Introduced Version
Senate Bill 741 History
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Senate Bill No. 741
(By Senator Bailey)
____________
[Introduced February 20, 2006; referred to the Committee
on the Judiciary; and then to the Committee on Finance.]
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A BILL to amend and reenact
§24-1-1
of the Code of West Virginia,
1931, as amended
, r
elating to
providing a legislative finding
that it may be in the best interests of public utility
consumers to allow public utilities to enter contracts which
allow the payment of capital costs of expansions or new
construction of public utility facilities in exchange for
reservations of capacity in these new facilities.
Be it enacted by the Legislature of West Virginia:
That §24-1-1 of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:
ARTICLE 1. GENERAL PROVISIONS.
§24-1-1. Legislative purpose and policy; plan for internal
reorganization; promulgation of plan as rule;
cooperation with Joint Committee on Government and
Finance.
(a) It is the purpose and policy of the Legislature in
enacting this chapter to confer upon the Public Service Commission
of this state the authority and duty to enforce and regulate the
practices, services and rates of public utilities in order to:
(1) Ensure fair and prompt regulation of public utilities in
the interest of the using and consuming public;
(2) Provide the availability of adequate, economical and
reliable utility services throughout the state;
(3) Encourage the well-planned development of utility
resources in a manner consistent with state needs and in ways
consistent with the productive use of the state's energy resources,
such as coal;
(4) Ensure that rates and charges for utility services are
just, reasonable, applied without unjust discrimination or
preference, applied in a manner consistent with the purposes and
policies set forth in article two-a of this chapter, and based
primarily on the costs of providing these services;
(5) Encourage energy conservation and the effective and
efficient management of regulated utility enterprises; and
(6) Encourage and support open and competitive marketing of
rail carrier services by providing to all rail carriers access to
tracks as provided in section three-b, article three of this
chapter. It is the purpose of the Legislature to remove artificial
barriers to rail carrier service, stimulate competition, stimulate the free flow of goods and passengers throughout the state and
promote the expansion of the tourist industry, thereby improving
the economic condition of the state.
(b) The Legislature creates the Public Service Commission to
exercise the legislative powers delegated to it. The Public Service
Commission is charged with the responsibility for appraising and
balancing the interests of current and future utility service
customers, the general interests of the state's economy and the
interests of the utilities subject to its jurisdiction in its
deliberations and decisions. Accordingly, the Legislature finds
that it may be in the best interests of public utility consumers to
allow public utilities to enter contracts which allow the payment
of capital costs of expansions or new construction of public
utility facilities in exchange for reservations of capacity in
these new facilities.
(c) The Legislature directs the Public Service Commission to
identify, explore and consider the potential benefits or risks
associated with emerging and state-of-the-art concepts in utility
management, rate design and conservation. The commission may
conduct inquiries and hold hearings regarding such concepts in
order to provide utilities subject to its jurisdiction and other
interested persons the opportunity to comment, and shall report to
the Governor and the Legislature regarding its findings and
policies to each of these areas not later than the first day of the regular session of the Legislature in the year one thousand nine
hundred eighty-five, and every two years thereafter.
(d) It is legislative policy to ensure that the Legislature
and the general public become better informed regarding the
regulation of public utilities in this state and the conduct of the
business of the Public Service Commission. To aid in the
achievement of this policy, the Public Service Commission annually
shall present to the Joint Committee on Government and Finance,
created by article three, chapter four of this code, or a
subcommittee designated by the joint committee, a management
summary report which describes in a concise manner:
(1) The major activities of the commission for the year
especially as such activities relate to the implementation of the
provisions of this chapter;
(2) Important policy decisions reached and initiatives
undertaken during the year;
(3) The current balance of supply and demand for natural gas
and electric utility services in the state and forecast of the
probable balance for the next ten years; and
(4) Other information considered by the commission to be
important including recommendations for statutory reform and the
reasons for such recommendations.
(e) In addition to any other studies and reports required to
be conducted and made by the Public Service Commission pursuant to any other provision of this section, the commission shall study and
initially report to the Legislature no later than the first day of
the regular session of the Legislature in the year one thousand
nine hundred eighty, upon:
(1) The extent to which natural gas wells or wells heretofore
supplying gas utilities in this state have been capped off or shut
in; the number of such wells, their probable extent of future
production and the reasons given and any justification for, capping
off or shutting in such wells, the reasons, if any, why persons
engaged or heretofore engaged in the development of gas wells in
this state or the Appalachian areas have been discouraged from
drilling, developing or selling the production of such wells and
whether there are fixed policies by any utility or group of
utilities to avoid the purchase of natural gas produced in the
Appalachian region of the United States generally and in West
Virginia specifically.
(2) The extent of the export and import of natural gas utility
supplies in West Virginia.
(3) The cumulative effect of the practices mentioned in
subdivisions (1) and (2) of this subsection upon rates theretofore
and hereafter charged gas utility customers in West Virginia.
In carrying out the provisions of this section the commission
shall have jurisdiction over such persons, whether public utilities
or not, as may be in the opinion of the commission necessary to the exercise of its mandate and may compel attendance before it, take
testimony under oath and compel the production of papers or other
documents. Upon reasonable request by the commission, all other
state agencies shall cooperate with the commission in carrying out
the provisions and requirements of this subsection.
(f) No later than the first day of the regular session of the
Legislature in the year one thousand nine hundred eighty, the
Public Service Commission shall submit to the Legislature a plan
for internal reorganization which plan shall specifically address
the following:
(1) A division within the Public Service Commission which
shall include the office of the commissioners, the hearing
examiners and such support staff as may be necessary to carry out
the functions of decision making and general supervision of the
commission, which functions shall not include advocacy in cases
before the commission;
(2) The creation of a division which shall act as an advocate
for the position of and in the interest of all customers;
(3) The means and procedures by which the division to be
created pursuant to the provisions of subdivision (2) of this
subsection shall protect the interests of each class of customers
and the means by which the commission will assure that such
division will be financially and departmentally independent of the
division created by subdivision (1) of this subsection;
(4) The creation of a division within the Public Service
Commission which shall assume the duties and responsibilities now
charged to the commissioners with regard to motor carriers which
division shall exist separately from those divisions set out in
subdivisions (1) and (2) of this subsection and which shall relieve
the commissioners of all except minimal administrative
responsibilities as to motor carriers and which plan shall provide
for a hearing procedure to relieve the commissioners from hearing
motor carrier cases;
(5) Which members of the staff of the Public Service
Commission shall be exempted from the salary schedules or pay plan
adopted by the civil service commission and identify such staff
members by job classification or designation, together with the
salary or salary ranges for each such job classification or
designation;
(6) The manner in which the commission will strengthen its
knowledge and independent capacity to analyze key conditions and
trends in the industries it regulates extending from general
industry analysis and supply-demand forecasting to continuing and
more thorough scrutiny of the capacity planning, construction
management, operating performance and financial condition of the
major companies within these industries.
Such plan shall be based on the concept that each of the
divisions mentioned in subdivisions (1), (2) and (4) of this subsection shall exist independently of the others and the plan
shall discourage ex parte communications between them by such means
as the commission shall direct, including, but not limited to,
separate clerical and professional staffing for each division.
Further, the Public Service Commission is directed to incorporate
within the said plan to the fullest extent possible the
recommendations presented to the subcommittee on the Public Service
Commission of the Joint Committee on Government and Finance in a
final report dated February, one thousand nine hundred seventy-
nine, and entitled "A Plan for Regulatory Reform and Management
Improvement."
The commission shall before the fifth day of January, one
thousand nine hundred eighty, adopt said plan by order, which order
shall promulgate the same as a rule of the commission to be
effective upon the date specified in said order, which date shall
be no later than the thirty-first day of December, one thousand
nine hundred eighty. Certified copies of such order and rule shall
be filed on the first day of the regular session of the
Legislature, one thousand nine hundred eighty, by the chairman of
the commission with the clerk of each house of the Legislature, the
Governor and the Secretary of State. The chairman of the commission
shall also file with the office of the Secretary of State the
receipt of the clerk of each house and of the Governor, which
receipt shall evidence compliance with this section.
Upon the filing of a certified copy of such order and rule,
the clerk of each house of the Legislature shall report the same to
their respective houses and the presiding officer thereof shall
refer the same to appropriate standing committee or committees.
Within the limits of funds appropriated therefor, the rule of
the Public Service Commission shall be effective upon the date
specified in the order of the commission promulgating it unless an
alternative plan be adopted by general law or unless the rule is
disapproved by a concurrent resolution of the Legislature adopted
prior to adjournment sine die of the regular session of the
Legislature to be held in the year one thousand nine hundred
eighty: Provided, That if such rule is approved in part and
disapproved in part by a concurrent resolution of the Legislature
adopted prior to such adjournment, such rule shall be effective to
the extent and only to the extent that the same is approved by such
concurrent resolution.
The rules promulgated and made effective pursuant to this
section shall be effective notwithstanding any other provisions of
this code for the promulgation of rules or regulations.
(g) The Public Service Commission is hereby directed to
cooperate with the Joint Committee on Government and Finance of the
Legislature in its review, examination and study of the
administrative operations and enforcement record of the Railroad
Safety Division of the Public Service Commission and any similar studies.
(h) (1) The Legislature hereby finds that rates for natural
gas charged to customers of all classes have risen dramatically in
recent years to the extent that such increases have adversely
affected all customer classes. The Legislature further finds that
it must take action necessary to mitigate the adverse consequences
of these dramatic rate increases.
(2) The Legislature further finds that the practices of
natural gas utilities in purchasing high-priced gas supplies, in
purchasing gas supplies from out-of-state sources when West
Virginia possesses abundant natural gas, and in securing supplies,
directly or indirectly by contractual agreements including take-or-
pay provisions, indefinite price escalators, or most-favored nation
clauses have contributed to the dramatic increase in natural gas
prices. It is therefore the policy of the Legislature to
discourage such purchasing practices in order to protect all
customer classes.
(3) The Legislature further finds that it is in the best
interests of the citizens of West Virginia to encourage the
transportation of natural gas in intrastate commerce by interstate
or intrastate pipelines or by local distribution companies in order
to provide competition in the natural gas industry and in order to
provide natural gas to consumers at the lowest possible price.
(i) The Legislature further finds that transactions between utilities and affiliates are a contributing factor to the increase
in natural gas and electricity prices and tend to confuse
consideration of a proper rate of return calculation. The
Legislature therefore finds that it is imperative that the Public
Service Commission have the opportunity to properly study the issue
of proper rate of return for lengthy periods of time and to limit
the return of a utility to a proper level when compared to return
or profit that affiliates earn on transactions with sister
utilities.
NOTE: The purpose of this bill is to
provide a legislative
finding that it may be in the best interests of public utility
consumers to allow public utilities to enter contracts which allow
the payment of capital costs of expansions or new construction of
public utility facilities in exchange for reservations of capacity
in these new facilities.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.