BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION

In the Matter of the Petition of

PUGET SOUND ENERGY, INC.,

For an Order (1) Authorizing Deferral of Expenditures Incurred Under Schedule 
150, Net Metering Services for Renewable Energy Systems, and (2) Authorizing 
Recovery in Electric Rates of Such Deferred Expenditures in Accordance with 
Schedule 120, Electricity Conservation Tariff Rider.
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		DOCKET NO.  UE-990016
		
		FIRST SUPPLEMENTAL ORDER
		
		AUTHORIZING INSURANCE EXPENSE RECOVERY


BACKGROUND

 On January 7, 1999, Puget Sound Energy, Inc., ("PSE" or "the Company") filed 
its petition for an Order regarding the accounting and ratemaking treatment of 
the Company’s Net Metering Services for Renewable Energy Systems Tariff (“Net 
Metering Program”).  

 On February 10, 1999, the Commission approved the proposed accounting 
treatment in Docket No. UE-990016, with respect to the Company’s Net Metering 
Program.

 On August 25, 1999, the Commission approved the Company’s Net Metering 
Agreement as an Attachment to Schedule 150, Net Metering Services for Renewable 
Energy Systems.

 On November 4, 1999, the Company, Commission Staff, and parties interested in 
net metering met in Olympia to discuss the Company’s Net Metering Program.

 On December 3, 1999, PSE filed its Petition for a Supplemental Order in Docket 
No. UE-990016 to include the costs of incremental insurance premiums as part of 
the Company’s administrative costs of operating a Net Metering Program.  These 
incremental insurance premiums are necessary to cover the Company’s identified 
risk of not being named as an additional insured on the customer-generator’s 
insurance policy or that the policy include a waiver of the insurer’s rights of 
subrogation against the Company.

DISCUSSION

 1. Chapter 80.60 RCW, Net Metering of Electricity,  requires utilities to make 
net metering available to eligible customer-generators, stating that it is in 
the public interest to do so.

 2. The Company has in place a Net Metering Program (including a Net Metering 
Agreement) in compliance with that statute.

 3. Some of the Company’s potential Net Metering customer-generators claim to 
have had difficulty obtaining the insurance provisions (as described in the 
existing Net Metering Agreement) from their insurers.

Proposed Modification to the Net Metering Program

1. Concurrent with the Company’s proposed Petition for a Supplemental Order in 
Docket No. UE-990016, the Company filed its proposed modifications to Schedule 
150, Net Metering Services for Renewable Energy Systems and Attachment to 
Schedule 150, Net Metering Agreement.  The purpose of the modifications is to 
remove the requirement that either the Company be named as an additional 
insured on the customer-generator’s insurance policy or that the policy include 
a waiver of the insurer’s rights of subrogation against the Company.

2. The Company’s proposed modification to the Net Metering Agreement will 
enhance the ability of customer-generators who own hydroelectric, solar, or 
wind-powered generators with a total capacity of no more than 25 kilowatts per 
customer to participate in the Company’s Net Metering Program.

3. The proposed modifications to the Net Metering Agreement will require the 
Company to incur the incremental insurance premiums (estimated to be $10,000 
per annum) as an additional expense.

4. The Company proposes to defer these additional Net Metering Program expenses 
associated with the incremental insurance premiums by recording them in FERC 
Account No. 182.3, Other Regulatory Assets.  Monthly entries will be made to 
reflect the Company’s actual incremental insurance costs.

5. The Company proposes to recover these additional deferred costs in the same 
manner as other deferred Net Metering Program costs, through Schedule 120, 
Electricity Conservation Tariff Rider, which amortizes to FERC Account No. 908, 
Customer Assistance Expenses.

6. PSE’s filing for calendar year 2000 costs for Schedule 120 will be made on 
or before March 1, 2000.  The Company proposes to include the cost of the 
incremental insurance premiums for the Net Metering Program in that filing. 


FINDINGS
THE COMMISSION FINDS:
1. Puget Sound Energy, Inc., is engaged in the business of furnishing electric 
and gas service within the state of Washington as a public service company, and 
is subject to the jurisdiction of this Commission.

2. On December 3, 1999,  Puget Sound Energy, Inc., filed a Petition for 
modification to the Accounting Order regarding the accounting and ratemaking 
treatment of the Company’s Net Metering Program.

3. The proposed Net Metering Program will encourage the development of 
small-scale renewable resources, which is in the public interest.

4. As the Net Metering Program is in the public interest, utility costs to 
implement and manage the program should not exceed public benefits.
5. As the Net Metering Program is in the public interest, the Company should be 
allowed to recover the costs of implementing the program from all electric 
customers, rather than solely from customer-generators.
6. The Company’s proposed accounting treatment is reasonable and the Company 
should be allowed to:
(a) Record monthly, as a Deferred Regulatory Asset, in FERC Account No. 182.3, 
the Company’s cost of providing the Net Metering Program, including the 
incremental insurance premiums associated with covering its identified risk 
directly associated with offering net metering to customer-generators, and
(b) Recover these incremental insurance premiums as any other approved Net 
Metering Program expenditure, in electric rates under the provisions of 
Schedule 120, which amortizes to FERC Account No. 908, Customer Assistance 
Expenses.

ORDER
THEREFORE, THE COMMISSION HEREBY ORDERS:
1. The proposed accounting treatment in the Company’s Petition dated December 
3, 1999, is hereby approved with respect to the Company’s Net Metering Program.

2. The Company is hereby authorized to:

(a) Record monthly, as a Deferred Regulatory Asset, in FERC Account No. 182.3, 
coincident with the revised Schedule 120 effective date, the Company’s cost of 
providing the Net Metering Program, including the incremental insurance 
premiums associated with covering its identified risk directly associated with 
offering net metering to customer-generators, and

(b) Recover these incremental insurance premiums as any other approved Net 
Metering Program expenditure, in electric rates under the provisions of 
Schedule 120, which amortizes to FERC Account No. 908, Customer Assistance 
Expenses, subject to annual review and true-up with actual costs.

3. This order shall in no way affect the authority of this Commission over 
rates, service, accounts, valuations, estimates or determination of costs, or 
any matters whatsoever that may come before it, nor shall anything herein be 
construed as an acquiescence in any estimate or determination of costs, or any 
valuation of property claimed or asserted.

 DATED at Olympia, Washington, and effective this 22nd day of December, 1999.

 WASHINGTON UTILITIES AND TRANSPORTAITON COMMISSION
         


       Carole J. Washburn
       Executive Secretary