The WVMA and its members oppose HB 2959 and similar bills that legislate accelerated surcharge ratemaking to the economic harm of manufacturing and consumers of electricity. Specifically:   

• HB 2959 is unnecessary as the utilities can meet their environmental compliance obligations as they always have—making the investments and seeking cost recovery in a full Base Rate case; they have never been denied environmental compliance cost recovery via traditional regulation as far as we are aware.

• HB 2959 and other bills legislating surcharge cost recovery accelerate rate increases for manufacturing and industrial ratepayers, and thus make them less competitive. This makes the state’s ability to retain and attract manufacturing investment more challenging and places good jobs at risk to the detriment of the WV economy.  

• By allowing the utilities to receive accelerated cost recovery through a shortened process, ratepayers lose the protections of a traditional, fully litigated Base Rate case, where investment costs by the utility may be offset by other expenses that have decreased and/or revenues that have increased.  With a narrow, limited surcharge cost recovery process, ratepayers lose the right to evaluate those potential cost offsets.

• HB 2959 and its accelerated surcharge cost recovery shifts the risk of investment from the utility and its shareholder to ALL ratepayers, including manufacturing and industry, small businesses, and home energy consumers.  It shifts this risk BEFORE the investment provides a benefit or service to consumers. Traditional regulation requires the utility demonstrate that its investment is “used and useful” before the cost can be recovered from ratepayers. HB 2959 removes this important consumer protection. 

The WVMA believes that if ratepayer protections are going to be systematically stripped away for the benefit and protection of utility shareholders, it becomes more critical to allow manufacturing and industry to access competitive power supplies from the PJM market and third-party power suppliers in West Virginia, rather than be captive to monopoly utilities without the protections afforded by the traditional regulatory model. 

Given its negative effects on the manufacturing industry, HB 2959 is among legislation which is being tracked and scored by the WVMA for its Legislative Scorecard. 

If you have questions about this legislation or the WVMA position, please email rebecca@wvma.com or call 304-767-5189.