July 29, 1998

Dear Interested Persons:

On August 5, we will convene a meeting to solicit your input on one section of the study of the state’s electricity industry that we are conducting under the provisions of ESSB 6560. This meeting will be designed to elicit your views on section F of the study, which deals with reliability and service quality issues. Instructions on how to get to the meeting are attached.

PROPOSED AGENDA: August 5, 1998 Topic Area Meeting – 6560 Study Section F (only)

9:30 -	Introductions – Review Agenda
9:45 -	Reliability – Clarifying Questions on Data Survey Section F
10:15 -	Reliability – Trends & Ways to Ensure High Reliability in the Future
12:15 -	Lunch (on your own)
1:15 -	Reliability – Discussion Continued
2:15 -	Service Quality – Clarifying Questions on Data Survey Section F, Service Quality Trends & Ways to Ensure High Service Quality in the Future
3:45 -	Discuss Next Steps
4:00 -	Adjourn

Also attached are descriptions that we previously distributed on how we intend to approach these sections of the study. To help you prepare, we describe below a bit more about our approach and how you can participate.

Section F deals with service quality and reliability. Reliability is expected to take the majority of our time, therefore we will address it first and leave service quality until the afternoon. Depending on the results of the meeting, we may need to make future data requests and provide additional opportunities for stake-holder input and discussion.

We perceive the section meeting to have three goals:

1. To discuss any clarifying questions you may have regarding the data request.
2. To develop and discuss issues that need to be addressed in the study.
3. To determine whether additional data or discussion is necessary.

"Study the current level of service quality and reliability as measured by available statistics."

"Study trends affecting service quality and the reliability of the distribution system."

"Study ways to ensure high service quality and reliability in the future."

Extensive changes have already occurred in the electric utility industry and alternatives are being discussed for further deregulation. The changes that have already occurred and the degree to which other aspects are deregulated and how, may have implications for reliability. For example, unbundled services, alternative retail rate structures and franchise options would create different incentives for distribution system investment. How has reliability already been affected by industry changes and what are the implications of further deregulation? What strategies could be implemented to ensure high reliability in the future?

The breakup of traditionally integrated utility functions and the influx of new industry players has changed the responsibilities and incentives for generating and transmission operations. What are the implications for reliability and what strategies could be implemented to ensure high reliability in the future?

Supply sufficiency is partly a function of generating and transmission capacity. What are current trends in the development of resource capacity relative to load? Will there be sufficient incentive to build resource capacity in the future under market conditions? Will the ratio of resource capacity to load be different under market conditions than in the past? Is this ratio relevant? What strategies could be implemented to ensure high reliability in the future?

Customers continue to increase their reliance on electricity for critical services and equipment is increasingly more sensitive to power quality. What implications does this have for reliability and what strategies could be implemented to ensure high power quality in the future?

The following matrix lists a variety of investment alternatives faced by each utility. Please come prepared to discuss each alternative and the role it should play in the development of reliability for utility customers. Aspects such as cost, cost-effectiveness, distribution of benefits and costs, importance to reliability and the implications of market conditions may all inform the discussion. What strategies could be implemented to ensure the best investment alternatives are selected?

Issue 6: Service Quality

For the purposes of this study, service quality is limited to the way in which companies interact with their customers (i.e., customer service). This definition would include, but is not limited to, elements such as the customer’s ability to contact the company for billing or other company policy questions; the company’s ability to meet the commitments it makes to customers for on-site visits for repair, installation or other service issues; the level of customer complaints; and meter reading and billing issues. What elements within service quality do companies consider important now and in the future? How do companies currently ensure they maintain high service quality standards? How have changes in the industry affected service quality? What are the implications for service quality of further deregulation? What strategies could be implemented to ensure high service quality in the future?

We are looking forward to a constructive discussion of the issues affecting part (f) of the 6560 study and particularly look forward to your suggestions and comments.

See you on Wednesday the 5^th of August.

[If you are not able to attend the meeting, you can provide suggestions and comments on these sections of the study through our general e-mail address – wepg@ep.cted.wa.gov – or by mail]

Sincerely,

Study 6560 web site: http://www.cted.wa.gov/energy/archive//6560 (includes a list of agency contacts, phone numbers and e-mail addresses).

General e-mail: wepg@ep.cted.wa.gov