The legislature directed the utilities and transportation commission (commission), in section 1 of ESSB 5295, to conduct a proceeding to develop a policy statement addressing alternatives to traditional cost of service rate making, including performance-based measures or goals, targets, performance incentives, and penalty mechanisms.

As directed by the legislature, on January 26, 2026, the commission issued a policy statement to provide clarification of the reported metrics for regulated energy companies to file with the commission on an annual basis. These metrics may be revised as needed in future proceedings within this docket (U-210590) or future multi-year rate plans. Additionally, the policy statement addresses expected principles for proposed performance incentive mechanisms. Finally, the commission provides its interpretation of how authorized incentives interact with the earnings test under RCW 80.28.425(6).

A copy of the policy statement and associated proceeding materials may be obtained by accessing the commission website at www.utc.wa.gov or by contacting Stacey Brewster, Rules Coordinator, 621 Woodland Square Loop S.E., P.O. Box 47250, Lacey, WA 98503, phone 360-664-1149, email stacey.brewster@utc.wa.gov.