Justice Enacts Fossil Fuel Bills, Lets Solar Bill Become Unsigned Law | Energy and environment
Governor Jim Justice signed bills intended to help the coal, oil and gas industries while allowing a solar-friendly bill to become law without his signature.
The justice enacted Senate Bill 542 on Wednesday, which requires coal-fired power plants owned by electric utilities to maintain at least 30 days of contracted coal supply over the life of those plants.
The bill requires electric utilities to notify the West Virginia Office of Homeland Security and Emergency Management, the State Civil Service Commission and the Joint Committee of the Legislature on Government and finances before announcing the proposed withdrawal or closure of a power generation unit.
SB 542, which was passed by the Legislature with support from the West Virginia Coal Association and the United Mine Workers of America, is a gutted version of the original bill that would have brought in far-reaching reforms to maintain the West Virginia’s declining coal-fired power plant fleet in operation. as long as possible. These reforms included the requirement for power producers in the state to maintain 2019 coal consumption levels and to file compliance plans every three years with the state energy authority. State, long dormant, detailing their fuel supply and how 2019 coal consumption levels would be maintained.
The original version of the bill required a 90-day supply, but the required supply has been shortened to approximate what representatives from Appalachian Power, FirstEnergy and Dominion Energy previously told the Senate Committee on energy, industry and mining which they currently maintain under contract.
The judiciary also enacted Senate Bill 718, which changes the coal departure tax rebate program approved in 2019, designed to encourage economic development in the coal industry.
SB 718 extends the base period for the calculation of the coal departure tax refund, instituting a base period comprising the previous five years for the calculation of the discounts instead of the current base period of the year of Taxation 2018 or the second year of a two-year period for an eligible. rebate recipient which produced coal for only two years before investing in new machinery and equipment.
The 2019 law provided for tax reduction possibilities for coal companies that made a qualifying capital investment demonstrated by purchasing new equipment, real estate and declaring an increase in the number of employees.
SB 718 requires that there be an increase in coal production and the number of full-time employees at all of the taxpayer’s mines in order to qualify for the tax refund. It also expands the eligibility for rebates to investments in the repair and refurbishment of coal-fired equipment. Previous legislation only allowed discounts for investments in new equipment.
At the committee meeting that initiated the bill in March, counsel for the Senate Finance Committee noted that the bill came at the behest of the governor’s office after several months of negotiations with representatives of industry.
Bill 2581, which changes the methodology for valuing production from oil and natural gas wells, also became law on the stroke of the pen of justice, leaving the state tax department limited latitude to propose rules for approval by a legislative committee.
The new law directs the Department of Taxation to propose emergency rules by July 1 on the valuation of properties producing oil, natural gas and / or natural gas liquids while providing for a tax on profits net by defining the net proceeds for petroleum and natural gas as actual gross revenue based on sales volume less royalties and operating costs for expenses, including lease operations, lifting, compression, processing and transport.
The Senate Judiciary Committee removed this methodology from the bill, but the entire Senate reinstated it.
Some members of the House and Senate had expressed concerns about an estimate by the Taxation Department that the original bill that saw county school boards and boards absorb a loss of $ 9 million in property tax revenue. during the first full year of effect.
A push for the bill was a 2019 state Supreme Court of Appeal ruling in which the court found in part that the Tax Department improperly imposed a cap on operating expense deductions. gas wells.
Becoming Law Without Justice’s Signature was legislation designed to encourage retail customer investment in solar energy by exempting solar power purchase agreements from the jurisdiction of the State Civil Service Commission. .
House Bill 3310 clarifies that solar power installations located and designed to meet only the electrical needs of a retail electrical customer’s premises do not constitute a utility, nor is production subject to contract. purchase of electricity with the retail electric customer.
Under a power purchase agreement, a developer arranges the design, licensing, financing, and installation of a solar power system on a customer’s property with little or no fresh.
The customer purchases the power generation of the system from the solar service provider for a predetermined period of time at a fixed rate, usually lower than the local utility’s retail rate, while the solar service provider obtains tax credits and income on electricity sales.
The bill’s exemption from power purchase agreements from the jurisdiction of the State Civil Service Commission would be conditional. A condition would be that the set of all power purchase agreements and net metering agreements for any utility do not exceed a cap of 3% of aggregate peak demand from utility customers in the state. during the previous year.
This cap already exists for net metering, a billing mechanism that credits customers who generate their own electricity from solar power to return electricity they are not using back to the grid.
Another condition sets the limits for individual customers’ on-site generators so that solar power installations meet only the electrical needs of the retail electrical customer’s premises, not to exceed 25 kilowatts for residential customers, 500 kilowatts for commercial customers and 2000 kilowatts for industrial customers.
The bill does not contain any provision relating to the tax credit and does not provide for any state subsidy.
The justice also promulgated a bill to create a cost reduction program to reduce energy consumption in state buildings.
Bill 2667 aims to reduce energy use in all state buildings by 25% from 2018 levels by 2030. The bill also requires annual reports to the Assembly legislation on the energy performance of buildings compared to similar buildings in similar climates. Under the bill, the West Virginia Office of Energy is expected to audit at least 20% of energy meters in state buildings each year so that all devices are audited by the end of 2026. .
The legislation directs the state to establish an energy efficiency measurement and benchmarking program for all state buildings by July 1. The bill also requires the state to compile and submit energy consumption data for all buildings in the state for benchmarking administered by the United States Environmental Protection Agency. tool before October 1 and again each following year.
Energy benchmarking involves measuring the energy use of a building and comparing it to the energy consumption of similar buildings.
The net benefit to the state from the bill would be a 9-to-1 return on investment, according to a state Department of Commerce estimate projecting a five-year project cost of $ 300,000.