WSR 99-03-074
PROPOSED RULES
UTILITIES AND TRANSPORTATION
COMMISSION
[Commission Docket No. A-980084--Filed January 19, 1999, 12:25 p.m.]
Original Notice.
Preproposal statement of inquiry was filed as WSR 98-14-137.
Title of Rule: Revising rules relating to transfers of property.
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, adds a provision requiring customer notice for transfers relating to mergers and consolidations, updates definitions, and deletes obsolete provisions.
Statutory Authority for Adoption: RCW 80.01.040 and 80.04.160.
Summary: See Explanation of Rule below.
Name of Agency Personnel Responsible for Drafting: Kathy Folsom, 1300 South Evergreen Park Drive S.W., Olympia, WA 98504, (360) 664-1279; Implementation and Enforcement: Carole J. Washburn, Secretary, 1300 South Evergreen Park Drive S.W., Olympia, WA 98504, (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 regulates transfer of property transactions of regulated companies. This review is in compliance with Executive Order 97-02 and reviews the chapter for clarity, 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, would add requirements for customer notice for mergers or consolidations, and would eliminate rules that are obsolete. The proposed rules will require commission determination that a property is not necessary or useful if the property to be disposed of has a market value that exceeds the greater of .1% of rate base or $20,000. The proposal will also codify commission policy on customer notice requirements whenever a public service company merges or consolidates any of its franchises, property or facilities with any other company. The proposed rule is intended to provide the public with timely notice and full disclosure of any information which may have impact.
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) adding requirements for companies to file customer notice for mergers and consolidations; and (3) adding provisions to clarify requirements relating to the disposal of necessary or useful property.
No small business economic impact statement has been prepared under chapter 19.85 RCW. The proposed rules will have minimal fiscal impact on regulated companies or the industry.
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 February 26, 1999, at 1:30 p.m.
Assistance for Persons with Disabilities: Contact Pat Valentine-Hazzard by February 18, 1999, TDD (360) 586-8203, or (360) 664-1133.
Submit Written Comments to: Carole J. Washburn, Secretary, P.O. Box 47250, Olympia, WA 98504 or e-mail to records@wutc.wa.gov, fax (360) 586-1150, by February 12, 1999. Please include Docket No. A-980084 in your communication.
Date of Intended Adoption: February 26, 1999.
January 13, 1999
Terrence Stapleton
for Carole J. Washburn
Secretary
OTS-2748.1
NEW SECTION
WAC 480-143-100 Application of rules. These rules apply to any public service company which meets the requirements for commission regulation or jurisdiction under RCW 80.04.010. The rules do not apply to a local exchange company that serves less than two percent of the access lines in the state of Washington.
The commission may waive or modify the application of any rule to a public service company upon written request or upon the commission's own motion, except when such provisions are fixed by statute. The waiver or modification must be approved by the commission in writing. Violations of these rules will be subject to the penalty provisions of chapter 80.04 RCW.
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NEW SECTION
WAC 480-143-110 Filing. Any filing under these rules must be made at the commission by mail or in person.
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NEW SECTION
WAC 480-143-120 Transfers of property. A public service company may not complete a transfer of property necessary or useful to perform its public duties unless the company first applies for, and obtains, commission approval. Transfers include sale, lease, assignment of all or part of a public service company's property, and merger or consolidation of a public service company's property with another public service company. Certain telephone utility leases are exempt under WAC 480-143-200. Applications must describe transfers in detail and must include the public service company's current financial statements and copies of all transfer instruments.
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NEW SECTION
WAC 480-143-130 Purchase of property. A public service company may not acquire any franchise, property, facility, capital stock, or bonds of another public service company unless it first applies for, and obtains, commission approval. Applications must describe the proposed acquisitions in detail and include the public service company's current financial statements and copies of all transfer instruments.
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NEW SECTION
WAC 480-143-140 General contents. Applicants must state all facts that support each application. Each application must be dated and signed by the applicant, the applicant's authorized representative, or the applicant's attorney. Whoever signs the application must certify the information it includes is true and correct to the best of the signer's information and belief under penalty of perjury as set forth in RCW 9A.72.085.
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NEW SECTION
WAC 480-143-150 Statement required for nonpublic service company purchases. If a company other than a public service company proposes to acquire franchises, property, or facilities from a public service company, the commission may require a sworn statement from the purchaser that includes any resulting changes in rates, services, or equipment which may affect the public interest.
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NEW SECTION
WAC 480-143-160 Public hearing. The commission will examine all applications for transfers and accompanying exhibits. The commission may set an application for hearing and require all parties to the transaction to appear and give testimony.
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NEW SECTION
WAC 480-143-170 Application in the public interest. If, upon the examination of any application and accompanying exhibits, or upon a hearing concerning the same, the commission finds the proposed transaction is not consistent with the public interest, it will deny the application.
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NEW SECTION
WAC 480-143-180 Disposal and determination of necessary or useful property. A public service company must not dispose of any property necessary or useful to perform its public duties unless it first applies for, and obtains, written authority from the commission.
Necessary or useful includes all property except items which either:
(1) Are substituted with or replaced by items of equal or greater value or usefulness;
(2) Are surplus and unneeded assets for which full value is received;
(3) Are obsolete; or
(4) Are excluded from the public service company's rate base by commission order, or otherwise.
The public service company must file an application for commission determination that any property is not necessary or useful, prior to disposing of such property, if the property to be disposed of has a market value which exceeds the greater of .1% of the public service company's rate base last established by commission order, or $20,000.
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NEW SECTION
WAC 480-143-190 Annual filing of property transferred without authorization. Every public service company must file with the commission by March 1 of each year a detailed list of all items transferred without commission approval during the previous calendar year except items whose fair market value is less than the greater of .01% of the public service company's last rate base established by commission order or two thousand dollars. The public service company must attach an affidavit by a responsible officer qualified to state none of the items were necessary or useful to perform the public service company's public duties and that the public service company received fair market value for each item.
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NEW SECTION
WAC 480-143-200 Certain telephone leases are exempt. A telephone utility may lease its properties to another telephone utility without prior commission approval if:
(1) The properties are not essential to the lessor's provision of telephone service;
(2) The properties are used to transmit interexchange messages between subscribers of different utilities;
(3) The lease expedites economical exchange; and
(4) A copy of the lease agreement is kept in the lessor's office.
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NEW SECTION
WAC 480-143-210 Transfer customer notice requirements. (1) The public service company must provide notice to customers thirty days before the commission's open meeting date when the application is scheduled for action whenever a public service company merges or consolidates any of its franchises, property or facilities with any other company.
(2) A draft customer notice must be submitted to the commission for review at least one week prior to the public service company's planned printing date for distribution.
(3) The public service company must provide a final copy of the notice to the commission.
(4) Content of notice. The notice to customers must contain, at a minimum, the following:
company name
address
phone number
date
important notice
(Company Name) has asked the Washington Utilities and Transportation Commission for authorization to transfer ownership and operation of (name of company being sold) to (name of company buying). This transfer is contingent upon approval by the Washington Utilities and Transportation Commission.
(Give background information about the new owner, for example, how many years in business, etc.)
If you have questions about this request and how it will affect you, please call (company name & office phone number). If you have questions about the approval process, you may contact the Washington Utilities and Transportation Commission at the following address:
Secretary
Washington Utilities & Transportation Commission
P.O. Box 47250
Olympia, WA 98504-7250
1-800-562-6150 (toll-free)
If you would like to comment on this proposal, it is important for you to do so now. Comments must be submitted in writing or presented at the commission's open meeting to be considered as part of the formal record. The commission encourages your written comments, either in favor or opposition, regarding this proposal. All open meetings are held in Olympia, WA. If you would like to be added to the commission's mailing list to be notified of the open meeting date please call the toll-free number listed above and leave your name and complete mailing address.
Sincerely,
Company Name/Representative (5) The commission may require additional notice to the public as it determines necessary.
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REPEALER
The following sections of the Washington Administrative Code are repealed:
WAC 480-143-010 Sale, lease or assignment of property.
WAC 480-143-020 Purchase of property.
WAC 480-143-030 Statement required of a nonutility.
WAC 480-143-040 Public hearing.
WAC 480-143-050 Transaction must be consistent with public interest.
WAC 480-143-060 Definition of property not necessary or useful.
WAC 480-143-070 Annual filing of property disposed of without authorization.
WAC 480-143-080 Certain telephone utility leases exempt.
WAC 480-143-990 Form of verification for application.