Subject of Possible Rule Making: This CR-101 supplements the preproposal statement of inquiry of October 2, 2002, filed as WSR 02-20-105, as follows:

     1. This supplemental CR-101 provides notice that other industries, including auto transportation companies may be affected by rules adopted in this docket; and

     2. This filing gives notice that the commission is not proposing that rules adopted in this docket apply to competitive telecommunications companies.

     In other respects, the scope of the proceeding identified in the statement at WSR 02-20-105 remains unchanged.

     Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 80.01.040, 80.04.160, and 81.04.160.

     Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: The regulated transportation and utility business environments have undergone a number of significant developments that include corporate and industry restructuring, competition, bankruptcy, financial rating downgrades, volatile commodity supply and demand, volatile pricing, and concern with the accuracy of corporate financial statements and reports. In this new environment, transactions between regulated companies and their affiliates and subsidiaries may significantly impact ratepayers. Transactions with affiliated interests are covered by existing law, but there are no rules specifically covering some types of subsidiaries. Establishing reporting requirements regarding transactions between regulated companies and their subsidiaries would provide the commission with more timely identification and disclosure of intercompany transactions that pose difficult regulatory issues. Establishing rules applicable to regulated companies may include, but not be limited to, the following:

     1. Requiring regulated companies to prefile the following transactions with subsidiaries:

     a. Management or service contracts (to be defined).

     b. Maintenance, operation and construction contracts.

     c. Construction, maintenance, or use of a telecommunications line or service contracts.

     d. Issuance of evidence of ownership or indebtedness or creation of liens on regulated company property.

     2. Requiring regulated companies to file periodic reports detailing transactions that have already occurred with subsidiaries.

     3. Requiring regulated companies to immediately post-file significant transactions/arrangements with subsidiaries.

     Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: FERC, FCC, SEC.

     Process for Developing New Rule:      Agency study; and the commission will ask for initial written comments, and will provide the opportunity or additional comments.

     Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication. Interested persons may contact the Secretary, Washington Utilities and Transportation Commission, P.O. Box 47250, 1300 South Evergreen Park Drive S.W., Olympia, WA 98504-7250, phone (360) 664-1174, facsimile (360) 586-1150.

     The commission will have provided notice of the previously-noticed workshop to companies that may be directly affected by the changes proposed herein. In addition, the written-comment date for such companies is extended to Wednesday, November 27, 2002. For specific information regarding the procedure for filing written comments and to ensure receipt of further information concerning this rule making, see below.

     A stakeholder workshop will be held Tuesday, November 5, 2002, in Room 206 at the commission's headquarters, beginning at 9:30 a.m. until 4:30 p.m.

     Electronic copies. The commission requests that comments be provided in electronic format to enhance public access, for ease of providing comments, to reduce the need for paper copies, and to facilitate quotations from the comments. Comments may be submitted by electronic mail to the Commission's Records Center at records@wutc.wa.gov. Please include:

•     The docket number of this proceeding (A-021178).

•     The commenting party's name.

•     The title and date of the comment or comments.

     An alternative method for submitting comments may be by mailing/delivering an electronic copy on a 3 1/2 inch, IBM-formatted, high-density disk, in .pdf Adobe Acrobat format or in Word 97 or later. Include all of the information requested above. The commission will post on the commission's website all comments that are provided in electronic format. The website is located at http://www.wutc.wa.gov/021178. If you are unable to file your comments electronically or to submit them on a disk, the commission will always accept a paper document.

     Opportunity for further comment is anticipated. Information about the schedule and other aspects of the rule making, including comments, will be posted on the commission's website as it becomes available. If you wish to receive further information on this rule making you may: (1) Call the Commission's Records Center at (360) 664-1234; (2) e-mail the commission at <records@wutc.wa.gov>, or (3) mail written comments to the address above to the attention of Carole J. Washburn, Secretary. When contacting the commission, please refer to Docket No. A-021178 to ensure that you are placed on the appropriate service list. Questions may be addressed to Fred Ottavelli, (360) 664-1297 or e-mail at <fottavel@wutc.wa.gov> or Sharyn Bate, (360) 664-1295, or e-mail at <sbate@wutc.wa.gov>.

October 28, 2002

C. Robert Wallis

for Carole J. Washburn

Secretary

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