Establishing the “Resiliency and Environmental System Investment Charge Program”
House Bill 3480 would create a new Public Service Commission-approved cost recovery mechanism for water and wastewater utilities called the Resiliency and Environmental System Investment Charge Program, or SEI. The bill allows eligible utilities to petition for approval of an SEI plan to recover costs for “service enhancement improvements,” including infrastructure replacement, resiliency upgrades, health and safety or environmental protection projects, and certain relocation work tied to public improvement projects. The bill defines recoverable SEI costs to include depreciation, operations and maintenance, restoration, property taxes, and a pretax return, while excluding fines and penalties.
Under the bill, a utility must first obtain PSC approval of an SEI plan supported by project details, engineering reports, cost estimates, and estimated customer rate impacts. After approval, the utility may file periodic petitions to implement or update the SEI and recover costs, subject to PSC review and hearings. The bill also requires a new base rate case within five years of SEI approval, limits SEI revenues to 5% of a utility’s total annual revenue, and allows separate plans for water and wastewater systems. In addition, the bill authorizes regulatory accounting for acquired water or wastewater systems, allowing utilities to track differences between acquisition-related costs and revenues as regulatory assets or liabilities until those costs are reflected in rates.
The bill would add two new sections to West Virginia Code Chapter 24 governing public utility regulation, expanding the Public Service Commission’s authority over water and wastewater utility rate recovery. It would create a new statutory framework for recovering capital and operating costs associated with infrastructure modernization and resiliency projects outside of traditional base rate cases, and it would establish procedural requirements, timelines, and caps for such recovery. It also would change how acquired water and wastewater systems are accounted for by permitting regulatory accounting treatment and later rate-base inclusion of resulting assets or liabilities.
The available record does not include committee debate, testimony, or recorded votes, so there is no direct evidence of support or opposition from the legislative process. Based on the bill’s structure, it appears designed to provide utilities with a more predictable path to recover infrastructure investment costs while preserving PSC oversight and customer protections through hearings, documentation requirements, and revenue caps. The overall tone of the bill is regulatory and utility-focused rather than partisan.
The main likely points of contention are the balance between utility cost recovery and ratepayer protection. Supporters would likely emphasize that the bill helps finance aging water and wastewater infrastructure, resiliency upgrades, and environmental compliance, while opponents may question whether the SEI charge could raise customer bills outside a normal rate case. Additional concerns may center on the five-percent revenue cap, the allowance for recovery of pre-approval expenditures if included in the plan, and the PSC’s discretion in determining whether projects are reasonable, necessary, and justified by incremental benefits.