Introduced Version
Senate Bill 691 History
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Key: Green = existing Code. Red = new code to be enacted
Senate Bill No. 691
(By Senators Bowman, Palumbo, Foster,
Snyder and Browning)
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[Introduced March 23, 2009; referred to the Committee on
Transportation and Infrastructure; and then to the Committee on
the Judiciary.]
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A BILL to amend and reenact §24-1-1, of
the Code of West Virginia,
1931, as amended; and to amend and reenact §24-2-1 and §24-2-
12 of said code, all relating to setting forth legislative
purpose and plan regarding modernizing and streamlining
antiquated telecommunications regulation; confirming the lack
of jurisdiction of the Public Service Commission or any other
department, agency, commission or political subdivision of the
state with respect to internet protocol-enabled services,
including broadband, video, voice or data communications using
internet protocol-enabled services; definitions; exceptions
and reservations; and providing that, effective July 1, 2009,
the requirements of section twelve, article two, chapter
twenty-four of said code no longer apply to telecommunications carriers, as that term is defined in 47 U. S. C. §153, subject
to certain exceptions and provisos.
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; and that §24-2-1 and §24-2-12 of said
code be amended and reenacted, all 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.
(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 1985, 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 1985, 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; and
(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 1980, 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; and
(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 1979, and entitled "A Plan for
Regulatory Reform and Management Improvement."
The commission shall before January 5, 1980, 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 December 31, 1980. Certified
copies of such order and rule shall be filed on the first day of
the regular session of the Legislature, 1980, 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 1980: 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:
(1) 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;
and
(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.
(j) The Legislature finds as follows:
(1) That regulation once suitable for traditional utilities
decades ago is no longer suitable for the myriad competitors in the
increasingly competitive and technologically changing intermodal
communications market;
(2) That antiquated and inapplicable regulation should be
modernized and streamlined;
(3) That it is the Legislature's intention that Internet
Protocol-enabled services flourish in West Virginia as competitive
services for which traditional utility regulation is unnecessary;
and
(4) That Internet is global and should be regulated, if at
all, on a federal basis.
ARTICLE 2. POWERS AND DUTIES OF THE PUBLIC SERVICE COMMISSION.
§24-2-1. Jurisdiction of commission; waiver of jurisdiction.
(a) The jurisdiction of the commission shall extend to all
public utilities in this state and shall include any utility
engaged in any of the following public services: Common carriage
of passengers or goods, whether by air, railroad, street railroad,
motor or otherwise, by express or otherwise, by land, water or air,
whether wholly or partly by land, water or air; transportation of
oil, gas or water by pipeline; transportation of coal and its
derivatives and all mixtures and combinations thereof with other
substances by pipeline; sleeping car or parlor car services;
transmission of messages by telephone, telegraph or radio;
generation and transmission of electrical energy by hydroelectric
or other utilities for service to the public, whether directly or
through a distributing utility; supplying water, gas or electricity, by municipalities or others; sewer systems servicing
twenty-five or more persons or firms other than the owner of the
sewer systems: Provided, That if a public utility intends to
provide sewer service by an innovative, alternative method, as
defined by the Federal Environmental Protection Agency, the
innovative, alternative method is a public utility function and
subject to the jurisdiction of the Public Service Commission
regardless of the number of customers served by the innovative,
alternative method; any public service district created under the
provisions of article thirteen-a, chapter sixteen of this code;
toll bridges, wharves, ferries; solid waste facilities; and any
other public service: Provided, however, That natural gas
producers who provide natural gas service to not more than
twenty-five residential customers are exempt from the jurisdiction
of the commission with regard to the provisions of such residential
service: Provided further, That upon request of any of the
customers of such natural gas producers, the commission may, upon
good cause being shown, exercise such authority as the commission
may deem appropriate over the operation, rates and charges of such
producer and for such length of time as the commission may consider
to be proper: And provided further, That the jurisdiction the
commission may exercise over the rates and charges of municipally
operated public utilities is limited to that authority granted the commission in section four-b of this article: And provided
further, That the decision-making authority granted to the
commission in sections four and four-a of this article shall, in
respect to an application filed by a public service district, be
delegated to a single hearing examiner appointed from the
commission staff, which hearing examiner shall be authorized to
carry out all decision-making duties assigned to the commission by
said sections, and to issue orders having the full force and effect
of orders of the commission.
(b) The commission may, upon application, waive its
jurisdiction and allow a utility operating in an adjoining state to
provide service in West Virginia when:
(1) An area of West Virginia cannot be practicably and
economically served by a utility licensed to operate within the
State of West Virginia;
(2) Said area can be provided with utility service by a
utility which operates in a state adjoining West Virginia;
(3) The utility operating in the adjoining state is regulated
by a regulatory agency or commission of the adjoining state; and
(4) The number of customers to be served is not substantial.
The rates the out-of-state utility charges West Virginia customers
shall be the same as the rate the utility is duly authorized to
charge in the adjoining jurisdiction. The commission, in the case of any such utility, may revoke its waiver of jurisdiction for good
cause.
(c) Any other provisions of this chapter to the contrary
notwithstanding:
(1) An owner or operator of an electric generating facility
located or to be located in this state that has been designated as
an exempt wholesale generator under applicable federal law, or will
be so designated prior to commercial operation of the facility, and
for which such facility the owner or operator holds a certificate
of public convenience and necessity issued by the commission on or
before July 1, 2003, shall be subject to subsections (e), (f), (g),
(h), (i) and (j), section eleven-c of this article as if the
certificate of public convenience and necessity for such facility
were a siting certificate issued under said section and shall not
otherwise be subject to the jurisdiction of the commission or to
the provisions of this chapter with respect to such facility except
for the making or constructing of a material modification thereof
as provided in subdivision (5) of this subsection.
(2) Any person, corporation or other entity that intends to
construct or construct and operate an electric generating facility
to be located in this state that has been designated as an exempt
wholesale generator under applicable federal law, or will be so
designated prior to commercial operation of the facility, and for which facility the owner or operator does not hold a certificate of
public convenience and necessity issued by the commission on or
before July 1,2003, shall, prior to commencement of construction of
the facility, obtain a siting certificate from the commission
pursuant to the provisions of section eleven-c of this article in
lieu of a certificate of public convenience and necessity pursuant
to the provisions of section eleven of this article. An owner or
operator of an electric generating facility as is described in this
subdivision for which a siting certificate has been issued by the
commission shall be subject to subsections (e), (f), (g), (h), (i)
and (j), section eleven-c of this article and shall not otherwise
be subject to the jurisdiction of the commission or to the
provisions of this chapter with respect to such facility except for
the making or constructing of a material modification thereof as
provided in subdivision (5) of this subsection.
(3) An owner or operator of an electric generating facility
located in this state that had not been designated as an exempt
wholesale generator under applicable federal law prior to
commercial operation of the facility, that generates electric
energy solely for sale at retail outside this state or solely for
sale at wholesale in accordance with any applicable federal law
that preempts state law or solely for both such sales at retail and
such sales at wholesale, and that had been constructed and had engaged in commercial operation on or before July 1, 2003, shall
not be subject to the jurisdiction of the commission or to the
provisions of this chapter with respect to such facility,
regardless of whether such facility subsequent to its construction
has been or will be designated as an exempt wholesale generator
under applicable federal law: Provided, That such owner or
operator shall be subject to subdivision (5) of this subsection if
a material modification of such facility is made or constructed.
(4) Any person, corporation or other entity that intends to
construct or construct and operate an electric generating facility
to be located in this state that has not been or will not be
designated as an exempt wholesale generator under applicable
federal law prior to commercial operation of the facility, that
will generate electric energy solely for sale at retail outside
this state or solely for sale at wholesale in accordance with any
applicable federal law that preempts state law or solely for both
such sales at retail and such sales at wholesale and that had not
been constructed and had not been engaged in commercial operation
on or before July 1, 2003, shall, prior to commencement of
construction of the facility, obtain a siting certificate from the
commission pursuant to the provisions of section eleven-c of this
article in lieu of a certificate of public convenience and
necessity pursuant to the provisions of section eleven of this article. An owner or operator of an electric generating facility as
is described in this subdivision for which a siting certificate has
been issued by the commission shall be subject to subsections (e),
(f), (g), (h), (i) and (j), section eleven-c of this article and
shall not otherwise be subject to the jurisdiction of the
commission or to the provisions of this chapter with respect to
such facility except for the making or constructing of a material
modification thereof as provided in subdivision (5) of this
subsection.
(5) An owner or operator of an electric generating facility
described in this subsection shall, before making or constructing
a material modification of the facility that is not within the
terms of any certificate of public convenience and necessity or
siting certificate previously issued for the facility or an earlier
material modification thereof, obtain a siting certificate for the
modification from the commission pursuant to the provisions of
section eleven-c of this article in lieu of a certificate of public
convenience and necessity for the modification pursuant to the
provisions of section eleven of this article and, except for the
provisions of section eleven-c of this article, shall not otherwise
be subject to the jurisdiction of the commission or to the
provisions of this chapter with respect to such modification.
(6) The commission shall consider an application for a certificate of public convenience and necessity filed pursuant to
section eleven of this article to construct an electric generating
facility described in this subsection or to make or construct a
material modification of such electric generating facility as an
application for a siting certificate pursuant to section eleven-c
of this article if the application for the certificate of public
convenience and necessity was filed with the commission prior to
July 1, 2003, and if the commission has not issued a final order
thereon as of that date.
(7) The limitations on the jurisdiction of the commission
over, and on the applicability of the provisions of this chapter
to, the owner or operator of an electric generating facility as
imposed by, and described in this subsection, shall not be deemed
to affect or limit the commission's jurisdiction over contracts or
arrangements between the owner or operator of such facility and any
affiliated public utility subject to the provisions of this
chapter.
(d) Notwithstanding any other provision of law, no department,
agency, commission or political subdivision of the State of West
Virginia, shall enact, adopt or enforce, either directly or
indirectly, any law, rule, regulation, ordinance, standard, order
or other provision having the force or effect of law that
regulates, or has the effect of regulating, the entry, rates, terms or conditions of Internet Protocol-enabled service. the term
"Internet Protocol-enabled service" means any service, capability,
functionality or application provided using Internet Protocol, or
any successor protocol, that enables an end user to send or receive
a communication in Internet Protocol format, or any successor
format, regardless of whether the communication is broadband,
video, voice or data. Nothing in this section may be construed to:
(i) Modify any authority of the state or its political
subdivisions relating to the provision and administration of
enhanced 911 service and nondiscriminatory enhanced 911 fees; or
(ii) modify any authority of the state or its political
subdivisions to manage the use of public rights-of-way.
§24-2-12. What acts may not be done without consent of commission;
consent in advance of exemption of transactions; when
sale, etc., of franchises, mergers, etc., void.
Unless the consent and approval of the Public Service
Commission of West Virginia is first obtained: (a) No public
utility subject to the provisions of this chapter, except railroads
other than street railroads, may enter into any contract with any
other utility to operate any line or plant of any other utility
subject thereto, nor which will enable such public utility to
operate their lines or plants in connection with each other, but
this shall not be construed to prevent physical connections between utilities supplying the same service or commodity, for temporary
purposes only, upon condition, however, that prompt notice thereof
be given to the commission for such action, if any, as it may deem
necessary, and thereafter the commission may require such
connection to be removed or discontinued; (b) no public utility
subject to the provisions of this chapter, except railroads other
than street railroads, may purchase, lease, or in any other manner
acquire control, direct or indirect, over the franchises, licenses,
permits, plants, equipment, business or other property of any other
utility; (c) no public utility subject to the provisions of this
chapter, except railroads other than street railroads, may assign,
transfer, lease, sell, or otherwise dispose of its franchises,
licenses, permits, plants, equipment, business or other property or
any part thereof; but this shall not be construed to prevent the
sale, lease, assignment or transfer by any public utility of any
tangible personal property which is not necessary or useful, nor
will become necessary or useful in the future, in the performance
of its duties to the public; (d) no public utility subject to the
provisions of this chapter, except railroads other than street
railroads, may, by any means, direct or indirect, merge or
consolidate its franchises, licenses, permits, plants, equipment,
business or other property with that of any other public utility;
(e) no public utility subject to the provisions of this chapter, except railroads other than street railroads, may purchase,
acquire, take or receive any stock, stock certificates, bonds,
notes or other evidence of indebtedness of any other public
utility; (f) no public utility subject to the provisions of this
chapter, except railroads other than street railroads, may, by any
means, direct or indirect, enter into any contract or arrangement
for management, construction, engineering, supply or financial
services or for the furnishing of any other service, property or
thing, with any affiliated corporation, person or interest; and (g)
no person or corporation, whether or not organized under the laws
of this state, may acquire either directly or indirectly a majority
of the common stock of any public utility organized and doing
business in this state.
The commission may grant its consent in advance or exempt from
the requirements of this section all assignments, transfers,
leases, sales or other disposition of the whole or any part of the
franchises, licenses, permits, plants, equipment, business or other
property of any public utility, or any merger or consolidation
thereof and every contract, purchase of stocks, arrangement,
transfer or acquisition of control, or other transaction referred
to in this section, upon proper showing that the terms and
conditions thereof are reasonable and that neither party thereto is
given an undue advantage over the other, and do not adversely affect the public in this state.
The commission shall prescribe such rules and regulations as,
in its opinion, are necessary for the reasonable enforcement and
administration of this section, including the procedure to be
followed, the notice to be given of any hearing hereunder, if it
deems a hearing necessary, and after such hearing or in case no
hearing is required, the commission shall, if the public will be
convenienced thereby, enter such order as it may deem proper and as
the circumstances may require, attaching thereto such conditions as
it may deem proper, consent to the entering into or doing of the
things herein provided, without approving the terms and conditions
thereof, and thereupon it shall be lawful to do the things provided
for in such order.
Every assignment, transfer, lease, sale or other disposition
of the whole or any part of the franchises, licenses, permits,
plant, equipment, business or other property of any public utility,
or any merger or consolidation thereof and every contract, purchase
of stock, arrangement, transfer or acquisition of control or other
transaction referred to in this section made otherwise than as
hereinbefore provided shall be void to the extent that the
interests of the public in this state are adversely affected, but
this shall not be construed to relieve any utility from any duty
required by this section.
Effective July 1, 2009, the requirements of this section no
longer apply to telecommunications carriers, as that term is
defined in 47 U.S.C. §153, except for mergers or other acquisitions
of control under subsection (b) of telecommunications carriers
providing services otherwise subject to the commission's
jurisdiction: Provided, however, That, with respect to any service
of a telecommunications carrier that remains subject to rate
regulation by the commission under this chapter, the commission is
not precluded under this section from disallowing any transaction
for ratemaking purposes to the extent required or permitted by law.
NOTE: The purpose of this bill is to modernize and streamline
antiquated telecommunications regulation, including removing
unnecessary preapproval requirements for telecommunications
carriers and codifying that Internet Protocol-enabled services are
unregulated competitive services for which traditional utility
regulation is unnecessary, thus encouraging them to flourish in
West Virginia.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.