[BETA] Fortnightly

The Washington Utilities and Transportation Commission (UTC) has issued an interim policy statement in its ongoing inquiry into regulatory tools to encourage the development of new resources by regulated monopoly utilities. The UTC expressed uncertainty regarding the future of the industry and the role of state regulators, citing recent developments: 1) inquiries at the federal level on stranded investment and transmission access, 2) the expansion of supply options in the wholesale market and a market price below many of the new resource cost estimates made over the past few years, and 3) uncertainties regarding the structure and future role of the Bonneville Power Administration.

The interim policy statement emphasizes the UTC's ongoing duty to ensure fair rates and reliable service, particularly the need to prevent uneconomic bypass and inappropriate shifting of fixed system costs among customer groups. The UTC emphasized that its efforts to enhance customer choice in service and pricing options will not come at the expense of the monopoly customer or undermine policies favoring environmental protection, energy efficiency, resource diversity, or technical innovation. Instead, the UTC affirmed that existing mechanisms (em such as the special contract rule, banded-rate tariff authority, and the UTC's general authority to regulate in the public interest (em should provide sufficient flexibility to settle regulatory issues associated with increased competition in the near term. The UTC said it had yet to form an opinion on the nature and extent of competition that would be beneficial in the retail electric market, or what actions, if any, it can or should take to facilitate such competition. While seeking comments on the external developments, the UTC directed its staff to evaluate studies of market conditions and to undertake a survey of customer views concerning electric competition and service. Re Regulation of Electric Utilities, Docket No. UE-940932, Aug. 14, 1995 (Wash.U.T.C.).

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