Introduced Version
Senate Bill 700 History
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Key: Green = existing Code. Red = new code to be enacted
Senate Bill No. 700
(By Senator Caruth)
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[Introduced March 23, 2009; referred to the Committee on the
Judiciary; and then to the Committee on Finance.]
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A BILL to amend and reenact §24-2-15 of the Code of West Virginia,
1931, as amended, relating to allowing natural gas utilities
to immediately recover increases in fuel costs which are later
reviewed by the Public Service Commission and subject to
refund if it is determined that the utility overstated its gas
costs.
Be it enacted by the Legislature of West Virginia:
That §24-2-15 of the Code of West Virginia, 1931, as amended,
be amended and reenacted to read as follows:
ARTICLE 2. POWERS AND DUTIES OF PUBLIC SERVICE COMMISSION.
§24-2-15. Automatic adjustment clauses prohibited.
(a) The commission shall not enforce, originate, continue,
establish, change or otherwise authorize or permit an increase in
the charge or charges for electric energy over and above the
established and published tariff, rate, joint rate, charge, toll or schedule through any automatic adjustment clause. or fuel
adjustment clause
(b) Notwithstanding any other provision of this chapter
utilities may immediately recover increases in fuel costs subject
to later scrutiny by the Public Service Commission.
(c) Fuel adjustment clauses which are not in conformity with
the principles set out below are not in the public interest and may
result in suspension of those parts of such rate schedules.
(d) The fuel clause shall provide for periodic adjustment per
kilowatt hour of sales equal to the difference between the fuel
costs per sale of kilowatt hour in the base period and in the
current period according to a formula that shall be contained in
the Code of State Rules that the Public Service Commission shall
promulgate forthwith.
(e) The formula that shall be so determined that on the
effective date of the commission's approval of the utility's
application of the formula, the resultant adjustment will be equal
to zero.
(f) Fuel costs shall be the most recent actual monthly cost
of:
(1) Fossil fuel consumed in the utility's own plants, and the
utility's share of fossil and nuclear fuel consumed in jointly
owned or leased plants, plus the cost of fuel which would have been
used in plants suffering forced generation or transmission outages, but less the cost of fuel related to substitute generation; plus
(2) The actual identifiable fossil and nuclear fuel costs
associated with energy purchased for reasons other than identified
in subdivision three of this subsection, but excluding the cost of
fuel related to purchases to substitute for the forced outages;
plus
(3) The net energy cost of energy purchases, exclusive of
capacity or demand charges (irrespective of the designation
assigned to such transaction) when such energy is purchased on an
economic dispatch basis. Included therein may be such costs as the
charges for economy energy purchases and the charges as a result of
scheduled outage, all such kinds of energy being purchased by the
buyer to substitute for its own higher cost energy; and less
(4) The cost of fossil fuel recovered through intersystem
sales including the fuel costs related to economy energy sales and
other energy sold on an economic dispatch basis.
(g) All fuel costs shall be based on weighted average
inventory costing.
(h) Forced outages are all nonscheduled losses of generation
or transmission which require substitute power for a continuous
period in excess of six hours. Where forced outages are not as a
result of faulty equipment, faulty manufacture, faulty design,
faulty installations, faulty operation, or faulty maintenance, but
are Acts of God, riot, insurrection or acts of the public enemy, then the utility may, upon proper showing, with the approval of the
commission, include the fuel cost of substitute energy in the
adjustment. Until such approval is obtained, the forced outage
costs to be subtracted shall be no less than the fuel cost related
to the lost generation.
(i) Sales shall be all kilowatts sold, excluding intersystem
sales. Where, for any reason, billed system sales cannot be
coordinated with fuel costs for the billing period, sales may be
equated to the sum of:
(1) Generation;
(2) Purchases;
(3) Interchange-in; less
(4) Energy associated with pumped storage operations; less
(5) Intersystem sales referred above; less
(6) Total system losses. Utility used energy shall not be
excluded in the determination of sales.
(j) The cost of fossil fuel shall include no items other than
the invoice price of fuel less any cash or other discounts. The
invoice price of fuel includes the cost of the fuel itself and
necessary charges for transportation of the fuel from the point of
acquisition to the unloading point.
(k) At the time the fuel clause is initially filed, the
utility shall submit copies of each fossil fuel purchase contract
not otherwise on file with the commission and all other agreements, options or similar such documents, and all amendments and
modifications thereof related to the procurement of fuel supply and
purchased power. Incorporation by reference is permissible. Any
changes in the documents, including price escalations, or any new
agreements entered into after the initial submission, shall be
submitted at the time they are entered into. Where fuel is
purchased from utility-owned or controlled sources, or the contract
contains a price escalation clause, those facts shall be noted and
the utility shall explain and justify them in writing. Fuel
charges which are unreasonable shall be disallowed and may result
in the suspension of the fuel adjustment clause. The commission on
its own motion may investigate any aspect of fuel purchasing
activities covered by this administrative regulation.
(l) Any tariff filing which contains a fuel clause shall
conform with this section within three months of the effective date
of this section, and any applicable regulations promulgated
therewith. The tariff filing shall contain a description of the
fuel clause with detailed cost support.
(m) The monthly fuel adjustment shall be filed with the
commission ten days before it is scheduled to go into effect, along
with all the necessary supporting data to justify the amount of the
adjustment which shall include data and information as may be
required by the commission.
(n) Copies of all documents required to be filed with the commission under this administrative regulation shall be open and
made available for public inspection at the office of the Public
Service Commission pursuant to applicable provisions of the code.
(o) At six month intervals, the commission will conduct public
hearings on a utility's past fuel adjustments. The commission will
order a utility to charge off and amortize, by means of a temporary
decrease of rates, any adjustments it finds unjustified due to
improper calculation or application of the charge or improper fuel
procurement practices.
(p) Every two years following the initial effective date of
each utility's fuel clause the commission in a public hearing will
review and evaluate past operations of the clause, disallow
improper expenses and to the extent appropriate reestablish the
fuel clause charge in accordance with other applicable provisions
of this code.
(q) The commission shall propose rules for legislative
approval in accordance with article three, chapter twenty-nine-a of
this code.
NOTE: The purpose of this bill is to allow natural gas
utilities to immediately recover increases in fuel costs which are
later reviewed by the Public Service Commission and subject to
refund if it is determined that the utility overstated its gas
costs.
Strike-throughs indicate language that would be stricken from
the present law, and underscoring indicates new language that would
be added.