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2016 SESSION

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SB 748 Economic Development Infrastructure Act of 2016; acquisition of utility right of way.

Introduced by: Frank W. Wagner | all patrons    ...    notes | add to my profiles | history

SUMMARY AS ENACTED WITH GOVERNOR'S RECOMMENDATION:

Economic Development Infrastructure Act of 2016. Authorizes an electric or natural gas public utility to conduct an Economic Development Program (Program). Under such a Program, the utility is authorized to acquire utility right-of-way for a qualified economic development site. The measure establishes criteria for the Virginia Economic Development Partnership Authority to certify that a site is a qualified economic development site. The State Corporation Commission (SCC) is authorized to approve a proposal for a Program that satisfies certain conditions, including a finding that implementation of the Program will provide significant economic development benefits that might not otherwise be attained absent its approval. A utility's capital investment is capped at $10 million in the aggregate of all of the utility's Programs and at $5 million for any specific qualified economic development site. The SCC shall approve, or approve with appropriate modifications, a proposed Program if the proposed Program authorizes (i) a natural gas utility to recover costs incurred in implementing the Program through a supplemental surcharge paid only by its retail customers at the qualified economic development site that connect to natural gas line extensions installed in utility right-of-way or other interests in real property acquired through the Program or (ii) an electric utility to recover its transmission-related costs incurred in implementing the Program through a rate adjustment clause pursuant to existing provisions that address recovery of transmission expenses. The SCC shall not approve a Program proposed by a natural gas utility unless it finds that the associated charges resulting from implementation of the Program will not impact the rates of customers other than customers receiving service at the qualified economic development site. A Program shall not have as its primary purpose the conversion of propane customers to natural gas or electricity. The measure does not authorize a natural gas utility or any firm, corporation, company, or partnership that is organized for the bona fide purpose of operating as a natural gas company to acquire utility right-of-way for or in furtherance of an interstate natural gas pipeline or related infrastructure. The measure does not change any existing law governing electric utility ratemaking and cost recovery and provides that if an electric utility files a plan, any cost recovery shall be in accordance with existing law governing electric utility ratemaking and cost recovery. The bill contains a reenactment clause.

SUMMARY AS PASSED:

Economic Development Infrastructure Act of 2016. Authorizes an electric or natural gas public utility to conduct an Economic Development Program (Program). Under such a Program, the utility is authorized to acquire utility right-of-way for a qualified economic development site. The measure establishes criteria for the Virginia Economic Development Partnership Authority to certify that a site is a qualified economic development site. The State Corporation Commission (SCC) is authorized to approve a proposal for a Program that satisfies certain conditions, including a finding that implementation of the Program will provide significant economic development benefits that might not otherwise be attained absent its approval. A utility's capital investment is capped at $10 million in the aggregate of all of the utility's Programs and at $5 million for any specific qualified economic development site. The SCC shall approve, or approve with appropriate modifications, a proposed Program if the proposed Program authorizes (i) a natural gas utility to recover costs incurred in implementing the Program through a supplemental surcharge paid only by its retail customers at the qualified economic development site that connect to natural gas line extensions installed in utility right-of-way or other interests in real property acquired through the Program or (ii) an electric utility to recover its transmission-related costs incurred in implementing the Program through a rate adjustment clause pursuant to existing provisions that address recovery of transmission expenses. The SCC shall not approve a Program proposed by a natural gas utility unless it finds that the associated charges resulting from implementation of the Program will not impact the rates of customers other than customers receiving service at the qualified economic development site. A Program shall not have as its primary purpose the conversion of propane customers to natural gas or electricity. The measure does not authorize a natural gas utility or any firm, corporation, company, or partnership that is organized for the bona fide purpose of operating as a natural gas company to acquire utility right-of-way for or in furtherance of an interstate natural gas pipeline or related infrastructure. The measure does not change any existing law governing electric utility ratemaking and cost recovery and provides that if an electric utility files a plan, any cost recovery shall be in accordance with existing law governing electric utility ratemaking and cost recovery.

SUMMARY AS PASSED SENATE:

Economic Development Infrastructure Act of 2016. Authorizes an electric or natural gas public utility to conduct an Economic Development Program (Program). Under such a Program, the utility is authorized to acquire utility right-of-way for a qualified economic development site. The measure establishes criteria for the Virginia Economic Development Partnership Authority to certify that a site is a qualified economic development site. The State Corporation Commission (SCC) is authorized to approve a proposal for a Program that satisfies certain conditions, including a finding that implementation of the Program will provide material economic development benefits that might not otherwise be attained absent its approval. A utility's capital investment is capped at $10 million in the aggregate of all of the utility's Programs and at $5 million for any specific qualified economic development site. The Commission's approval of a proposed Program authorizes the utility to recover costs incurred in implementing the Program through a rate adjustment clause. The SCC's approval is contingent on finding that the associated charges resulting from implementation of the Program will not in the aggregate impact an average residential consumer by more than one dollar on an annual basis. The measure does not permit a utility to convert existing retail propane customers to electric or natural gas.

SUMMARY AS INTRODUCED:

Economic Development Infrastructure Act of 2016. Directs the State Corporation Commission (SCC) to establish a program under which any public utility providing electric, natural gas, water, or sewer services to retail customers in the Commonwealth is authorized to offer special rates and services to customers under a supplemental rate schedule in order to encourage the location of significant economic development projects in the Commonwealth and to allow the utility to fully recover from the customer over the duration of the contract its capital investment, fees, expenses, costs, and other charges. The terms of the financing of any project are required to be set out in a contract that will be effective only if approved by the SCC. Under the program, a utility's total capital investment in facilities is limited to $10 million in the aggregate and to $1 million for any specific contract. The purpose of the program is to authorize a utility to use its own funds to finance the extension of transmission lines, distribution lines, or service laterals and related facilities to economic development sites in the Commonwealth at no upfront cost to the customer and to provide for the utility's recovery of its costs of such a project through a separate charge.