WRECA seeks legislative and regulatory provisions that provide small utilities with exemptions or more simple compliance alternatives. Small utilities are defined as those with two percent or less of the state’s total number of electric consumers as reported by the most recent data from the U.S. Energy Information Administration (EIA).
There are over 60 utilities selling retail electric power to consumers in Washington State. Seven of those utilities are very large, and together, those seven large utilities provide electric service to over 78 percent of the electric consumers in the state.
The majority of the electric distribution utilities in Washington are much smaller. These small utilities are not-for-profit entities with service areas that range from mostly-residential urban areas to the sparsely-populated rural regions of the state. Their customer base is primarily residential and small commercial, with some irrigation customers in the rural service areas. They have very few if any industrial customers. They are publicly or member owned utilities with locally-elected and more readily accessible governing boards which ensures that the utility’s policy-makers and management is more responsive and operate in the best interest of the utility’s ratepayers.
As an integral part of their communities, the small utilities serve with a high level of involvement and support for civic, business, economic development and other community efforts. The small utilities provide this service while often serving territories that are physically challenging and thus require a larger portion of the utility resources (staff, equipment, and financial) to be focused on providing reliable and safe electrical service.
The typical small utility is a full-requirements customer of BPA and does not own any generating resources. The typical small utility doesn’t own or operate any transmission facilities and the distribution system has very little if any impact on the regional power grid. As existing hydro and other resources from BPA become less able to meet the resource needs in the future, these small utilities will be seeking opportunities to participate in joint acquisition ventures with other small utilities in efforts to obtain cost-effective resources to take advantage of economy of scale purchases.
Many state laws and regulations covering the retail sale of electric power are “one size fits all” approaches to public policy. Most of these laws and regulations do not provide additional reliability or safety for the electric customers, and may in fact adversely affect the small utilities’ ability to maintain a high standard of service reliability and public safety in a cost effective manner. While such policies, laws and regulations can be effectively managed by larger utilities that have more flexibility with staffing and resource allocations, this isn’t the case with the small utilities.
With fewer customers, lower energy sales, and less staff, many of the compliance requirements place a disproportionately higher burden on smaller utilities. Sometimes, the compliance requirements are beyond the scope of the small utilities’ resources and have a negative impact on the small utilities’ ability to meet the needs of their customers with cost-effective, reliable electric service.
The small utilities ability to provide cost-effective, reliable and safe utility services to their customers should not be jeopardized by unnecessary mandates or regulations. Therefore, WRECA will seek legislative and regulatory provisions that when appropriate provide small utilities with exemptions or more simple compliance alternatives.
An example is RCW 19.280 that requires each electric utility in Washington to file an integrated resource plans (IRP) every two years. An IRP is very complicated and highly technical in nature which requires expertise far beyond that of the staffs of the small utilities.
An IRP requires an exhaustive amount of research, analysis, commentary and public participation, resulting in a detailed report that is sometimes several volumes in length. For small utilities, this requirement would have had a devastating effect on the small utilities’ resources.
Realizing this, the legislature provided a simple alternative compliance option: small utilities are allowed to file a Resource Plan (RP) that is a single page and states that the utility is a full-requirements wholesale customer of BPA and that the utility plans to continue receiving its wholesale power from BPA.
Since BPA’s generation resources are already known, this provides the information needed by the state for its analytical needs