SB 600 — Relating to powers and duties of PSC

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Red = new code to be enacted WEST virginia legislature regular session IntroducedCommittee Substitute for Senate Bill 600 By Senators Smith, Ferns, and Weld [Introduced[Originating Februaryin 19,the 2018;Committee on Energy, Industry, and Mining;

ReferredReported on February 23, 2018]     A BILL to amend and reenact §24-2-1j of the CommitteeCode onof Energy,West Industry,Virginia, 1931, as amended, relating to powers and Mining;duties of the Public Service Commission;

andestablishing thenspecial torates theand Committeeprovisions onfor Governmentenergy Organization]intensive Aindustrial BILL to amend and reenactmanufacturing §24-2-1jconsumers of theelectric Codepower; of West Virginia, 1931, as amended, relating to powers and duties of the Public Service Commission;

specialadding ratesnew anddefinitions; provisions for energy intensive industrial and manufacturing consumers of electric power;

newand definitions;establishing the procedure required for approval of these rates for manufacturing consumers by the commission.

and the procedure required for approval of these rates for manufacturing consumers by the commission.

(3) Energy intensive industrial and manufacturing consumers of electric power create jobs, provide a substantial tax basebase, and enhance the productive capacity, competitivenesscompetitiveness, and economic opportunities of West Virginia and all of its citizens;

(5) It is in the best interests of West Virginia, the citizens of West Virginia, electric public utilities in West Virginia, and all consumers of electric power in West Virginia, including residential customers, to encourage the continued development, construction, operation, maintenancemaintenance, and expansion in West Virginia of industrial and manufacturing plants and facilities which are energy intensive consumers of electric power, thereby increasing the creation, preservationpreservation, and retention of jobs, retaining and expanding the tax base, helping keep power rates low for all consumers of electric power, and enhancing the productive capacity, competitivenesscompetitiveness, and economic opportunities of all citizens of West Virginia and;

(6) To encourage the continued development, construction, operation, maintenancemaintenance, and expansion in West Virginia of industrial and manufacturing plants and facilities which are energy intensive consumers of electric power, the commission may accept special contracts and establish special rates and other supply arrangements under this section that in its judgment are necessary or appropriate for the continued, newnew, or expanded operation of energy intensive industrial and manufacturing consumers and that can reasonably be expected to support the long-term operation of energy intensive industrial and manufacturing consumers, and that do not impose an unreasonable burden upon electric public utilities or their other customers.

(1) “Energy intensive industrial and manufacturing consumer” means an industrial or manufacturing facility, plantplant, or enterprise located or to be located in West Virginia that has an actual demand in the past 12 months, or or a projected contract demand of at least fifty thousand 10,000 kilowatts of electric power at its West Virginia facilitiesfacilities, and the cost of electricity consumed in the industrial or manufacturing process constitutes at least 10 percent of the cost of production under normal operating conditions.

In setting a special rate by reference to fluctuations in market prices for the goods and products produced by an energy intensive industrial or manufacturing consumer of electric power, the commission may establish variable rates including, but not limited to, ceilings and floors on the special rate, banking or crediting mechanisms, caps, limitslimits, or other similar types of safeguards that are intended by the commission, in its reasonable judgment, to provide appropriate flexibility and predictability in the special rate over time, to permit the energy intensive industrial or manufacturing consumer customer the ability to make the capital investments and other commitments necessary to support the continued operation of the facility.

If the utility may implement the provisions of the agreement pursuant to the provisions of subsections§24-2-1j(f) (f) and (h)§24-2-1j(h) of this section. code. Nothing herein limits the legal rights of the energy intensive industrial or manufacturing consumer if the negotiations are unsuccessful.

Nothing herein limits the legal rights of the energy intensive industrial or manufacturing consumer if the negotiations are unsuccessful.

(5) Provide reasonable evidence that, with the special rate, the energy intensive industrial or manufacturing consumer intends to operate the industrial or manufacturing facility or facilities in West Virginia for an extended period of time, and that the operation or continued operation of the industrial or manufacturing facility or facilities for an extended period of time appears economically viable, under reasonable assumptions and projections regarding the market in which the energy intensive industrial or manufacturing consumer operates and regarding the operation of the industrial or manufacturing facility or facilities;

and (6) Provide information and data setting forth how the energy intensive industrial or manufacturing consumer meets the qualifications of this section, and how the special rate advances the policy goals set forth in subsection§24-2-1j(a) (a) of this section.code.

If the commission takes no action during the 60-day review period to further suspend the effectiveness by setting the agreement for hearing, the rates and any other provisions set forth in the agreement shall be considered reasonable and may be implemented by the utility. utility. The special rate or special contract may not provide any discount on the variable cost recovery component that the utility would have received under the applicable tariff rates for which the consumer would otherwise qualify (g) If the commission determines that:

The special rate or special contract may not provide any discount on the variable cost recovery component that the utility would have received under the applicable tariff rates for which the consumer would otherwise qualify.

(g) If the commission determines that:

The allocated share shall be calculated by the affected public utility, subject to the approval of the commission A utility entering into a special rate or special contract under the provisions of subsection§24-2-1j(f) (f) of this sectioncode may not seek recovery outside of a general rate proceeding filed pursuant to Rule 42 of the commission's rules for the construction and filing of tariffs of any revenue differential attributable to the difference between the fixed cost recovery component of the special rate or special contract and the fixed cost recovery component of the applicable approved tariff rate for which the consumer would otherwise qualify.

(h) The commission shall include in the annual report to the Legislature which it makes pursuant to subsection (d), section one, article one of this chapter a report on the tax credits being employed pursuant to article thirteen-cc, chapter eleven of this code to help fund special rates created under this section section A special rate or special contract under this subsection related to existing electrical load of the consumer shall become effective 60 days after the filing of the agreement with the commission under its Rules,rules, unless upon review the commission finds cause within the 60-day period to suspend the effectiveness of the agreement and sets the agreement for further consideration or hearing.

(i) A utility entering into a special rate or special contract under subsection§24-2-1j(h) (h) of this sectioncode shall recover in a timely manner the revenue differential attributable to the difference between the special rate or special contract and the rates previously applicable to the consumer in a general rate proceeding, a special purpose rate proceeding, or other proceeding specific to the special rate or special contract.

(j) Notwithstanding the capacity limit for energy intensive industrial or manufacturing consumers set forth in subsection§24-2-1j(b)(1) (b)(1) of this section,code, individual consumers with capacities less than 10,000 kilowatts and for which the cost of electricity consumed in the industrial or manufacturing process constitutes at least 10 percent of the cost of production under normal operating conditions may qualify for a special rate or special contract under this subsection provided that the aggregate capacity for consumers participating in a special rate or special contract under this subsection (j) of this section does not exceed 20,000 kilowatts for affiliated regulated utilities operating in West Virginia.

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