Regulation of Public Water Systems.
The State Board of Health adopts rules, administered by the Office of Drinking Water (ODW) under the Department of Health (DOH), that pertain to the operation of public water systems.  Local governments are authorized to establish operating permit requirements for public water systems, provided these requirements receive approval from the DOH and lead to an enhanced level of service for the public water system. 

The ODW has delegated primary authority from the United States Environmental Protection Agency to administer and enforce federal regulations for primary drinking water requirements from the federal Safe Drinking Water Act.  The ODW may impose penalties for noncompliance with public water system laws and regulations and may direct water system owners and operators to resolve known or suspected public health threats.  These regulations establish primary drinking water requirements for larger public water systems, known as Group A public water systems.  Group A public water systems are systems that:

• have 15 or more service connections;
• serve an average of 25 or more people per day for at least 60 days within a calendar year, regardless of the number of service connections; or
• serve 1,000 or more people for two or more consecutive days.

Group B public water systems encompass all other public water systems.  For Group B public water systems, there is an additional requirement that the local operating permit requirements be at least as strict as the state regulations.  The rules set drinking water standards and requirements for monitoring, reporting, and responding to emergencies.

Water System Rate Regulation.

The Utilities and Transportation Commission (UTC) regulates the rates and charges of privately-owned water companies that serve more than 100 customers or have charges that exceed an average of $557 per customer per year.  The UTC does not regulate the rates or services of city, town, or county water systems; Public Utility Districts (PUDs); or cooperative or homeowners' associations.

The UTC may provide for the funding of a reserve account by a regulated water company to perform construction or maintenance required by the Department of Ecology to secure safety to life and property.  Expenditures from the fund are subject to prior approval by the UTC and must be treated for rate-making purposes as customer contributions.

The UTC may not approve any transaction that would result in a person acquiring a controlling interest in a gas or electrical company without finding that the transaction would provide a net benefit to customers of the company.

Water System Plans.

Water system plans are intended to demonstrate system capacity and how the system will address present and future needs.  Public water systems are required by rule to submit their water plans to the DOH.  Water system plans must address several elements, including:  a description of the water system, basic planning data, demand forecasts, system analysis, water resource analysis, and other plans and documents.

Multiyear Rate Plans for Gas and Electric Utilities.
Every general rate case filing of a gas or electric utility before the UTC must include a proposal for a multiyear rate plan (MYRP).  The UTC may, by order after an adjudicative proceeding, approve, approve with conditions, or reject an MYRP proposal made by a utility, an alternative proposal made by one or more parties, or any combination of these.  The UTC's consideration of an MYRP proposal is subject to the same standards as other related filings, including that it be in the public interest and that the rates be fair, just, reasonable, and sufficient.

Regulation of Public Water Systems.

Prior to a change in ownership, public water systems must:

• provide notification to the county, any water district or public utility district operating a water system in the county, and any adjacent publicly owned water systems; and
• for transfers to a publicly owned water system, inform customers of the acquisition by mailed notice or public posting.

Group A public water systems are required by law to submit water system plans, small water system management plans, or engineering documents as required by the DOH.

Water System Rate Regulation.

In determining the rates to be charged by each water company subject to its jurisdiction, the UTC must adopt rules that:

• account for any federal, state, or other external funding sources for system improvements;
• require a showing that the company is following its water system plan that has been approved by the DOH;
• consider the extent to which the company provided notice of planned capital projects to consumers and the impact of the projects on rates;
• promote rate smoothing and the avoidance of excessive or sudden rate changes; and
• consider the ability for a public water system that is owned and operated by a special purpose district to comply with the water system planning requirements.

The UTC may not approve any transaction that would result in a person acquiring a controlling interest in a water company without finding that the transaction would provide a net benefit to customers of the company.  Prior to approving any such transaction, the UTC must verify that the water company has provided the customers with 90 days' notice of the acquisition as well as a good faith estimate of future capital improvements and water system rate changes.  The notification must be provided to the customers of the company, the county in which any water system of the company is located, any water district or PUD operating water systems within such county, and any adjacent water system.

Multiyear Rate Plans for Water Companies.

Beginning January 1, 2027, every general rate case filing of a water company may include a proposal for an MYRP subject to review and approval by the UTC in a manner comparable to existing rules for electric and gas utilities.  The UTC may, by order after an adjudicative proceeding, approve, approve with conditions, or reject, an MYRP proposal made by a water company, an alternative proposal made by one or more parties, or any combination of these.  The UTC's consideration of an MYRP proposal is subject to the same standards as other related filings, including the requirements that the proposal is in the public interest and would result in fair, just, reasonable, and sufficient rates.  

The UTC may approve, disapprove, or approve with modifications any proposal to recover from ratepayers up to 5 percent of the total UTC revenue requirement for each year of an MYRP for tariffs that reduce the water burden of low-income residential customers through mechanisms that may include bill assistance programs or special rates.

If the UTC approves an MYRP, it must approve rates separately for the initial rate year, the second rate year, and, if applicable, the third and fourth rate years.  The UTC must determine the fair value, for rate-making purposes, of the property of a water company that has filed an MYRP that is or will be used and useful for service in Washington by or during each rate year for the MYRP.  The UTC may order refunds to customers if property expected to be used and useful by the rate effective date when the UTC approved the MYRP is not used and useful by that date.