Senate Bill No. 656
(By Senators McCabe, Hall, Kessler, Deem, Jenkins, Green,
Stollings and Boley)
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[Introduced February 22, 2010; referred to the Committee on the
Judiciary; and then to the Committee on Finance.]
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A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new section, designated §24-2-1j, relating to
special rates for energy-intensive industrial consumers of
electric power; setting forth legislative findings on energy-
intensive industrial consumers of electric power; defining
certain terms; enabling the Public Service Commission to
establish special rates for energy-intensive industrial
consumers of electric power; setting 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; authorizing the Public Service
Commission to adopt mechanisms reasonably designed to assure
appropriate flexibility and predictability of special rates; establishing procedures for application to the Public Service
Commission for a special rate; setting forth data and
information to be included in an application for a special
rate; and establishing qualifications for eligibility for a
special rate.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new section, designated §24-2-1j, to read as
follows:
ARTICLE 2. POWERS AND DUTIES OF PUBLIC SERVICE COMMISSION.
§24-2-1j. Special rates for energy intensive industrial consumers
of electric power.
(a) The Legislature hereby finds that:
(1) West Virginia enjoys relatively low cost electric power
rates for residential customers, business and industry and these
relatively low rates constitute a competitive economic advantage
for West Virginia;
(2) West Virginia has many energy intensive industrial
consumer of electric power, and has ability to retain its existing
energy intensive industrial consumers of electric power and attract
additional energy intensive industrial consumers of electric power
in the future, through the adoption of policies and the
establishment of rates that enhance and preserve the attractiveness
of West Virginia as a place for energy intensive industries enterprises to do business;
(3) Energy intensive industrial consumers of electric power
create jobs, provide a substantial tax base and enhance the
productive capacity, competitiveness and economic opportunities of
West Virginia and all of its citizens;
(4) Energy intensive industrial consumers of electric power
help keep power rates low for all consumers of electric power,
including residential customers, by providing a large consumption
base over which the cost of producing electric power may be spread
from time to time;
(5) It is in the best interests of West Virginia, the citizens
of West Virginia and all consumers of electric power in West
Virginia, including residential customers, to encourage the
continued development, construction, operation, maintenance and
expansion in West Virginia of industrial plants and facilities
which are energy intensive consumers of electric power, thereby
increasing the creation, preservation and retention of jobs,
expanding the tax base, helping keep power rates low for all
consumers of electric power, and enhancing the productive capacity,
competitiveness and economic opportunities of all citizens of West
Virginia; and
(6) To encourage the continued development, construction,
operation, maintenance and expansion in West Virginia of industrial
plants and facilities which are energy intensive consumers of
electric power, the commission may establish special rates under this section that in its judgment are necessary or appropriate for
the continued, new or expanded operation of energy intensive
industrial consumers and that can reasonably be expected to support
the long-term operation of energy intensive industrial consumers.
(b) As used in this section:
(1) "Energy intensive industrial consumer" means an industrial
facility, plant or enterprise that has a contact demand of at least
fifty thousand kilowatts of electric power at its West Virginia
facilities under normal operating conditions.
(2) "Special rate" means a rate set for an energy intensive
industrial consumer pursuant to this section.
(c) In addition to all other factors which the commission may
consider in setting rates for consumers of electric power, and
notwithstanding any other provisions of this code to the contrary,
in setting a special rate the commission may take into
consideration fluctuations in market prices for the goods or
products produced by the energy intensive industrial consumer of
electric power, or other variables or factors which may be relevant
to or affect the continuing vitality of the energy intensive
industrial consumer of electric power in dynamic markets. In
setting a special rate by reference to fluctuations in market
prices for the goods and products produced by an energy intensive
industrial consumer of electric power, the commission may establish
variable rates including, but not limited to, ceilings and floors
on the special rate, banking or crediting mechanisms, caps, limits or other similar types of safeguards that are intended by the
commission, in its reasonable judgment, to provide appropriate
flexibility and predictability in the special rate over time, to
permit the energy intensive industrial customer the ability to make
the capital investments and other commitments necessary to support
the continued operation of the facility.
(d) An energy intensive industrial consumer wishing to apply
for a special rate shall first enter into negotiations with the
utility that provides it with electric power, regarding the terms
and conditions of a mutually agreeable special rate. If the
negotiations result in an agreement between the energy intensive
industrial consumer and the utility, the energy intensive
industrial consumer and the utility shall make a joint filing with
the commission seeking approval of the proposed special rate. If
the negotiations are unsuccessful, the energy intensive industrial
consumer may file a petition with the commission to establish the
special rate. The commission shall have the authority to establish
a special rate upon the filing of either a joint filing or a
petition pursuant to this section.
(e) In order to qualify for a special rate, an energy
intensive industrial consumer shall:
(1) Have a contact demand of at least fifty thousand kilowatts
of electric power at its West Virginia facilities under normal
operating conditions;
(2) Create or retain at least twenty-five full time jobs in West Virginia;
(3) Have invested not less than $500,000 in fixed assets,
including machinery and equipment, in West Virginia;
(4) Provide reasonable evidence that due to market conditions
in the industry in which the energy intensive industrial consumer
operates, or other factors bearing on investment in and operation
of the industrial facility or facilities, without the special rate
the operation or continued operation of the industrial facility or
facilities is threatened or not economically viable under
reasonable assumptions and projections regarding the market and the
operation of the industrial facility or facilities;
(5) Provide reasonable evidence that with the special rate, it
intends to operate the industrial facility or facilities in West
Virginia for an extended period of time, and that the operation or
continued operation of the industrial facility or facilities for an
extended period of time appears economically viable, under
reasonable assumptions and projections regarding the market in
which the energy intensive industrial consumer operates and
regarding the operation of the industrial facility or facilities;
and
(6) Provide information and data setting forth how the energy
intensive industrial consumer meets the qualifications of this
section, and how the special rate advances the policy goals set
forth in subsection (a) of this section.
NOTE: The 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.
This section is new; therefore, strike-throughs and
underscoring have been omitted.