The Washington Utilities and Transportation Commission (UTC) regulates numerous industries, including electricity, natural gas, freight, ferries, and more. The UTC’s three commissioners are nominated by the governor for six-year terms and approved by the State Senate, and may not include more than two from any single party. The Washington State Legislature is a hybrid legislature. Two committees in each chamber have jurisdictional oversight over the UTC.
The following text is an abridged transcript of interviews conducted with David Danner, chairman of the Washington Utilities and Transportation Commission; Representative Jeff Morris (D-Wash.); Representative Joe Fitzgibbon (D-Wash.); and Senator Reuven Carlyle (D-Wash.).
Can you talk broadly about what the working relationship looks like between the commission and the state legislature?
David Danner, Washington Utilities and Transportation Commission: It's built on communication. I work very closely with the chairs of the committees that have jurisdiction and they understand the need for the commission. They do not want to be doing our business; they do not want to be setting rates. They respect our expertise. This can be a bit of a double-edged sword because it means that we have more reports to do and they rely on us more, but it also means they do not undermine our work.
Representative Jeff Morris (D-Wash.): It’s a very collegial relationship and very collaborative. Because there’s so much change happening so rapidly in the energy industry, everyone realizes that we need to come together to deal with this. So, there’s been a joint exploration of what this new world is going to look like going forward.
Usually, in state legislatures, there’s a choice between whether the utility commission or state energy office will be consulted for input on legislation or studies on policy options. Here in Washington, there’s a feeling that the commission tends to be neutral and more probing around regulations and facts.
My experience has been that regardless of how close our relationship is with the commission, the commission always appreciates some leadership from the legislature or the governor to give them a portfolio to go ahead and work in an area that is maybe outside their normal operations.
Senator Reuven Carlyle (D-Wash.): We have a high degree of confidence in the technical competence and skillset of the UTC—both commissioners and staff. They’re absolutely central to our work and we rely upon them a great deal. We seek their advice and counsel. We might ask them to provide us with best practices or provide recommendations on certain issues. And we’ve given them, under the 100% Clean Electricity Bill, substantive authority to follow up and implement the legislation.
Representative Joe Fitzgibbon (D-Wash.): When there were specific policy choices that came up for us recently in a 100% Clean Electricity Bill, we checked in with the UTC on their perspectives. I viewed them as an independent entity and one that was trusted—that they were bringing a separate set of considerations from the Governor's Office.
Can you talk about how the relationship really works in practice: How often you engage with them, what kind of topics, who typically initiates the interaction?
Danner: We have a citizen legislature in Washington (not full-time), so they have other jobs to do and are often in their districts. When I'm in their area I will look them up, have a cup of coffee with them, talk about what we're working on, let them know what we are up to. Some legislators are very interested in what's going on, some have no idea what we do and don't want to. Certainly, the chairs, vice-chairs, and ranking members on committees with jurisdiction are very engaged. Even the ones that are not necessarily my supporters, I do try and reach out to them, just let them know what my perspective is. All three UTC Commissioners have their own networks of relationships.
Carlyle: When I first came in as a senate chair, I asked the commission chair for a comprehensive briefing of the scale and scope of their work, their challenges, and the real-deal issues they faced. I believe any incoming chair needs to invest time to really understand an agency over which they have strong regulatory oversight.
Morris: We regularly are consulting each other about, "OK, what's the best way to deal with this problem in Washington state?" One of the things that they've done that I've appreciated is inviting me in a number of times to meet with their key staff looking at emerging technology issues like storage and distributed energy resource (DER) planning. That's one of the most helpful things in having a collaborative relationship. Recognizing that a lot of this is still a personality-driven business, having that dialogue happen really helps the process a lot.
Do you have any illustrative examples you could share?
Danner: Sure. The legislature had been talking about the structure of the marine pilotage commission for years, including the rate-setting process. The legislature floated the idea of the UTC taking on the rate-setting responsibilities, and all three of the UTC commissioners agreed. We had numerous meetings with the pilotage commission, the shippers, the pilots, and all of their associations. We also worked very closely with the transportation chair and ranking member through a series of meetings to work out how the changes would work. Commissioner Balasbas had very good relationships with the Republicans on the Transportation Committee and I had good relationships with the Democrats on the Committee, and we were able to make sure that the legislation that they were drafting worked, wouldn’t create problems for the UTC, and was sufficiently funded.
Morris: Back in 2012/2013, I started pushing a proactive approach to DER planning as chair; however, in a part-time legislature, it's extremely difficult to be proactive on any issue. I wanted us to avoid what was happening in other states with organic, unplanned build-out of distribution resources, then investment in expensive capital expenditures to solve problems in a reactive way. In contrast, by planning and being predictive, we could avoid future rate shocks. After three years of discussion, I proposed: Let's commission the UTC to do a study about the best practices of DER planning, so that we have an apples-to-apples comparison as a state legislature. Among all the stakeholders, even the public, they hate when we try to move anything new to be regulated under the authority of the UTC, but when we ask the UTC to be a convener, there tends to be more acceptance of their expertise.
We asked the UTC to conduct workshops to explore this question and come back with recommendations about best practices, so they did. They came back with a study that had 12 recommendations. We boiled them down to nine and now those best practices for DER planning are being signed into law (Washington House Bill 1126-2019) by the governor.
Do you have a formal way of tracking legislative/commission activity?
Danner: The legislative director position began eight years ago when I was executive director. Because I had been both governor's staff and legislative staff, I took it on myself initially. When I became a commissioner, we created the legislative and policy director senior staff roles, who work with the policy staff. Policy staff advise the commissioners on rate cases, rulemakings, and integrated resource plans; plus, they're also tracking legislation, giving their critiques of legislation, and talking about problems that legislation might create. In addition, all three commissioners have legislative backgrounds, so we all weigh in. During the session, the legislative director also has one person assigned to track bills and make sure nothing falls through the cracks.
Even with a small agency, this is crucial. We have no more than 170 employees, but we get the third-largest number of fiscal note requests of any agency, for which we need to estimate the fiscal impact of potential legislation. So, it's a large burden that necessitates tracking the many bills where we are involved or named.
Fitzgibbon: It's helpful that when the UTC makes a particularly important decision on a rate case or something else, they usually email us and let us know. That way, the legislators who are tracking that issue closely know who to follow up with and know how to get their questions answered.
It sounds like you often collaborate across the legislature and commission on potential bills. How does that work?
Danner: Committee chairs might approach the commission to help them write legislation. Recently, we’ve had legislators come to us to say "If I had a bill that wanted to do this, what would it look like?" And then they invite us to work closely with the legislative staff to talk and hash out concepts to turn ideas into bill language.
In addition, the commission can request legislation. The request legislative process for agencies is pretty well established and normal practice. In September, before the legislature starts meeting in January, we are asked to submit to the governor's office all of our requested legislation and they decide whether to approve or not approve.
A recent example was a bill dealing with regulatory flexibility. We had to fix a Court of Appeals decision that was written so restrictively that it limited us from doing anything other than pro forma adjustments on historical test years. Rather than appeal, we submitted our proposal to fix it to the legislature (Washington SB 5816-2019), to grant us the authority to look forward to setting rates even though we’ve never done these things before. Ultimately, our proposal was included in Washington SB 5116-2019 and we got authorities that we were not sure we had, and now we're sure we have them.
Fitzgibbon: A recent example was legislation that the UTC and our investor-owned utilities came to us with (Washington SB 5816-2019). They were asking to overturn a Court of Appeals' decision that the UTC and the utilities felt constrained their ratemaking discretion in a way that was unhelpful. We viewed this as being a technical fix. They would rarely take the lead on a major policy change.