Senate Bill No. 615
(By Senators Kessler, Edgell and Hunter)
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[Introduced February 16, 2007; referred to the Committee on
Government Organization; and then to the Committee on the
Judiciary.]
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A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new section, designated §8-19-2, relating to
authorizing a municipality that owns and operates an electric
power system to enter into certain contracts with other
parties to purchase electric power and energy from certain
projects.
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 §8-19-2, to read as
follows:
ARTICLE 19. MUNICIPAL AND COUNTY WATERWORKS AND ELECTRIC POWER
SYSTEMS.
PART II. LIMITATIONS ON SALE OR LEASE OF
CERTAIN MUNICIPAL WATERWORKS.
§8-19-2.
Contracts for purchase of electric power or energy by a
municipality; definitions; requirements; payments; rates and charges.
(a) For the purposes of this section:
(1) "Contract" means an agreement entered into by a
municipality with any other party for the purchase of electric
output, capacity or energy from a project as defined herein.
(2) "Any other party" means any other legal entity, including,
but not limited to, another municipality, political subdivision,
public authority, agency or instrumentality of any state or the
United States, a partnership, a limited partnership, a limited
liability company, a corporation, an electric cooperative or an
investor owned utility existing under the laws of any state; and
(3) "Project" or "projects" means systems or facilities owned
by another party and used for the generation, transmission,
transformation or supply of electric power, or any interest in
them, whether an undivided interest as a tenant in common or
otherwise, or any right to the output, capacity or services
thereof.
(b) In addition to the general authority to purchase
electricity on a wholesale basis for resale to its customers, any
municipality that owns and operates an electric power system under
the provisions of this article may enter into a contract with any
other party for the purchase of electricity from one or more
projects located in the United States that provide that the
contracting municipality is obligated to make payments required by
the contract whether or not a project is completed, operable or
operating, and notwithstanding the suspension, interruption,
interference, reduction or curtailment of the output of a project or the power and energy contracted for, and that the payments shall
not be subject to any reduction, whether by offset or otherwise,
and shall not be conditioned upon performance or nonperformance by
any other party. The contract may provide that, in the event of a
default by the municipality or any other party to the contract in
the performance of each entities' obligations under the contract,
any non defaulting municipality or any other party to the contract
shall on a pro rata basis succeed to the rights and interests of,
and assume the obligations of, the defaulting party.
(c) Notwithstanding any other provisions of law, ordinance or
charter provision to the contrary, a contract under subsection (b)
of this section may extend for more than fifty years or fifty years
from the date a project is estimated to be placed into normal
continuous operation, and the execution and effectiveness of the
contract is not subject to any authorizations or approvals by the
state or any agency, commission, instrumentality or political
subdivision thereof except as otherwise specifically required by
law.
(d) A contract under subsection (b) of this section may
provide that payments by the municipality are made solely from and
may be secured by a pledge of and lien upon revenues derived by the
municipality from ownership and operation, and that payments shall
constitute an operating expense of the electric power system. No
obligation under the contract shall constitute a legal or equitable
pledge, charge, lien or encumbrance upon any property of the
municipality or upon any of its income, receipts or revenues,
except the revenues of the municipality's electric power system. Neither the faith and credit nor the taxing power of the
municipality shall be pledged for the payment of any obligation
under the contract.
(e) A municipality contracting under the provisions of
subsection (b) of this section is obligated to fix, charge and
collect rents, rates, fees and charges for electric power and
energy and other services it sells, furnishes or supplies through
its electric power system in an amount sufficient to provide
revenues adequate to meet its obligations under the contract and to
pay any and all other amounts payable from or constituting a charge
and lien upon the revenues, including the amounts necessary to pay
the principal and interest on any municipal bonds issued related to
its electric power system:
Provided, That any change in the rates
and charges of the municipality to the customers of the electric
power system under the provisions of this section are subject to
the provisions and requirements of section four-b, article two,
chapter twenty-four of this code and the obligations of the
municipality under the contract are costs of providing electric
service within the meaning of that section.
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(NOTE: The purpose of this bill is to authorize a
municipality that owns and operates an electric power system to
enter into certain contracts for the purchase of electric power
from certain projects.
This section is new; therefore, strike-throughs and
underscoring have been omitted.)
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