1. (1) The commission only regulates investor-owned water companies that:

   1. (a) Own, operate, control, or manage one or more water systems; except that control or management does not include management by a satellite management agency as defined in chapter 70.116 RCW if the satellite management agency is not an owner of the water company.

   2. (b) Meet jurisdictional thresholds of one hundred or more customers, or have average revenue of more than five hundred fifty-seven dollars per customer per year.

      If a water company serves customers	and has average annual revenue per customer	commission regulation
      99 or less	$557 or less	No
      99 or less	more than $557	Yes
      100 or more	$557 or less	Yes
      100 or more	more than $557	Yes

2. (2) The commission does not regulate the following providers of water service:

   1. (a) Cities, towns, or counties.
   2. (b) Public utility districts.
   3. (c) Water districts.
   4. (d) Local improvement districts.
   5. (e) Homeowner associations, cooperatives and mutual corporations, or similar entities that provide service only to their owners or members.
   6. (f) Homeowner associations, cooperatives and mutual corporations, or similar entities that provide service to nonmembers unless they serve one hundred or more nonmembers, or charge nonmembers more than five hundred fifty-seven dollars average annual revenue per nonmember.

   7. (g) Entities or persons that provide water only to their tenants as part of the business of renting or leasing.

      1. (i) Apartment buildings.
      2. (ii) Mobile home parks.
      3. (iii) Manufactured home rental communities.
      4. (iv) Office complexes.
      5. (v) Commercial or industrial parks.

      This may include:

3. (3) To determine jurisdiction, the commission considers only those customers receiving water. The commission does not consider customers who do not receive water, such as customers who have paid:

   1. (a) Water-availability letter fees.
   2. (b) Standby charges.
   3. (c) System-readiness fees.
   4. (d) Ready-to-serve charges.

4. (4) To calculate the average annual revenue per customer, the commission considers only the charges that water-receiving customers are billed on a recurring basis, other than contributions in aid of construction. For example, this includes money billed for flat-rate service or the metered base-charge and all usage charges.

   1. (a) The commission does not include charges billed to customers who do not receive water, such as:

      1. (i) Water availability letter fees.
      2. (ii) Standby charges.
      3. (iii) System-readiness fees.
      4. (iv) Ready-to-serve charges.

   2. (b) The commission does not consider contributions in aid of construction in determining jurisdiction. These contributions can be money, services or property. Payments can be made in a lump sum or financed over time. Examples of contributions in aid of construction include payments for:

      1. (i) Connection to system.
      2. (ii) Meter installation.
      3. (iii) System buy-in.
      4. (iv) Facilities charges.
      5. (v) Assessments for capital plant and equipment.

5. (5) The following example shows how to calculate the average annual revenue per customer for two hypothetical customers. The data for each customer are provided at the end of the example:

   1. (a) Select the most recent twelve consecutive months.

      Example:

      February 2004 through January 2005.

   2. (b) For each customer who received water service during the twelve-month period, add the amount the customer was billed by the water company for items other than contribution in aid of construction items.

      Example:	Customer A billed $340.
      	Customer B billed $283.

   3. (c) For each customer who received water service during the twelve-month period, add the number of months the customer received water service.

      Example:	Customer A received water service for twelve months.
      	Customer B received water service for nine months.

   4. (d) Total the amount billed the customers during the twelve-month period.

      Example:
      			Billed by the Water Company During theTwelve-Month Period
      	Customer A		$340
      	Customer B	+	$283
      	Total Billed During Twelve-Month Period	$623

   5. (e) Total the number of months each customer received water service.

      Example:
      			Number of Months Received Water Service During theTwelve-Month Period
      	Customer A		12
      	Customer B	+	9
      	Total Months Received Water Service During the Twelve-Month Period	21

   6. (f) Calculate the "Average Monthly Revenue Per Customer": Divide the "Total Billed During the Twelve-Month Period" by the "Total Months Received Water Service During the Twelve-Month Period."

      Example:
      	Total Billed During the Twelve-Month Period		$623
      	Total Months Received Water Service During the Twelve-Month Period	÷	21
      	Average Monthly Revenue Per Customer	$29.67

   7. (g) Calculate the "Average Annual Revenue Per Customer": Multiply the "Average Monthly Revenue Per Customer" times 12 months.

      (A)	Average Monthly Revenue Per Customer		$29.67
      	Months in a Year	x	12
      (B)	Average Annual Revenue Per Customer		$356.04

      data used in the exampleto calculateaverage annual revenue per customer
      Example—Customer A
      		StandbyCharge	Ready-to-ServeCharge	ConnectionCharge	FacilitiesCharge	MeterBaseCharge	MeterUsageCharge
      Receive Water Service	No	No	Yes	Yes	Yes	Yes
      Contribution in Aidof Construction	No	No	Yes	Yes	No	No
      								Total
      Year	Month							Billed
      2004	February					$20	$4	$24
      2004	March					$20	$5	$25
      2004	April					$20	$2	$22
      2004	May					$25	$5	$30
      2004	June					$25	$6	$31
      2004	July					$25	$12	$37
      2004	August					$25	$6	$31
      2004	September					$25	$4	$29
      2004	October					$25	$4	$29
      2004	November					$25	$3	$28
      2004	December					$25	$2	$27
      2005	January					$25	$2	$27
      		$0	$0	$0	$0	$285	$55	$340
      	Number of months service			12
      Not Receiving Water		$0
      Receiving Water - Contribution in Aid of Construction		$0
      Receiving Water - Other than Contribution in Aid of Construction		$340
      Total customer billed during period		$340

      data used in the exampleto calculateaverage annual revenue per customer
      Example—Customer B
      		StandbyCharge	Ready-to-ServeCharge	ConnectionCharge	FacilitiesCharge	MeterBaseCharge	MeterUsageCharge
      Receive Water Service	No	No	Yes	Yes	Yes	Yes
      Contribution in Aidof Construction	No	No	Yes	Yes	No	No
      								Total
      Year	Month							Billed
      2004	February	$7						$7
      2004	March	$7						$7
      2004	April		$12					$12
      2004	May			$300	$4,500	$25	$5	$4,830
      2004	June					$25	$4	$29
      2004	July					$25	$3	$28
      2004	August					$25	$12	$37
      2004	September					$25	$10	$35
      2004	October					$25	$15	$40
      2004	November					$25	$5	$30
      2004	December					$25	$2	$27
      2005	January					$25	$2	$27
      		$14	$12	$300	$4,500	$225	$58	$5,109
      	Number of months service			9
      Not Receiving Water		$26
      Receiving Water - Contributions in Aid of Construction		$4,800
      Receiving Water - Other than Contribution in Aid of Construction		$283
      Total customer billed during period		$5,109

   8. (h) To ensure that all customers are treated equitably, the commission will impute the same rates to any customers receiving free or reduced service that apply to other customers receiving comparable service on the same system.

[Statutory Authority: RCW 80.01.040, 80.04.160, and 80.04.010 (30)(b). WSR 12-17-047 (Docket UW-120246, General Order R-566), § 480-110-255, filed 8/9/12, effective 9/9/12. Statutory Authority: RCW 80.01.040, 80.04.160 and 80.04.010. WSR 05-08-099 (Docket No. UW-040375, General Order No. R-519), § 480-110-255, filed 4/4/05, effective 5/5/05. Statutory Authority: RCW 80.01.040. WSR 00-17-135 (General Order No. R-473, Docket No. UW-991634), § 480-110-255, filed 8/21/00, effective 9/21/00; WSR 99-24-100 (Order R-467, Docket No. UW-980082), § 480-110-255, filed 11/30/99, effective 12/31/99.]