BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION

In the Matter of the Petition of

PUGET SOUND ENERGY, INC.,

For an Order Regarding the Accounting Treatment of a Silicone Injection Program.

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		DOCKET No. UE-991328
		
		
		ORDER DIRECTING ACCOUNTING TREATMENT

BACKGROUND

  On August 24, 1999, Puget Sound Energy, Inc. (PSE or the Company), filed with 
the Commission a petition pursuant to WAC 480-09-420(7) for an order regarding 
the accounting and ratemaking treatment of a proposed Silicone Injection 
Program ("Injection or CableCureTM Program").  According to the petition, the 
requested accounting treatment aligns the costs of the program with expected 
long-term benefits.

MEMORANDUM

  Underground residential conductors installed in the 1960s and 1970s are 
failing due to the infiltration of water into the plastic insulation causing 
water trees which eventually create an electrical path to the ground.  
CableCureTM is a silicone liquid which fills the voids and permanently solves 
the early failure problem.

  The FERC ruled that CableCureTM is a maintenance activity which must be 
expensed in the year incurred, but allows state utility commissions to reach 
different conclusions.  In its petition, the Company requests authorization to 
account for the silicone injection program as a regulatory asset to be 
amortized over ten years. According to PSE, this ratemaking treatment more 
closely matches the costs of the program with the extended life of the treated 
cables.

  Staff views the CableCureTM program as a capital addition to existing plant 
and counter-proposed capitalizing CableCureTM costs into the plant account for 
underground cable with normal depreciation for that account.  PSE accepts this 
counter-proposal.

FINDINGS

  1. PSE is a public service company furnishing electric and gas service 
primarily in the Puget Sound region of Washington and is subject to the 
regulatory authority of the Commission as to its rates, service, facilities, 
and practices.

  2. On August 24, 1999, PSE filed with the Commission a petition for an order 
regarding the accounting and ratemaking treatment of a proposed Silicone 
Injection Program.

  3. The application of CableCureTM is a one time expense which extends the 
life of the treated cable providing benefits to future periods.  Given this 
conclusion, the proper accounting is to capitalize the cost into plant account 
367, Underground Conductors, and to depreciate it in a manner consistent with 
that account.

ORDER

  THE COMMISSION ORDERS:

  1. PSE is authorized to capitalize, for recovery in rates through 
depreciation, the CableCureTM  Program in Account 367, Underground Conductors.
 
  2. Nothing in this order shall be construed to waive or otherwise impair the 
jurisdiction of the Commission over the rates, services, accounts, and 
practices of Puget Sound Energy.  The Commission, under its general ratemaking 
authority, will have the ability in subsequent PSE general rate case 
proceedings to evaluate the Company's level of expenditures for underground 
conductor remediation activities.

  3. The Commission retains jurisdiction to effectuate the provisions of this 
Order.

  DATED at Olympia, Washington and effective this 13th day of October, 1999.

  WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION



     MARILYN SHOWALTER, Chairwoman



     RICHARD HEMSTAD, Commissioner



     WILLIAM R. GILLIS, Commissioner