H. B. 3007


(By Delegates Wright, Kuhn and Butcher)

[Introduced February 13, 2003 ; referred to the

Committee on the Judiciary.]





A BILL to amend and reenact sections three and four-b, article two, chapter twenty-four of the code of West Virginia, one thousand nine hundred thirty-one, as amended, relating to the jurisdiction of the public service commission over public service districts with respect to rates and charges.

Be it enacted by the Legislature of West Virginia:
That sections three and four-b, article two, chapter twenty-four of the code of West Virginia, one thousand nine hundred thirty-one, as amended, be amended and reenacted to read as follows:
ARTICLE 2. POWERS AND DUTIES OF PUBLIC SERVICE COMMISSION.

§24-2-3. General power of commission with respect to rates.
The commission shall have power to enforce, originate, establish, change and promulgate tariffs, rates, joint rates, tolls and schedules for all public utilities: Provided, That the commission may exercise such rate authority over public service districts and municipal utilities only under the circumstances set forth in section four-b of this article. And whenever the commission shall, after hearing, find any existing rates, tolls, tariffs, joint rates or schedules unjust, unreasonable, insufficient or unjustly discriminatory or otherwise in violation of any of the provisions of this chapter, the commission shall by an order fix reasonable rates, joint rates, tariffs, tolls or schedules to be followed in the future in lieu of those found to be unjust, unreasonable, insufficient or unjustly discriminatory or otherwise in violation of any provisions of law, and the said commission, in fixing the rate of any railroad company, may fix a fair, reasonable and just rate to be charged on any branch line thereof, independent of the rate charged on the main line of such the railroad.
In determining just and reasonable rates, the commission may audit and investigate management practices and policies, or have performed an audit and investigation of such practices and policies, in order to determine whether the utility is operating with efficiency and is utilizing sound management practices. The commission shall adopt rules and regulations setting forth the scope, frequency and application of such audits and investigations to the various utilities subject to its jurisdiction. The commission may include the cost of conducting the management audit in the cost of service of the utility.
In determining just and reasonable rates, the commission shall investigate and review transactions between utilities and affiliates. The commission shall limit the total return of the utility to a level which, when considered with the level of profit or return the affiliate earns on transactions with the utility, is just and reasonable.
§24-2-4b. Procedures for changing rates of electric and natural gas cooperatives, local exchange services of telephone cooperatives and municipally operated public utilities.

(a) The rates and charges of electric cooperatives, natural gas cooperatives, public service districts and municipally operated public utilities, except for municipally operated commercial solid waste facilities as defined in section two, article fifteen, chapter twenty-two of this code, and the rates and charges for local exchange services provided by telephone cooperatives are not subject to the rate approval provisions of section four or four-a of this article, but are subject to the limited rate provisions of this section.
(b) All rates and charges set by electric cooperatives, natural gas cooperatives, public service districts and municipally operated public utilities and all rates and charges for local exchange services set by telephone cooperatives shall be just, reasonable, applied without unjust discrimination or preference and based primarily on the costs of providing these services. Such Rates and charges shall be adopted by the electric, natural gas or telephone cooperative's governing board, in the case of public service districts by resolution and in the case of the municipally operated public utility by municipal ordinance to be effective not sooner than forty-five days after adoption: Provided, That notice of intent to effect a rate change shall must be specified on the monthly billing statement of the customers of such the utility for the month next preceding the month in which the rate change is to become effective or the utility shall give its customers, and in the case of a cooperative, its customers, members and stockholders, such other reasonable notices as will allow filing of timely objections to such rate change. Such Rates and charges shall must be filed with the commission together with such information showing the basis of such the rates and charges and such other additional information as the commission considers necessary. Any change in such the rates and charges with updated information shall must be filed with the commission. If a petition, as set out in subdivision (1), (2) or (3), subsection (c) of this section, is received and the electric cooperative, natural gas cooperative, telephone cooperative, public service district or municipality has failed to file with the commission such the rates and charges with such information showing the basis of rates and charges and such the other additional information as the commission considers necessary, the suspension period limitation of one hundred twenty days and the one hundred day period limitation for issuance of an order by a hearing examiner, as contained in subsections (d) and (e) of this section, is tolled until the necessary information is filed. The electric cooperative, natural gas cooperative, telephone cooperative, public service district or municipality shall set the date when any new rate or charge is to go into effect.
(c) The commission shall review and approve or modify such the rates upon the filing of a petition within thirty days of the adoption of the ordinance or resolution changing said the rates or charges by:
(1) Any customer aggrieved by the changed rates or charges who presents to the commission a petition signed by not less than twenty-five percent of the customers served by such the municipally operated public utility, five percent of the customers served by the public service district, or twenty-five percent of the membership of the electric, natural gas or telephone cooperative residing within the state; or
(2) Any customer who is served by a municipally operated public utility and who resides outside the corporate limits and who is affected by the change in said the rates or charges and who presents to the commission a petition alleging discrimination between customers within and without the municipal boundaries. Said The petition shall be accompanied by evidence of discrimination; or
(3) Any customer or group of customers who are affected by said the change in rates who reside within the public service district or municipal boundaries and who present a petition to the commission alleging discrimination between said the customer or group of customers and other customers of the public service district or municipal utility, as the case may be. Said The petition shall must be accompanied by evidence of discrimination.
(d) (1) The filing of a petition with the commission signed by not less than twenty-five percent of the customers served by the municipally operated public utility, five percent of the customers served by the public service district, or twenty-five percent of the membership of the electric, natural gas or telephone cooperative residing within the state, under subdivision (1), subsection (c) of this section, shall suspend the adoption of the rate change contained in the ordinance or resolution for a period of one hundred twenty days from the date said rates or charges would otherwise go into effect, or until an order is issued as provided herein in this section.
(2) Upon sufficient showing of discrimination by customers outside the municipal boundaries, under a petition filed under subdivision (2), subsection (c) of this section, or a customer or a group of customers within the public service district or municipal boundaries, under a petition filed under subdivision (2) or (3), subsection (c) of this section, the commission shall suspend the adoption of the rate change contained in the resolution or ordinance, as the case may be, for a period of one hundred twenty days from the date said the rates or charges would otherwise go into effect or until an order is issued as provided herein in this section.
(e) The commission shall forthwith appoint a hearing examiner from its staff to review the grievances raised by the petitioners. Said The hearing examiner shall conduct a public hearing, and shall within one hundred days from the date the said rates or charges would otherwise go into effect, unless otherwise tolled as provided in subsection (b) of this section, issue an order approving, disapproving or modifying, in whole or in part, the rates or charges imposed by the electric, natural gas or telephone cooperative or by the public service district or municipally operated public utility pursuant to this section.
(f) Upon receipt of a petition for review of the rates under the provisions of subsection (c) of this section, the commission may exercise the power granted to it under the provisions of section three of this article. The commission may determine the method by which such rates are reviewed and may grant and conduct a de novo hearing on the matter if the customer, electric, natural gas or telephone cooperative or municipality requests such a hearing.
(g) The commission may, upon petition by a public service district, municipality or electric, natural gas or telephone cooperative, allow an interim or emergency rate to take effect, subject to future modification, if it is determined that such the interim or emergency rate is necessary to protect the public service district or municipality from financial hardship and if that financial hardship is attributable solely to the purchase of the utility commodity sold. In such cases, the commission may waive the forty-five-day waiting period provided for in subsection (b) of this section and the one hundred twenty-day suspension period provided for in subsection (d) of this section.
(h) Notwithstanding any other provision, the commission has no authority or responsibility with regard to the regulation of rates, income, services or contracts by municipally operated public utilities for services which are transmitted and sold outside of the state of West Virginia.



NOTE: The purpose of this bill is to limit the jurisdiction of the public service commission over public service districts with regard to rates and charges to only those instances where a customer aggrieved by a change in the public service district's rates or charges presents to the commission a petition signed by not less than five percent of the customers served by the public service district or where a customer or group of customers who are affected by changed rates or charges who reside within the public service district presents a petition to the commission alleging discrimination between said customer or group of customers and other customers of the public service district.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.