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2023 SESSION

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23101229D
HOUSE BILL NO. 1480 Offered January 11, 2023 Prefiled December 30, 2022 A BILL to direct the establishment of a pilot program for customer exemptions in energy-intensive trade-exposed industries. ---------- Patron-- Ware ---------- Referred to Committee on Commerce and Energy ----------

Be it enacted by the General Assembly of Virginia:

1. § 1. Notwithstanding any other provision of law, the State Corporation Commission (the Commission) shall establish, implement, and manage a pilot program under which energy-intensive trade-exposed industries are exempt from all or a portion of non-bypassable charges related to the requirements of §§ 56-585.1:11 and 56-585.5 of the Code of Virginia. For the purposes of this act, "energy-intensive trade-exposed industries" or "EITE industries" means large private-sector manufacturing companies, classified within North American Industry Classification System Sector 31-33, that are constrained in their ability to pass through costs related to a transition to generation of electricity from renewable sources due to domestic or international competition, that engage in importation of products that cause emission leakage, or that have fixed-price manufacturing contracts for the federal government. The pilot program shall be subject to the following terms, conditions, and restrictions:

1. The pilot program shall be designated as the EITE Pilot Program and shall be designed to exempt eligible customers within EITE industries from all or a portion of the non-bypassable charges imposed pursuant to the requirements of §§ 56-585.1:11 and 56-585.5 of the Code of Virginia by a Phase I or Phase II Utility. The Commission may consider the proposed American Clean Energy and Security Act of 2009 and other relevant programs as guidance in establishing the parameters for the EITE Pilot Program. For the purposes of the EITE Pilot Program, "Phase I Utility" means an investor-owned utility that was not bound by a rate case settlement adopted by the Commission that extended in its application beyond January 1, 2002, other than a utility described in subsection G of § 56-580 of the Code of Virginia, and "Phase II Utility" means an investor-owned utility that was bound by a rate case settlement adopted by the Commission that extended in its application beyond January 1, 2002.

2. The EITE Pilot Program shall commence no later than January 1, 2024, and the initial aggregate customer load for eligible customers shall not exceed 150 megawatts for a Phase I Utility and 200 megawatts for a Phase II Utility, based on each customer's load during the calendar year preceding the date when the customer is accepted into the EITE Pilot Program.

3. The Commission shall accept petitions by eligible customers to participate in the EITE Pilot Program during a 60-day application period following its commencement. The Commission shall allow participation in the program based on a showing and determination that such participation would further the public interest in job creation or retention or other economic benefits to the Commonwealth, taking into consideration the impact of the program on charges to nonparticipating customers, as well as the benefits to nonparticipating customers of retaining the EITE applicant load in the rate base and the benefits of retaining the EITE applicant load in the tax base for state and local governments. The Commission, in its discretion, may allow partial or full exemption from the applicable non-bypassable charges for a qualifying customer and may allow such exemption for a portion or all of the qualifying customer's electric load, based the customer's load during the most recent calendar year preceding the date at which the customer is accepted into the EITE Pilot Program, and as thereafter updated on an annual basis. The Commission shall rule upon such petitions within four months of the termination of the application period and may provide further application periods subject to the EITE Pilot Program's participation cap.

§ 2. On or before March 31, 2025, and annually thereafter, the Commission shall submit a report and make recommendations to the Governor and to the Chairs of the House Committee on Commerce and Energy and the Senate Committee on Commerce and Labor, or to the Chairs of any successor committees, regarding the status of the EITE Pilot Program.

§ 3. Any customer served by a competitive service provider pursuant to § 56-577 of the Code of Virginia shall not be eligible to participate in the EITE Pilot Program. However, the parameters of the EITE Pilot Program shall provide that the Commission may waive any advance notice requirements for any such customer to return to full requirements service from a Phase I Utility or a Phase II Utility, if the Commission finds that the retail customers of such utility will not be adversely affected pursuant to subsection A 3 of § 56-577 of the Code of Virginia, and that upon such return, the customer will be eligible to participate in the EITE Pilot Program, except that any customer of a Phase II Utility that is subject to subsection H of § 56-585.5 of the Code of Virginia will not be eligible to participate in the EITE Pilot Program.

§ 4. The load of any customer participating in the EITE Pilot Program shall be excluded from the definition of "total electric energy" as such term is defined in subsection A of § 56-585.5 of the Code of Virginia.

§ 5. The EITE Pilot Program shall terminate on July 1, 2028.