Agenda Date:                 July 12, 2000                                    
Item Number:           2B and 2C
Docket:                    UE-960612 and UE-960613 
Company Name:           Puget Sound Energy
Staff:                              Doug Kilpatrick, Electric Industry 
Coordinator
                            Ken Elgin, Case Strategist 
Recommendation: 
Approve the proposed power sale agreement amendments filed on June 28, 2000, 
under Dockets UE-960612 and UE-960613 on Less than Statutory Notice, effective 
July 13, 2000. 
Background:
On June 28, 2000, Puget Sound Energy ( "PSE" or "Puget" ) filed amendments to 
its power sales agreements with its customers Georgia-Pacific West, Inc. ( "GP" 
) and Bellingham Cold Storage Company ( "BCS" ) under Dockets UE-960612 and 
UE-960613, respectively. Each of the amendments were entered into as of April 
28, 2000, however the filings originally requested an effective date for both 
amendments of November 1, 1999. The amendments clarify the parties' intent with 
respect to the pricing indices set forth in the original power sales agreements 
approved by the Commission on June 7, 1996. Specifically, the amendments change 
the definition of the index to be used for energy pricing to the Dow Jones 
Mid-Columbia Electricity Index reporting "Firm On-Peak" , "Firm Off-Peak" , 
and  "Sunday & NERC Holidays 24 Hour Firm" energy prices (in dollars per 
megawatt-hour).
In addition to the power sales agreement amendments, PSE's June 28 filing also 
contains an "Accord and Satisfaction and Agreement Regarding Index." PSE states 
that the accord was entered into to resolve all disputes regarding contracts 
for power supply between PSE and these customers arising prior to November 1, 
1999, under the original 1996 power sales agreements. The accord is dated 
October 27, 1999.
Considerations: 
WAC 480-80-335(4) states that:
          "Each such contract shall be filed with the Commission not less than 
thirty days prior to the proposed effective  date of the contract, and shall 
become effective according to its terms the thirty-first day from the date of 
its  filing unless earlier approved, suspended, or rejected by the commission: 
Provided, That upon application and  for good cause shown, the commission may 
approve the contract as of an effective date prior to the date that  the 
contract would have become effective in accordance with this rule."  (emphasis 
added)
In its application, PSE states that good cause is shown because the amendments 
reflect the result of negotiations, and clarify issues, between the parties. It 
further states that no purchasers under other Puget tariffs will be affected by 
the requested waiver if it is granted.
Discussion: 
Following discussions between Regulatory Services Division Staff ( "Staff" ) 
and PSE it was agreed that the originally requested effective date of November 
1, 1999, was inappropriate in that it would constitute retroactive ratemaking. 
Instead Puget has agreed to refile its advice letter in this matter with the 
following changes:
1.         The requested effective date for the power sales agreement 
amendments will be July 13, 2000, which is less  than the statutory notice 
requirement. Good cause is shown for approving the request based on the   
understanding that both PSE and its customers (GP and BCS) agree that the 
revised definition of "Non-Firm  Energy" should be modified as outlined in the 
amendments and no other customers are impacted by this   change.
2.         Puget has agreed to work with Staff to re-evaluate the charges made 
to BCS and GP under their respective  power sales agreements between the dates 
of June 1, 1998 and the present. PSE will recalculate the charges  to these 
customers in accordance with the Commission's decision in the Fifth 
Supplemental Order in Docket  No. UE-981410 (Air Liquide, et al vs. Puget Sound 
Energy). Puget will file a report with Staff outlining the  recalculated 
charges and showing what refund, if any, is due. 
On July 7, 2000, PSE faxed its letter regarding the above to Staff.
Recommendation: 
Approve the power sales agreement amendments filed in Dockets UE-960612 and 
UE-960613 on Less than Statutory Notice, effective July 13, 2000.