Senate Bill No. 461

(By Senators Tomblin, Mr. President, Buckalew and Plymale)

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[Introduced February 11, 1998; referred to the Committee on Energy, Industry and Mining.]
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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 legislative findings on electric service; providing jurisdiction of the public service commission to determine public interest in permitting retail customers in West Virginia to obtain direct access to competitive markets for their power supply; prescribing a plan to allow deregulation of existing utility generation assets and access by retail customers to competitive electric power supply markets and establish standards and procedures therefor, if the commission determines that such a plan is in the public interest; prescribing procedures and standards for the marketing of power supply in the state; issuing reports on findings and on the potential state and local tax consequences of any plan adopted by the commission; and retaining continuing jurisdiction to modify or rescind any plan adopted and 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.

§24-2-18. Legislative findings on electric service; jurisdiction of the commission to determine public interest in permitting retail access to competitive power supply markets; establish standards and procedures for the marketing of power supply; continuing jurisdiction; certain reports required.
(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 that 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 of West Virginia is the appropriate agency to determine whether West Virginia should adopt a plan whereby users of electricity in the state have open access across existing and new utility delivery systems to a competitive market for power supply. The commission may not adopt any such plan unless it finds that the plan fairly balances the interests of the electric utilities, their customers, and the state's economy and that the 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 and reliability of electric service;
(E) Does not impact compliance with environmental rules;
(F) Considers and maintains the public benefits of energy efficiency, renewable resource technology and research and development;
(G) Encourages the continued and expanded use of West Virginia coal, oil, natural gas and other energy resources;
(H) Assures that customers have meaningful choices among electricity providers and that customers are protected from anticompetitive behavior, poor service and unfair billing, collection or disconnection procedures;
(I) 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; and
(J) 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.
(4) Restructuring of the electric utility industry should reasonably preserve tax revenues for state and local governments, not result in a shift of the tax burden to any customer or customer group and that the tax system not result in a disadvantage to any competitor in the market place.
(b) In addition to all other powers and duties the commission is authorized to:
(1) Determine whether it is in the public interest to permit retail customers in West Virginia to obtain direct access to competitive markets for their supply of electricity and if that determination is made;
(2) Prescribe a plan and adopt rules, standards and procedures to allow deregulation of existing utility generation assets and direct access by retail customers to competitive electric power supply markets consistent with the legislative findings set forth in this section while maintaining the safety and reliability of the electric system for all parties;
(3) Prescribe, by order or rules, procedures and standards for the marketing of power supply in the state; and
(4) 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) After the adoption and implementation of a plan, rules, procedures and standards the commission shall retain authority and jurisdiction to modify or rescind the plan, if, upon application to the commission or upon the commission's own motion, and after notice and hearing, the commission finds that it is in the public interest to do so, after a finding that a substantial change in state or federal law or court decision necessitates the rescission or modification to continue to meet the legislative findings in this section or the commission determines that for any other reason the plan is not meeting the legislative findings set forth in this section. The implementation of any plan through an order of the commission pursuant to this section does not amend existing provisions of this code, except as specifically herein modified.
(d) If the commission adopts any plan pursuant to this section prior to the fifteenth day of January, one thousand nine hundred ninety-nine, the plan will become effective as ordered by the commission, but not before the fifteenth day of March, one thousand nine hundred ninety-nine. If the commission adopts any plan pursuant to this section after the fifteenth day of January, one thousand nine hundred ninety-nine, but before the thirty- first day of December, one thousand nine hundred ninety-nine, or any subsequent year, the plan will become effective as ordered by the commission, but not before the fifteenth day of April of the year following the year in which the plan is adopted. Upon the adoption of the plan, the commission shall issue a report on the potential state or local tax consequences to the governor, the president of the state Senate and the speaker of the House of Delegates, along with recommendations for statutory changes, if any are necessary, to satisfy the legislative findings specified in subdivision (4), subsection (a), section eighteen, article two, chapter twenty-four of this code.


NOTE: The purpose of this bill is to authorize the public service commission, if it determines that it is appropriate to do so, to prescribe and implement a plan whereby retail customers in West Virginia could obtain direct access to competitive markets for their electric power supply.

This section is new; therefore, strike-throughs and underscoring have been omitted.