Senate Bill No. 571
(By Senators Fanning, Ross,
Helmick, Chafin, Schoonover and Sharpe)
[Introduced February 17, 1998; referred to the
Committee on Energy, Industry and Mining; and then to the
Committee on Finance.]
A BILL to amend and reenact section five, article one, chapter
five-d of the code of West Virginia, one thousand nine
hundred thirty-one, as amended, relating to requiring that
state agencies purchase their electric power, natural gas or
other such energy or power needs from electric power
projects, natural gas transmission projects or other such
energy projects administered by the West Virginia public
energy authority, provided that the electric power, natural
gas or other such energy or power source is available from
the authority and is competitively priced.
Be it enacted by the Legislature of West Virginia:
That section five, article one, chapter five-d of the code
of West Virginia, one thousand nine hundred thirty-one, as
amended, be amended and reenacted to read as follows:
ARTICLE 1. PUBLIC ENERGY AUTHORITY OF THE STATE OF WEST
§5D-1-5. Powers, duties and responsibilities of authority generally; termination of certain powers; purchase requirements for state agencies.
(a) The West Virginia public energy authority is hereby
granted, has and may exercise all powers necessary or appropriate
to carry out and effectuate its corporate purpose. The authority
shall have the power and capacity to:
(1) Adopt, and from time to time, amend and repeal bylaws
necessary and proper for the regulation of its affairs and the
conduct of its business and rules
and regulations to implement
and make effective its powers and duties, such rules and
regulations to be promulgated in accordance with the provisions
of chapter twenty-nine-a of this code.
(2) Adopt and use an official seal and alter the same at
(3) Maintain a principal office and, if necessary, regional
suboffices at locations properly designated or provided.
(4) Sue and be sued in its own name and plead and be
impleaded in its own name, and particularly to enforce the
obligations and covenants made under this article. Any actions
against the authority shall be brought in the circuit court of Kanawha County.
(5) Foster, encourage and promote the mineral development
(6) Represent the state with respect to national initiatives
concerning the mineral development industry, and international
marketing activities affecting the mineral development industry.
(7) Engage in strategic planning to enable the state to cope
with changes affecting or which may affect the mineral
(8) Acquire, whether by purchase, construction, gift, lease,
lease-purchase or otherwise, any electric power project or
natural gas transmission project. In the event that an electric
power project to be constructed pursuant to this article is
designed to utilize coal wastes for the generation of electricity
or the production of other energy, such project shall also be
capable of using coal as its primary energy input: Provided,
That it shall be demonstrated to the authority's satisfaction
that quantities of coal wastes exist in amounts sufficient to
provide energy input for such project for the term of the bonds
or notes issued by the authority to finance the project and are
accessible to the project.
(9) Lease, lease with an option by the lessee to purchase,
sell, by installment sale or otherwise, or otherwise dispose of, to persons other than governmental agencies, any or all of its
electric power projects or natural gas transmission projects for
such rentals or amounts and upon such terms and conditions as the
public energy authority board may deem advisable.
(10) Finance one or more electric power projects or natural
gas transmission projects by making secured loans to persons
other than governmental agencies to provide funds for the
acquisition, by purchase, construction or otherwise, of any such
project or projects.
(11) Issue bonds for the purpose of financing the cost of
acquisition and construction of one or more electric power
projects or natural gas transmission projects or any additions,
extensions or improvements thereto which will be sold, leased
with an option by the lessee to purchase, leased or otherwise
disposed of to persons other than governmental agencies or for
the purpose of loaning the proceeds thereof to persons other than
governmental agencies for the acquisition and construction of
said projects or both. Such bonds shall be issued and the
payment of such bonds secured in the manner provided by the
applicable provisions of sections seven, eight, nine, ten,
eleven, twelve, thirteen and seventeen, article two-c, chapter
thirteen of this code: Provided, That the principal and interest
on such bonds shall be payable out of the revenues derived from the lease, lease with an option by the lessee to purchase, sale
or other disposition of or from loan payments in connection with
the electric power project or natural gas transmission project
for which the bonds are issued, or any other revenue derived from
such electric power project or natural gas transmission project.
(12) In the event that the electric power project or natural
gas transmission project is to be owned by a governmental agency,
apply to the economic development authority for the issuance of
bonds payable solely from revenues as provided in article
fifteen, chapter thirty-one of this code: Provided, That the
economic development authority shall not issue any such bonds
except by an act of general law: Provided, however, That the
authority shall require that in the construction of any such
project, prevailing wages shall be paid as part of a project
specific agreement which also takes into account terms and
conditions contained in the West Virginia -- Ohio valley market
retention and recovery agreement or a comparable agreement.
(13) Acquire by gift or purchase, hold and dispose of real
and personal property in the exercise of its powers and the
performance of its duties as set forth in this article.
(14) Acquire in the name of the state, by purchase or
otherwise, on such terms and in such manner as it deems proper,
or by the exercise of the right of eminent domain in the manner provided in chapter fifty-four of this code, such real property
or parts thereof or rights therein, rights-of-way, property,
rights, easements and interests it deems necessary for carrying
out the provisions of this article, and compensation shall be
paid for public or private lands so taken; and the authority may
sell any of the real property or parts thereof or rights therein,
rights-of-way, property, rights, easements and interests acquired
hereunder in such manner and upon such terms and conditions as
the authority deems proper: Provided, That if the authority
determines that land or an interest therein acquired by the
authority through the exercise of the power of eminent domain for
the purpose of this article is no longer necessary or useful for
such purposes, and if the authority desires to sell such land or
interest therein, the authority shall first offer to sell such
land or interest to the owner or owners from whom it was
acquired, at a price equal to its fair market value: Provided,
however, That if the prior owner or owners shall decline to
reacquire the land or interest therein, the authority shall be
authorized to dispose of such property by direct sale, auction,
or competitive bidding. In no case shall such land or an
interest therein acquired under this subdivision be sold for less
than its fair market value. This article does not authorize the
authority to take or disturb property or facilities belonging to any public utility or to a common carrier, which property or
facilities are required for the proper and convenient operation
of such public utility or common carrier, except for the
acquisition of easements or rights-of-way which will not
unreasonably interfere with the operation of the property or
facilities of such public utility or common carrier, and in the
event of the taking or disturbance of property or facilities of
public utility or common carrier, provision shall be made for the
restoration, relocation or duplication of such property or
facilities elsewhere at the sole cost of the authority.
The term "real property" as used in this article is defined
to include lands, structures, franchises and interests in land,
including lands under water and riparian rights, and any and all
other things and rights usually included within the said term,
and includes also any and all interests in such property less
than full title, such as easements, rights-of-way, uses, leases,
licenses and all other incorporeal hereditaments and every
estate, interest or right, legal or equitable, including terms
for years and liens thereon by way of judgments, mortgages or
otherwise, and also all claims for damages for such real estate.
For the purposes of this section "fair market value" shall
be determined by an appraisal made by an independent person or
firm chosen by the authority. The appraisal shall be performed using the principles contained in the "Uniform Appraisal
Standards for Federal Land Acquisitions" published under the
auspices of the Interagency Land Acquisition Conference, United
States Government Printing Office, 1972.
(15) Make and enter into all contracts and agreements and
execute all instruments necessary or incidental to the
performance of its duties and the execution of its powers:
Provided, That if any electric power project or natural gas
transmission project is to be constructed by a person other than
a governmental agency, and with whom the authority has contracted
to lease, sell or finance such project upon its completion, then
the authority shall not be required to comply with the provisions
of article twenty-two, chapter five of this code requiring the
solicitation of competitive bids for the construction of such a
(16) Employ managers, superintendents and other employees,
and retain or contract with consulting engineers, financial
consultants, accountants, architects, attorneys, and such other
consultants and independent contractors as are necessary in its
judgment to carry out the provisions of this article, and fix the
compensation or fees thereof. All expenses thereof shall be
payable solely from the proceeds of bonds issued by the economic
development authority, from the proceeds of bonds issued by or loan payments, lease payments or other payments received by the
authority, from revenues and from funds appropriated for such
purpose by the Legislature.
(17) Receive and accept from any federal agency, or any
other source, grants for or in aid of the construction of any
project or for research and development with respect to electric
power projects, natural gas transmission projects or other energy
projects, and receive and accept aid or contribution from any
source of money, property, labor or other things of value to be
held, used and applied only for the purpose for which such grants
and contributions are made.
(18) Purchase property coverage and liability insurance for
any electric power project or natural gas transmission project or
other energy project and for the principal office and suboffices
of the authority, insurance protecting the authority and its
officers and employees against liability, if any, for damage to
property or injury to or death of persons arising from its
operations and any other insurance which may be provided for
under a resolution authorizing the issuance of bonds or in any
trust agreement securing the same.
(19) Charge, alter and collect transportation fees and other
charges for the use or services of any natural gas transmission
project as provided in this article.
(20) Charge and collect fees or other charges from any
energy project undertaken as a result of this article.
(21) When the electric power project is owned and operated
by the authority, charge reasonable fees in connection with the
making and providing of electric power and the sale thereof to
corporations, states, municipalities or other entities in the
furtherance of the purposes of this article.
(22) Purchase and sell electricity or other energy produced
by an electric power project in and out of the state of West
(23) Enter into wheeling contracts for the transmission of
electric power over the authority's or another party's lines.
(24) Make and enter into contracts for the construction of
a project facility and joint ownership with another utility, and
the provisions of this article shall not constrain the authority
from participating as a joint partner therein.
(25) Make and enter into joint ownership agreements.
(26) Establish or increase reserves from moneys received or
to be received by the authority to secure or to pay the principal
of and interest on the bonds issued by the economic development
authority pursuant to the provisions of article fifteen, chapter
thirty-one of this code or bonds issued by the authority.
(27) Broker the purchase of natural gas for resale to end-users: Provided, That whenever there are local distribution
company pipelines already in place the authority shall arrange to
transport the gas through such pipelines at the rates approved by
the public service commission of West Virginia.
(28) Engage in market research, feasibility studies,
commercial research, and other studies and research pertaining to
electric power projects and natural gas transmission projects or
any other functions of the authority pursuant to this article.
(29) Enter upon any lands, waters and premises in the state
for the purpose of making surveys and examinations as it may deem
necessary or convenient for the purpose of this article, and such
entry shall not be deemed a trespass, nor shall an entry for such
purposes be deemed an entry under any condemnation proceedings
which may be then pending, and the authority shall make
reimbursement for any actual damages resulting to such lands,
waters and premises as a result of such activities.
(30) Participate in any reorganization proceeding pending
pursuant to the United States Code (being the act of Congress
establishing a uniform system of bankruptcy throughout the United
States, as amended) or any receivership proceeding in a state or
federal court for the reorganization or liquidation of a
responsible buyer or responsible tenant. The authority may file
its claim against any such responsible buyer or responsible tenant in any of the foregoing proceedings, vote upon any
question pending therein, which requires the approval of the
creditors participating in any reorganization proceeding or
receivership, exchange any evidence of such indebtedness for any
property, security or evidence of indebtedness offered as a part
of the reorganization of such responsible buyer or responsible
tenant or of any entity formed to acquire the assets thereof and
may compromise or reduce the amount of any indebtedness owing to
it as a part of any such reorganization.
(31) Make or enter into management contracts with a second
party or parties to operate any electric power project or any gas
transmission project and associated facilities, or other related
energy project, either during construction or permanent
(32) Do all acts necessary and proper to carry out the
powers expressly granted to the authority in this article.
(33) Nothing herein shall be construed to permit the
transportation of gas produced outside of this state through a
natural gas transmission project.
(34) The authority shall, after consultation with other
agencies of state government having environmental regulatory
functions, promulgate legislative rules pursuant to chapter
twenty-nine-a of this code, to establish standards and principles to be applied to all projects in assessing the effects of
projects on the environment: Provided, That when a proposed
project requires an environmental impact statement pursuant to
the National Environmental Policy Act of 1969, a copy of the
environmental impact statement shall be filed with the authority
and be made available prior to any final decision or final
approval of any project and prior to the conducting of any public
hearings regarding the project, and in any such case, no
assessment pursuant to the legislative rule need be made.
(35) The power and authority granted to the public energy
authority pursuant to this section and section six of this
article to initiate, acquire, construct, finance or issue bonds
for electric power projects and transmission facilities, or to
exercise the power of eminent domain with respect to any project,
shall terminate on the effective date of this section: Provided,
That nothing herein shall be construed to affect the validity of
any act of the public energy authority prior to the effective
date of this section or to impair the rights of bondholders with
respect to bonds or other evidence of indebtedness issued prior
to the effective date of this section. Following the effective
date of this section, the public energy authority may exercise
any power expressly granted pursuant to this section or section
six of this article with respect to any project or facility previously constructed or acquired, any existing contractual
obligations, and any outstanding bonded indebtedness.
(b) On and after the first day of January, one thousand nine
hundred ninety-nine, all state agencies shall purchase their
electric power, natural gas or other such energy or power
requirements from electric power projects, natural gas
transmission projects or other such energy projects administered
by the authority, provided that the electric power, natural gas
or other such energy or power source is available through the
authority and is competitively priced.
NOTE: The purpose of this bill is to require that state
agencies purchase their electric power, natural gas and other
such energy needs through the West Virginia Public Energy
Authority, provided that the electric power, natural gas or other
such energy or power source is available from the Authority and
is competitively priced.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.