SENATE BILL REPORT

SB 5355

BYSenators Benitz, Williams, Metcalf, Smitherman, Bluechel, Stratton, Johnson and Fleming

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

Senate Committee on Energy & Utilities

Senate Hearing Date(s):January 19, 1989; January 24, 1989

Majority Report:  That Substitute Senate Bill No. 5355 be substituted therefor, and the substitute bill do pass.

      Signed by Senators Benitz, Chairman; Bluechel, Vice Chairman; Metcalf, Nelson, Owen, Stratton, Sutherland, Williams.

Senate Staff:Phil Moeller (786-7455)

                  January 24, 1989

AS REPORTED BY COMMITTEE ON ENERGY & UTILITIES, JANUARY 24, 1989

BACKGROUND:

State law allows certain municipal utilities, public utility districts, and joint operating agencies to share ownership of electric generating facilities or distribution systems with electric cooperatives in this state, and regulated utilities in Washington and Oregon.  This authority is vested in the public utility districts title RCW 54.44.  No specific authority exists to construct and operate generating facilities and distribution systems outside Washington or Oregon, or to enter into these agreements with federal agencies.

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.  Current limitations on authority may preclude ownership participation in interregional electric transmission interties by public power agencies.

SUMMARY:

A new section is added to RCW 35.92 authorizing municipal utilities operated by first class cities to enter into agreements for the undivided ownership of high voltage transmission facilities and for the undivided ownership of electric generating plants and facilities.  These cities may enter agreements with each other, regulated utilities in any state, electric cooperatives in any state, municipal corporations or utility districts in any state, or federal agencies authorized to generate or transmit electricity.

These agreements must provide that each city owns a percentage of the project equal to the percentage of money supplied by it.  Cities are responsible for applicable taxes and are limited in liability.  Actions relating to a jointly owned facility must be authorized by the governing body of a participating city.

A city acting under this section is prohibited from acquiring properties owned or operated by any regulated utility, any public utility district or any municipal utility without its consent.

EFFECT OF PROPOSED SUBSTITUTE:

Technical corrections are made.  Language is added to clarify that any city acting jointly under this section may not acquire properties without the consent of the utility owning or operating the property.

Appropriation:    none

Revenue:    none

Fiscal Note:      none requested

Senate Committee - Testified: FOR:  Henry Yates, Seattle City Light; Ray Nelson, Seattle City Light; Garth Jackson, Tacoma City Light