The Washington Utilities and Transportation Commission (UTC) has issued a policy statement of eight principles as a guide to adapting its regulatory authority to the "more competitive circumstances facing the state's electric industry." The statement is not binding on the UTC or on parties to formal proceedings.
The UTC said it would strive to promote the "natural" evolution of efficient markets, but that its primary goals would remain affordable prices for electric service, protecting the long-term integrity of the system, and preventing noneconomic bypass and attendant cost-shifting to remaining ratepayers. The UTC warned that utilities should not expect guaranteed recovery of all costs of investments eventually proven uneconomic or stranded by competitive forces. It said that regulatory polices must seek to continue to balance ratepayer and shareholder interests while seeking flexible ways to reduce the exposure of all market participants to the risk of stranded investment.
In addition, the UTC said that market developments should not undermine existing public policies and social goals such as protection of the environment and promotion of resource diversity and technological innovation. New market entrants would be expected to share in the responsibility for implementing such policies. The UTC also vowed to protect the public's right to voice their views on the planning and development of the electric system. Re Regulation of Electric Utilities in the Face of Change in the Electric Industry, Docket No. UE-940932, Dec. 12, 1995 (Wash.U.T.C.).
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