT

HB 1198

As Amended by the Senate

BYRepresentatives Nelson, Hankins, Jesernig, R. Meyers, Brooks, Wineberry, Walker, Cole, Miller and Gallagher

Authorizing first class cities to enter into agreement to own and operate electrical utilities.

House Committe on Energy & Utilities

Majority Report:  Do pass. (11)

      Signed by Representatives Nelson, Chair; Hankins, Ranking Republican Member; Brooks, Cooper, Gallagher, Jesernig, May, R. Meyers, Miller, H. Myers and S. Wilson.

House Staff:Fred Adair (786-7113) and Harry Reinert (786-7110)

AS PASSED HOUSE FEBRUARY 1, 1989

BACKGROUND:

Certain municipal utilities, public utility districts, and joint operating agencies are authorized to share in ownership of electric generating facilities or distribution systems together with other like entities and rural electric cooperatives in this state and with regulated utilities in Washington and Oregon.

Under favorable water conditions, utilities with their own hydroelectric systems can have an electric energy surplus.  It is in the interest of the utilities and their ratepayers to market the surplus advantageously.  Additionally, seasonal energy exchanges with utilities having different peak usage periods can reduce generation reserve requirements and thereby save money.

Control of portions of interregional electric transmission interties may better assure a beneficial out of region market for surplus energy and for effecting seasonal energy exchanges.  The current limitations delineated above on joint participation authority may preclude advantageous participation in intertie ownership.

Additionally, some municipal utilities have expressed interest in developing generating projects jointly with entities other than listed above.

SUMMARY:

In addition to their current authority, cities of the first class which operate electric generating facilities and distribution systems may join with regulated utilities in any state, municipal corporations in any state, and any federal agency authorized to generate or transmit electrical energy (The Bonneville Power Administration) in ownership of electric generating facilities or distribution systems.

EFFECT OF SENATE AMENDMENTS:  There are no substantive effects;  grammatical rearrangement only.

Fiscal Note:      Not Requested.

House Committee ‑ Testified For:    Will Patton, Seattle Legal Department; Ray Nelson, Seattle City Light; Gary Johnson, Tacoma City Light; Ron Newbry, Pacific Power and Light; Mike Tracy, Puget Sound Power and Light; Tom Paine, Washington Water Power.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    It is increasingly difficult to acquire generating projects, leading to the need to be able to enter into joint projects with a wider variety of entities than currently authorized in law.  Additionally, this same difficulty impels gaining maximum efficiency from existing generating resources through, among other things, interregional power exchanges.  To enable this, a need for additional transmission line capacity is foreseen. Transmission line partial ownership will assure means for both interregional exchanges and for marketing any surplus energy that would be available in event of high water years.

House Committee - Testimony Against:      None Presented.

VOTE ON FINAL PASSAGE:

      Yeas 95; Absent 1; Excused 2

Absent:     Representative Bristow

Excused:    Representatives O'Brien and Todd