Source: http://lis.virginia.gov/cgi-bin/legp604.exe?151+ful+SB1442
Timestamp: 2018-01-21 12:43:44
Document Index: 91824302

Matched Legal Cases: ['§ 10', '§ 10', '§ 10', '§ 111', '§ 1341', '§ 2', '§ 2', '§ 2', '§ 111', '§ 111', '§ 15', '§ 56', '§ 56', '§ 67', '§ 111']

15103723D
SENATE BILL NO. 1442 Offered January 23, 2015 A BILL to amend and reenact §§ 10.1-1186, 10.1-1308, and 56-585.1 of the Code of Virginia, relating to implementation of a federal Clean Air Act rule for existing power plants. ---------- Patrons-- Wagner and Chafin ---------- Referred to Committee on Agriculture, Conservation and Natural Resources ----------
1. That §§ 10.1-1186, 10.1-1308, and 56-585.1 of the Code of Virginia are amended and reenacted as follows:
§ 10.1-1186. General powers of the Department.
The Department shall have the following general powers, any of which the Director may delegate as appropriate:
1. Employ such personnel as may be required to carry out the duties of the Department;
2. Make and enter into all contracts and agreements necessary or incidental to the performance of its duties and the execution of its powers under this chapter, including, but not limited to, contracts with the United States, other states, other state agencies and governmental subdivisions of the Commonwealth;
3. Accept grants from the United States government and agencies and instrumentalities thereof and any other source. To these ends, the Department shall have the power to comply with such conditions and execute such agreements as may be necessary, convenient, or desirable;
4. Accept and administer services, property, gifts and other funds donated to the Department;
5. Implement all regulations as may be adopted by the State Air Pollution Control Board, the State Water Control Board, and the Virginia Waste Management Board;
6. Administer, under the direction of the Boards, funds appropriated to it for environmental programs and make contracts related thereto, but shall (i) refrain from expending funds to develop or implement a Clean Power State Implementation Plan (Plan) required under Clean Air Act § 111(d) for existing power plants until such time that federal judicial review as to the legality of a final U.S. Environmental Protection Agency rule has been fully resolved and (ii) not expend funds to implement a Plan until that Plan is approved by the Air Pollution Control Board;
7. Advise and coordinate the responses of state agencies to notices of proceedings by the State Water Control Board to consider certifications of hydropower projects under 33 U.S.C. § 1341;
8. Advise interested agencies of the Commonwealth of pending proceedings when the Department of Environmental Quality intervenes directly on behalf of the Commonwealth in a Federal Energy Regulatory Commission proceeding or when the Department of Game and Inland Fisheries intervenes in a Federal Energy Regulatory Commission proceeding to coordinate the provision of information and testimony for use in the proceedings;
9. Notwithstanding any other provision of law and to the extent consistent with federal requirements, following a proceeding as provided in § 2.2-4019, issue special orders to any person to comply with: (i) the provisions of any law administered by the Boards, the Director or the Department, (ii) any condition of a permit or a certification, (iii) any regulations of the Boards, or (iv) any case decision, as defined in § 2.2-4001, of the Boards or Director. The issuance of a special order shall be considered a case decision as defined in § 2.2-4001. The Director shall not delegate his authority to impose civil penalties in conjunction with issuance of special orders. For purposes of this subdivision, "Boards" means the State Air Pollution Control Board, the State Water Control Board, and the Virginia Waste Management Board; and
10. Perform all acts necessary or convenient to carry out the purposes of this chapter.
E. The Board shall not expend funds to develop or approve a Clean Power State Implementation Plan required under Clean Air Act § 111(d) for existing power plants until such time federal judicial review as to the legality of a final EPA rule has been fully resolved at law.
F. The Board shall not regulate or otherwise expend funds to implement a Clean Power State Implementation Plan (Plan) required under Clean Air Act § 111(d) for existing power plants until (i) both Senate and House of Delegates committees having jurisdiction over the federal Clean Air Act have, or an advisory committee appointed by these committees, have (a) affirmatively approved the Plan and (b) approved a report submitted by the State Corporation Commission on the impact of the Plan, including its affordability and reliability, on commercial and residential consumers and (ii) the State Corporation Commission finds that the Plan will guarantee full compliance with Federal Energy Regulatory Commission reliability standards.
6. To ensure the generation and delivery of a reliable and adequate supply of electricity, to meet the utility's projected native load obligations and to promote economic development, a utility may at any time, after the expiration or termination of capped rates, petition the Commission for approval of a rate adjustment clause for recovery on a timely and current basis from customers of the costs of (i) a coal-fueled generation facility that utilizes Virginia coal and is located in the coalfield region of the Commonwealth, as described in § 15.2-6002, regardless of whether such facility is located within or without the utility's service territory, (ii) one or more other generation facilities, (iii) one or more major unit modifications of generation facilities, or (iv) one or more new underground facilities to replace one or more existing overhead distribution facilities of 69 kilovolts or less located within the Commonwealth; however, subject to the provisions of the following sentence, the utility shall not file a petition under clause (iv) more often than annually and, in such petition, shall not seek any annual incremental increase in the level of investments associated with such a petition that exceeds five percent of such utility's distribution rate base, as such rate base was determined for the most recently ended 12-month test period in the utility's latest biennial review proceeding conducted pursuant to subdivision 3 and concluded by final order of the Commission prior to the date of filing of such petition under clause (iv). In all proceedings regarding petitions filed under clause (iv), the level of investments approved for recovery in such proceedings shall be in addition to, and not in lieu of, levels of investments previously approved for recovery in prior proceedings under clause (iv). Such a petition concerning facilities described in clause (ii) that utilize nuclear power, facilities described in clause (ii) that are coal-fueled and will be built by a Phase I utility, or facilities described in clause (i) may also be filed before the expiration or termination of capped rates. A utility that constructs any such facility shall have the right to recover the costs of the facility, as accrued against income, through its rates, including projected construction work in progress, and any associated allowance for funds used during construction, planning, development and construction costs, life-cycle costs, costs related to assessing the feasibility of potential sites for new underground facilities, and costs of infrastructure associated therewith, plus, as an incentive to undertake such projects, an enhanced rate of return on common equity calculated as specified below; however, in determining the amounts recoverable under a rate adjustment clause for new underground facilities, the Commission shall not consider, or increase or reduce such amounts recoverable because of (a) the operation and maintenance costs attributable to either the overhead distribution facilities being replaced or the new underground facilities or (b) any other costs attributable to the overhead distribution facilities being replaced. Notwithstanding the preceding sentence, the costs described in clauses (a) and (b) thereof shall remain eligible for recovery from customers through the utility's base rates for distribution service. A utility seeking approval to construct a generating facility shall demonstrate that it has considered and weighed alternative options, including third-party market alternatives, in its selection process. The costs of the facility, other than return on projected construction work in progress and allowance for funds used during construction, shall not be recovered prior to the date a facility described in clause (i), (ii), or (iii) begins commercial operation or new underground facilities are classified by the utility as plant in service. Such enhanced rate of return on common equity shall be applied to allowance for funds used during construction and to construction work in progress during the construction phase of the facility and shall thereafter be applied to the entire facility during the first portion of the service life of the facility. The first portion of the service life shall be as specified in the table below; however, the Commission shall determine the duration of the first portion of the service life of any facility, within the range specified in the table below, which determination shall be consistent with the public interest and shall reflect the Commission's determinations regarding how critical the facility may be in meeting the energy needs of the citizens of the Commonwealth and the risks involved in the development of the facility. After the first portion of the service life of the facility is concluded, the utility's general rate of return shall be applied to such facility for the remainder of its service life. As used herein, the service life of the facility shall be deemed to begin on the date a facility described in clause (i), (ii), or (iii) begins commercial operation or new underground facilities are classified by the utility as plant in service, and such service life shall be deemed equal in years to the life of that facility as used to calculate the utility's depreciation expense. Such enhanced rate of return on common equity shall be calculated by adding the basis points specified in the table below to the utility's general rate of return, and such enhanced rate of return shall apply only to the facility that is the subject of such rate adjustment clause. Allowance for funds used during construction shall be calculated for any such facility utilizing the utility's actual capital structure and overall cost of capital, including an enhanced rate of return on common equity as determined pursuant to this subdivision, until such construction work in progress is included in rates. The construction of any facility described in clause (i) is in the public interest, and in determining whether to approve such facility, the Commission shall liberally construe the provisions of this title. In determining whether to approve petitions for rate adjustment clauses for new underground facilities, and in determining the level of costs to be recovered thereunder, the Commission shall liberally construe the provisions of this title and shall give due consideration to the public policy goals of increased electric service reliability and reduced outage times associated with the replacement of existing overhead distribution facilities with new underground facilities. The basis points to be added to the utility's general rate of return to calculate the enhanced rate of return on common equity, and the first portion of that facility's service life to which such enhanced rate of return shall be applied, shall vary by type of facility, as specified in the following table:
In connection with planning to meet forecasted demand for electric generation supply and assure the adequate and sufficient reliability of service, consistent with § 56-598, planning and development activities for a new generating facility or facilities utilizing energy derived from offshore wind are in the public interest.
D. The Commission may determine, during any proceeding authorized or required by this section, the reasonableness or prudence of any cost incurred or projected to be incurred, by a utility in connection with the subject of the proceeding. A determination of the Commission regarding the reasonableness or prudence of any such cost shall be consistent with the Commission's authority to determine the reasonableness or prudence of costs in proceedings pursuant to the provisions of Chapter 10 (§ 56-232 et seq.). In determining the reasonableness or prudence of a utility providing energy and capacity to its customers from renewable energy resources, the Commission shall consider the extent to which such renewable energy resources, whether utility-owned or by contract, further the objectives of the Commonwealth Energy Policy set forth in §§ 67-101 and 67-102, and shall also consider whether the costs of such resources is are likely to result in unreasonable increases in rates paid by consumers and shall cap non-fuel rate increases associated with greenhouse gas regulations at 1.5 percent.
F. The Commission shall not allow electric generating units to be retired prior to the end of their engineering lifetime, as proposed in order to comply with a federal or state implementation plan authorized under § 111(d) of the federal Clean Air Act for existing power plants, unless the owners have fully recouped the cost of construction and financing, the replacement generation results in lower costs to consumers, and there is sufficient replacement capacity to meet dispatchable capacity of the unit to be retired.
G. The Commission shall not allow electric generating units to be retired prior to their engineering lifetime if the unit is necessary to maintain the grid reliability specified by the Federal Energy Regulatory Commission in its reliability standards.
H. The Commission shall require that existing electric generating units be operated in accordance with their design parameters and in such a manner as to ensure operation consonant with the design life of the unit.