Introduced Version
House Bill 2118 History
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Key: Green = existing Code. Red = new code to be enacted
H. B. 2118
(By Delegate Guthrie)
[Introduced February 13, 2013; referred to the
Committee on Energy, Industry and Labor, Economic
Development and Small Business then Finance.]
A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new article, designated §5B-2I-1, §5B-2I-2,
§5B-2I-3, §5B-2I-4, §5B-2I-5, §5B-2I-6 and §5B-2I-7; and to
amend said code by adding thereto a new section, designated
§11-24-11c, all relating to creating the West Virginia
Renewable Energy Act; providing an investment cost recovery
incentive for customer-generated electricity from renewable
energy systems; making exceptions; providing for tax credits
electric light and power companies that purchase customer-
generated electricity; establishing time limits for the
incentives and credits; providing that customers who generate
electricity from renewable sources may sell electricity to
electric light and power companies; requiring reports be made
to the Legislature; and making legislative findings and
defining terms.
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 article, designated §5B-2I-1, §5B-2I-2,
§5B-2I-3, §5B-2I-4, §5B-2I-5, §5B-2I-6 and §5B-2I-7; and that said
code be amended by adding thereto a new section, designated §11-24-
11c, all to read as follows:
CHAPTER 5B. ECONOMIC DEVELOPMENT ACT OF 1985.
ARTICLE 2I. THE WEST VIRGINIA RENEWABLE ENERGY ACT.
§5B-2I-1. Short title.
_____This article shall be known and cited as the "West Virginia
Renewable Energy Act."
§5B-2I-2. Legislative findings.
_____The Legislature finds that the use of renewable energy
resources generated from local sources such as solar, biomas,
geothermal, hydroelectric and wind
power benefit our state by
reducing the load on the state's electric energy grid, by providing
nonpolluting sources of electricity generation, and by the creation
of jobs for local industries that develop and sell renewable energy
products and technologies.
_____The Legislature finds that West Virginia can become a national
and international leader in the technologies related to the solar,
biomas, geothermal, hydroelectric and wind
electric markets. The
state can support these industries by providing incentives for the purchase of locally made renewable energy products. Locally made
renewable technologies benefit and protect the state's environment.
_____The Legislature also finds that the state's economy can be
enhanced through the creation of incentives to develop additional
renewable energy industries in the state. The Legislature intends
to provide incentives for the greater use of locally created
renewable energy technologies, support and retain existing local
industries and create new opportunities for renewable energy
industries to develop in the state.
§5B-2I-3. Definitions.
_____The following definitions apply throughout this article unless
the context clearly requires otherwise:
_____(1) "Biomass energy" means any organic materials that can be
burned and used as a source of fuel, including, but not limited to,
wood, wood waste, wood waste used to make wood pellets, biogas,
animal manure to make biogas, solid waste, waste heat harnessed by
waste-to-energy plants that can generate electricity for heating
buildings.
_____(2) "Customer-generated electricity" means the alternating
current electricity that is generated from a renewable energy
system located on an individual's, businesses', or local
government's real property that is also provided electricity
generated by an electric light and power company. A system located
on a leasehold interest does not qualify under this definition. "Customer-generated electricity" does not include electricity
generated by an electric light and power company
with greater than
one thousand megawatt hours of annual sales or a gas distribution
business.
_____(3) "Economic development kilowatt-hour" means the actual
kilowatt-hour measurement of customer-generated electricity
multiplied by the appropriate economic development factor.
_____(4) "Geothermal energy" means the energy that is harnessed
under the earth's surface by the water that comes into contact with
hot rock turning it into boiling hot water or steam.
_____(5) "
Hydroelectric energy" means energy generated from the
energy of falling water or any other hydraulic source and producing
electricity.
_____(6) "Photovoltaic cell" means a device that converts light
directly into electricity without moving parts.
_____(7) "Renewable energy system" means a solar, biomas,
geothermal, hydroelectric and wind
energy systems used for
producing electricity.
_____(8) "Solar energy system" means any device or combination of
devices or elements that rely upon direct sunlight as an energy
source for use in the generation of electricity.
_____(9) "Solar inverter" means the device used to convert direct
current to alternating current in a photovoltaic cell system.
_____(10) "Solar module" means the smallest nondivisible self-contained physical structure housing interconnected photovoltaic
cells and providing a single direct current electrical output.
_____(11) "Standards for interconnection to the electric
distribution system" means technical, engineering, operational,
safety, and procedural requirements for interconnection to the
electric distribution system of an electric light and power
company
.
_____(12) "Wind energy" means the energy of motion harnessed or
captured by a wind turbine.
§5B-2I-4. Investment cost recovery incentive for customer-
generated electricity from renewable energy systems.
_____(a) Any individual, business, or local governmental entity,
not in the electric light and power business or in the gas
distribution business, may apply to the electric light and power
company serving the situs of the system, each fiscal year beginning
July 1, 2013, for an investment cost recovery incentive for each
kilowatt-hour from a customer-generated electricity renewable
energy system installed on its property that is not interconnected
to the electric distribution system. No incentive may be paid for
kilowatt-hours generated before July 1, 2013, or after June 30,
2022.
_____(b) Electric light and power companies serving eighty percent
of the total customer load in the state shall adopt uniform
standards by January 1, 2015 for interconnection to the electric distribution system. Any individual, business, or local
governmental entity, not in the electric light and power business
or in the gas distribution business, may apply to
an electric light
and power company
serving the situs of the system, each fiscal
year, for an investment cost recovery incentive for each kilowatt-
hour from a customer-generated electricity renewable energy system
installed on its property that is not interconnected to the
electric distribution system and from a customer-generated
electricity renewable energy system installed on its property that
is interconnected to the electric distribution system. No
incentive may be paid for kilowatt-hours generated before July 1,
2013, or after June 30, 2022.
_____(c)(1) Before submitting for the first time the application
for the incentive allowed under this section, the applicant shall
submit to the Tax Department and the Division of Energy, a
certification in a form and manner prescribed by the department
that includes, but is not limited to, the following information:
_____(A) The name and address of the applicant and location of the
renewable energy system;
_____(B) The applicant's tax registration number or, if an
individual, his or her name and address;
_____(C) That the electricity produced by the applicant meets the
definition of "customer-generated electricity" and that the
renewable energy system produces electricity with:
_____(i) Any solar inverters and solar modules manufactured in the
state;
_____(ii) A wind generator powered by blades manufactured in the
state;
_____(iii) A solar inverter manufactured in the state;
_____(iv) A solar module manufactured in the state;
_____(v) Other renewable energy system equipment manufactured in
the state; or
_____(vi) Solar, wind or other energy system equipment manufactured
outside of the state;
_____(D) That the electricity can be transformed or transmitted for
entry into or operation in parallel with electricity transmission
and distribution systems; and
_____(E) The date that the renewable energy system received its
final electrical permit from the applicable local jurisdiction.
___(2) Within thirty days of receipt of the certification the
State Tax Department shall advise the applicant in writing whether
the renewable energy system qualifies for an incentive under this
section. The department may consult with the Division of Energy to
determine eligibility for the incentive.
___(d)(1) By October 1 of each year application for the incentive
shall be made to the electric light and power company serving the
situs the system by certification in a form and manner prescribed
by the Tax Department that includes, but is not limited to, the following information:
___(A) The name and address of the applicant and location of the
renewable energy system;
___(B) The applicant's tax registration number or, if an
individual, his or her name and address;
___(C) The date of the letter from the Tax Department stating
that the renewable energy system is eligible for the incentives
under this section;
___(D) A statement of the amount of kilowatt-hours generated by
the renewable energy system in the prior fiscal year.
___(2) Within sixty days of receipt of the incentive
certification the
electric light and power company
serving the
situs of the system shall notify the applicant in writing whether
the incentive payment will be authorized or denied. The company
may consult with the Division of Energy for the incentive payment.
___(3)(A) Persons receiving incentive payments shall keep and
preserve, for a period of five years, suitable records as may be
necessary to determine the amount of incentive applied for and
received. Such records shall be open for examination at any time
upon notice by the electric light and power company that made the
payment. If upon examination of any records or from other
information obtained by the company or the Tax Department, it
appears that an incentive has been paid in an amount that exceeds
the correct amount of incentive payable, the business may assess against the person for the amount found to have been paid in excess
of the correct amount of incentive payable and shall add thereto
interest on the amount. Interest shall be assessed in the manner
that the department assesses interest upon delinquent tax.
___(B) If it appears that the amount of incentive paid is less
than the correct amount of incentive payable the company may
authorize additional payment.
___(e) The investment cost recovery incentive may be paid $0.15
per economic development kilowatt-hour unless requests exceed the
amount authorized for credit to the participating
electric light
and power company
. For the purposes of this section, the rate paid
for the investment cost recovery incentive may be multiplied by the
following factors:
___(1) For customer-generated electricity produced using solar
modules manufactured in the state, two and four-tenths;
___(2) For customer-generated electricity produced using a
solar,
biomas, geothermal, hydroelectric or wind
system manufactured in
the state, one and two-tenths; and
___(3) For all other customer-generated electricity produced by
solar, biomas, geothermal, hydroelectric and wind
systems, eight-
tenths.
___(f) No individual, household, business, or local governmental
entity is eligible for incentives for more than $2,000 per year.
___(g) If requests for the investment cost recovery incentive exceed the amount of funds available for credit to the
participating light and power company, the incentive payments shall
be reduced proportionately.
___(h) The Division of Energy may establish guidelines and
standards for technologies that are identified as West Virginia
manufactured and therefore most beneficial to the state's
environment.
___(i) The environmental attributes of the renewable energy
system belong to the applicant, and do not transfer to the state or
the light and power business upon receipt of the investment cost
recovery incentive.
§5B-2I-5. Sales of customer-generated electricity from renewable
energy systems to electric light and power companies.
___Any individual, business, or local governmental entity, not in
the electric light and power business or in the gas distribution
business, may contract with the electric light and power company
serving the situs of the system, each fiscal year beginning July 1,
2013, to sell to the company kilowatt-hours from a customer-
generated electricity renewable energy system installed on its
property that is interconnected to the electric distribution system
at the following rates:
___(1) For ten year contracts the rate is $0.15 per kilowatt
hour;
___(2) For twenty year contracts the rate is $0.32 per kilowatt hour; and
___(3) For electricity generated from solar modules, solar
inverters or solar energy systems manufactured in the state the
rate is $0.54 per kilowatt hour.
§5B-2I-6. Tax credit.
___(a) An electric light and power company is allowed a credit
against taxes due under article twenty-four, chapter eleven of this
code in an amount equal to investment cost recovery incentive
payments made in any fiscal year under section four of this
article. The credit shall be taken in a form and manner as
required by the Tax Department. 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. The credit may not exceed the tax that would
otherwise be due under this chapter. Refunds shall not be granted
in the place of credits. Expenditures not used to earn a credit in
one fiscal year may not be used to earn a credit in subsequent
years.
___(b) The right to earn tax credits under this section expires
June 30, 2022. Credits may not be claimed after June 30, 2023.
§5B-2I-7. Reporting to the Legislature.
___Using existing sources of information, the Tax Department
shall report to the Legislature by December 1, 2017. The report
shall measure the impacts of this article, including the total number of
solar, biomas, geothermal, hydroelectric and wind
energy
systems manufacturing companies in the state, any change in the
number of
solar, biomas, geothermal, hydroelectric and wind
energy
system manufacturing companies in the state, and, where relevant,
the effect on job creation, the number of jobs created for West
Virginia residents, and such other factors as the Tax Department
selects.
___
CHAPTER 11. TAXATION.
ARTICLE 24. CORPORATION NET INCOME TAX.
§11-24-11c. Credit for the purchase of electricity from renewable
energy systems.
___(a) Pursuant to section six, article two-i, chapter five-b of
this code, an electric light and power company is allowed a credit
against taxes due under this article in an amount equal to
investment cost recovery incentive payments made in any fiscal year
under section four, article two-i, chapter five-b of this code.
The credit shall be taken in a form and manner as required by the
Tax Department. 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.
The credit may not exceed the tax that would otherwise be due under
this article. Refunds shall not be granted in the place of
credits. Expenditures not used to earn a credit in one fiscal year may not be used to earn a credit in subsequent years.
___(b) The right to earn tax credits under this section expires
June 30, 2022. Credits may not be claimed after June 30, 2023.
NOTE: The 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 be made to the Legislature. The bill also provides that no
incentives may be taken after June 30, 2022, and credits may not be
taken after June 30, 2023. The bill also provides that customers
who generate electricity from renewable sources may sell
electricity to electric light and power companies.
Article §5B-2I and section §11-24-11c are new; therefore, they
have been completely underscored.