HB5492 HEPW AM. #1 2-19
Casto 3264
The Committee on Energy and Public Works moved to amend the bill by striking out everything after the enacting clause and inserting in lieu thereof the following:
Be it enacted by the Legislature of West Virginia:
(a) Legislative Findings: -- The Legislature finds that the timely availability of electric substation transformers is a critical factor in attracting and supporting large scale industrial, commercial, and advanced technology development within the State of West Virginia. The Legislature further finds that nationwide shortages and extended manufacturing lead times for high voltage power transformers materially delay economic development projects and limit the ability of the state to compete for new investment. It is the intent of the Legislature to authorize the strategic advance purchase of standardized, reusable substation transformers through regulated electric utilities in order to shorten project timelines while preserving utility ownership and regulatory oversight.
(b) Authority: -- The West Virginia Public Energy Authority is authorized to enter into advance purchase agreements with regulated electric utilities operating within the State of West Virginia for the advance ordering and reservation of up to 10 electric substation transformers, reactors, and the associated breakers annually by each such regulated electric utility, which transformers are intended to serve qualifying economic development projects.
(c) Eligible utilities: -- Advance purchase agreements may be entered into only with electric utilities that:
(1) Are subject to regulation by the Public Service Commission of West Virginia; and
(2) Own or operate electric transmission or subtransmission facilities within the state.
(d) Eligible equipment specifications.
(1) Only standardized substation transformers meeting the following criteria are eligible for advance purchase under this section:
(A) Rated capacity: not less than 150 MVA and not more than 200 MVA;
(B) High side voltage: 138 kilovolts, 230 kilovolts, or 345 kilovolts;
(C) Low side voltage: 34.5 kilovolts or 13.8 kilovolts;
(D) Design: transformers of standardized construction capable of parallel operation, redundancy, and phased expansion at electric substations;
(E) Purpose: transformers intended for stepping down voltage at substations serving industrial parks or other large electric load users.
(2) Transformers designed for direct connection to transmission lines operating at or above 400 kilovolts are eligible under this section.
3) Only standardized substation breakers having rated capacities of 138 kV, 345 kV, and 765kV are eligible for advance purchase under this section.
3) Only standardized substation line reactor/power reactors having rated capacities of 345 kV and 765kV are eligible for advance purchase under this section.
(e) Advance ordering and payment.
(1) Pursuant to an advance purchase agreement authorized by this section:
(A) The State of West Virginia may pay the ordering cost and required down payment necessary to secure a manufacturing slot for an eligible transformer;
(B) The transformer shall be ordered by and owned by the regulated utility;
(C) The state shall retain contractual authority to direct the assignment of the transformer to a qualifying economic development project within the state.
(f) (1) Creation and Purpose of Fund. – There is hereby created in the West Virginia Public Energy Authority the Transformer Advance Purchase Account. The fund shall be administered by the West Virginia Public Energy Authority and shall consist of all moneys made available for the purposes and from the sources set forth in this section of the code.
(2) The fund consists of moneys received from the following sources:
(A) All moneys received pursuant to relevant provisions of this code;
(B) All appropriations provided by the Legislature;
(C) Any moneys available from external sources; and
(D) All interest and other income earned from investment of moneys in the fund.
(3) The West Virginia Public Energy Authority shall use moneys in the fund to carry out the provisions of this section.
(4) Any balance, including accrued interest and any other returns, in the Transformer Advance Purchase Account at the end of each fiscal year may not expire to the General Revenue Fund but remain in the fund and be expended for the purposes provided by this section.
(5) Fund balances may be invested with the state’s Consolidated Investment Fund. Earnings on the investments shall be used solely for the purposes defined in §5B-13-11, et.seq. of this code
(6) The funds distributed shall be used for the acquisition of transformers in accordance with the provisions of this section.
(g) Unassigned transformers at time of delivery.
(1) If an eligible transformer ordered under this section is not pledged to a specific qualifying project at the time delivery is scheduled to occur:
(A) The state may fund the remaining unpaid balance of the transformer purchase price;
(B) The transformer shall be retained by the utility as part of its system inventory;
(C) The transformer shall remain available for assignment to a future qualifying economic development project or to meet utility system needs.
(h) Recovery of state funds: -- Amounts paid by the state under this section shall be recovered through one or more of the following methods, as determined by the Public Energy Authority:
(1) Repayment by the regulated utility when the transformer is placed into service;
(2) Reimbursement or repayment as part of a negotiated economic development agreement with a project sponsor;
(3) Recovery through industrial utility rates as approved by the Public Service Commission, to the extent permitted by law;
(4) Other lawful recovery mechanisms authorized by the Public Energy Authority.
(i) Debt forgiveness for economic benefit.
(1) The West Virginia Public Energy Authority may forgive all or a portion of amounts paid under this section if the transformer is used to serve a project that provides substantial economic benefit to the state.
(2) In determining whether to forgive such amounts, the West Virginia Public Energy Authority may consider:
(A) Number of jobs created;
(B) Average wages;
(C) Capital investment;
(D) Long term state and local tax revenue;
(E) Strategic importance of the project to statewide economic development objectives.
(j) Rulemaking. -- The West Virginia Public Energy Authority, in consultation with the Public Service Commission, may in order to effectuate the purposes of this section, promulgate legislative rules including emergency rules, in accordance with §29A-3-1 et seq. of this code, including rules governing:
(1) Qualification of projects;
(2) Standard terms for advance purchase agreements;
(3) Accounting and audit requirements;
(4) Criteria for repayment or forgiveness;
(5) Coordination with regulated utilities.
(k) Construction: -- Nothing in this section shall be construed to require approval by the Public Service Commission of any specific transformer placement, cost recovery method, or substation construction, nor to limit the commission’s existing regulatory authority.
Adopted
Rejected