COMMITTEE SUBSTITUTE
FOR
H. B. 4277
(By Mr. Speaker, Mr. Kiss, and Delegate Ashley)
(Originating in the Committee on the Judiciary)
[March 4, 1998]
A BILL to amend article two, chapter twenty-four of the code of
West Virginia, one thousand nine hundred thirty-one, as
amended, by adding thereto a new section, designated section
eighteen, relating to deregulation of electric service;
setting forth legislative findings; providing jurisdiction
to the public service commission to determine whether
permitting retail customers in West Virginia to obtain
direct access to competitive markets for their power supply
is in the public interest; authorizing commission to develop
a deregulation plan if such a determination is made;
providing for involvement of interested parties; requiring
that deregulation plan be submitted to the Legislature for
approval or rejection; requiring issuance of reports on
findings and on the potential state and local tax consequences of any plan submitted by the commission;
permitting persons participating in plan development to
issue reports; and providing continuing jurisdiction to the
commission to modify or rescind any plan implemented by the
commission.
Be it enacted by the Legislature of West Virginia:
That article two, chapter twenty-four of the code of West
Virginia, one thousand nine hundred thirty-one, as amended, be
amended by adding thereto a new section, designated section
eighteen, to read as follows:
ARTICLE 2. POWERS AND DUTIES OF PUBLIC SERVICE COMMISSION.
ยง24-2-18. Legislative findings on electric service; jurisdiction
of the commission to determine public interest in permitting retail access to competitive power supply markets; participation of interested parties; development of deregulation plan; legislative
approval or rejection of plan; certain reports
required or permitted; continuing jurisdiction.
(a) The Legislature hereby finds that:
(1) Electric service is essential to the health and well-being
of residents, to public safety and to orderly economic
development, and the cost of electricity is an important factor
in decisions made by businesses concerning locating, expanding and retaining facilities in West Virginia. Therefore, reliable
electric service should continue to be available to all customers
at reasonable rates and on reasonable terms and conditions;
(2) Many state governments have been studying policies that
would create a competitive market for the supply of electricity;
(3) The public service commission is the appropriate agency to
determine whether West Virginia should adopt a plan whereby users
of electricity in the state would have open access across
existing and new utility delivery systems to a competitive market
for power supply. An affirmative determination of this question
is hereafter designated in this section as a "finding of public
interest." If the commission makes a finding of public interest,
the commission is also the appropriate agency to develop such a
plan for submission to the Legislature for approval, hereafter
designated in this section as a "deregulation plan."
(4) Notwithstanding the commission's substantial expertise in
the supervision and regulation of the electricity generation
industry, the significant public policy issues involved in
determining whether to make a finding of public interest and, if
necessary, in developing a deregulation plan, require that the
commission seek and secure the involvement of a wide spectrum of
interests in the state, including but not limited to the
following interests, hereafter collectively designated in this section as "all interested parties": groups representing senior
citizens and other persons on fixed incomes, including the
American association of retired persons; groups representing low
income persons and the working poor, including the West Virginia
community action directors association; labor unions, including
the West Virginia AFL-CIO, the communications workers of America,
the united mine workers of America, the West Virginia state
building and construction trades council, the international
brotherhood of electrical workers, the independent steel workers,
and the united steel workers of America; groups representing
residential consumers; groups representing industrial consumers;
groups representing commercial consumers; groups representing the
electric utility industry and electricity generation concerns;
groups representing natural resources industries and associated
industries, including the West Virginia coal association; groups
representing heating, ventilating and air conditioning
contractors, including the West Virginia heating, ventilating,
air conditioning and electrical contractors association; groups
representing environmental concerns; the electric industry
research group of West Virginia University; and any other person
or group which has an interest in these issues.
(5) In order to provide meaningful involvement and
participation to all interested parties in determining whether to make a finding of public interest and, if necessary, in
developing a deregulation plan, the commission is directed (A) to
provide notice to all interested parties of each public meeting
to be held by the commission in studying whether to make a
finding of public interest and, if necessary, in developing a
deregulation plan, including providing written notice by first
class mail at least five days prior to the date of each public
meeting to each of the groups specifically identified in
subdivision (4) of this subsection; (B) to consult with all
interested parties attending such public meetings; and (C) to
report periodically to the joint committee on government and
finance of the Legislature or any interim study committee
appointed by the joint committee on government and finance on the
commission's progress on these issues.
(6) The commission may not submit a deregulation plan to the
Legislature for approval unless it submits findings and explains
the basis for its findings, after providing adequate notice to
all interested parties and other persons and holding a hearing,
that the deregulation plan fairly balances the interests of the
electric utilities, their customers, and the state's economy, and
that the deregulation plan:
(A) Is in the best interest of West Virginia electric energy
consumers;
(B) Results in potential benefits available for all customers,
considering that while some customers may be immediately
benefited by reductions in electricity costs, depending on their
individual needs and choices, no customer should be worse off;
(C) Preserves universal electric service at reasonable rates;
(D) Maintains reasonable standards of safety, availability and
reliability of electric service for all customers at all times,
including at times of peak load usage of electric service;
(E) Does not result in a substantial negative impact on
employment in the state or the state's economy;
(F) Does not impact compliance with environmental rules;
(G) Considers and maintains the public benefits of energy
efficiency, renewable resource technology and research and
development;
(H) Encourages the continued and expanded use of West Virginia
coal, oil, natural gas and other energy resources;
(I) Assures that customers have meaningful choices among
electricity providers and that customers are protected from
anticompetitive behavior, poor service, and unfair billing,
collection and disconnection procedures;
(J) Is conditioned upon workable competition with a level
playing field for all buyers and sellers, and provides for a code
of conduct for electric service providers to be established by commission rule;
(K) Assures that existing commitments of utilities arising
from past decisions made pursuant to historical regulatory and
legal principles are addressed in a fair and reasonable manner,
considering the financial integrity of the utilities;
(L) Addresses and maintains adequate protections for low- income consumers and gives meaningful consideration to the
development of funding mechanisms to protect senior citizens and
other persons on fixed incomes, low income persons and the
working poor; and
(M) Ensures that regulated industries do not subsidize non- regulated industries and businesses.
(7) Restructuring of the electric utility industry should
reasonably preserve tax revenues for state and local governments
and should neither result in a shift of the tax burden to any
customer or customer group nor result in a tax system which
places any competitor in the market place at a disadvantage.
(b) In addition to its other powers and duties, the commission
is authorized to determine, in consultation with all interested
parties, whether to make a finding of public interest, and if a
finding of public interest is made:
(1) To develop, in consultation with all interested parties,
a deregulation plan to allow deregulation of existing utility generation assets and direct access by retail customers to
competitive electric power supply markets and which is consistent
with the legislative findings set forth in subsection (a) of this
section;
(2) To prescribe, by order or rules, procedures and standards
for the marketing of power supply in the state; and
(3) To resolve all issues necessary to provide for an orderly
transition from the current regulated structure to a system of
direct retail access in a fully workable competitive power supply
market in a manner that is fair to customers, electric utilities
and other affected parties.
(c) If the commission develops a deregulation plan pursuant to
subsection (b) of this section, the commission shall submit the
deregulation plan to each house of the Legislature during the
next succeeding regular session of the Legislature or during any
special session of the Legislature occurring after such regular
session if legislative approval of the deregulation plan is
included in the call therefor. Upon such submission, the
Legislature shall, by concurrent resolution, approve or reject
the deregulation plan. If the deregulation plan is so rejected,
the concurrent resolution shall set forth the reasons for such
rejection, and the commission may subsequently modify the
deregulation plan to meet the objections of the Legislature and may resubmit it as modified to the Legislature pursuant to this
subsection. No initial or modified deregulation plan may be
adopted or implemented by the commission until the Legislature
has approved it pursuant to this subsection.
(d) Upon the development of a deregulation plan and prior to
or concurrently with the submission of the deregulation plan to
the Legislature pursuant to subsection (c) of this section, the
commission shall issue a report to the governor, the president of
the Senate and the speaker of the House of Delegates on the
potential state or local tax consequences which might be created
by implementation of the deregulation plan, along with
recommendations for statutory changes, if any are necessary, to
satisfy the legislative findings specified in subdivisions (6)
and (7), subsection (a) of this section.
(e) Upon the development of a deregulation plan and prior to
or concurrently with the submission of the deregulation plan to
the Legislature pursuant to subsection (c) of this section, any
interested party who actively consulted with the commission
during the development of the deregulation plan may issue a
report to the governor, the president of the Senate and the
speaker of the House of Delegates setting forth the instances in
which such interested party believes the deregulation plan does
not satisfy one or more of the legislative findings specified in subdivisions (6) and (7), subsection (a) of this section.
(f) After the adoption and implementation of a deregulation
plan approved by the Legislature pursuant to subsection (c) of
this section, the commission shall retain authority and
jurisdiction to modify or rescind the deregulation plan if, upon
application to the commission or upon the commission's own
motion, and after notice to all interested parties and a hearing,
the commission finds that it is in the public interest to do so,
after making a finding that a substantial change in state or
federal law or a court decision necessitates the rescission or
modification of the deregulation plan to continue to meet the
legislative findings in this section or that for any other reason
the deregulation plan is not meeting such legislative findings.
The implementation of a deregulation plan through an order of the
commission pursuant to this section does not amend existing
provisions of this code, except as specifically herein modified.
NOTE: The purpose of this bill is to authorize the public
service commission, working with various interested parties, to
study whether deregulation of the electric utility industry
(permitting retail customers to obtain direct access to
competitive markets for their electric power supply) is in the
public interest. If the commission makes this determination,
the commission is directed to develop a deregulation plan to be
submitted to the Legislature for its approval.
This section is new; therefore, strike-throughs and underscoring have been omitted.