FISCAL NOTE



FUND(S):

General Revenue Fund

Sources of Revenue:

General Fund

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


The stated purpose of this bill is to provide for special rates for energy intensive industrial consumers of electric power. The bill sets forth legislative findings on energy intensive industrial consumers of electric power and defines certain terms. The bill authorizes the Public Service Commission to establish special rates for energy intensive industrial consumers of electric power. The bill sets forth factors that the Public Service Commission may take into consideration in establishing special rates for energy intensive industrial consumers of electric power, in addition to factors that may already be considered by the Public Service Commission in its rate setting process and authorizes the commission to adopt mechanisms reasonably designed to assure appropriate flexibility and predictability of special rates. The bill establishes procedures for application to the Public Service Commission for a special rate, sets forth data and information to be included in an application for a special rate and establishes qualifications for eligibility for a special rate. As written, the bill provides for the process and criteria by which energy intensive industrial consumers of electric power (i.e., “an industrial facility, or plant or enterprise that has a contact [sic] demand of at least fifty thousand kilowatts of electric power at its West Virginia facilities under normal operating conditions”) may work with their electric power provider and the Public Service Commission to obtain a special rate for purchased electric power. The bill makes reference to the current and potential tax base of energy intensive industrial consumers of electric power in the Legislative findings section of the bill, but does not directly propose a change in current tax laws administered by the State Tax Department. A change in the rates charged for electric power used by energy intensive industrial consumers would possibly have an indirect tax revenue effect on a portion of the Business and Occupation Tax and on the Corporation Net Income Tax. However, the State Tax Department does not have sufficient information to estimate the potential tax revenue impact of this proposal. There would be no additional administrative costs to the State Tax Department associated with passage of this bill. However, the Public Service Commission is likely to incur additional administrative costs attributable to passage of this bill.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2010
Increase/Decrease
(use"-")
2011
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


As written, the bill provides for the process and criteria by which energy intensive industrial consumers of electric power (i.e., “an industrial facility, or plant or enterprise that has a contact [sic] demand of at least fifty thousand kilowatts of electric power at its West Virginia facilities under normal operating conditions”) may work with their electric power provider and the Public Service Commission to obtain a special rate for purchased electric power. The bill makes reference to the current and potential tax base of energy intensive industrial consumers of electric power in the Legislative findings section of the bill, but does not directly propose a change in current tax laws administered by the State Tax Department. A change in the rates charged for electric power used by energy intensive industrial consumers would possibly have an indirect tax revenue effect on a portion of the Business and Occupation Tax and on the Corporation Net Income Tax. However, the State Tax Department does not have sufficient information to estimate the potential tax revenue impact of this proposal. There would be no additional administrative costs to the State Tax Department associated with passage of this bill. However, the Public Service Commission is likely to incur additional administrative costs attributable to passage of this bill.



Memorandum


The stated purpose of this bill is to provide for special rates for energy intensive industrial consumers of electric power. The bill sets forth legislative findings on energy intensive industrial consumers of electric power and defines certain terms. The bill authorizes the Public Service Commission to establish special rates for energy intensive industrial consumers of electric power. The bill sets forth factors that the Public Service Commission may take into consideration in establishing special rates for energy intensive industrial consumers of electric power, in addition to factors that may already be considered by the Public Service Commission in its rate setting process and authorizes the commission to adopt mechanisms reasonably designed to assure appropriate flexibility and predictability of special rates. The bill establishes procedures for application to the Public Service Commission for a special rate, sets forth data and information to be included in an application for a special rate and establishes qualifications for eligibility for a special rate. The bill defines energy intensive industrial consumers of electric power “an industrial facility, or plant or enterprise that has a contact [sic] demand of at least fifty thousand kilowatts of electric power at its West Virginia facilities under normal operating conditions.” However, the bill does not provide a definition for “contact [sic] demand.”



    Person submitting Fiscal Note: Mark Muchow
    Email Address: kerri.r.petry@wv.gov