A West Virginia Senate committee approved a bill over the head of the state Public Service Commission’s objections Thursday that would subject rules and regulations promulgated by the PSC to legislative review.
The Senate Government Organization Committee advanced Senate Bill 245 to the full Senate despite objections from PSC Chairman Charlotte Lane that the measure would unnecessarily slow down her agency’s administrative process.
But committee members supporting the legislation said they viewed it as a welcome power shift from unelected PSC leadership to elected officials.
“I don’t want to say to my constituent, ‘Hey, it’s not in my hands. Go blame those folks at the PSC,’” Sen. Mike Stuart, R-Kanawha, said.
State lawmakers have the authority to approve or disapprove the promulgation of legislative rules proposed by many state agencies. The PSC, the regulatory agency for utilities doing business in West Virginia, has been an exception.
SB 245 would not grant lawmakers the authority to set utility rates or craft PSC procedural rules, committee counsel Carl Fletcher told the committee.
But Lane predicted SB 245 could indirectly impact utility rates.
“[A] lot of our rules do deal with policy issues, and those policy issues can affect rates,” Lane said. “For instance, we have rules relating to alternate main extensions, leak adjustment, where electric utility parts begin and customer parts begin, we have gas abandonment rules, termination rules, motor carrier rules that relate to third party tows and allowable charges.”
Related costs eventually can “get into” the rate base, Lane said, referring to the value of a utility’s assets, a key part of revenue requirements that utilities meet by charging customers in rate cases.
“The components of what a utility is seeking to recover, there will be some elements included in our rules that they will attempt to get in a rate case,” Lane said after noting that SB 245 wouldn’t give the Legislature control over ratemaking “per se.”
Lane said lawmakers could point to the PSC as “the bad guy” when constituents lament rate increases.
“Do we want people that are out there promising that they’re going to lower rates when the law requires that utilities are entitled to a fair rate of return and are entitled to get their cost back?” Lane asked. “Electing does not seem to be good … for this process.”
Lane said the PSC already has to file its rules with the Secretary of State’s Office and take public comment on them.
“So let me just ask you to please vote no on this bill,” Lane told the committee.
But Stuart was unconvinced.
“I think it’s important for the Legislature to reassert oversight over the PSC,” Stuart said.
Rate hike fatigue has set in for West Virginians in recent years.
West Virginia ratepayers faced a 90% climb in average residential electricity retail price from 2005 to 2020, per Energy Information Administration data. Only Michigan had a greater increase by percentage.
The average monthly bill for use of 4,500 gallons for a customer of West Virginia American Water, the state’s largest investor-owned water utility, escalated from $40.26 in 2005 to $85.52 in 2022. Twelve rate hikes approved by the PSC drove those increases.
In November, the PSC approved interim purchased gas cost recovery rates raising the average monthly residential bills by 15% and 28% for customers of Mountaineer Gas and Hope Gas, respectively.
Mike Tony covers energy and the environment. He can be reached at 304-348-1236 or mtony@hdmediallc.com. Follow @Mike__Tony on Twitter.
