COMMITTEE SUBSTITUTE
FOR
H. B. 4665
(By Delegate Kominar)
(Originating in the Committee on Finance)
[February 25, 2010]
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 additional factors
that the Public Service Commission may take into consideration
in establishing special rates for energy intensive industrial
consumers of electric power; 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; establishing qualifications for eligibility for a
special rate; and authorizing the distribution of any excess
revenue or revenue shortfall as directed by the Commission.
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
consumers of electric power, and has the 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
industrial consumers 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, electric public utilities in 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, that can reasonably be expected to support
the long-term operation of energy intensive industrial consumers, and that do not impose an unreasonable burden upon electric public
utilities or their other customers.
(b) As used in this section:
(1) "Energy intensive industrial consumer" means an industrial
facility, plant or enterprise that has a contract 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 any authority of the Commission to allow
special rates or contracts under any other provision of this code
or rule, and 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
including but not limited to the Commission's responsibilities
under subsection (b), section one, article one of this chapter, 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 consider
establishing a 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 contract 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) 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;
(4) Provide reasonable evidence that, with the special rate,
the energy intensive industrial consumer 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
(5) 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.
(f) Any excess revenue or revenue shortfall created by a
special rate authorized by the Commission pursuant to this section
shall be distributed among the customers of the utility as directed
by the Commission.