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 authorize the Public Service Commission of West Virginia to consider and issue a financing order to certain regulated electric utilities to permit the recovery of expanded net energy costs through securitization. The securitization mechanism authorized in the bill would permit commission approved expanded net energy costs, which are generally recoverable in a utility's rates, to be recovered through the issuance of customer rate relief bonds financed at a lower cost to customers than traditional utility financing mechanisms.
On the issuance of a financing order, the utility is authorized to issue consumer rate relief bonds to recover expanded net energy costs. The financing order also authorizes the utility to collect consumer rate relief charges from its customers that would be dedicated to repayment of customer rate relief bonds and related costs pursuant to the financing order. The financing order would be irrevocable, as it is the dedicated revenue stream from the consumer rate relief charges, not the financed expanded net energy costs or the credit of the utility, that is pledged to repay the consumer rate relief bonds. In the financing order process, the commission is required to consider, among other things, whether the issuance of consumer rate relief bonds is reasonably expected to achieve the lowest reasonably attainable cost in order to produce cost savings to customers and mitigate rate impacts to customers when compared to traditional financing mechanisms or traditional cost-recovery methods available to the electric utility.
This bill mostly relates to the West Virginia Public Service Commission. However, our analysis only applies to tax related impacts. The passage of this bill would have no more than a minimal impact on the General Revenue Fund. There may be very slight alterations in taxable income and Corporate Net Income Tax receipts associated with the proposed change.
As drafted, there would also be a small decrease in municipal occupation tax and municipal public utility excise tax collections associated with the consumer rate relief surcharge.
There would be no additional administrative costs to the State Tax Department from the passage of this bill.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2012
Increase/Decrease
(use"-") |
2013
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):
This bill mostly relates to the West Virginia Public Service Commission. However, our analysis only applies to tax related impacts. The passage of this bill would have no more than a minimal impact on the General Revenue Fund. There may be very slight alterations in taxable income and Corporate Net Income Tax receipts associated with the proposed change.
As drafted, there would also be a small decrease in municipal occupation tax and municipal public utility excise tax collections associated with the consumer rate relief surcharge.
There would be no additional administrative costs to the State Tax Department from the passage of this bill.
Memorandum
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov