The rules in this chapter apply to any water company that distributes, sells, or supplies water, and that meets requirements for commission regulation or jurisdiction under RCW 80.04.010 and WAC 480-110-255 (Jurisdiction). This includes investor-owned water companies that meet the jurisdictional threshold of serving one hundred or more customers or have average revenue of more than five hundred fifty-seven dollars per customer per year.

The commission may grant an exemption from the provisions of any rule in this chapter in the same manner and consistent with the standards and according to the procedures set forth in WAC 480-07-110 (Exceptions from and modifications to the rules in this chapter; special rules).

(1) These rules do not relieve any company from any of its duties and obligations under the laws of the state of Washington.

(2) The commission retains the authority to impose additional or different requirements on any company in appropriate circumstances, consistent with the requirements of law.

If any provision of this chapter or its application to any person or circumstance is held invalid, the remainder of the chapter or the application of the provision to other persons or circumstances is not affected.

(1) For purposes of determining commission jurisdiction over a water company as defined in RCW 80.04.010, "control" means the water system operator or manager has discretion over the property or finances or operations of a water company which is normally exercised by an owner. Factors indicating control include, but are not limited to, whether the operator or manager:

(a) May authorize the purchase or sale of all or part of the water system or its water rights;

(b) May authorize capital additions or improvements to the system;

(c) May accept contributed plant;

(d) May authorize the expenditure or acquisition of funds that encumber any asset of the company;

(e) May authorize the expenditure of funds for nonwater company purposes;

(f) Receives compensation of a type or amount having no reasonable relationship to the work performed or to be performed.

(2) Control does not include management by a satellite agency as defined in chapter 70.116 RCW if the satellite agency is not an owner of the water company.

"Applicant" means any person, partnership, firm, corporation, municipality, cooperative organization, governmental agency, etc., that has completed a water company's application for water service.

"Commission" means the Washington utilities and transportation commission.

"Contributions in aid of construction" means any money, services or property received by a water company to fund capital investments at no cost to the company with no obligation to repay.

"Customer" means:

• Anyone who has paid water company fees and/or has an accepted application for service; or

• Anyone whose service connection is installed and is currently paying a ready-to-serve charge; or

• Anyone who is actually receiving water service from the company with the knowledge of the company.

"Extension" means the water mains and equipment necessary to extend the company's transmission and distribution infrastructure. An extension may also be called a distribution extension, a main extension, or a line extension.

"Facilities charge" means a one-time fee that a new customer must pay, consistent with WAC 480-110-455 (Water company funding mechanisms), before the company will connect the customer's property to the water system.

"Initial tariff" means:

• The tariff filed by a water company when it first becomes subject to the jurisdiction of the commission; or

• The tariff filed by a water company that was formerly subject to commission jurisdiction, and has once again become jurisdictional. It does not mean a tariff filed to add a newly acquired system or company to the tariff of a currently jurisdictional company.

"Jurisdictional customer" means anyone who is actually receiving water service.

"Potential customer" means anyone to whom the water company has given a letter agreeing to provide service; and

• The letter is currently enforceable and has not expired by its own terms; and

• The property is not yet receiving any type of service.

"Primary contaminants" means substances that, when present in drinking water at levels exceeding designated maximum contaminant levels (MCL), may adversely affect the health of consumers. These MCLs are established as water quality "primary standards" and are based on chronic, nonacute, or acute human health effects.

"Rate increase filing" means any filing by the company that would:

• Increase gross annual revenues of the company from activities regulated by the commission; or

• Restructure tariffs so that one class of customer would provide more gross revenue than under the prior tariff structure. The term does not mean filings designed only to recover governmentally imposed taxes or periodic rate adjustments that have been authorized by commission order.

"Ready-to-serve charge" means the charge assessed by the water company when:

• The water company has the ability to provide water service;

• The water company has committed to provide water service; and

• There is an installed service connection at the customer's property.

"Reconnect charge" means the charge specified in the company's tariff for restoring water service that has been disconnected:

• At the customer's request; or

• For nonpayment; or

• For failure to comply with the company's rules.

"Service area" means the geographic area to which the company intends to provide water service using current plant.

"Service connection" means the pipes, valves, and fittings between the water company's distribution system and the customer's service line.

"Standby charge" means a charge imposed by some unregulated companies for having transmission and distribution infrastructure installed but without the current ability to provide water. It is also sometimes referred to as a system-readiness fee. The commission does not authorize this type of charge for regulated water companies.

"Surcharge" means a monthly charge or fee paid to the water company for plant or expenses. The surcharge is in addition to regular monthly service fees and typically has an expiration date or dollar limit and is subject to specific accounting requirements.

"Water company" or "company" means any corporation, company, association, joint stock association, partnership or person, their lessees, trustees or receivers appointed by any court whatever, owning, controlling, operating or managing any water plant within the state of Washington for the purpose of furnishing water service to the public for hire and subject to the jurisdiction of the commission. It does not include management by a satellite management agency as defined in chapter 70.116 RCW if the satellite agency is not an owner of the water company.

"Water system" means all plant, equipment, and other assets used to provide water service for a specific location.

(1) The commission only regulates investor-owned water companies that:

(a) Own, operate, control, or manage one or more water systems; except that control or management does not include management by a satellite management agency as defined in chapter 70.116 RCW if the satellite management agency is not an owner of the water company.

(b) Meet jurisdictional thresholds of one hundred or more customers, or have average revenue of more than five hundred fifty-seven dollars per customer per year.

(2) The commission does not regulate the following providers of water service:

(a) Cities, towns, or counties.

(b) Public utility districts.

(c) Water districts.

(d) Local improvement districts.

(e) Homeowner associations, cooperatives and mutual corporations, or similar entities that provide service only to their owners or members.

(f) Homeowner associations, cooperatives and mutual corporations, or similar entities that provide service to nonmembers unless they serve one hundred or more nonmembers, or charge nonmembers more than five hundred fifty-seven dollars average annual revenue per nonmember.

(g) Entities or persons that provide water only to their tenants as part of the business of renting or leasing.

This may include:

(i) Apartment buildings.

(ii) Mobile home parks.

(iii) Manufactured home rental communities.

(iv) Office complexes.

(v) Commercial or industrial parks.

(3) To determine jurisdiction, the commission considers only those customers receiving water. The commission does not consider customers who do not receive water, such as customers who have paid:

(a) Water-availability letter fees.

(b) Standby charges.

(c) System-readiness fees.

(d) Ready-to-serve charges.

(4) To calculate the average annual revenue per customer, the commission considers only the charges that water-receiving customers are billed on a recurring basis, other than contributions in aid of construction. For example, this includes money billed for flat-rate service or the metered base-charge and all usage charges.

(a) The commission does not include charges billed to customers who do not receive water, such as:

(i) Water availability letter fees.

(ii) Standby charges.

(iii) System-readiness fees.

(iv) Ready-to-serve charges.

(b) The commission does not consider contributions in aid of construction in determining jurisdiction. These contributions can be money, services or property. Payments can be made in a lump sum or financed over time. Examples of contributions in aid of construction include payments for:

(i) Connection to system.

(ii) Meter installation.

(iii) System buy-in.

(iv) Facilities charges.

(v) Assessments for capital plant and equipment.

(5) The following example shows how to calculate the average annual revenue per customer for two hypothetical customers. The data for each customer are provided at the end of the example:

(a) Select the most recent twelve consecutive months.

(b) For each customer who received water service during the twelve-month period, add the amount the customer was billed by the water company for items other than contribution in aid of construction items.

(c) For each customer who received water service during the twelve-month period, add the number of months the customer received water service.

(d) Total the amount billed the customers during the twelve-month period.

(e) Total the number of months each customer received water service.

(f) Calculate the "Average Monthly Revenue Per Customer": Divide the "Total Billed During the Twelve-Month Period" by the "Total Months Received Water Service During the Twelve-Month Period."

(g) Calculate the "Average Annual Revenue Per Customer": Multiply the "Average Monthly Revenue Per Customer" times 12 months.

(h) To ensure that all customers are treated equitably, the commission will impute the same rates to any customers receiving free or reduced service that apply to other customers receiving comparable service on the same system.

Each water company shall maintain a current map of each of its water systems showing the current service area. The company must provide the current maps to the commission for review within five business days of a request. The maps must contain enough detail to answer questions related to rates and charges and obligations to serve.

Authorized personnel of a water company have the right to enter a customer's property during reasonable hours to perform meter reading, maintenance, testing, installation or removal of the company's property. Customers may ask to see the identification of the water company personnel before allowing entry to the customer's property.

(1) A water company must notify its customers of its regular business hours, telephone number, mailing address and a twenty-four hour emergency telephone, pager, voice messaging, fax machine or mobile phone number, at least once a year.

(2) A water company must advise its customers and the commission of any change in address or telephone number(s) at least ten days prior to the effective date.

(3) The water company must develop procedures for prompt response to reported failures or emergencies. A company representative must respond to the customer who reported the service failure or emergency within twenty-four hours of the report.

(4) When a nonemergency customer call is received, a water company must return the customer's call within two business days.

(5) A water company must acknowledge and respond to a customer's written inquiry within two weeks of receiving the letter.

(6) The water company must provide a copy of the commission's consumer brochure to each new applicant for service, and once a year notify its current customers of the availability of the brochure and how to obtain a copy.

(7) The water company must make the following information available for review by customers:

(a) A copy of the water rules, chapter 480-110 WAC.

(b) A copy of the company's current rates and regulations (tariff).

(c) A copy of the consumer brochure published by the commission.

(1) When establishing initial service to a location the water company must obtain applications for service in writing, on company-supplied forms. The completed application form must:

(a) Include both the company's and the applicant's name, address and telephone number;

(b) Show the date the person applied for service;

(c) Comply with the water company's filed tariffs;

(d) Clearly state the type of service requested. (Examples: Residential or commercial, flat-rated or metered service, a letter to provide service, ready-to-serve, etc.);

(e) Include a property lot description, street number, or other sufficient description of location for service;

(f) Include a complete list and description of all applicable charges. (Examples: Account set-up, service connection, facilities charge, line extension, etc.);

(g) Include the date by which a customer can expect service;

(h) Include the application expiration date, if any;

(i) Include signatures of the potential customer and a company representative.

(2) After completing the application, the water company must:

(a) Provide the applicant with a copy of the completed form;

(b) Keep a copy of the completed application in the company's business office for no less than three years after the expiration date or the denial-of-service date;

(c) Inform the applicant within ten days of the company's intention to provide service or deny service. If service is denied, the company must tell the applicant the reason service is being denied and advise the applicant of the commission's toll-free number ( 1-800-562-6150) for appealing the decision.

(1) Establishing credit - residential. A company may not collect a security deposit if an applicant for residential service can establish satisfactory credit by any one of the following:

(a) The applicant had prior service with the company or another water company for twelve months before the application date and:

(i) Service was not disconnected for nonpayment;

(ii) The customer received no more than one delinquency notice; and

(iii) References with the other company (if applicable) can quickly and easily be checked. The company may request that the references from the previous company be in writing.

(b) The applicant had consecutive employment during the prior twelve months with no more than two employers and is currently employed or has a regular source of income.

(c) The applicant owns or has a legal interest in the premises being served.

(d) The applicant can furnish a satisfactory guarantor who will be responsible for payment of water service bills in the event of disconnection or default by the customer, in a specified amount, not to exceed the amount of the cash deposit required.

(e) The applicant personally produces at the company's business office two major credit cards, or other credit references that the company can quickly and easily check, that demonstrate a satisfactory payment history.

(2) Establishing credit - nonresidential. A company may require an applicant for nonresidential water service to demonstrate that the applicant is a satisfactory credit risk by reasonable means appropriate under the circumstances.

(3) Deposit requirements. A company may require a deposit if:

(a) The applicant has failed to establish a satisfactory credit history as outlined in subsections (1) or (2) of this section;

(b) The applicant's service from another water company was disconnected for failure to pay amounts owing when due during the twelve months before the application date;

(c) The applicant has an unpaid, overdue balance owing for similar service from the water company to which application is being made or from any other water company;

(d) Two or more delinquency notices have been served on the applicant by any water company during the prior twelve months; or

(e) The application is for beginning or continuing service to a residence where a prior customer still lives and owes a past due bill to the company.

(4) Deposit amount. Deposits required for a customer or location must not exceed:

(a) Two-twelfths of the estimated annual billings for companies billing monthly;

(b) Three-twelfths of estimated annual billings for companies billing bimonthly;

(c) Four-twelfths of estimated annual billings for companies billing trimonthly.

(5) Transfer of deposit. When a customer moves to a new address within the company's service territory, the deposit plus accrued interest, less any outstanding past-due balance owing from the old address, must be transferred to the new address or refunded.

(6) Interest on deposits. Companies that collect customer deposits must pay interest on those deposits calculated:

(a) For each calendar year, at the rate for the one-year Treasury Constant Maturity as of November 15 of the previous year, as calculated by the U.S. Treasury, and published in the Federal Reserve's Statistical Release H.15; and

(b) From the date of deposit to the date of refund or when applied directly to the customer's account.

(7) Deposit payment arrangements. The company must allow an applicant or customer the option of paying fifty percent of the deposit prior to service, and paying the remaining balance in equal amounts over the next two months, on the dates mutually agreed upon between the applicant or customer and the company. The company and applicant or customer may make other mutually acceptable deposit payment arrangements.

(8) Receipt for deposit. A company must furnish a receipt to each applicant or customer for the amount deposited.

(9) When refund of deposits is required. A company must refund deposits plus accrued interest when there has been satisfactory payment, as defined in (a) of this subsection, or when service is terminated.

(a) "Satisfactory payment" means a customer has paid for service for twelve consecutive months in a prompt and satisfactory manner as evidenced by the following:

(i) The company has not started a disconnection process against the customer; and

(ii) The company has sent no more than two delinquency notices to the customer.

(b) Termination of service. When service is terminated, the company must return to the customer the deposit amount plus accrued interest, less any amounts due the company by the customer.

(10) How deposits are refunded. The company must refund any deposit plus accrued interest, as indicated by the customer at the time of deposit, or as modified by the customer on a later date, using one of the following methods:

(a) A check issued and mailed to the customer no later than fifteen days following completion of twelve months of satisfactory payment, as described above; or

(b) A credit applied to the customer's account for service beginning in the thirteenth month.

(11) Additional deposit. If a deposit or additional deposit amount is required after the service is established, the reasons must be specified to the customer in writing. Any request for a deposit or additional deposit amount must comply with the standards outlined in subsections (1) and (2) of this section. If the original deposit was secured by a guarantor and the guarantor does not agree to be responsible for the additional deposit amount, the customer will be held responsible for paying the additional deposit.

(1) A water company must not refuse or discontinue service to an applicant or customer when there are unpaid bills from a prior customer at the same premises unless the company believes, based on objective evidence, that the applicant is acting on behalf of the prior customer with the intent to avoid payment.

(2) A water company cannot permanently deny service to an applicant or customer because of a prior obligation to the company. A prior obligation is the dollar amount that has been billed to a customer but left unpaid at the time of disconnection of service for nonpayment.

(3) The water company may refuse to connect an applicant for service, or refuse to increase service to a customer, when one or more of the following conditions exist:

(a) The service will adversely affect service being provided to other customers;

(b) The applicant or customer has not complied with state, county, or municipal codes or regulations concerning the approved design or use of the facilities;

(c) In the company's judgment, the applicant's or customer's installation of piping or equipment is hazardous, or of such design that satisfactory service cannot be provided;

(d) The applicant or customer has not installed on its premises required protective devices necessary to protect the company's property or that of its other customers;

(e) The company is unable to secure all necessary rights of way, easements, approvals, and permits;

(f) Furnishing the water is contrary to the provisions of the company's approved water system plan; or

(g) The location to be served is located outside of the company's service area.

(1) Service may be disconnected either by customer direction or by company action:

(a) Customer-directed. Customers wanting to discontinue service must notify the water company. The company must disconnect the service as requested by the customer. If the customer fails to request disconnection of service the customer will be responsible to continue paying for water service at the company's tariff rate until the company becomes aware that the customer vacated the property.

(b) Company-directed: Notice requirements - After properly notifying the customer, as explained in subsection (3) of this section, the water company may discontinue service to its customers for:

(i) Unpaid bills, as provided for in WAC 480-110-375 (Form of bills);

(ii) Water use for purposes or properties other than those specified in the customer's application for service;

(iii) Willful waste of water through improper or defective piping, equipment, or otherwise;

(iv) Piping or equipment that does not meet the company's standards or fails to comply with other applicable codes and regulations;

(v) Tampering with the company's property;

(vi) Vacating the premises;

(vii) Nonpayment of any proper charges, including deposit, as provided in the company's tariff;

(viii) Refusing to allow access as required in WAC 480-110-305 (Access to premises);

(ix) Violating rules, service agreements, or effective tariffs, including violation of outdoor watering instructions given to customers in order to curtail water use during time of shortage;

(x) Use of equipment that detrimentally affects the company's service to its other customers.

(c) Service obtained by fraud: No notice required before termination - A water company may terminate service without notice when it discovers that a customer has obtained service fraudulently. Examples of fraud include: When service is connected without the company's knowledge, when service is obtained by fraudulent means or representations, or when service is used to provide service to other persons who are required to obtain their own service.

(i) First offense: The company may disconnect service immediately and without prior notice when it discovers fraud, unless the customer immediately pays:

(A) The tariff rate for service that the company estimates was taken fraudulently; plus

(B) All company costs resulting from the fraudulent use and all applicable fees; plus

(C) Any applicable required deposit.

(ii) Second offense: The company may disconnect service immediately and without prior notice when it discovers further fraud. The company may refuse to reconnect service to a customer who has been disconnected for further fraud.

(iii) Commission review: A customer may ask the commission to review any company determination of fraud through an informal or formal complaint. The company has the burden of proving that fraud occurred. However, this rule does not relieve any person who has committed fraud from civil or criminal responsibility.

(2) Medical emergencies. When a water company has cause to disconnect or has disconnected a residential service, it must postpone disconnection of service or must reinstate service for a grace period of five business days after receiving either verbal or written notification of the existence of a medical emergency. In cases of actual emergencies when service is reinstated, payment of a reconnection charge and/or deposit shall not be required prior to reinstatement of service.

(a) The company may require that the customer, within five business days, submit written certification from a qualified medical professional stating that the disconnection of water service would significantly endanger the physical health of a resident of the household. "Qualified medical professional" means a licensed physician, nurse practitioner, or physician's assistant authorized to diagnose and treat the medical condition without supervision of a physician. Nothing in this section precludes a company from accepting other forms of certification, but the maximum the company can require is written certification. If the company requires written certification, it may require that the certification include some or all of the following information:

(i) Residence location;

(ii) An explanation of how the physical health of the person will be endangered by disconnection of local service;

(iii) A statement of how long the condition is expected to last; and

(iv) The title, signature and telephone number of the person certifying the condition.

(b) A medical emergency does not excuse a customer from paying delinquent and ongoing charges. The company may require that the customer do the following within the five business day grace period: Pay a minimum of twenty-five percent of the delinquent balance and enter into an agreement to pay the remaining delinquent balance within ninety days and to pay subsequent bills when due. Nothing in this section precludes the company from agreeing to an alternate payment plan, but the company may not require the customer to pay more than this subsection prescribes. The company must send a notice to the customer confirming the payment arrangements within two business days.

(c) If within the five-day grace period the customer fails to provide an acceptable payment arrangement, the company may disconnect service without further notice.

(d) If the customer fails to abide by the terms of the payment agreement the company may disconnect service without further notice.

(e) The medical certification is valid only for the length of time the health endangerment is certified to exist but no longer than six months unless renewed.

(3) Required notice prior to disconnecting service. Each water company must notify customers before disconnecting their service except in case of danger to life or property, fraudulent use, impairment of service, or violation of law. In all other cases, the company must not disconnect service until it has met the following requirements:

(a) The company must serve a written disconnection notice on the customer, either by mail, or, at the company's option, by personal delivery of the notice to the customer's address, attached to the primary door. Each disconnection notice must include:

(i) A delinquent date that is no less than eight business days after the date of personal delivery or mailing if mailed from inside the state of Washington or a delinquent date that is no less than eleven days if mailed from outside of the state of Washington; and

(ii) All pertinent information about the reason for the disconnection notice and how to correct the problem; and

(iii) The company's name, address, and telephone number by which a customer may contact the company to discuss the pending disconnection of service.

(b) In addition to (a) of this subsection, a second notice must be provided by one of the two options listed below:

(i) Delivered notice. The company must deliver a second notice to the customer and attach it to the customer's primary door. The notice must contain a deadline for compliance that is no less than twenty-four hours after the time of delivery that allows the customer until 5:00 p.m. of the following day to comply; or

(ii) Mailed notice. The company must mail a second notice, which must include a deadline for compliance that is no less than three business days after the date of mailing if mailed from within the state of Washington or six days if mailed outside the state of Washington.

(c) Disconnection notices must:

(i) Include detailed information pertinent to the situation; and

(ii) Include the company's name, address and telephone number by which the customer may contact the company to discuss the pending disconnection of service; and

(iii) Expire after ten business days from the first day that the company may disconnect service, unless other mutually agreed upon arrangements have been made and confirmed in writing by the company. If mutually accepted arrangements are not kept, the company may disconnect service without further notice.

(d) Except in case of danger to life or property, companies may not disconnect service on Saturdays, Sundays, legal holidays, or on any other day on which the company cannot reestablish service on the same or following day.

(e) A company employee dispatched to disconnect service must accept payment of a delinquent account at the service address if tendered in cash, but is not required to give change for cash tendered in excess of the amount due and owing. The company must credit any excess payment to the customer's account. When disconnection does not take place due to payment made by the customer, the company may assess a fee for the disconnection visit to the service address as provided in the company's tariff. The disconnection notice must describe the disconnection visit charge, the amount, and the circumstances under which the charge will be made.

(f) When service is provided through a master meter, or when the utility has reasonable grounds to believe service is to other than the customer of record, the company must undertake reasonable efforts to inform occupants of the service address of the impending disconnection. Upon request of one or more service users, where service is to other than the customer of record, a minimum period of five days must be allowed to permit the service users to arrange for continued service.

(g) When service is provided to a hospital, medical clinic with resident patients, or nursing home, notice of pending disconnection must be provided to the director of the Washington department of health, and to the customer. Upon request to the company from the Washington department of health director or designee, an additional five business days must be allowed before disconnecting service to allow the department to take whatever steps are necessary to protect the interests of resident patients who are responsibilities of the Washington department of health.

(h) Service may not be disconnected while the customer is pursuing any remedy or appeal provided by these rules or while engaged in discussions with the company's representatives or with the commission. However, any amounts not in dispute must be paid when due and any conditions posing a danger to health, safety, or property must be corrected.

(4) Payments at a payment agency. Payment of any past due amounts to a designated payment agency of the water company constitutes payment when the customer informs the company of the payment and the company has verified the payment with the payment agency.

(5) Reconnecting water service after disconnection. The water company must restore disconnected service when the customer has paid, or the company has agreed to bill, any reconnection charge and:

(a) The causes of disconnection are removed; or

(b) The customer pays all proper charges; or

(c) The customer pays any applicable deposit as provided for in the company tariff in accordance with WAC 480-110-335 (Establishing credit and deposits).

The commission may order reconnection pending resolution of any bona fide dispute between the company and the customer over the propriety of disconnection.

(1) Customer responsibility - Customers must notify the water company in writing prior to making a change in equipment or usage that will materially affect the service being provided by the company. The customer must:

(a) Provide the company adequate time to install necessary additional facilities or supply; and

(b) Pay an equitable share of the cost of necessary additional facilities, if any, as provided in the company's tariff or through a contract submitted to the commission for approval.

(2) Water company responsibility. Each water company must:

(a) Install and maintain all equipment at appropriate locations necessary to operate the system;

(b) Install additional equipment as required by the commission in connection with performing special investigations; and

(c) Notify all affected customers when changes to the service will require customers to adjust their equipment.

(i) If the customer has been advised of the needed change prior to taking service, the company has no obligation to pay for any costs in connection with making required changes to the customer's equipment.

(ii) If the change in service is required by law, the company has no obligation to pay for any costs in connection with making required changes to the customer's equipment.

(iii) Otherwise when equipment must be adjusted to permit use under the changed conditions, the cost of any necessary adjustments must be equitably shared by the company and customer.

(3) Maintenance. Each water company must maintain its plant and system in a condition that enables it to furnish adequate service and meet its obligation under chapter 246-290 WAC, Public water supplies or chapter 246-291 WAC, Group B public water systems, as applicable.

(4) Quality of water. Each water company must meet Washington department of health requirements under chapter 246-290 or 246-291 WAC, as applicable.

(5) Protection of water supply. Each water company must protect its sources of supply, as required by Washington department of health under chapter 246-290 or 246-291 WAC, as applicable.

(6) Operations and maintenance. Each water company must comply with Washington department of health rules regarding operation and maintenance, as required under chapter 246-290 or 246-291 WAC as applicable, and by good engineering practices.

(7) Test records. Each water company must:

(a) Keep a complete record of each test made for quality and service conditions as required under these rules. The records must contain complete information concerning the test, including such items as the commission may require;

(b) Provide the records to the commission staff upon request.

(8) Interruption of service and service outages:

(a) Each water company must make all reasonable efforts to avoid outage of service but are not insurers in the event of emergency, acts of God, or similar event. When outages do occur, the company must make reasonable efforts to reestablish service with a minimum of delay.

(b) When making necessary repairs or changes to its facilities, a water company:

(i) May interrupt service for a period of time as reasonably necessary and in a manner that minimizes the inconvenience to the customers; and

(ii) Must attempt to do the work during working hours regularly maintained by the company.

(c) A water company may interrupt service without incurring any liability.

(9) Notice of service interruptions. Each water company must:

(a) Notify its customers of a scheduled interruption twenty-four hours in advance through newspapers, radio announcements, or other means;

(b) Notify police and fire departments affected by the interruption individually;

(c) Keep a record of all interruptions of service affecting a substantial number of customers, including in such records:

(i) The location;

(ii) The date and time;

(iii) The duration; and

(iv) The cause of each interruption, if known.

(d) Provide copies of records to the commission staff, upon request;

(e) Notify the Washington department of health.

(1) Customer bills must:

(a) Be issued at intervals not to exceed three months and identify if the water company is billing in arrears or advance;

(b) Show a reference to the applicable rate schedule;

(c) Identify and show each separate charge as a line item;

(d) Show the total amount of the bill;

(e) Include enough information that, together with tariff rates, the customer can calculate his or her bill (a copy of the tariff is available for review at company or from the commission upon request);

(f) Show the date the bill becomes delinquent if not paid. The minimum specified time must be fifteen days after the bill's mailing date, if mailed from within the state of Washington, or eighteen days if mailed from outside the state of Washington, after the bill's mailing date.

A customer may request to pay by a certain date that is not the normally designated payment date when showing good cause. Good cause may include, but is not limited to, adjustment of a billing cycle to parallel receipt of income. The preferred payment date must be prior to the next invoice date.

(g) Include the water company's name, business address, and telephone number and/or emergency telephone number by which a customer may contact the company;

(h) If the customer is metered, include the current and previous meter readings, the current read date, and the number and kind of units consumed;

(i) Show taxes and any tax percentage rate that the taxes are computed from. Taxes must be totaled to show a total taxed amount. Upon request, the company must provide a detail of the computation of the tax amount. Taxes, as used here, represent municipal occupation, business and excise taxes that have been levied by a municipality against the company, and are being passed on to the customer as a part of the charge for water service; and

(j) Clearly identify when a bill has been estimated.

(2) Each water company may prorate bills for customers who have taken service for a fraction of the billing period. If the company does not have its method of prorating bills in its tariff, the company must prorate bills in the following manner:

(a) For flat rate service, the charge must be prorated on the basis of the proportionate part of the period during which service was rendered.

(b) For metered service the charge will be equal to:

(i) The applicable minimum charge as shown in the company's tariff must be prorated on the basis of the proportionate part of the period during which service was rendered; plus

(ii) Any water usage charge computed using rates and allowances shown in the company's tariff.

(3) The water company must include its method for estimating bills in its tariff. Estimating of bills is allowed for no more than two consecutive billing cycles.

(4) When a company has cause to back-bill a customer, the company must allow the customer payment arrangements, if requested, for the same number of months to pay equal to the cumulative total of months being back-billed. (Example: If the company is back-billing for a one-year period, the company must allow the customer twelve months of equal payments to pay the total amount of the back billing.) These payments will be in addition to current billings.

(1) If a water company receives a complaint or dispute from a customer or an applicant for service it must:

(a) Acknowledge the complaint;

(b) Investigate promptly;

(c) Report the results of the investigation to the complainant;

(d) Take corrective action, if warranted, as soon as appropriate under the circumstances;

(e) Inform the complainant that the decision may be appealed to a higher level representative at the company, if any;

(f) Inform the complainant, if still dissatisfied after speaking with the higher level representative, of the commission's availability for review of the complaint; and

(g) Provide the complainant with the commission's address and toll-free telephone number.

(2) Applicants, customers, or their representatives, may file with the commission:

(a) An informal complaint against the company as set forth in WAC 480-07-910 (Informal complaints); and/or

(b) A formal complaint against the company as set forth in WAC 480-07-370 (Pleadings—General).

(3) When commission consumer affairs staff refers an informal complaint to the company, the company must:

(a) Investigate and report the results to the commission consumer affairs staff within two business days. The commission consumer affairs staff may grant an extension of time for responding to the complaint, if requested and warranted;

(b) Keep the commission consumer affairs staff informed of progress toward the solution and the final result.

(4) Each water company must keep a record of all complaints concerning service or rates for at least one year and, on request, make them readily available for commission review. The record must contain:

(a) Complainant's name and address;

(b) Date and nature of the complaint;

(c) Action taken; and

(d) Final result.

(1) Each water company may be required to refund water charges due to poor water quality only:

(a) Upon commission order resulting from a formal proceeding before the commission; and

(b) When there are violations of the Washington department of health water quality standards in WAC 246-290-310 (Maximum contaminant levels (MCLs) and maximum residual disinfectant levels (MRDLs)); and

(c) If the company does not take follow up steps outlined in WAC 246-290-320 (Follow-up action).

(2) The amount of the refund will be determined in a formal proceeding before the commission and is not recoverable through rates or charges.

(1) When the water company receives a meter accuracy or water pressure complaint, it must perform a test and share the results with the customer. The test must be at no charge to the customer, except the water company may charge for any additional meter tests requested by the customer within a twelve-month period as provided in its tariff.

(2) The test must be performed within ten days of the complaint.

(3) The customer has the option to witness the test. Should the customer choose to witness the test, a mutually agreed time will be established. A continuously recording pressure gauge may be required for a period of up to one week based on customer complaints of low pressure.

(4) The meter or pressure test must be taken using industry standard methods and equipment.

(5) If a meter test reveals a meter error in excess of two percent water flow to the detriment of the customer, the company must repair or replace the meter at no cost to the customer. A refund for any over billing must be made to the customer.

(6) If the water company and customer cannot resolve a complaint, it may be appealed to the commission for resolution.

(7) The water company must keep a record of meter and pressure tests and have them available for inspection. The record must list the customer's name and address, type of complaint, resolution, and what test method was used.

(8) The water company must provide, at the commission's request, a description of the test procedures and equipment used to perform meter and pressure complaint tests.

(1) Water company rights and responsibilities:

(a) Each water company must:

(i) Bear the cost of the meter and meter installation.

(ii) Install water meters that are in working order and accurately measure water flow.

(iii) Record meter serial numbers and identify location of installation.

(iv) Repair or replace a malfunctioning meter at its expense unless a customer causes the malfunction.

(b) The water company may:

(i) Install meters and charge the tariff meter rate after thirty days notice to affected customers.

(ii) Install any apparatus to detect fraud or waste without notifying the customer.

(2) Water customer rights and responsibilities:

(a) A customer may request that a standard residential meter as defined in the company's tariff be installed, provided that metered rates are in effect.

(b) When a customer requests a meter installation, the water company may charge the customer in advance for the meter cost and meter installation, if such charge is included in the company's tariff. The company must reimburse the customer, by bill credit, at least ten percent of the meter and installation charge each month until fully paid.

(c) The water company has thirty days from the date of request to install the meter.

(d) If the water company fails to install the meter within the time limit in (c) of this subsection, the customer must be charged only the meter minimum charge until the meter is installed.

(e) If a customer tampers with a meter, the customer will be liable to the company for any repair or replacement costs.

(f) If the customer requests assistance in reading a meter, the water company must provide information on how to read the meter.

(1) Each water company must submit a draft customer notice to the commission for review at least one week before the company's planned printing date for distribution.

(2) At a minimum, the water company must notify:

(a) Customers and potential customers who may be affected by the water company's proposal; and

(b) The public affairs section of the commission.

(3) Customers must receive notice thirty days before the requested effective date when a water company proposes to:

(a) Increase rates;

(b) Change terms and/or conditions of an existing service;

(c) Change the ownership or control of the operating company (see WAC 480-143-210 (Transfer customer notice requirements) for content of notice);

(d) Institute a charge for a service that was formerly provided without charge; or

(e) Eliminate or grandfather any service.

(4) Content of notice for rate change - The notice to customers must contain, at a minimum, the following:

(a) Date

(b) (Insert water company name) has filed for approval from the Washington utilities and transportation commission to increase rates (insert total annual revenue). If approved, the rates will be effective on (insert effective date).

(c) (Clearly explain the reason for the proposal - be specific.)

(d) If you have questions about the proposed filing and how it will affect you, please call (insert company name & office phone number). If you have questions about the rate making process, you may contact the Washington Utilities and Transportation Commission at the following address: WUTC, 1300 S. Evergreen Park Drive S.W., P.O. Box 47250, Olympia, WA 98504-7250; 1-800-562-6150 (toll-free) or by email comments@wutc.wa.gov.

(e) If you would like to comment on this proposal, it is important for you to do so now. Comments must be submitted in writing or presented at the commission's open meeting to be included as part of the formal record. The commission is interested in receiving your views regarding this proposal whether in favor or not. All open meetings are held in Olympia, WA. If you would like to be added to the commission's mailing list to be notified of the open meeting date, please call 1-800-562-6150 and leave your name, complete mailing address, the water company's name, and a description of the proposal you are interested in.

Sincerely,

(Company Name/Representative)

(5) Notice after commission action is permitted only when the commission approves an increase in federal, state, county or city-imposed taxes, fees or surcharges, and when credits are issued.

(a) At a minimum, notice after commission action must include the effective date, a clear description of changes to rates or services resulting from the commission's decision, and a company contact number where customers may seek additional information.

(b) Any notice after commission action may be accomplished by a bill message, bill insert, printed in a company newsletter, or mailed separately to customers.

(c) The commission may require other notification to the public as it determines necessary.

Tariffs filed by a water company must conform to the rules of this section and chapter 480-80 WAC Utilities general—Tariffs, unless the commission has authorized deviation from the rules in writing.

A water company must file revisions to its filed tariff within thirty days of its acquisition of new service area, whether by acquisition of another regulated water company or by acquiring one or more previously unregulated water systems.

(1) Adopted tariffs - When a regulated company acquires another regulated company. Any regulated water company acquiring a regulated water company must adopt the latter's tariff. An adoption form must be completed and filed with the commission by the acquiring water company within thirty days of the acquisition. The commission will supply an adoption form upon request.

(2) Incorporate into existing tariff - When a regulated water company acquires a nonregulated company.

(a) When a regulated water company acquires a nonregulated water company or water system, the acquiring water company must file a separate tariff page indicating the name of the newly acquired company or system with the rates and charges that were in existence before the acquisition.

(b) If the acquired nonregulated company or water system was previously subject to commission jurisdiction, the acquiring water company must file a separate tariff page indicating the name of the newly acquired company or system with the rates and charges in effect for the acquired company at the time the acquired company was removed from regulation.

(c) No other rates and charges may apply to the customers on the newly acquired system except those specifically shown on the new tariff page unless the company obtains the commission's approval to charge a different rate.

(3) Initial tariffs - When a company becomes jurisdictional.

(a) An initial tariff must be filed in a standard tariff format. The commission will provide illustrations of the standard format upon request.

(b) The tariff must be accompanied by a cover letter describing the filing as an initial tariff.

(c) Customers must be notified before the commission receives the filing.

(d) The filing must be accompanied by supporting financial data justifying the proposed rates. See WAC 480-07-530 (General rate proceedings—Water companies).

(4) Initial tariffs - A company that was previously subject to commission jurisdiction. If a company or water system was previously subject to commission jurisdiction and once again becomes jurisdictional, the company must file a tariff with the rates and charges in effect at the time the company was last removed from regulation.

(1) Each water company must file, as a part of its tariff, an extension rule that states the conditions required by the company before it will extend its transmission and distribution infrastructure to provide water service to an applicant.

(2) Companies entering into any extension contract must:

(a) File the contract with the commission not less than thirty days before the proposed effective date of the contract.

(b) Conform the proposed contract to the applicable provisions of WAC 480-80-143 (Special contracts for gas, electric, and water companies).

(3) Extension contracts must include the documentation necessary to show that the proposed charges are fair, just, reasonable, and sufficient.

(4) An extension may also be referred to as a distribution extension, a main extension, or a line extension.

A service connection is the pipes, valves, and fittings between the water company's distribution system and the customer's service line. The customer's service line is the water line from the customer's points of usage to the water company's service connection.

(1) Service connection charge and service connection length. The length of a service connection can vary depending on where the customer's service line is or will be located. A tariffed service connection charge may be assessed for the cost of a new service connection. However, if the service connection is longer than the distance from the water distribution main to the outside edge of the right of way or easement that runs along or parallel to the water distribution main and closest to the customer's property line, the cost of such an extension may be financed as line extension, at the option of the company. The related line extension contract is subject to approval by the commission under WAC 480-110-435 (Extension contracts).

(2) Service connections may be installed when the system is built or at a later date, after the system is operational. A service connection charge may be based on the average installation cost for new service connections in subsection (3)(a) and (b) of this section. The service connection must be owned and maintained by the water company.

(3) A water company may assess a service connection charge, if named in its tariff, to recover the cost of the service connection:

(a) Installed by the water company during construction of the water system; or

(b) Installed after the distribution system had been buried and in service; or

(c) When the service connection has been previously removed for good cause and must be reinstalled to provide water service.

(4) A service connection charge must not be assessed if:

(a) The water company did not incur any cost to install the service connection (e.g., the service connection is a contribution in aid of construction);

(b) The water company is just installing a meter; or

(c) The water company is merely opening a valve to connect the company's distribution system to the customer's service line.

(5) The company may install the service connection to the property line, property corner, or to a location on the property mutually agreed upon. The company may install a meter or valve at any point along the service connection line or at a different mutually agreed location provided that in such event the property line will nevertheless be deemed the point of delivery.

(6) The customer's service line must be installed to provide easy access to the water company's distribution system. If there is doubt as to where the proper location should be, the customer must consult with the water company and agree on a location.

(7) The water company may request that the trench be left open and customer's service line exposed in order to inspect the connection for potential problems. The water company must complete the inspection within two business days after notification that the trench is open.

(1) Some water companies have insufficient funds to respond to emergencies, replace or upgrade failing infrastructure, or add plant to accommodate growth. Frequently, water companies cannot obtain financing through traditional capital markets. The purpose of a surcharge or a facilities charge is to provide the water company with a source of capital, provided by customers, to fund capital needs. No company may collect a surcharge or facilities charge except by commission order or approval.

(2) Surcharges.

(a) Surcharges are designed to fund three types of financing needs:

(i) Future water utility plant. This surcharge allows the company to collect money from current customers to fund a reserve in order to pay for future capital projects that are part of a long-range plan. The project must be approved by the department of health as a part of a long-range plan, or required by the department of health to assure compliance with federal or state drinking water regulations, or to perform construction or maintenance required by the department of ecology to secure safety to life and property under RCW 43.21A.064(2).

(ii) Current water utility plant. This surcharge is tied to the servicing and repayment of the debt used for the financing of the water utility plant required by:

(A) Washington department of health order or letter to adequately serve current customers; or

(B) Department of ecology.

(iii) Special expenses. This surcharge is used to pay for operating expenses that are independent and unique from normal operating expenses or that may be subject to large variations. This type of operating expense may need periodic reevaluation without the need of a general rate case. Examples of the use of this type of surcharge are: New or highly variable safe drinking water act testing and treatment expenses, extraordinary maintenance expenses, or temporary taxes.

(b) A surcharge may fund up to one hundred percent of the total cost of a project or expense.

(c) Funds received by surcharge, including any interest earned on the funds while being held in reserve, are contributions in aid of construction.

(d) When seeking approval of a surcharge the company must file:

(i) A cover letter explaining the request;

(ii) A tariff page, stating the amount of the surcharge and who must pay;

(iii) Supporting justification for the charge; and

(iv) If applicable, requests for capital surcharges must refer to the appropriate sections of the company's submitted comprehensive water system plan, or include a copy of the Washington department of health order or letter requiring plant improvements to adequately serve current customers.

(3) Facilities charges.

(a) Facilities charges are designed to fund two types of capital needs:

(i) Future water utility plant. This type of facilities charge allows the company to collect money from new customers to fund a reserve in order to pay a portion of future capital projects that are part of a long-range plan. The project must be in accordance with the company's submitted comprehensive water system plan or Washington department of health order or letter requiring plant improvements to adequately serve current customers, or utility plant that is required by department of ecology.

(ii) Current water utility plant. This type of facilities charge allows the company to collect money from new customers to be used to fund a reserve to partially finance current plant improvements required by Washington department of health order or letter to adequately serve current customers or required by department of ecology.

(b) A facilities charge may not fund one hundred percent of the total cost of qualifying projects. The water company must maintain an appropriate ratio of rate base to total plant.

(c) Funds received through a facilities charge, including any interest earned on the funds while being held in reserve, are contributions in aid of construction.

(d) A water company may impose a facilities charge by tariff or contract.

(e) When seeking approval of a facilities charge the company must file:

(i) A cover letter explaining the request;

(ii) A tariff page or signed contract, stating the amount of the charge and who must pay;

(iii) Supporting justification for the charge;

(iv) Requests for a facilities charge must refer to the appropriate sections of the company's submitted comprehensive water system plan, or include a copy of the Washington department of health order or letter requiring plant improvements to serve current or potential customers.

(4) Accounting and reporting requirements.

(a) Surcharge funds and facilities charge funds collected pursuant to this rule, and interest earned upon such funds must be held in a separate account by the company for the benefit of customers. Such funds do not become the property of company owners and may not (except as authorized in (b) of this subsection), be disbursed, alienated, attached, or otherwise encumbered by the company or its owners. In the event of a sale or transfer of the company, the trust obligations established in this rule regarding any unspent surcharge or facilities charge funds are transferred to the new owner of the company.

(b) Funds may be used from the account only to the extent and for the purposes approved by the commission.

(i) At the discretion of the commission, disbursements from the account may become subject to prior approval by the commission either by order by the commission or by letter from the executive secretary.

(ii) The company may be required to file requests for disbursements.

Requests must provide sufficient detail to allow the determination that the requested disbursement is in compliance with the commission's order.

(c) The water company must report for each tariffed surcharge or facilities charge the following information to the commission within sixty days of the end of the calendar quarter:

(i) Beginning balance;

(ii) Amounts received, detailed by source;

(iii) Amounts spent, detailed by project or expense;

(iv) Ending balance;

(v) Reconciliation of bank balance to general ledger.

The definitions in this section apply to Part IV of this chapter.

"Affiliated interest" means a person or corporation as defined in RCW 80.16.010.

"Business day" means the same as defined in WAC 480-07-120 (Office hours).

"Control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a company, whether through the ownership of voting shares, by contract, or otherwise.

"Investment grade" means a water company whose corporate credit/issuer rating is in one of the four highest rating categories of either Standard & Poor's L.L.C. or Moody's Investors Service, Inc.

"Subsidiary" means any company in which the water company owns directly or indirectly five percent or more of the voting securities, unless the water company demonstrates it does not have control.

(1) Filing. The commission records center will accept any filing under WAC 480-110-525 (Issuing securities) delivered in person, by mail, telefacsimile, or electronic mail message. The commission records center will accept all other reports required in Part IV in person, by mail, or when procedures are in place, electronic mail message.

(2) Commission may require additional information. The commission may require pertinent information in addition to that specified by statute or in this chapter.

(3) Information by reference. When any information required to support a filing is on file with the commission, it is sufficient to make specific reference to the information indicating the proceeding, report, or other filing that contains the referenced information.

(4) When information is unavailable. If any required information is unavailable at the time of the filing, the filing must include the reason why the information is not available and state when it will be available.

Part IV does not supersede any reporting requirement specified in a commission order or limit the commission's ability to request additional information.

(1) The commission will not allow either direct or indirect expenditures for political or legislative activities for ratemaking purposes.

(2) For purposes of this rule, political or legislative activities include, but are not limited to:

(a) Encouraging support or opposition to ballot measures, legislation, candidates for a public office, or current public office holders;

(b) Soliciting support for or contributing to political action committees;

(c) Gathering data for mailing lists that are generated for the purposes of encouraging support for or opposition to ballot measures, legislation, candidates for public office, or current office holders, or encouraging support for or contributions to political action committees;

(d) Soliciting contributions or recruiting volunteers to assist in the activities set forth in (a) through (c) of this subsection.

(3) Political or legislative activities do not include activities directly related to appearances before regulatory or local governmental bodies necessary for the utility's operations.

(1) The water company must retain all records and reports for three years unless otherwise specified in subsection (2) of this section.

(2) The Regulations to Govern the Preservation of Records of Electric, Gas and Water Companies, published by the National Association of Regulatory Utility Commissioners is prescribed as the requirement for the state of Washington. Information about the Regulations to Govern the Preservation of Records of Electric, Gas and Water Companies regarding the version adopted and where to obtain it is set out in WAC 480-110-999, Adoption by reference.

(1) Water companies must use the uniform system of accounts (USOA) published by the National Association of Regulatory Utility Commissioners (NARUC). Information about the USOA regarding the version adopted and where to obtain it is set out in WAC 480-110-999 (Adoption by reference). The USOA sets out the accounting requirements for Class A, B, and C water companies.

Water companies are classified by revenues.

(2) A water company may use the accounting requirements for a higher class if it chooses.

(3) The commission will distribute an annual report form that each water company must complete and file with the commission for the prior calendar year. The annual report must be filed, and the company's regulatory fee paid, no later than May 1st of each year.

(4) A written request for the extension of the time for filing the annual report can be made prior to May 1st. The commission does not grant an extension of time for payment of regulatory fees.

(5) The maximum water company regulatory fee is set by statute at one-tenth of one percent of the first $50,000 of gross intrastate operating revenue plus four-tenths of one percent of any gross operating revenue in excess of $50,000.

(a) The maximum regulatory fee is assessed each year, unless the commission issues an order establishing the regulatory fee at an amount less than the statutory maximum.

(b) The minimum regulatory fee that a water company must pay is $20.

(c) The $20 minimum regulatory fee is waived for any water company with less than $20,000 in gross intrastate operating revenue.

(d) The commission does not grant extensions for payment of regulatory fees.

(e) If a company does not pay its regulatory fee by May 1st, the commission will assess an automatic late fee of two percent of the amount due, plus one percent interest for each month the fee remains unpaid.

Each water company must notify the commission within seventy-two hours after every accident resulting in death or serious injury to any person occurring in its plant or through contact with its facilities. At a minimum, the report must include the name of the injured person, time and place of the accident, and an explanation of the accident. The water company may notify the commission by phone, but must provide a written report within five business days.

(1) Before a water company issues stocks, stock certificates, other evidence of interest or ownership, bonds, notes other than those notes exempted from reporting under RCW 80.08.043, or other evidences of indebtedness, or assumes any obligation or liability as guarantor subject to reporting under RCW 80.08.130, it must file with the commission:

(a) A description of the purposes for which the issuance will be made, including a certification by an officer authorized to do so, that the proceeds from any such financing is for one or more of the purposes allowed by RCW 80.08.030;

(b) A description of the proposed issuance, including the terms of financing; and

(c) A statement as to why the transaction is in the public interest.

(2) A commission order is not required for such a filing. The company may request a written order affirming that the company has complied with the requirements of RCW 80.08.040. The company must submit the request for a commission order, along with the information required in subsection (1) of this section, at least fifteen business days before the requested effective date for the order. Requests for supplemental orders may be exempt from the fifteen business day requirement.

(3) Filing a Registration Statement with the Securities and Exchange Commission using a shelf registration process does not constitute undertaking the issuance of a security, and therefore a filing with the commission is not required under the provisions of RCW 80.08.040. A shelf registration filing is defined under the General Rules and Regulations promulgated under the Securities Act of 1933, Rule 415 - Delayed or Continuous Offering and Sale of Securities.

(4) An authorized representative must sign and date the filing and include a certification or declaration that the information is true and correct under penalty of perjury as set forth in chapter 9A.72 RCW. The certificate or declaration must be in substantially the following form:

"I certify (or declare) under penalty of perjury under the laws of the State of Washington that the foregoing is true and correct."

(5) Filings under this section may be submitted with portions designated confidential pursuant to WAC 480-07-160 (Confidential information).

(6) Within sixty days after the issuance of any securities, except for dividend reinvestment and employee benefit plans, a company must file with the commission a verified statement:

(a) Outlining the final terms and conditions of the transaction; and

(b) Setting forth actual proceeds from the issuance and, to the extent known, the disposition of proceeds stating the final amount to be used for each purpose allowed by RCW 80.08.030.

(1) At least five business days before a water company that is not rated investment grade or its subsidiary transfers cash to any of its affiliated interests or subsidiaries or assumes an obligation or liability of any of its affiliated interests or any of its subsidiaries, the company must report to the commission an estimate of the amount to be transferred and the terms of the transaction when the transaction will exceed thresholds as described in (a) or (b) of this subsection.

(a) The company must report if the cumulative transactions to a subsidiary or affiliated interest for the prior twelve months exceed a threshold of five percent, which is based on the prior calendar year gross operating revenue from Washington intrastate operations subject to commission jurisdiction.

(b) When the threshold in (a) of this subsection has been reached, the company must report each subsequent transaction exceeding a threshold of one percent for the prior twelve-month period, which is based on the prior calendar year gross operating revenue from Washington intrastate operations subject to commission jurisdiction.

(2) The reporting requirements in subsection (1) of this section do not include payments for:

(a) Federal and state taxes;

(b) Goods, services, or commodities;

(c) Transactions, attributed to the regulated entity, previously approved or ordered by the commission, other regulatory agencies, or the court; or

(d) Dividends to the extent the level of such dividends over a twelve-month period does not exceed the larger of:

(i) Net income during such period; or

(ii) The average level of dividends over the preceding three years; or

(e) Sweep or cash management accounts used to transfer funds to or from a subsidiary or affiliate as part of the customary and routine cash management functions between or among the company and its subsidiary or affiliate.

Prior to the effective date of any contract or arrangement described in RCW 80.16.020, each water company must file a verified copy or a verified summary, if unwritten, of contracts or arrangements, except for transactions provided at tariff rates, with any affiliated interest. Prior to the effective date of any modification or amendment, the company must file verified copies of the modifications or amendments to the contracts or arrangements. If the contract or arrangement is unwritten, the company must file a verified summary of any modification or amendment. The commission may institute an investigation and disapprove the contract or arrangement if the commission finds the company has failed to prove that it is reasonable and consistent with the public interest.

Before selling, leasing, or assigning any of its property or facilities which are necessary or useful in the performance of its duties to the public, or before acquiring property or facilities of another public utility, a water company must obtain from the commission an order authorizing such transaction in accordance with chapters 80.12 RCW (Transfers of property) and 480-143 WAC (Commission general—Transfers of property).

Each water company that has issued securities must file with the commission an annual securities transaction report. The report is due ninety days from the end of the company's reporting period, whether a fiscal or calendar year. At a minimum, the report must contain:

(1) A schedule of the securities issued during the reporting period including a detailed description of the final agreements;

(2) A description of the use of proceeds stating the amounts used for each purpose allowed by RCW 80.08.030;

(3) The level of expenses for each of the securities transactions for the reporting period;

(4) A schedule of securities retired, refunded, repurchased, or otherwise removed from the company's capitalization; and

(5) A schedule of securities scheduled to mature in the fiscal or calendar year following the reporting period.

(1) Each Class A water company must file an annual report summarizing all transactions, except for transactions provided at tariff rates, that occurred between the company and its affiliated interests, and the company and its subsidiaries. The report is due one hundred twenty days from the end of the company's reporting period, whether a fiscal or calendar year. The report must include a corporate organization chart of the company and its affiliated interests and subsidiaries.

(2) When total transactions with an affiliated interest or a subsidiary are less than twenty-five thousand dollars for the reporting period, the company must provide the name of the affiliated interest or subsidiary participating in the transactions and the total dollar amounts of the transactions. When total transactions with an affiliated interest or subsidiary equal or exceed twenty-five thousand dollars for the reporting period, the company must provide:

(a) A balance sheet and income statement for such affiliated interest;

(b) A description of the products or services provided to or from the company and each such affiliated interest or subsidiary;

(c) A description of the pricing basis or costing method, and procedures for allocating costs for such products or services, and the amount and accounts charged during the year;

(d) A description of the terms of any loans between the company and each such affiliated interest or subsidiary and a listing of the year-end loan amounts and maximum loan amounts outstanding during the year;

(e) A description of the terms and total amount of any obligation or liability assumed by the company for each such affiliated interest or subsidiary;

(f) A description of the activities of each such affiliated interest or subsidiary with which the company has transactions; and

(g) A list of all common officers and directors between the water company and each such affiliated interest or subsidiary, along with their titles in each organization.

(3) The report required in this section supersedes the reporting requirements contained in previous commission orders authorizing affiliated interest transactions pursuant to chapter 80.16 RCW.

(4) The company is obligated to file verified copies of affiliated interest contracts and arrangements as stated in WAC 480-110-545 (Affiliated interests—Contracts and arrangements).

In this chapter, the commission adopts by reference all or portions of regulations and standards identified below. They are available for inspection at the commission branch of the Washington state library. The publications, effective date, references within this chapter, and availability of the resources are as follows:

(1) The Uniform System of Accounts for Water Utilities is published by the National Association of Regulatory Utility Commissioners (NARUC).

(a) The commission adopts the version in effect in 1996.

(b) This publication is referenced in WAC 480-110-505 (Accounting, and reporting requirements and regulatory fees).

(c) The Uniform System of Accounts for Water Utilities is a copyrighted document. Copies are available from NARUC, in Washington, D.C.

(2) The Regulations to Govern the Preservation of Records of Electric, Gas, and Water Utilities is published by the National Association of Regulatory Utility Commissioners (NARUC).

(a) The commission adopts the version in effect in 2007.

(b) This publication is referenced in WAC 480-110-485 (Retaining and preserving records and reports).

(c) The Regulations to Govern the Preservation of Records of Electric, Gas, and Water Utilities is a copyrighted document. Copies are available from NARUC, in Washington, D.C. or at NARUC publications store online: https://maxxwww.naruc.org/forms/store/ProductFormPublic/regulations-to-govern-the-preservation-of-records.