BILL REQ. #:  H-3199.1 

Prefiled 01/08/14. Read first time 01/13/14.   Referred to Committee on Technology & Economic Development.

     AN ACT Relating to the expansion of natural gas infrastructure in rural or underserved areas; amending RCW 80.28.130 and 80.28.260; and adding a new section to chapter 43.180 RCW.

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

Sec. 1   RCW 80.28.130 and 2011 c 214 s 22 are each amended to read as follows:
     (1) Whenever the commission finds, after hearing had upon its own motion or upon complaint, that repairs or improvements, to, or changes in, any gas plant, electrical plant, system of sewerage, or water system ought to be made, or that any additions or extensions should reasonably be made thereto, in order to promote the security or convenience of the public or employees, or in order to secure adequate service or facilities for manufacturing, distributing or supplying gas, electricity, wastewater company services, or water, the commission may enter an order directing that such reasonable repairs, improvements, changes, additions or extensions of such gas plant, electrical plant, system of sewerage, or water system be made.
     (2)(a) Upon finding that a requested investment in natural gas infrastructure will promote the security or convenience of the public, the commission must grant recovery and authorize those mechanisms or adjustments as are necessary for a gas company to recover operational expenses or capital costs, or both, associated with those investments.
     (b) For the purposes of this subsection, the term "security or convenience of the public" includes but is not limited to natural gas infrastructure in rural or underserved areas of the state that: (i) Promotes economic development; (ii) improves environmental conditions; or (iii) enhances public health. The term does not apply to a single residential, commercial, or industrial building.

Sec. 2   RCW 80.28.260 and 1996 c 186 s 520 are each amended to read as follows:
     (1) The commission shall adopt a policy allowing an incentive rate of return on investment (a) for payments made under RCW 19.27A.035 and (b) for programs that improve the efficiency of energy end use if priority is given to senior citizens and low-income citizens in the course of carrying out such programs. The incentive rate of return on investments set forth in this subsection is established by adding an increment of two percent to the rate of return on common equity permitted on the company's other investments.
     (2) The commission shall consider and may adopt a policy allowing an incentive rate of return on investment in additional programs to improve the efficiency of energy end use or other incentive policies to encourage utility investment in such programs.
     (3) The commission shall consider and may adopt other policies to protect a company from a reduction of short-term earnings that may be a direct result of utility programs to increase the efficiency of energy use. These policies may include allowing a periodic rate adjustment for investments in end use efficiency or allowing changes in price structure designed to produce additional new revenue.
     (4) The commission shall authorize incentive rates of return for investments in natural gas infrastructure that promote the security or convenience of the public.
     (5) The commission shall develop minimum filing requirements and procedural schedules and is required to issue a final determination regarding a gas company's request in ninety days.
     (6) If the commission denies a gas company's request, the commission shall state the reasons for the denial. A gas company may refile, without prejudice, an amended request in sixty days. The commission must approve or deny the amended request in sixty days.
     (7) For the purposes of this section, the term "security or convenience of the public" includes but is not limited to natural gas infrastructure in rural or underserved areas of the state that: (a) Promotes economic development; (b) improves environmental conditions; or (c) enhances public health.

NEW SECTION.  Sec. 3   A new section is added to chapter 43.180 RCW to read as follows:
     (1) The commission may issue bonds for the purpose of financing all or part of a project's cost of converting to natural gas in underserved rural and urban areas with newly extended or expanded natural gas service when the conversions promote the security or convenience of the public.
     (2) Eligible projects may include, but are not limited to, conversions of the following to natural gas:
     (a) Wood burning stoves or oil-fired boilers in low-income households in air quality nonattainment areas;
     (b) Industrial boilers to combined heat and power applications that yield energy efficiency gains and emission reductions;
     (c) Commercial and industrial boilers currently burning hog fuel or bunker oil; and
     (d) The locating of industrial facilities in economically depressed areas.
     (3) For the purposes of this section, the term "security or convenience of the public" has the same meaning as defined in RCW 80.28.130.