Subject of Possible Rule Making: The subject of this inquiry is to consider the development of proposed rules to implement statutory changes in RCW 80.80.010, 80.80.040 and 80.80.060, enacted in the state of Washington's 2009 regular legislative session.

     Statutes Authorizing the Agency to Adopt Rules on this Subject: RCW 80.01.040, 80.04.160, and 80.80.060(8).

     Reasons Why Rules on this Subject may be Needed and What They Might Accomplish: On April 20, 2009, and May 11, 2009, respectively, the governor signed SB 5989, chapter 147, Laws of 2009, and HB 2129, chapter 448, Laws of 2009, with the common title "greenhouse gas emissions performance standard." Both bills became effective July 26, 2009.

     SB 5989 amends RCW 80.80.060.

     HB 2129 amends RCW 80.80.010, 80.80.040, 80.80.060, and 80.80.070.

     This rule making considers revisions to chapter 480-100 WAC to reflect the changes to chapter 80.80 RCW included in SB 5989, and HB 2129.

     Other Federal and State Agencies that Regulate this Subject and the Process Coordinating the Rule with These Agencies: None.

     Process for Developing New Rule:      Agency study; and the commission will ask for initial written comments on draft rules included in this preproposal statement of inquiry, and will provide the opportunity to comment on proposed CR-102 rules prior to adoption.

     Interested parties can participate in the decision to adopt the new rule and formulation of the proposed rule before publication. Interested persons may file comments with the executive director and 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, fax (360) 586-1150, by 5:00 p.m., Monday, July 26, 2010.

     WRITTEN COMMENTS: Written comments may be submitted to the commission at the address given above and should be filed with the commission no later than July 26, 2010.

     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 via the commission's web portal at www.utc.wa.gov/e-filing or by e-mail to the commission's records center at records@utc.wa.gov. Please include:

     •     The docket number of this proceeding (UE-100865).

     •     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 web site all comments that are provided in electronic format. The web site is located at www.wutc.wa.gov/100865. 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 web site 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@utc.wa.gov>, or (3) mail written comments to the address above to the attention of David W. Danner, executive director and secretary. When contacting the commission, please refer to Docket UE-100865 to ensure that you are placed on the appropriate service list. Questions may be addressed to Danny Kermode, (360) 664-1253, or e-mail at dkermode@utc.wa.gov.

June 23, 2010

David W. Danner

Executive Director and Secretary

     (2) The following definitions apply for purposes of this section, WAC 480-100-415, 480-100-425, and 480-100-435:

     (a) "Baseload electric generation" means electric generation from a power plant that is designed and intended to provide electricity at an annualized plant capacity factor of at least sixty percent.

     (b) "Electricity from unspecified sources" means electricity that is to be delivered in Washington pursuant to a long-term financial commitment entered into by an electrical company and whose sources or origins of generation and expected average annual deliveries cannot be ascertained with reasonable certainty.

     (c) "Greenhouse gases gas emissions performance standard" means the standard established in RCW 80.80.040, WAC 173-407-120 and 173-407-130, and the verification and measurement procedures contained in WAC 173-407-140, 173-407-230, and 173-407-300.

     (d) "Long-term financial commitment" means either a new ownership interest in baseload electric generation or an upgrade to a baseload electric generation facility; or a new or renewed contract for baseload electric generation with a term of five or more years for provision of retail power or wholesale power to end-use customers in this state. This definition does not include any long-term financial commitment with the Bonneville power administration.

     (e) "New ownership interest" means a change in the ownership structure of a baseload power plant or a cogeneration facility or the electrical generation portion of a cogeneration facility affecting at least:

     (i) Five percent of the market value of the power plant or cogeneration facility; or

     (ii) Five percent of the electrical output of the power plant or cogeneration facility.

     The above thresholds apply to each unit within a multiunit generation facility. A direct or indirect change in ownership of an electrical company does not constitute a new ownership interest in baseload electric generation.

     (f) "Plant capacity factor" means the ratio of the electricity produced during a given time period, measured in kilowatt hours, to the electricity the unit could have produced if it had been operated at its rated capacity during that period, expressed in kilowatt hours.

     (g) "Power plant" means a facility for the generation of electricity that is permitted as a single plant by the energy facility site evaluation council or a local jurisdiction. a jurisdiction inside or outside the state.

     (h) "State" means the State of Washington.

     (hi) "Upgrade" means any modification made for the primary purpose of increasing the electric generation capacity of a baseload electric generation facility or unit. Upgrade does not include:

     (ii) Routine or necessary maintenance;

     (iii) Installation of emission control equipment;

     (iiiiv) Installation, replacement, or modification of equipment that improves the heat rate of the facility; or

     (iv) Installation, replacement, or modification of equipment for the primary purpose of maintaining reliable generation output capability that does not increase the heat input or fuel usage as specified in existing generation air quality permits as of July 22, 2007, but may result in incidental increases in generation capacity.

[Statutory Authority: RCW 80.01.040, 80.04.160 and 80.80.060. 08-23-047 (Docket UE-080111, General Order R-553), § 480-100-405, filed 11/14/08, effective 12/15/08.]

     Reviser's note: The bracketed material preceding the section above was supplied by the code reviser's office.

     Reviser's note: RCW 34.05.395 requires the use of underlining and deletion marks to indicate amendments to existing rules. The rule published above varies from its predecessor in certain respects not indicated by the use of these markings.

     Reviser's note: The typographical errors in the above section occurred in the copy filed by the agency and appear in the Register pursuant to the requirements of RCW 34.08.040.

AMENDATORY SECTION [(Amending Docket UE-080111, General Order R-553, filed 11/14/08, effective 12/15/08)]WAC 480-100-415   Electrical company applications for commission determination outside of a general rate case of electric generation resource compliance with greenhouse gas emissions performance standard.   (1) An electrical company may apply for determination by the commission outside of a general rate case of whether an electric generation resource it proposes to acquire as a long-term financial commitment complies with the greenhouse gases gas emissions performance standard, including whether the resource is baseload electric generation, whether the company has a need for the resource, and whether the proposed resource is appropriate to meet that need. Such an application must include the following information:. No such application may be made if the long-term financial commitment includes more than twelve percent of electricity from unspecified sources.

     (2) If an electrical company submits an application under this section regarding If a long-term financial commitment with that includes twelve percent or less of electricity from unspecified sources that multiple power plants, each power plant will be considered individually in determining:

     (a) Annualized plant capacity factor;

     (b) Net emissions;

     (c) Compliance with RCW 80.80.040(1) except as provided in RCW 80.80.040(3), 80.80.040(4), and 80.80.040(5).

     (3) Any application under this section must include the following information:

     (a) The electrical company's most recent integrated resource plan filed under WAC 480-100-238 and a description of how the proposed electric generation resource meets the resource need, resource investment strategies and other factors identified in the integrated resource plan.

     (b) If the proposed electric generation resource is a specific power plant located in the state:

     (i) The plant technology, design, fuel and fuel consumption;

     (ii) Any site certificate or other permits necessary for operation of the power plant, including, for power plants located in Washington, any determination made by the department of ecology or the energy facility site evaluation council regarding compliance with the greenhouse gases gas emissions performance standard;

     (iii) Such other information as is available concerning the exhaust emissions characteristics of the including total annual pounds of greenhouse gas from each power plant.; and

     (iv) The expected cost of the power generation to be acquired from the plant.

     (b) If the proposed electric generation resource is a specific power plant located outside the state:

     (i) The plant technology, design, fuel and fuel consumption;

     (ii) Any site certificate or other permits necessary for operation of the power plant;

     (iii) Such other information as is available concerning the exhaust emissions characteristics of the plant including total annual pounds of greenhouse gas from each power plant.

     (iv) Documentation of emissions verifications and measurement procedures which show consistency with the state's emissions performance standard.

     (c) If the proposed electric generation resource is a power purchase contract including contracts for delivery of electricity from unspecified sources:

     (i) The proposed contract;

     (ii) The technology, location, design, fuel and fuel consumption of any power plant, or plants, identified in the contract as the source of the contracted power deliveries, including such information as is knowable regarding the proportionate share each power source, or type of plant, will contribute to deliveries on an annual basis over the life of the contract;

     (iii) Such other information as is available concerning the exhaust emissions characteristics of the plant(s) supporting contracted power deliveries; and including total annual pounds of greenhouse gas from each power plant.

     (iv) The contract term and expected cost of the power to be acquired through the power purchase agreement.

     (24) The commission will may consider the application pursuant to chapter 34.05 RCW (Part IV) following the procedures established in chapter 480-07 WAC, but the commission. The schedule for a proceeding under this subsection will take into account both:

     (a) The needs of the parties to the proposed resource acquisition or power purchase agreement for timely decisions that allow transactions to be completed; and

     (b) The procedural rights to be provided to parties in chapter 34.05 RCW (Part IV), including intervention, discovery, briefing, and hearing.

     (3) The commission will not decide in any application proceeding under this section, issues involving the actual costs to construct and operate the selected resource, cost recovery, or other issues reserved by the commission for decision in a general rate case or other proceeding authorized by the commission for recovery of the resource or contract costs.

[Statutory Authority: RCW 80.01.040, 80.04.160 and 80.80.060. 08-23-047 (Docket UE-080111, General Order R-553), § 480-100-415, filed 11/14/08, effective 12/15/08.]

     Reviser's note: The bracketed material preceding the section above was supplied by the code reviser's office.

     Reviser's note: RCW 34.05.395 requires the use of underlining and deletion marks to indicate amendments to existing rules. The rule published above varies from its predecessor in certain respects not indicated by the use of these markings.

     Reviser's note: The typographical errors in the above section occurred in the copy filed by the agency and appear in the Register pursuant to the requirements of RCW 34.08.040.

AMENDATORY SECTION [(Amending Docket UE-080111, General Order R-553, filed 11/14/08, effective 12/15/08)]WAC 480-100-425   Electrical company applications for exemption from the greenhouse gas emissions performance standard.   (1) An electrical company may apply to the commission for a case-by-case exemption from the greenhouse gases gas emissions performance standard to address:

     (a) Unanticipated electric system reliability needs; or

     (b) Extraordinary cost impacts on utility ratepayers; or

     (c) Catastrophic events or threat of significant financial harm that may arise from unforeseen circumstances.

     (2) An electrical company's application under subsection (1)(a) of this section must include:

     (a) A description of the electric system reliability needs including an explanation of why these needs were not anticipated, and why they cannot be addressed with other baseload electric generation that complies with the greenhouse gases gas performance standard.

     (b) The estimated duration of the exemption necessary to address the reliability need.

     (c) A description of any long-term financial commitment the company proposes to enter into to address the reliability need including all of the information specified in WAC 480-100-415.

     (3) An application under subsection (1)(b) of this section must include:

     (a) Identification of the long-term financial commitment that will result in extraordinary costs to ratepayers.

     (b) Criteria used by the applicant to judge cost as extraordinary.

     (c) A description of the extraordinary cost including:

     (i) Total system, jurisdictional and per-customer cost impact.

     (ii) Company proposed alternatives, if any, to address the extraordinary costs.

     (iii) The estimated duration of the exemption necessary to address the extraordinary cost impact.

     (34) An electrical company's application under subsection (1)(bc) of this section must include:

     (a) A description of the catastrophic event or threat of significant financial harm and an explanation of why the circumstances from which the event or harm arose were not foreseen including:

     (i) An explanation of why the circumstances cannot be addressed with baseload generation that complies with the greenhouse gases gas performance standard;

     (ii) What the anticipated negative financial impact would be to the company if such exemption were denied;

     (b) The estimated duration of the exemption necessary to address the catastrophic event or threat of significant financial harm.

     (c) A description of any long-term financial commitment the company proposes to enter into to address the catastrophic event or threat of significant financial harm including all of the information specified in WAC 480-100-415.

     (45) An electrical company may propose recovery of costs associated with an application under this rule as part of a general rate case.

[Statutory Authority: RCW 80.01.040, 80.04.160 and 80.80.060. 08-23-047 (Docket UE-080111, General Order R-553), § 480-100-425, filed 11/14/08, effective 12/15/08.]

     Reviser's note: The bracketed material preceding the section above was supplied by the code reviser's office.

     Reviser's note: The typographical errors in the above section occurred in the copy filed by the agency and appear in the Register pursuant to the requirements of RCW 34.08.040.

AMENDATORY SECTION [(Amending Docket UE-080111, General Order R-553, filed 11/14/08, effective 12/15/08)]WAC 480-100-435   Electrical company deferral of costs associated with long-term financial commitments -- Notice and reporting.   (1) An electrical company may account for and defer for later consideration by the commission costs incurred in connection with a long-term financial commitment for:

     (a) baseload Baseload electric generation, or

     (b) An eligible renewable resource as defined in RCW 19.285.030 that the electrical company owns or has entered a power purchase agreement for with a term of five or more years.

     (2) Deferred costs may includeing operating and maintenance costs, depreciation, taxes, and cost of invested capital.

     (23) An electrical company deferring costs under subsection (1) of this section must:

     (a) Notify the commission within ten business days of its intent to defer such costs; and

     (b) File quarterly with the commission a report documenting the balances of costs deferred in a form specified by the commission.

     (34) The deferral begins with the date on which the power plant begins commercial operation or the effective date of the power purchase agreement and continues for a period not to exceed twenty-four months; provided that if during such period the company files a general rate case or other proceeding for the recovery of such costs, deferral ends on the effective date of the final decision by the commission in such proceeding. Creation of such a deferral account does not by itself determine the actual costs of the long-term financial commitment, whether recovery of any or all of these costs is appropriate, or other issues to be decided by the commission in a general rate case or other proceeding authorized by the commission for recovery of these costs.

[Statutory Authority: RCW 80.01.040, 80.04.160 and 80.80.060. 08-23-047 (Docket UE-080111, General Order R-553), § 480-100-435, filed 11/14/08, effective 12/15/08.]

     Reviser's note: The bracketed material preceding the section above was supplied by the code reviser's office.

     Reviser's note: The typographical errors in the above section occurred in the copy filed by the agency and appear in the Register pursuant to the requirements of RCW 34.08.040.

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