creation; findings; expedited process; requirements; rulemaking.
(a) The Legislature hereby finds that:
(1) West Virginia is rich in energy resources, which provide many advantages to the state, its
economy and its citizens;
(2) West Virginia is experiencing significant growth in the natural gas industry with the
development of the Marcellus and Utica shale;
(3) West Virginia's abundant natural gas reserves have created, and will continue to create,
many benefits to the state and its citizens;
(4) Growth in the natural gas industry and its accompaanying benefits require West Virginia
to be proactive and increase the focus on the natural gas infrastructure in this state in order
for those benefits to flow to the state and its citizenls, including those citizens in areas
unserved or underserved by natural gas utilities;
(5) A comprehensive program of replacing, upgrading and expanding infrastructure by
natural gas utilities at reasonable cost to ratepayers will benefit the customers of the natural
gas utilities, the public in West Virginia and the economy of the state, as a whole;
(6) A natural gas utility infrastructure program will create jobs, provide for continued and
enhanced safety and reliability of aging natural gas infrastructure, provide for more
economic natural gas utility service, and provide natural gas utility service to new customers
in areas of the state that are unserved or underserved; and
(7) Natural gas utility infrastructure programs involve the investment of capital and the
incurrence of associated incremental costs. Accordingly, in order for the natural gas utility
undertaking those infrastructure programs to attract the necessary capital, the natural gas
utility should be permitted to recover the incremental rate of return, related income taxes,
depreciation and property taxes associated with the infrastructure programs commencing
with the implementation of an infrastructure program approved by the commission without
waiting for a full base rate tariff filing as more fully described in subsection (f) of this
section.
(b) Natural gas utilities may file with the commission an application for a multi-year
comprehensive plan for infrastructure replacements, upgrades and extensions. Subject to
commission review and approval, a plan may be amended and updated by the natural gas
utility as circumstances warrant. The recovery of costs in support of the plans shall be
allowed in the manner set forth in this section if the proposed plans have been found to be
prudent and useful.
(c) The application is in lieu of a proceeding pursuant to section eleven of this article and
shall contain the following:
(1) A description of the infrastructure program, in such detail as the commission prescribes,
and the projected annual amount (in approximate line sizes and feet), general location, type,
and projected installation timing of the facilities that the applicant proposes to replace,
construct and/or improve;
(2) The projected net cost, on an annual basis, of the replacement, construction or
improvements; e
(3) The projected starting date for the infrastructure program;
(4) The projected numbers of potential new customers, if any, thuat may be served by the
infrastructure program and the projected annual load of the customers;
(5) The projected cost of debt for the infrastructure program funding and the projected
capital structure for infrastructure program funding; a
(6) Testimony, exhibits or other evidence that demolnstrates the need for the replacement,
construction or improvement of facilities in order to provide and maintain adequate,
efficient, safe, reliable and reasonable natural gas service;
(7) A proposed cost recovery mechanism consistent with this section; and
(8) Other information the applicant considers relevant or the commission requires.
(d) Upon filing of the application, the applicant shall publish, in the form the commission
directs, which form shalLl include, but not be limited to, the anticipated rates and, if any, rate
increase under the proposal, by average percentage and dollar amount for customers within
a class of service, as a Class I legal advertisement in compliance with the provisions of
article three, chapter fifty-nine of this code, the publication area to be each county in which
service is provided by the natural gas utility, a notice of the filing of the application and that
the commission shall hold a hearing on the application within ninety days of the notice;
unless no opposition to the rate change is received by the Public Service Commission within
one week of the proposed hearing date, in which case the hearing can be waived, and issue a
final order within one hundred fifty days of the application filing date. However, if the
proposed infrastructure program includes a request for extension of infrastructure into an
unserved area and another natural gas utility files to extend service to the same area, the
commission may move that extension request of each natural gas utility into separate
proceedings to be considered concurrently and extend the time period for issuing a final
order on that portion of the proposed programs beyond the one hundred fifty days.
(e) Upon notice and hearing, if required by the commission, the commission shall approve
the infrastructure program and allow expedited recovery of costs related to the expenditures
as provided in subsection (f) of this section if the commission finds that the expenditures and
the associated rate requirements are just, reasonable, not contrary to the public interest and
will allow for the provision and maintenance of adequate, efficient, safe, reliable and
reasonably priced natural gas service.
(f) Upon commission approval, natural gas utilities will be authorized to implement the
infrastructure programs and to recover related incremental costs, net of contributions to
recovery of return and depreciation and property tax expenses directly attributable to the
infrastructure program provided by new customers served by the infrastructure program
investments, if any, as provided in the following: e
(1) An allowance for return shall be calculated by applying a rate of return to the average
planned net incremental increase to rate base attributable to the infrastructure program for
the coming year, considering the projected amount and timing ouf expenditures under the
infrastructure program plus any expenditures in previous years of the infrastructure
program. The rate of return shall be determined by utilizingt the rate of return on equity
authorized by the commission in the natural gas utility's most recent rate case proceeding or
in the case of a settled rate case, a rate of return on equity as determined by the
commission, and the projected cost of the natural gas utility's debt during the period of the
infrastructure program to determine the weighted cost of capital based upon the natural gas
utility's capital structure. s
(2) Income taxes applicable to the return allowed on the infrastructure program shall be
calculated for inclusion in rates. g
(3) Incremental depreciation and property tax expenses directly attributable to the
infrastructure program shall be estimated for the upcoming year.
(4) Following commission approval of its infrastructure program, a natural gas utility shall
place into effect rates that include an increment that recovers the allowance for return,
related income taxes, depreciation and property tax expenses associated with the natural
gas utility's estimated infrastructure program investments for the upcoming year, net of
contributions to recovery of those incremental costs provided by new customers served by
theW infrastructure program investments, if any, ("incremental cost recovery increment"). In
each year subsequent to the order approving the infrastructure program and an incremental
cost recovery increment, the natural gas utility shall file a petition with the commission
setting forth a new proposed incremental cost recovery increment based on investments to
be made in the subsequent year, plus any under-recovery or minus any over-recovery of
actual incremental costs attributable to the infrastructure program investments, for the
preceding year.
(g) The natural gas utility may make any accounting accruals necessary to establish a
regulatory asset or liability through which actual incremental costs incurred and costs
recovered through the rate mechanism are tracked.
(h) Natural gas utilities may defer incremental operation and maintenance expenditures
attributable to regulatory and compliance-related requirements introduced after the natural
gas utility's last rate case proceeding and not included in the natural gas utility's current
base rates. In a future rate case, the commission may allow recovery of the deferred costs
amortized over a reasonable period of time to be determined by the commission provided the
commission finds that the costs were reasonable and prudently incurred and were not
reflected in rates in prior rate cases.‹ Prev All West Virginia sections Next ›
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