Date Requested:January 13, 2011
Time Requested:02:23 PM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2011R1268 Introduced HB2056
CBD Subject: SMALL RENEWABLE ENERGY PROJECTS
FUND(S)
General Revenue Fund
Sources of Revenue
General Fund
Legislation creates:
A New Program

Fiscal Note Summary

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

    The stated purpose of this bill is to create the West Virginia Renewable Energy Act. The bill makes legislative findings and defines terms. The bill provides a maximum $2,000 investment cost recovery incentive for customer-generated electricity from renewable energy systems, but exempts electric and gas companies from qualifying for that incentive. The bill also provides a $25,000 maximum tax credit for electric light and power companies that purchase customer-generated electricity. The bill requires reports to be made to the Legislature. The bill also provides that no incentives may be taken after June 30, 2020 and credits may not be taken after June 30, 2021. The bill also provides that customers who generate electricity from renewable sources may sell electricity to electric light and power companies.
    
    As written, this bill provides a process for persons, other than electric and gas companies, to apply for an incentive payment related to the person’s customer-generated electricity renewable energy system that is not interconnected to the electric distribution system. The base incentive is $0.15 per kilowatt-hour; however, for certain electricity production sources, the base incentive is increased by a multiplicative factor.
    
    The State Tax Department does not have sufficient data to estimate the potential revenue impact of this proposed incentive.
    
    As written, the bill requires the State Tax Department to develop application forms, to review and approve applications for the incentive credit, and to prepare a report on the incentive. Additional administrative costs to the State Tax Department associated with passage of this bill would be roughly $50,000 per year. Additionally, the Division of Energy and electric power companies may incur additional administrative costs associated with this bill.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 50,000 50,000
Personal Services 0 5,000 50,000
Current Expenses 0 10,000 0
Repairs and Alterations 0 0 0
Assets 0 35,000 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0
3. Explanation of above estimates (including long-range effect):
    As written, this bill provides a process for persons, other than electric and gas companies, to apply for an incentive payment related to the person’s customer-generated electricity renewable energy system that is not interconnected to the electric distribution system. The base incentive is $0.15 per kilowatt-hour; however, for certain electricity production sources, the base incentive is increased by a multiplicative factor.
    
    The State Tax Department does not have sufficient data to estimate the potential revenue impact of this proposed incentive.
    
    As written, the bill requires the State Tax Department to develop application forms, to review and approve applications for the incentive credit, and to prepare a report on the incentive. Additional administrative costs to the State Tax Department associated with passage of this bill would be roughly $50,000 per year. Additionally, the Division of Energy and electric power companies may incur additional administrative costs associated with this bill.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov
    The stated purpose of this bill is to create the West Virginia Renewable Energy Act. The bill makes legislative findings and defines terms. The bill provides a maximum $2,000 investment cost recovery incentive for customer-generated electricity from renewable energy systems, but exempts electric and gas companies from qualifying for that incentive. The bill also provides a $25,000 maximum tax credit for electric light and power companies that purchase customer-generated electricity. The bill requires reports to be made to the Legislature. The bill also provides that no incentives may be taken after June 30, 2020 and credits may not be taken after June 30, 2021. The bill also provides that customers who generate electricity from renewable sources may sell electricity to electric light and power companies.
    
    The stated purpose indicates “The bill also provides a $25,000 maximum tax credit for electric light and power companies that purchase customer-generated electricity.” However, the provision in the bill reads as “The credit under this section for the fiscal year shall not exceed twenty-five one-hundredths of one percent of the businesses’ taxable power sales or $25,000, whichever is greater.” As written, the bill does not specify a maximum credit. Also, the bill uses a number of terms and phrases without providing definitions of the terms and phrases. Additionally, proposed paragraph 5B-2H-4(d)(1) states in part “the electric light and power company serving the situs the system.” The intended meaning of this statement is not clear.