(1) In order to manage the financial risk associated with fuel price volatility, it is hereby declared to be the policy of the Washington state transportation commission (WSTC) that the WSTC may implement a fuel surcharge as an added component to the regular posted fares for passage on vessels operated by Washington state ferries (WSF) to mitigate the financial impacts associated with unexpected increases in fuel prices which exceed those incorporated in WSF's fuel budget. Upon WSTC approval, the total ferry fare charged will consist of the base fare plus an incremental, additional surcharge as calculated according to the formula set forth in this rule.

(2) WSF shall estimate the need for a fuel surcharge on a quarterly basis, based upon the standards prescribed in this rule. For the purposes of this rule, quarters shall be consistent with the state fiscal year definition of quarters.

(3) A fuel surcharge may be implemented where the amount appropriated by the legislature for ferry fuel is less than the reasonable fuel costs projected by WSF for that period. Any fuel surcharge implemented under this section must be approved by a vote of the Washington state transportation commission. Any fuel surcharge implemented under this section may not exceed the amount that would be sufficient to cover the difference between WSF's projected fuel costs and the amount appropriated by the legislature for ferry fuel.

(4) If a fuel surcharge is implemented under this section, the WSTC shall re-evaluate the need for the surcharge on at least a quarterly basis, and if the WSTC determines the surcharge is no longer needed to cover fuel costs not paid for by legislative appropriation, the WSTC shall revoke the surcharge.

(5) If the WSTC approves such a surcharge to be added or modified, then, the department shall:

(a) Notify ORCA partners and customers of the pending surcharge changes at least 30 days prior to implementation of said changes.

(b) Make all surcharge changes effective on the first of the month.

(6) The amount of any fuel surcharge shall be shown separately on customer receipts.

(7) WSF shall provide an annual report to the legislature, OFM, and the Washington state transportation commission summarizing its fuel cost mitigation activities, including how the department has managed its costs as well as the application, performance and impact of fuel surcharges pursuant to this authority.

(8) To facilitate understanding on the part of WSF customers and to ensure a transparent process, an explanation of how the surcharge is applied, including a summary of the actual calculation of the surcharge percentage, shall be described on the WSF website.

(9) This rule goes into effect on October 1, 2011.