Bill > SB505

This bill establishes a new legal framework for evaluating electricity utility rate adjustments in West Virginia, with a primary focus on ensuring reliable and affordable electric service. The legislation requires electric utilities to demonstrate the reliability and capacity of their electric generation units (EGUs) and transmission assets when seeking rate increases, introducing a comprehensive assessment process that considers factors like energy capacity, on-demand dispatch ability, useful life, operational costs, and environmental compliance. Utilities must provide detailed evidence about how proposed additions or retirements of generation units and transmission assets will impact the bulk-power system's reliability during peak demand periods. The Public Service Commission is given expanded authority to scrutinize rate applications, with the power to approve, partially approve, or deny cost recovery based on the reliability and effectiveness of proposed assets. Notably, the bill introduces a novel approach to calculating rate of return that incorporates the capacity value of new resources, potentially adjusting investor returns based on the actual reliability contribution of new energy assets. The legislation aims to balance the transition to carbon-neutral energy generation with maintaining a reliable electric grid, protecting both utility investors and ratepayers by ensuring that only fair, just, and reasonable costs are recovered through electricity rates.