Original Notice.

Preproposal statement of inquiry was filed as WSR 99-09-028.

Title of Rule: WAC 480-140, Commission general--Budgets, requirements for reviewing budgets of regulated companies.

Purpose: To implement the requirements of Executive Order 97-02, requiring agencies to review significant rules for need; effectiveness and efficiency; clarity; intent and statutory authority; cost and fairness. The proposal would repeal the existing rules, reorganize and rewrite the substance of the text for compliance with Executive Order 97-02, and promulgate new sections incorporating the redrafted provisions. In addition, the proposal adds provisions to set existing policies in rules, updates definitions, and deletes obsolete provisions.

Statutory Authority for Adoption: RCW 80.01.040 General and 80.04.160 Utility.

Statute Being Implemented: RCW 80.04.300 through 80.04.330.

Summary: See Explanation of Rules below.

Name of Agency Personnel Responsible for Drafting: Fred Ottavelli, 1300 South Evergreen Park Drive S.W., Olympia, WA 98503, (360) 664-1297; Implementation and Enforcement: Carole J. Washburn, Secretary, 1300 South Evergreen Park Drive S.W., Olympia, WA 98503, (360) 664-1174.

Name of Proponent: Washington Utilities and Transportation Commission, governmental.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: These rules address how the Washington Utilities and Transportation Commission reviews budgets of regulated companies. This review is in compliance with Executive Order 97-02 and reviews the chapter for clarify, intent and statutory authority, need, effectiveness and efficiency, coordination, cost and fairness. This proposal would redraft the rules to comply with the executive order, would incorporate and formalize policies, and would eliminate rules that are obsolete.

Proposal Changes the Following Existing Rules: The proposal would repeal existing rules and substitute reorganized and redrafted rules. The proposed substantive changes to rule text include the following: (1) Deleting and adding definitions as needed; (2) clarifying who must file, when to file, and what to file; and (3) deleting obsolete and redundant requirements.

No small business economic impact statement has been prepared under RCW 19.85. The rule implements state law, limits the companies that must file, and reduces the amount of information to be filed. The agency does not believe that any increase in cost will result from adopting these rules.

RCW 34.05.328 does not apply to this rule adoption. The commission is not an agency to which RCW 34.05.328 applies.

Hearing Location: Commission Hearing Room, Second Floor, Chandler Plaza Building, 1300 South Evergreen Park Drive S.W., Olympia, WA 98504, on October 13, 1999, at 9:30 a.m.

Submit Written Comments to: Carole J. Washburn, Secretary, P.O. Box 47250, Olympia, WA 98504, or e-mail to <records@wutc.wa.gov>, or fax (360) 586-1150, by September 8, 1999. Please include Docket No. A-990298 in your communication.

Date of Intended Adoption: October 13, 1999.

August 12, 1999

Terrence Stapleton

for Carole J. Washburn

Secretary

OTS-3325.1

AMENDATORY SECTION(Amending Order R-5, filed 6/6/69, effective 10/9/69)

WAC 480-140-010
Definitions.

(((1) The term "public service company" shall mean every person, firm, corporation, or association, or their lessees, trustees, or receivers, now or hereafter engaged in business in this state as a public utility and subject to regulation as to rates and service by the Washington utilities and transportation commission.

(2) The term "commission" when used in those rules and regulations shall mean the Washington utilities and transportation commission or such body as may succeed to the powers and duties now exercised by it.

(3) The term "budget" when used in these rules and regulations shall mean a financial statement prepared by each public service company showing the estimated revenues, sources and amounts of money which each public service company shall, in its judgment, require during the ensuing year for maintenance, operations and construction classified by accounts as prescribed by the commission.)) Commission means Washington utilities and transportation commission.

Net utility plant in service means plant in service less accumulated depreciation and amortization.

Public service company means every gas company, electrical company, telecommunications company, and water company subject to regulation under the provisions of Title 80 RCW as to rates and service by the commission.

[Order R-5, § 480-140-010, filed 6/6/69, effective 10/9/69.]

(1) The commission may grant an exemption of any rule in this chapter, if consistent with the public interest, the purposes underlying regulation, and applicable statutes.

(2) To request a rule exemption, a person must file with the commission a written request identifying the rule for which an exemption is sought and giving a full explanation of the reason the exemption is requested.

(3) The commission will assign the request a docket number, if needed, and schedule the request for consideration at one of its regularly scheduled open meetings or, if appropriate under RCW 34.05, in an adjudication. The commission will notify the person requesting the exemption, and other interested persons, of the date the commission will consider the request.

(4) The commission will enter an order granting or denying the request or setting it for hearing, pursuant to WAC 480-09.

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((All public service companies shall file budgets with the commission except (1) gas, water, telecommunications, telegraph, and electrical companies whose annual gross operating revenues do not exceed one hundred fifty thousand dollars and (2) water companies who are required to file water system plans with the department of health in compliance with WAC 246-290-100.  Water companies required to file such plans with the department of health shall concurrently file a copy of such plan with the commission.)) The following public service companies with annual gross operating revenues exceeding two hundred fifty thousand dollars must file budgets with the commission:

(1) Gas companies;

(2) Electrical companies;

(3) Telecommunications companies that serve more than two percent of the access lines in the state of Washington, except those companies classified as competitive by the commission; and

(4) Water companies that are not required to file water system plans with the department of health in compliance with WAC 246-290-100. A copy of the water system plan must be filed with the commission.

[Statutory Authority: RCW 80.01.040.  92-02-083 (Order R-363, Docket No. U-911075), § 480-140-020, filed 12/31/91, effective 1/31/92; 91-08-026 (Order R-341, Docket No. U-901099), § 480-140-020, filed 3/28/91, effective 4/28/91.  Statutory Authority: RCW 80.01.040 and RCW 80.04.320.  87-01-001 (Order R-269, Cause No. U-86-121), § 480-140-020, filed 12/5/86; Order R-5, § 480-140-020, filed 6/6/69, effective 10/9/69.]

The budget for the ensuing fiscal year ((shall)) must be ((prepared and)) filed with the commission within ((10)) ten days of the date it is approved by the company, but in no event ((shall)) will it be filed later than ((the last day of the year preceding that for which the budget is applicable)) sixty days after the beginning of the fiscal year.

[Order R-5, § 480-140-030, filed 6/6/69, effective 10/9/69.]

((Budgets shall be made in duplicate on forms furnished by the commission.  The original and three copies shall be filed with the commission and one copy shall be kept by the company for its files.  Each question must be answered fully and accurately.  Where the word "none" truly and completely states the fact, it may be given as the answer to any particular inquiry or portion thereof.  Do not leave blank lines.  Items and schedules which do not apply to the reporting company's business and therefore cannot be filled in, shall be answered "not applicable." In no case shall any utility deviate from the requirements of these rules except upon a showing of good cause, and then only to the extent authorized by the commission in writing.  For the purpose of the budget report an "individual major project," is defined according to the following schedule:

((Company Construction Budget	Major Project
$25,000 or less	$2,000 or more
$25,001 to $50,000	$2,500 or more
$50,001 to $100,000	$10,000 or more
$100,001 to $500,000	$15,000 or more
$500,001 to $1,000,000	$50,000 or more
$1,000,001 to $5,000,000	$100,000 or more
$5,000,001 or more	$500,000 or more))

All other individual projects shall be listed by name, location, and estimated cost.  For companies with utility operations in more than one state, the major project threshold shall be applied to all projects proposed to be located in the state of Washington and to all projects which will be partly or wholly allocated to Washington operations: Provided, That individual project description sheets shall be required only for those projects for which the assigned or allocated costs to Washington equal or exceed the threshold set forth in this rule.)) Budgets must show construction expenditures and the operating income, including operation and maintenance expenditures during the ensuing year. All major construction projects must be identified in the budget. Major construction projects for water, gas, and electrical companies include all projects where the Washington-allocated share of the total project is greater than five-tenths of one percent of the company's latest year-end Washington-allocated net utility plant in service, but does not include any project of less than three million dollars on a total project basis. For telecommunications companies, major projects include all construction projects where the intrastate Washington-allocated share is greater than one million dollars.

[Statutory Authority: RCW 80.01.040.  92-02-083 (Order R-363, Docket No. U-911075), § 480-140-040, filed 12/31/91, effective 1/31/92; 91-08-026 (Order R-341, Docket No. U-901099), § 480-140-040, filed 3/28/91, effective 4/28/91.  Statutory Authority: RCW 80.01.040 and RCW 80.04.320.  87-01-001 (Order R-269, Cause No. U-86-121), § 480-140-040, filed 12/5/86.  Statutory Authority: RCW 80.01.040 and RCW 80.04.300 through RCW 80.04.330.  83-06-016 (Order R-195, Cause No. U-83-02), § 480-140-040, filed 2/23/83; Order R-5, § 480-140-040, filed 6/6/69, effective 10/9/69.]

The commission may, in its discretion, to the extent permitted by ((section 31, chapter 1, Laws of 1973)) RCW 80.04.095 and RCW 42.17, upon the request of any public service company, withhold from publication, ((during such time as the commission may deem advisable,)) any portion of any ((original or supplemental)) budget ((relating to proposed capital expenditures)) designated as confidential pursuant to WAC 480-09-015.

[Order R-43, § 480-140-080, filed 4/5/73 and 4/18/73; Order R-5, § 480-140-080, filed 6/6/69, effective 10/9/69.]

     The following sections of the Washington Administrative Code are repealed:

WAC 480-140-050	Approval.
WAC 480-140-060	Supplemental change.
WAC 480-140-070	Emergency expenditures.
WAC 480-140-090	Conformity of accounts.
WAC 480-140-100	Donations.
WAC 480-140-110	Dues.
WAC 480-140-120	Wage scales.
WAC 480-140-130	Tax expenditures.
WAC 480-140-140	Affiliated interests.
WAC 480-140-150	Advertising.
WAC 480-140-160	Salaries.
WAC 480-140-170	Operations covered.