Opinion ID: 1406402
Heading Depth: 2
Heading Rank: 1

Heading: NedPower is a Public Utility

Text: The appellees describe NedPower time and again as being an EWG and its PSC certificated wind-powered electric generating facilities as being an EWG project. [5] EWG, the first letters of exempt wholesale generator, is derived from the Energy Policy Act adopted by Congress in 1992. According to National Association of Regulatory Utility Commissioners v. Securities & Exchange Commission, 63 F.3d 1123 (D.C.Cir.1995),the Energy Policy Act's purpose was to encourage stead[y] increases [in] U.S. energy security in cost effective . . . ways by us[ing] the market rather than government regulation wherever possible both to advance energy security goals and to protect consumers. In order to facilitate the development of a competitive market for wholesale electric power, Congress amended the [Public Utility Holding Company Act of 1935] to make it easier for holding companies to invest in an exempt wholesale generator or EWG, which is defined as any person . . . exclusively in the business of owning or operating . . . all or part of one or more eligible facilities and selling electric energy at wholesale. An eligible facility is in turn defined to mean a facility that is either used for the generation of electric energy exclusively for sale at wholesale, or . . . used for the generation of electric energy and leased to one or more public utility companies. . . . Because Congress viewed the [Public Utility Holding Company Act's] limitations on corporate structures as stifling [to] the growth of independent power, the 1992 amendments exempted EWGs from all provisions of [the Public Utility Holding Company Act]. The amendments also ease the restrictions on companies that wish to invest in EWGs. National Assoc. of Reg. Commr's, 63 F.3d at 1125 (internal citations omitted) (emphasis added.) This is not the first time that an EWG has been before the Court, yet neither parties nor the Court made any reference to the earlier case, that of Affiliated Construction Trades Foundation v. Public Service Commission of West Virginia, 211 W.Va. 315, 565 S.E.2d 778 (2002). While there are a number of facets to that case, the most significant holding of the majority for purposes of this case was that Big Sandy, the corporation at issue therein, was, a public utility despite the fact that the PSC had decided that it was not. Big Sandy, like NedPower, intended to generate electricity solely for the wholesale market. The majority in Affiliated Trades disagreed with the PSC's and Big Sandy's contentions that Big Sandy was not a public utility, stating: Big Sandy has represented that it will produce electricity which which will be transmitted to AEP for eventual sale to the public. West Virginia Code § 24-2-1 specifically states that one engaged in the generation of electric power is subject to PSC jurisdiction, whether the service is provided directly or through a distributing utility. We note also that any entity engaged in any business, whether herein enumerated or not, which is, or or shall hereafter be held to be, a public service constitutes a public utility under West Virginia Code § 24-1-2, as quoted above. That is an inclusive definition. We conclude that electric generation and transmission facilities intended solely for the sale of electricity on the wholesale market are within the statutory definition of a public utility set forth in West Virginia Code § 24-2-1 whenever it appears that the electricity produced will, in the course of distribution, ultimately be sold to the public. Accordingly, we find that the PSC determination that Big Sandy is not a public utility was erroneous as a matter of law. Affiliated Trades, 211 W.Va. at 322, 565 S.E.2d at 785 (footnote omitted) (emphasis added). To the majority in Affiliated Trades, if the electricity generated by a facility will ultimately be sold to the public, the facility is a public utility. It was of no consequence to the majority that the public may be situate entirely out of State. Furthermore, the extent of the PSC's regulation of the facility did not enter into the Court's decision. Thus, by operation of the Affiliated Trades case, upon receipt of its certificate of convenience and necessity from the PSC on April 2, 2003, NedPower became a public utility subject to the full jurisdiction of the PSC to regulate its service, practices and rates under the provisions of Chapter 24 of the West Virginia Code. Some three months after the PSC order, specifically on July 1, 2003, legislation was enacted, which, in amending W. Va.Code § 24-2-1, converted NedPower's certificate of convenience and necessity (issued by the PSC on April 2, 2003), into a siting certificate for its EWGs and declared in effect, insofar as here relevant, that except for certain delineated continuing jurisdiction of the PSC over the certificate issued to it, NedPower's wind-power-driven electric generators would not be subject to the jurisdiction of the [PSC] or to the provisions of [Chapter 24 of the West Virginia Code] with respect to such facilit[ies] except for the making or constructing of a material modification thereof as provided in subdivision (5) of this subsection [ (c) of W. Va.Code 24-2-1]. See W. Va.Code 24-2-1(c)(1). Thus, according to the 2003 legislation, specifically W. Va.Code § 24-2-1(c)(1) and (2), and W. Va.Code § 24-2-11c(e), (f) and (h), an EWG is subject to the PSC's jurisdiction and regulation with respect to the siting of its electric generating facilities, the making or constructing of a material modification thereof after the siting has been certificated, and considering and resolving complaints relating to compliance with, and the enforcing of, the material terms and conditions of the PSC order issuing the siting certificate. Significantly, the 2003 legislation did not nullify the majority's holding in Affiliated Trades that an EWG is a public utility, and, in my opinion, it did not implicitly do so. Rather, the legislation simply lessened the PSC's authority to regulate an EWG under the provisions of Chapter 24 of the West Virginia Code. Whether an entity such as NedPower, an EWG, is or is not a public utility is not determined by the extent of the PSC's statutory authority to regulate it, but rather, as the Court held in Affiliated Trades, whether its sale of electricity in the wholesale market will, in the course of distribution, ultimately be sold to the public, regardless of where that public may be located. It is therefore my opinion that NedPower is a public utility herein even though the Majority and the parties assumed that it is not.