Unless the context clearly requires otherwise, the definitions in this section apply throughout this chapter.
(1) "Assignee" means a person, and any subsequent assignee, to which an electrical, gas, or water company assigns, sells, or transfers all or part of the electrical, gas, or water company's interest in or right to rate recovery assets, except as security.
(2) "Bond" includes bonds, notes, certificates of beneficial interests in a trust, or other evidences of indebtedness.
(3) "Bondable rate recovery expenditures" means all costs and expenditures incurred or to be incurred through the date of issuance of a financing order by an electrical, gas, or water company associated with:
(a) An event that is the subject of a federal or state declaration of disaster or emergency that has caused widespread loss of life, injury to person or property, human suffering, or financial loss, including those costs and expenses owed by an electrical, gas, or water company to such company's customers as a result of the event, but not including any fees, fines, penalties, or costs imposed as a result of criminal or civil enforcement actions brought against the utility, or attributable to the utility's negligence or gross negligence as determined in a finding by a court of law in causing the event; or
(b) Energy or water conservation measures and services intended to improve the efficiency of electricity, gas, or water end use, including related carrying costs if:
(i) The conservation measures and services do not produce assets that would be bondable utility property under the general utility mortgage of the electrical, gas, or water company;
(ii) The commission has determined that the expenditures were incurred in conformance with the terms and conditions of a conservation service tariff in effect with the commission at the time the costs were incurred, and at the time of such determination the commission finds that the company has proven that the costs were prudent, that the terms and conditions of the financing are reasonable, and that financing under this chapter is more favorable to the customer than other reasonably available alternatives;
(iii) The commission has approved inclusion of the expenditures in rate base and has not ordered that they be currently expensed; and
(iv) The commission has not required that the measures demonstrate that energy or water savings have persisted at a certain level for a certain period before approving the cost of these investments as bondable rate recovery expenditures.
(4) "Bondholder" means a holder or owner of a rate recovery bond.
(5) "Finance subsidiary" means any corporation, limited liability company, company, association, joint stock association, trust, or other entity that is beneficially owned, directly or indirectly, by an electrical, gas, or water company, or in the case of a trust issuing rate recovery bonds consisting of beneficial interests, for which an electrical, gas, or water company or a subsidiary thereof is the grantor, or an unaffiliated entity formed for the purpose of financing or refinancing approved bondable rate recovery expenditures, and that acquires rate recovery assets directly or indirectly from such company in a transaction approved by the commission.
(6) "Financing costs" includes the following costs related to rate recovery bonds, whether incurred and paid upon issuance or over the life of rate recovery bonds:
(a) The costs of issuing, serving, managing, repaying, or refinancing rate recovery bonds, including any fees, expenses, or charges incurred and the costs of any activities performed in connection with the rate recovery bonds, including:
(i) Information technology programming;
(ii) Obtaining a financing order;
(iii) Serving, accounting, or auditing;
(iv) Services related to trustees;
(v) Legal services;
(vi) Consulting;
(vii) Services related to financial and structuring advisors;
(viii) Administration;
(ix) Placement and underwriting;
(x) Services related to independent directors and managers;
(xi) Services related to rating agencies;
(xii) Stock exchange listing and compliance;
(xiii) Securities registration and filing; and
(xiv) Services necessary to ensure a timely payment of rate recovery bonds or other amounts or charges payable in connection with rate recovery bonds;
(b) Principal, interest and acquisition, defeasance, and redemption premiums payable on rate recovery bonds;
(c) Payments required under an ancillary agreement and any amounts required to fund or replenish a reserve or account established under the terms of an indenture, ancillary agreement, or financing document related to rate recovery bonds;
(d) Applicable federal, state, and local taxes, franchise fees, license fees, gross receipts, or other taxes or charges, whether paid, payable, or accrued; and
(e) The commission's costs in performing the commission's duties related to rate recovery bonds that are recoverable by the commission under RCW 80.24.010 .
(7) "Financing order" means an order issued by the commission that authorizes one or more of the following:
(a) The recovery of bondable rate recovery expenditures and financing costs;
(b) The creation of rate recovery assets;
(c) The issuance of rate recovery bonds;
(d) The imposition, collection, and periodic adjustment of rate recovery charges; or
(e) The sale, assignment, or transfer of rate recovery assets to an assignee.
(8) "Financing party" includes:
(a) Bondholders, trustees, agents, and secured parties related to rate recovery bonds;
(b) A person acting for the benefit of bondholders, trustees, agents, or secured parties; and
(c) A party to rate recovery bond documents or an ancillary agreement.
(9) "Rate recovery asset" means the right of an electrical, gas, or water company to recover from customers bondable rate recovery expenditures and related costs and expenses approved in a financing order, including the right to:
(a) Impose, charge, bill, collect, receive, hold, and apply rate recovery charges authorized under a financing order or obtain, to the extent authorized, periodic adjustments of rate recovery charges; and
(b) All claims, accounts, revenues, payments, collections, moneys, or proceeds arising from the rights and interest specified in a financing order, regardless of whether the claims, accounts, revenues, payments, collections, moneys, or proceeds arising from the rights and interest specified in the financing order are commingled with other claims, accounts, revenues, payments, collections, moneys, or proceeds.
(10) "Rate recovery bonds" means bonds, notes, certificates of beneficial interests in trusts, or other evidences of indebtedness or ownership that:
(a) The commission determines at or before the time of issuance are issued to finance or refinance bondable rate recovery expenditures by an electrical, gas, or water company; and
(b) Rely partly or wholly for repayment on rate recovery assets and revenues arising with respect thereto.
(11) "Rate recovery charge" means charges to electrical, gas, or water company customers authorized by the commission to recover bondable rate recovery expenditures and financing costs and to be used to pay, repay, or refinance rate recovery bonds.
(12) "Secured party" means a financing party that has been granted a security interest in rate recovery assets.
(13) "Thermal energy" has the same definition as in RCW 80.04.010 .
(14) "Thermal energy company" has the same definition as in RCW 80.04.010 .
(15) "Thermal energy network" has the same definition as in RCW 80.04.010 .
(16) "Thermal energy services" has the same definition as in RCW 80.04.010 .
(17) "Thermal energy system" has the same definition as in RCW 80.04.010 .
Reviser's note: This section was amended by 2025 c 263 s 3 and by 2025 c 310 s 2, each without reference to the other. Both amendments are incorporated in the publication of this section under RCW 1.12.025 (2). For rule of construction, see RCW 1.12.025 (1).
Purpose — Intent — 2025 c 310: "(1) The purpose of this act is to allow an electrical, gas, or water company, if authorized by an order issued by the utilities and transportation commission, to use securitization financing for certain types of costs related to emergency events and approved for recovery in rates or charges. The legislature finds that:
(a) Securitized debt may lower the total rates in comparison with other methods of recovery and may benefit the citizens of this state who are electrical, gas, or water company customers;
(b) Rate recovery bonds are not a public debt or pledge of the full faith and credit of the state but require the state to provide clear and exclusive methods to create, transfer, and encumber the rate recovery assets and prohibit future impairment; and
(c) This act allowing electrical, gas, or water companies to use securitization financing for emergency-related costs does not limit, impair, or affect the utilities and transportation commission's plenary authority and jurisdiction over rates and services offered by electrical, gas, or water companies.
(2) It is the legislature's intent that when issuing an approval for recovery of expenditures under this act, the utilities and transportation commission will consider whether expenditures are broadly aligned with Washington state climate goals including, but not limited to, chapters 70A.45 and 19.405 RCW." [ 2025 c 310 s 1 .]
Severability — Validity of actions taken pursuant to financing orders — 2025 c 310: "If any provision of this section and sections 1, 3, and 4 of this act or the amendments to RCW 80.08.140 , 80.28.005 , 80.28.303 , 80.28.306 , and 80.28.309 by sections 2, 5, 6, 7, and 8 of this act is determined to be invalid, or is invalidated, superseded, replaced, repealed, or expired, such determination or occurrence does not affect the validity of any action allowed under this section and sections 1, 3, and 4 of this act or the amendments to RCW 80.08.140 , 80.28.005 , 80.28.303 , 80.28.306 , and 80.28.309 by sections 2, 5, 6, 7, and 8 of this act and taken in good faith and pursuant to a financing order issued prior to such determination or occurrence." [ 2025 c 310 s 9 .]
Application — 2025 c 310: "Except to the extent required by section 7 of this act, this act applies prospectively only and not retroactively. Nothing in this act shall impair or affect the validity of any conservation bonds issued under RCW 80.28.303 , 80.28.306 , and 80.28.309 as those sections existed prior to May 17, 2025. Conservation bonds issued under those sections prior to May 17, 2025, shall continue to be governed by the provisions of such sections as they existed at the time such conservation bonds were issued." [ 2025 c 310 s 10 .]
Effective date — 2025 c 310: "This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect immediately [May 17, 2025]." [ 2025 c 310 s 12 .]