H. B. 4367

         (By Delegates Manypenny, Skinner, Staggers,

              Wells, Fleischauer and Manchin)

         [Introduced January 29, 2014; referred to the

         Committee on Energy then the Judiciary.]

A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new article, designated §24-2G-1, §24-2G-2, §24-2G-3, §24-2G-4, §24-2G-5 and §24-2G-6, all relating to utility resource planning; providing a short title; making findings and declaring a purpose; defining terms; establishing required energy efficiency programs; allowing for the establishment of a third-party energy efficiency program administrator; requiring integrated resource planning; and setting deadlines and target dates.

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 §24-2G-1, §24-2G-2, §24-2G-3, §24-2G-4, §24-2G-5 and §24-2G-6, all to read as follows:

ARTICLE 2G. ENERGY EFFICIENCY.

§24-2G-1. Short title.

    This article may be known as the "West Virginia Energy Efficiency Resource Act."

§24-2G-2. Findings and purpose.

    The Legislature finds and declares that:

    (1) Energy efficiency is the least expensive and least risk resource for meeting electricity demand; and

    (2) It is in the public interest for electric utilities to offer energy efficiency and peak demand reduction programs to their customers and to integrate demand-side resources into long-term resource planning.

§24-2G-3. Definitions.

    As used in this article:

    (1) "Demand response program" means a program established by an electric utility that promotes changes in electricity usage by customers from their normal consumption patterns in response to:

    (A) Changes in the price of electricity over time; or

    (B) Incentives designed to promote lower electricity use at times of high wholesale market prices or when system reliability is jeopardized.

    (2) "Commission" means the West Virginia Public Service Commission.

    (3) "Cost effective" refers to a standard that is met for an energy efficiency program if the program passes the Program Administrator Cost Test, meaning that on a life cycle basis, the total avoided supply-side costs to the utility, including representative values for electricity or natural gas supply, transmission, distribution, and other associated costs, are greater than the total costs to the utility of administering and incentivizing the energy efficiency program.

    (4) "Electricity consumption" and "electricity consumed" mean the sum of retail electricity sales to all customers and reported electricity losses within the electric distribution system.

    (5) "Electric utility" means any investor-owned electric utility.

    (6) "Peak demand" means the highest level of electricity demand in the state measured in megawatts during the period from January 1 to December 31 of a year on a weather-normalized basis.

    (7) "Plan" means an electricity savings and demand reduction plan and cost recovery proposal.

§24-2G-4. Energy efficiency programs required.

    (a) By May 31, 2014, the commission shall initiate a proceeding to establish targets for electricity and peak demand savings for 2020 and 2026. Establishment of such targets shall be based on:

    (1) Availability of cost-effective energy efficiency in West Virginia.

    (2) Short-term and long-term utility bill impacts of electric utility investment in energy efficiency.

    (3) Economic development potential of electric utility investment in energy efficiency.

    (4) Experience of other states in implementing energy efficiency resource standards.

    (b) By July 1, 2014, the commission shall issue an order:

    (1) Requiring each electric utility to: (A) Provide for its electric customers cost-effective energy efficiency and conservation programs that achieve, at a minimum, verifiable energy savings equivalent to the targets established in subsection (a) of this section; and (B) provide for its electric customers cost-effective demand response programs that achieve, at a minimum, verifiable peak demand savings equivalent to the targets established in subsection (a) of this section.

    (2) Adopting rate-making policies that provide cost recovery for all energy efficiency and demand response programs approved by the commission and provide reasonable financial incentives for electric utilities who implement programs and services that successfully achieve customer energy efficiency improvements.

    (3) Establishing guidelines for evaluation and reporting on progress towards achieving the targets established in subsection (a) of this section. 

    (c) By December 31, 2015, the commission shall initiate a proceeding to determine the feasibility of setting energy savings targets for natural gas companies and to establish such targets if appropriate.

    (d) By December 31, 2019, the commission shall review the performance of the electric utilities in achieving the 2020 targets set forth in subsection (a) of this section, together with information about future energy savings potential and with integrated resource plans provided pursuant to section six of this article, and develop recommendations as to whether there should be any adjustments, up or down, in the 2026 targets established in subsection (a) of this section.

§24-2G-5. Third-party administration.

    If the utility-specific programs developed pursuant to section four of this article fail to make adequate progress towards the targets specified in subsection (a) of that section for three consecutive years, the commission may, after notice and opportunity for hearing, provide for the development, implementation, and monitoring of gas and electric energy efficiency and conservation programs and measures, including programs and measures delivered in multiple service territories, by one or more entities appointed by the commission for these purposes. The commission may specify that the implementation of these programs and measures satisfies a utility's corresponding obligations, in whole or in part, under section four of this article and under any prior orders of the commission. If such an independent third-party entity administers energy efficiency programs in lieu of the utility under this section, the targets described in section four of this article shall apply to that third party administrator for those years that the entity administers the programs. The commission has the authority to fund energy efficiency and conservation programs developed, implemented, and monitored by an independent entity under this section via a volumetric charge to customers. The charge shall be known as the energy efficiency charge and shall be paid to a fund administrator appointed by the commission. Funds collected through an energy efficiency charge may not be funds of the state, are not available to meet the general obligations of the government, and may not be included in the financial reports of the state. The commission will annually provide the Legislature with a report detailing the revenues collected and the expenditures made for energy efficiency programs under this section.

§24-2G-6. Integrated resource planning required.

    (a) Not later than July 1, 2014, the commission shall issue an order directing electric utilities to develop an initial integrated resource plan to be filed not later than December 31, 2014, in conjunction with other similar deadlines required by other states or entities of the electric utilities. This order may include guidelines for developing an integrated resource plan.

    (b)(1) Electric utilities shall file with the commission initial integrated resource plans as directed by the commission and must comply with this section and with the order issued pursuant to subsection (a) of this section.

    (2) Electric utilities shall file updated integrated resource plans at least every two years after the initial integrated resource plan which shall comply with any relevant order of the commission establishing guidelines for the format and contents of updated and revised integrated resource plans.

    (c) The commission shall analyze and review an integrated resource plan and, after giving notice and hearing comment at a public hearing, file the plan as appropriate. The commission may request further information from the utility, as necessary. This section does not affect the obligations of utilities to obtain otherwise required applicable commission approvals.

    (d) The commission shall consider the information reported in the integrated resource plan when it evaluates the performance of the utility in rate and other proceedings.

    (e) The plan shall address both supply-side and demand-side resources on a consistent and integrated basis. The plan shall compare projected peak demands with current and planned capacity resources in order to develop a portfolio of resources that represents a reasonable balance of cost and risk for the utility and its customers in meeting future demand for the provision of adequate and reliable service to its electric customers for a least the following twenty years.

    NOTE: The purpose of this bill is to require utility resource planning. The bill provides a short title. The bill makes findings and declares a purpose. The bill defines terms. The bill establishes required energy efficiency programs. The bill allows for the establishment of a third-party energy efficiency program administrator. The bill requires integrated resource planning. The bill sets deadlines and target dates.

    This article is new; therefore, it has been completely underscored.