A Tale of Two Bills Or — We Need Least Cost Planning Now More than Ever

Sen. Dan Foster (D-Kanawha) introduced Senate Bill 162 on January 12.  Senate Judiciary Committee chairman Sen. Corey Palumbo has yet to put the bill on his committee’s agenda for a vote.  You can read Sen. Foster’s original version of SB162 here.

SB162 would require the WV PSC to require all WV electric companies to submit least cost plans, also known as integrated resource plans, every two years.  The 1992 federal energy policy act states that the purpose of least cost planning is to provide “adequate and reliable service to its electric customers at the lowest system cost.”  Here is a good explanation of how this system works and why it is needed here in WV to keep our electric rates from rising as rapidly as they have in the last five years.

Currently, the WV PSC has no mechanism for analyzing or comparing alternatives when a power company requests a rate increase.  The power company comes in, tells the PSC what its costs were and how much it wants in rate increases.  In 27 other states, PSCs can compare the power companies’ costs with the cost/benefit analysis they provided in their least cost plans and use that comparison in making rate decisions.

The power companies prepare the least cost plans which are used only for informational purposes.  They are not required to follow the plan, but the plans are used by the PSC as guidance or comparison in rate cases.

Well, the power company lobbyists have freaked out over this bill.  They wanted to drop most of the important elements of the original bill.  They wanted to cut any public involvement in development or approval of the plan.  They wanted to drop the requirement that the PSC approve the power companies’ plans.  They wanted to eliminate all reference to the requirement that power companies had to identify the combination of resources with “the lowest system cost” as defined in the federal law.  In other words, they wanted to gut the bill and make it entirely meaningless.  That was no surprise.

Sen. Palumbo has not yet put any version of SB162 before his committee, despite the fact that Energy Efficient WV has made a number of concessions and the power companies have made NONE.

Compare the over one month delay in moving SB162 and the well lubricated HB4350 referred to in the previous post.  AEP’s bubble bond bill has the skids greased with sponsors from the House leadership.  It appears that a companion bill in the Senate is also sponsored by the full Senate leadership.

If any aspect of the deeply flawed bubble bond bill passes, WV rate payers will need SB162 more than ever as the PSC’s only tool for holding down electric rates.  The bubble bond bill will hide power company rate increases behind a complicated borrowing process that will insulate the power companies’ outrageous fuel costs from public scrutiny.  Power companies’ bad decisions will pass rapidly into the bubble bond black box with its hidden fees and “adjustments.”  Only least cost planning will force power companies to show the PSC and rate payers what goes into that black box.

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