H. B. 2433
(By Delegates Riggs, By Request, and Ryan)
[Introduced January 10, 1996; referred to the
Committee on the Judiciary.]
A BILL to amend and reenact section one, article thirteen-a,
chapter sixteen of the code of West Virginia, one thousand
nine hundred thirty-one, as amended; and to further amend
said article thirteen-a by adding thereto nine new sections,
designated sections twenty-six, twenty-seven, twenty-eight,
twenty-nine, thirty, thirty-one, thirty-two, thirty-three
and thirty-four, all relating generally to providing natural
gas service from individual wells to individual homeowners;
and setting forth legislative findings.
Be it enacted by the Legislature of West Virginia:
That section one, thirteen-a, chapter sixteen of the code of
West Virginia, one thousand nine hundred thirty-one, as amended,
be amended and reenacted; and that said article thirteen-a be
further amended by adding thereto nine new sections, designated
sections twenty-six, twenty-seven, twenty-eight, twenty-nine, thirty, thirty-one, thirty-two, thirty-three and thirty-four, all
to read as follows:
ARTICLE 13A. PUBLIC SERVICE DISTRICTS FOR WATER, SEWERAGE AND
GAS SERVICES.
§16-13A-1. Legislative findings.
The Legislature of the state of West Virginia hereby
determines and finds that the present system of public service
districts within the state has provided a valuable service at a
reasonable cost to persons who would otherwise have been unable
to obtain public utility services. To further this effort, and
to insure that all areas of the state are benefiting from the
availability of public service district utility services and to
further correct areas with health hazards, the Legislature
concludes that it is in the best interest of the public to
implement better management of public service district resources
by expanding the ability and the authority of the public service
commission to assist public service districts by offering advice
and assistance in operational, financial and regulatory affairs.
In addition to the expanded powers which shall be given to
the public service commission, the Legislature also concludes
that it is in the best interest of the public for each county
commission to review current technology available and consider
consolidating existing public service districts where it is
feasible and will not result in the interference with existing bond instruments. Further, if such consolidation is not
feasible, the Legislature finds that it is in the best interest
of the public for each county commission to review current
technology available and consider consolidating or centralizing
the management of public service districts within its county or
multicounty area to achieve efficiency of operations. The
Legislature also finds that additional guidelines should be
imposed on the creation of new public service districts and that
county commissions shall dissolve inactive public service
districts as hereinafter provided. The Legislature also finds
that the public service commission shall promulgate rules and
regulations to effectuate the expanded powers given to the
commission relating to public service districts.
The Legislature also finds that many homeowners live in
areas not presently served by any commercially available domestic
natural gas service; that many homeowners are desirous of
obtaining domestic natural gas service; that many oil and gas
wells are capable of providing domestic natural gas service; that
individual oil and gas well operators may not want to provide
natural gas service to individual homeowners because, by
providing natural gas service, the oil and gas well operator may
become subject to the jurisdiction of the public service
commission; and that oil and gas well operators need to maintain
existing levels of income from oil and gas well operations without diminishment as a result of providing domestic natural
gas to public service districts for resale to homeowners.
The Legislature also finds that existing public service
districts are fully authorized and capable of acting as providers
of domestic natural gas service.
§16-13A-26. Initiation of natural gas service.
Upon written request for domestic natural gas service from
an individual well or gathering line from the well or wells and
payment of any application fees by a homeowner to the public
service district, the public service district shall, at a
minimum, perform the following:
(a) Within ten days of receipt of the application,
acknowledge to the applicant, in writing, the receipt of the
application and any application fees;
(b) Within ten days of receipt of the application, notify,
in writing, the affected oil and gas well operator, that an
application for domestic natural gas service exists and notify
the oil and gas well operator of an intent by the public service
district to purchase natural gas from the oil or gas well or
gathering line in order to serve the applicant;
(c) Within sixty days of receipt of the application, begin
a study, in accordance with sound engineering practice, to
determine the feasibility of serving the applicant and
considering, but not limited to, the following factors:
(1) The volumetric production capacity of the well under
peak day flow conditions;
(2) The estimated productive life of the well;
(3) The volumetric capacity of field gathering lines and
processing equipment under peak day flow conditions;
(4) The estimated cost for the homeowner to construct
service lines, processing equipment, regulators, maintenance and
other applicable construction and maintenance costs necessary for
providing and maintaining safe natural gas service;
(d) Within ten days, following completion of the study,
notify in writing the applicant and affected oil and gas well
operator, of the results of the study;
(e) If the study provides that domestic natural gas service
from the well or gathering line is within sound engineering
practice, then within sixty days following notification to the
applicant and affected oil and gas well operator, if no
objections arise from the oil and gas operator, the public
service district shall undertake such efforts as are necessary to
provide domestic natural gas service from the well and to provide
payment to the oil and gas well operator or an independent
contractor for construction costs associated with the purchase of
natural gas.
§16-13A-27. Objections by the oil and gas well operator.
If an oil and gas well operator has an objection to the study, the oil and gas well operator shall notify, within thirty
days following notification of the public service district's
study, in writing, the public service district of the objection
and the basis for the objection. Following receipt of the
objection, the public service district shall notify the
applicant, in writing, within ten days that an objection exists.
The public service district shall, within thirty days of receipt
of the objection, schedule a hearing for the purpose of resolving
the objection. At the conclusion of the hearing, the public
service district shall make and file the public service
district's finding and order and serve the finding and order, by
certified mail upon the parties of record.
§16-13A-28. Judicial review.
(a) Any person having an interest which is or may be
adversely affected, by a finding of the public service district
issued pursuant to this article is entitled to judicial review
thereof.
(b) The judgment of the circuit court shall be final unless
reversed, vacated or modified on appeal to the supreme court of
appeals of West Virginia in accordance with the provisions of
section one, article six, chapter twenty-nine-a of this code.
§16-13A-29. Purchase price of natural gas by the public service
district.
(a) The public service district shall purchase natural gas from the oil and gas well operator at such prices as the operator
is receiving from current sales contracts and include the
operator's expenses from such items as brokerage fees,
conditioning costs, and other such applicable costs borne by the
oil and gas operator.
(b) Payments to oil and gas operators shall be made within
one calender month following the sale of natural gas to the
public service district. Payments to the oil and gas well
operator by the public service district shall not be dependent on
the homeowner paying the public service district.
§16-13A-30. Indemnification by the public service district.
The public service district shall indemnify and hold the oil
and gas well operator free and harmless from any and all claims,
liability, loss, damage or expenses resulting from the public
service district's purchase of natural gas from the oil and gas
operator, including any claim, liability, loss or damage arising
by reason of the injury to or death of any person or persons or
by reason of damage to any property caused by such use. The
duties of the public service district under this section to
indemnify and hold the oil and gas well operator free and
harmless from any such claim, liability, loss or damage shall
extend to any claim, liability, loss or damage arising by reason
of the injury to or death of any agent, officer or employee of
the public service district and any independent contractor hired by the public service district to perform work or render services
to the public service district.
§16-13A-31. Hearings.
Any hearing or proceeding before the public service district
on any objection shall be conducted and heard in accordance with
the provisions of article five, chapter twenty-nine-a of this
code.
§16-13A-32. Plugging of oil or gas well.
Nothing in this article shall prevent an oil and gas well
operator from plugging a well. If an oil and gas well operator
intends to plug a well which is wholly or partially selling gas
to a public service district, the oil and gas well operator shall
provide a copy of the application for a plugging permit to the
public service district at such time as the application for a
plugging permit is submitted to the office of oil and gas of the
division of environmental protection and any revisions thereto.
§16-13A-33. Oil and gas well operator not to become subject to
the jurisdiction of the public service commission.
The intent of this article is to allow a public service
district to purchase natural gas from an individual oil and gas
well operator and for the public service district to sell that
natural gas to homeowners for domestic consumption. Nothing in
this article is intended to provide for an oil and gas well
operator to become subject to the jurisdiction of the public service commission as a result of action taken to provide
domestic natural gas services to an individual homeowner by a
public service district purchasing gas from an oil and gas well
operator under the provisions of this article: Provided, That
nothing in this article shall contravene the provisions of
section one, article two, chapter twenty-four, that provides, in
part, that natural gas service to twenty-five or more residents
is subject to the jurisdiction of the public service commission.
§16-13A-34. Rules.
The public service commission has the power and authority to
propose legislative rules for promulgation in accordance with the
provisions of article three, chapter twenty-nine-a of this code
in order to carry out and implement the provisions of this
article.
NOTE: The purpose of this bill is to set forth a procedure
whereby an individual homeowner may request that the local public
service district provides domestic natural gas service to the
homeowner from individual wells.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.
§§16-13A-26, 27, 28, 29, 30, 31, 32, 33 and 34 are new;
therefore, strike-throughs and underscoring have been omitted.