Introduced Version
House Bill 2210 History
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Key: Green = existing Code. Red = new code to be enacted
H. B. 2210
(By Delegates Manypenny, Fleischauer and Guthrie)
[Introduced February 13, 2013; referred to the
Committee on the Judiciary then Finance.]
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, §24-2G-6, §24-2G-7, §24-2G-8,
§24-2G-9, §24-2G-10 and §24-2G-11, all relating to energy
efficiency for electric and gas utilities and their customers;
defining terms; establishing required energy efficiency
programs and plans; setting forth time tables; establishing
targets and goals; identifying certain metering and grid
technologies; providing for revenue sharing; establishing
penalties; providing for customer self direct option; allowing
for administration by third-party entities; and providing for
$600,000 in special license fees for implementation purposes.
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, §24-2G-6, §24-2G-7, §24-2G-8,
§24-2G-9, §24-2G-10 and §24-2G-11, all to read as follows:
ARTICLE 2G. Energy Efficiency.
§24-2G-1. Short title.
__________This article shall be known as the "West Virginia Energy
Efficiency Act."
§24-2G-2. Findings and purpose.
__________The Legislature finds and declares that:
__________(1) Energy efficiency is among the least expensive ways to
meet the growing electricity demands of the state; and
__________(2) To provide affordable, reliable and clean energy for
consumers of West Virginia, it is the goal of the state to, based
on electricity consumption for calendar year 2010, achieve the
following energy efficiency, conservation and demand response
targets:
__________(A) Savings of fifteen percent of 2010 electricity sales by
the end of 2025; and
__________(B) Savings of fifteen percent of 2010 peak demand by the end
of 2025.
§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" means a standard that is met for an
energy efficiency program if, 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 delivering 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) "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.
__________(6) "Plan" means an electricity savings and demand reduction
plan and cost recovery proposal.
§24-2G-4. Energy efficiency programs required.
__________(a) Beginning with the 2014 calendar year and each year thereafter, the commission shall calculate:
__________(1) The electricity consumption for each year; and
__________(2) The peak demand for each year.
__________(b) Subject to review and approval by the commission, each
electric utility shall develop and implement programs and services
to encourage and promote energy efficiency improvements and
conservation of energy by consumers, commercial and industrial end
users and electric utilities.
__________(c) As directed by the commission, each municipal electric
utility and each electric cooperative that serves a population of
less than fifty thousand in its service territory shall include
energy efficiency and conservation programs or services as part of
the services provided to its customers.
__________(d) The commission shall:
__________(1) Require each electric utility to establish a program or
service that the commission finds appropriate and cost-effective
to encourage and promote energy efficiency improvements and
conservation of energy; and
__________(2) Adopt rate-making policies that provide cost recovery for
all energy efficiency and demand response programs approved by the
commission under subsection (e) of this section and, in appropriate
circumstances, reasonable financial incentives for gas utilities
and electric utilities who implement programs and services that
successfully achieve customer energy efficiency improvements and conservation of energy.
__________(e) Except as provided in subsection (c) of this section, by
December 31, 2013, by rule or order, the commission shall:
__________(1) To the extent the commission determines that
cost-effective energy efficiency and conservation programs and
services are available, for each affected class, require each
electric utility to:
__________(A) Provide cost-effective energy efficiency and conservation
programs for its electricity customers; and
__________(B) To achieve through these programs, at a minimum,
verifiable electricity savings equivalent to the following
cumulative percentages of electricity consumed in the electric
utility's service territory during the year 2010:
__________(i)One percent of 2010 sales by the end of 2014;
__________(ii) One and one-quarter percent of 2010 sales by the end of
2015;
__________(iii) Two percent of 2010 sales by the end of 2016;
__________(iv) Three percent of 2010 sales by the end of 2017;
__________(v) Four percent of 2010 sales by the end of 2018; and
__________(vi) Five percent of 2010 sales by the end of 2019.
__________(2) Require each electric utility to:
__________(A) Implement a cost-effective demand response program in the
electric utility's service territory; and
__________(B) Achieve, through demand response and energy efficiency programs, relative to the peak demand of electricity consumed in
the electric utility's service territory during the year 2010, a
targeted cumulative reduction of:
__________(i) One-half percent of 2010 peak demand by the end of 2014;
__________(ii) One and one-quarter percent of 2010 peak demand by the
end of 2015;
__________(iii) Two percent of 2010 peak demand by the end of 2016;
__________(iv) Three percent of 2010 peak demand by the end of 2017;
__________(v) Four percent of 2010 peak demand by the end of 2018; and
__________(vi) Five percent of 2010 peak demand by the end of 2019.
__________(f) By December 31, 2018, the commission shall:
_____(1) Review the performance of the utilities in achieving the
targets set forth in subsections (e)(1) and (e)(2) of this section,
together with information about future energy savings potential,
and develop recommendations as to whether there should be any
adjustments, up or down, in the following cumulative energy
efficiency and peak demand reduction targets proposed for 2020
through and including 2026:
_____(A) Six and one-quarter percent of 2010 peak demand and six
and one-quarter percent of 2010 electricity sales by the end of
2020;
_____(B) Seven and one-half percent of 2010 peak demand and seven
and one-half percent of 2010 electricity sales by the end of 2021;
_____(C) Eight and three-quarter percent of 2010 peak demand and eight and three-quarter percent of 2010 electricity sales by the
end of 2022;
_____(D) Ten percent of 2010 peak demand and ten percent of 2010
electricity sales by the end of 2023;
_____(E) Eleven and six-tenths percent of 2010 peak demand and
eleven and six-tenths percent of 2010 electricity sales by the end
of 2024;
_____(F) Thirteen and three-tenths percent of 2010 peak demand and
thirteen and three-tenths percent of 2010 electricity sales by the
end of 2025; and
_____(G) Fifteen percent of 2010 peak demand and fifteen percent of
2010 electricity sales by the end of 2026.
_____(2) Provide any other recommendations for improving the
ability of West Virginia to achieve the state goal of saving the
equivalent of fifteen percent of 2010 electricity sales and peak
demand by the end of 2026.
_____(3) After providing opportunity for public comment, report its
findings to the interim Joint Committee on Economic Development.
_____(g)(1) By September 1, 2013, and every three years thereafter,
an electric utility shall:
_____(A) Consult with the commission regarding the design and
adequacy of its plan to achieve the electricity savings and demand
reduction targets specified in subsection (e) of this section; and
_____(B) Provide the commission with any additional information regarding the plan that the commission requests.
_____(2) By September 1, 2013, and every three years thereafter,
each electric utility shall submit its plan to the commission that
details the electric utility's proposals for achieving the
electricity savings and demand reduction targets specified in
subsection (e) of this section for the three subsequent calendar
years.
_____(3) Each electric utility shall provide annual updates to the
commission on plan implementation and progress towards achieving
the electricity savings and demand reduction targets specified in
subsection (e) of this section. As part of these updates, each
utility shall follow evaluation guidance provided by the commission
under subsection (g) of this section.
_____(4) Each plan shall include:
_____(A) A description of the proposed energy efficiency and
conservation programs and services and the proposed demand response
program, anticipated costs, projected electricity savings and any
other information requested by the commission; and
_____(B) Energy efficiency programs for residential, commercial and
industrial sectors, as appropriate, including low-income
communities and low-to-moderate income communities.
_____(5) The commission shall review each electric utility's plan
to determine if the plan is adequate and cost-effective in
achieving the electricity savings and demand reduction targets specified in subsection (e) of this section.
_____(6) The commission may request additional information from an
electric utility regarding its plan.
_____(h) (1) The commission shall establish rules for evaluating
the savings from energy efficiency and demand response programs,
seeking to balance accuracy and cost and based on best practices
from other states.
_____(2) In monitoring and analyzing the impact of a program or
service under paragraph (1) of this subdivision, if the commission
determines that the outcome of the program or services may not be
providing the best possible results, the commission shall direct
the electric utility to include in its annual update, under
subdivision (3), subsection (f) of this section, specific measures
to address the findings.
§24-2G-5. Energy efficiency program reports.
_____(a) On or before January 1 of each year, the commission shall
report to the Legislature on:
_____(1) The status of programs and services to encourage and
promote energy efficiency improvements and conservation of energy,
including, to the extent possible, an evaluation of the impact of
programs and services on energy use, energy costs and jobs in the
state. In addition, specific sections in the report shall discuss
the energy efficiency programs and services directed to low-income
communities, low-to-moderate income communities, businesses and other particular classes of ratepayers;
_____(2) A recommendation for the appropriate funding level to
adequately fund these programs and services; and
_____(3) The electricity consumption and the peak demand for the
previous calendar year.
_____(b) By December 31, 2014, the commission shall:
_____(1) Study the feasibility of setting energy savings targets in
2017 and 2022 for natural gas companies; and
_____(2) After providing opportunity for public comment, report its
findings to the Senate Committee on Finance and the House of
Delegates Committee on Finance.
§24-2G-6. Smart meter and smart grid technology.
_____The commission shall evaluate whether advanced meter
technology, commonly known as "smart meters", and digital
automation of the components of the entire power supply system,
commonly known as "smart grid", are cost-effective in reducing
consumption and peak demand of electricity. If smart meter or
smart grid technology are found to be cost-effective, the
commission shall allow appropriate cost recovery for any electric
utility to implement cost-effective smart meter or smart grid
technology in its service territory.
§24-2G-7. Revenue sharing.
_____(a) The commission shall establish performance incentives
under this article by which the utility and the customer share the economic benefits of energy conservation. Such performance
incentives shall be structured to:
_____(1) Require that the utility meet at least ninety percent of
its energy savings goal in a given year in order to receive an
incentive for that year;
_____(2) Preclude the utility from receiving compensation for
revenues lost due to energy efficiency program savings in any year
for which actual electricity sales exceed the sales forecast upon
which rates were set;
_____(3) Ensure that the utility engages in incremental
conservation efforts to meet and maintain energy efficiency
requirements;
_____(4) Require the utility to demonstrate that the reduced usage
reflected in revenue sharing adjustments are specifically linked to
the utility's promotion of energy efficiency programs; and
_____(5) Base incentives on the utility's performance in achieving
energy efficiency targets with the incentive structured as a
percentage of the utility's energy efficiency spending. Incentives
shall begin as performance targets are approached and the incentive
increased as targets are reached and further increased as targets
are exceeded. These incentives may not exceed, in the maximum
case, twenty percent of utility spending on energy efficiency
programs.
_____(b) The commission may authorize a utility that spends a minimum of one and one-half percent of total retail sales revenues
in a year on commission-approved energy efficiency programs to
implement a symmetrical revenue decoupling true-up mechanism that
adjusts for sales volumes that are above or below the projected
levels that were used to determine the revenue requirement and set
retail rates authorized in the utility's most recent rate case. The
commission may authorize the decoupling regardless of whether the
utility's energy efficiency programs are administered by the
utility or an independent energy efficiency program administrator
under section ten of this article.
§24-2G-8. Special license fee.
_____(a) (1) Notwithstanding any other provision of this code, for
fiscal year 2014 only, in addition to the amounts appropriated in
the budget bill for fiscal year 2014, the commission may establish
up to $600,000 as a special license fee for the commission and its
Consumer Advocate Division to accomplish the requirements of this
article.
_____(2) Of the $600,000 that may be collected under subdivision
(1) of this subsection:
_____(A) Up to $500,000 may be expended in accordance with an
approved budget amendment for consultants, personnel and related
expenses of the commission as it determines is necessary to
accomplish the requirements of this article; and
_____(B) Up to $100,000 may be expended in accordance with an approved budget amendment for consultants, personnel and related
expenses of the Consumer Advocate Division as it determines is
necessary to accomplish the requirements of this article.
_____(3) The special license fee shall be imposed only on those
electric utilities otherwise subject to the license fees under
section six, article three, chapter twenty-four of this code. The
amounts collected shall be deposited in the Public Service
Commission Fund.
_____(4) The amount of the bill sent to each electric utility
subject to the special license fee shall be that amount resulting
from multiplying:
_____(A) The amount authorized to be collected under this
subsection; and
_____(B) The ratio of gross operating revenues of the entity
subject to the special license fee to the total gross operating
revenues for all entities subject to the special license fee.
_____(b) It is the intent of the Legislature that, beginning with
fiscal year 2014, the annual state budget include amounts for the
commission and the Consumer Advocate Division for the
implementation of this article, including consultants, personnel
and related expenses.
§24-2G-9. Self-direct option.
_____(a) An eligible primary or secondary electric customer may
direct up to eighty percent of any energy efficiency charge on electricity usage that the customer would otherwise incur, based on
projected energy usage for the duration of the customer's proposed
self-directed plan, towards developing and implementing a
self-directed energy efficiency plan as provided in this section.
_____(b) Eligibility requirements for participation in the
self-direct option under subsection (a) of this section are as
follows:
_____(1) The customer must have had an annual peak demand in the
preceding year of at least two megawatts at each site to be covered
by the self-directed plan or ten megawatts in the aggregate at all
sites to be covered by the plan; and
_____(2) The customer must comply with all provisions established
by the commission under this section, including subsections (c),
(d),(e),(g) and (h) of this section.
_____(c) The commission shall by order establish the rates, terms,
and conditions of service for customers related to this section.
_____(d) The commission shall by order do all of the following:
_____(1) Require a customer to develop and file with the provider
and the commission a self-directed energy efficiency plan meeting
the requirements in subsection (e) of this section and provide
evidence each year that it has implemented the self-directed plan;
and
_____(2) Take such additional actions as necessary to effectively
implement the self-directed energy efficiency program option in a manner that provides verifiable energy efficiency savings.
_____(e) All of the following apply to a self-directed energy
efficiency plan under subsection (a) of this section:
_____(1) The self-directed plan shall cover not less than one nor
more than three years;
_____(2) The self-directed plan shall provide for aggregate energy
savings from new energy efficiency measures that for each year meet
or exceed the energy efficiency performance standards in
subdivision (1), subsection (e), section four of this article. The
percentage savings shall be computed using the electricity
purchases in 2010 for the site or sites covered by the
self-directed plan;
_____(3) Under the self-directed plan, none of the following are
included in the calculation of cumulative energy savings:
_____(A) Changes in electricity usage because of changes in
business activity levels not attributable to energy efficiency
measures; and
_____(B) Changes in electricity usage because of the installation,
operation or testing of pollution control equipment; and
_____(4) The self-directed plan shall describe how the customer
intends to achieve the energy savings specified in the
self-directed plan.
_____(f) Verified energy savings from energy efficiency measures
implemented under a self-directed plan may be attributed to the relevant provider's energy efficiency programs for the purposes of
determining annual cumulative savings achieved by the provider
under subdivision (1), subsection (e), section four of this
article.
_____(g) Once a customer begins to implement a self-directed plan
at a site covered by the self-directed plan, that site qualifies
for the up to eighty percent self-direct option described in
subsection (a) of this section and is not eligible to participate
in the relevant electric provider's energy efficiency programs.
_____(h) A customer implementing a self-directed energy
optimization plan under this section shall submit to the customer's
electric provider every year a brief report documenting the energy
efficiency measures taken under the self-directed plan during that
period and the corresponding energy savings that will result. The
report shall provide sufficient information for the provider and
the commission to monitor progress toward the goals in the
self-directed plan and to develop reliable estimates of the energy
savings that are being achieved from self-directed plans. A
customer shall promptly notify the provider in its annual report if
the customer fails to achieve cumulative energy savings as set
forth in its self-directed plan. If a customer submitting a report
or notice under this subsection wishes to amend its self-directed
plan, the customer shall submit with the report or notice an
amended self-directed plan. A report under this subsection shall be accompanied by an affidavit from a knowledgeable official of the
customer that the information in the report is true and correct to
the best of the official's knowledge and belief. If the customer
has retained an independent energy efficiency service company, the
requirements of this subsection shall be met by the energy
efficiency service company.
_____(i) An electric provider shall provide an annual report to the
commission that identifies customers implementing self-directed
energy optimization plans and summarizes the results achieved for
each of those customers under these self-directed plans. The annual
report shall also describe the steps taken by the electric provider
to independently verify the reported energy efficiency measures and
the estimated savings. The commission may request additional
information from the electric provider. If the commission has
sufficient reason to believe the information is inaccurate or
incomplete, it may request additional information from the customer
to ensure the accuracy of the report.
_____(j) If the commission determines that the minimum energy
efficiency goals under subdivision (2), subsection (e) of this
section have not been achieved at the sites covered by a
self-directed plan, in aggregate, the customer will no longer be
allowed to participate in the self-direct option and must begin
paying the full normal energy efficiency charge. In addition, the
commission shall order the customer or customers collectively to pay to the provider, for exclusive use in funding energy efficiency
programs, an amount calculated as follows:
_____(1) Determine the proportion of the shortfall in achieving the
minimum energy optimization goals under subdivision (2), subsection
(e) of this section; then
_____(2) Multiply the figure under subdivision (1) of this
subsection by the energy efficiency charges which the customer or
customers collectively avoided under subsection (a) of this
section; then
_____(3) Multiply the product under subdivision (2) of this
subsection by a number not less than one nor greater than two, as
determined by the commission based on the reasons for failure to
meet the minimum energy efficiency goals.
§24-2G-10. Third-party administration.
_____In place of utility-specific programs developed pursuant to
section four of this article, 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 an independent third-party
entity administers energy efficiency programs in lieu of the
utility under this section, the annual incremental energy savings
requirements described in section four of this article shall apply
to that third-party administrator for any years that this entity
administers these programs. The commission may 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 are not funds of the state, may not be 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-11. Severability.
_____The provisions of this article are severable and if any
phrase, clause, sentence or provision is declared to be invalid or
is preempted by federal law or regulation, the validity of the
remainder of this article is not affected.
NOTE: The purpose of this bill is to provide the Public Service Commission the authority to require electric utilities to
develop and implement plans for the efficient use, conservation and
reduction of energy usage. The bill sets forth goals to achieve
energy savings equivalent to five percent of 2010 sales by 2019,
and directs the Public Service Commission to establish targets
through 2026 by December 31, 2018. The bill also requires electric
utilities to submit plans for reaching those goals, provides for
revenue sharing and the opportunity for financial incentives for
gas and electric utilities to establish energy saving programs.
Additionally, the bill authorizes a special license fee up to
$600,000 to be collected from the affected utilities to implement
the bill's requirements. The bill also provides for a self-direct
option for large, energy customers.
This article is new; therefore, it has been completely
underscored.