West VirginiaHB 20142025 Regular SessionHouse

Certified Microgrid Program

Sponsored By: Roger Hanshaw (Republican)

Signed by Governor

§5B-2-21§5B-2-21A§5B-2-21B§5B-2N-2A§11-6N-1§11-6N-2§11-6N-3§11-6N-4§11-6N-5§11B-2-33§24-2-1D§24-2-1Q§24-2-15§24-2-19§24-2-21a

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Bill Overview

Analyzed Economic Effects

15 provisions identified: 3 benefits, 2 costs, 10 mixed.

West Virginia customers cover shared plant costs

West Virginia customers must cover certain shared power plant costs after another state's regulator orders the plant to close. This applies when the utility serves both states and the West Virginia Public Service Commission decides to keep the plant operating. Customers cover capital, operating, and maintenance costs that can no longer be assigned to the other state. The utility must also assign the related power, capacity, and environmental attributes to its West Virginia operations. The law sets no household bill amount.

New protections against power bill charges

Beginning July 11, 2025, utilities cannot charge outside customers for power facilities serving a certified microgrid district. District generators or electricity users must pay construction, operating, grid, backup-service, energy, and capacity costs. Separately, the Public Service Commission cannot approve automatic adjustments or fuel-price mechanisms that increase energy charges above published rates. Those mechanisms remain allowed only without a net increase, comparing calendar-year average charges with and without the mechanism. Neither rule guarantees a specific household bill reduction.

Utilities must consider lower-cost in-state power

When the Public Service Commission finds a purchased-capacity shortfall beyond approved agreements, utilities must use qualifying in-state supply when reasonable. Supply must use West Virginia coal or natural gas and provide the most reliable service at the least cost. Plants selling all output outside West Virginia are excluded, while certain existing power-purchase contracts count as in-state generation. The Commission must also review each PJM regional capacity auction and encourage lawful coordination among West Virginia plants for customer benefit. Plant participation in those auctions remains voluntary.

Data center taxes fund state priorities

The special revenue split applies upon certification to data centers with at least 90 megawatts of critical computing demand, placed in service on or after July 1, 2025. Positive property-tax increments go 50% to income tax reduction, 30% to the host county, and 10% to all counties by population. Economic enhancement grants and grid stabilization each receive 5%; remaining collections follow separate regular-levy, bond, and excess-levy calculations. The new Personal Income Tax Reduction Fund keeps earnings and unspent balances, and certified net proceeds transfer to general revenue within 60 days. This does not guarantee a household tax cut; the fund ends if the personal income tax is eliminated, and the special data-center tax article expires December 31, 2055.

Fewer tax deals for covered projects

Beginning July 11, 2025, covered power-generation and distribution property cannot use payments instead of regular taxes or tax-increment financing. The ban covers related property interests and power property dedicated to covered projects in the relevant county or counties. Dedicated generally means at least 75% of electricity output supplies those facilities or related projects. Property and related interests under the high-impact data center tax article face the same financing bans. That article expires December 31, 2055.

Certified projects bypass local development rules

Certified microgrid districts and high-impact data centers are exempt from specified local zoning, land-use, permit, inspection, and licensing rules. They generally fall outside county and municipal authority, except where the law preserves that authority. Municipal consent is not required for covered state or county actions. Commerce, Environmental Protection, and Transportation may support these projects, including roads and sidewalks in their host counties or municipalities. The law specifies no funding amount for that support.

Large data centers gain state certification

Beginning July 11, 2025, the Division of Economic Development runs a program supporting high-impact data center development and expansion. The qualifying size threshold is at least 90 megawatts of combined critical information-technology power demand. Centers must notify the Division within 30 days of determining they meet or reasonably expect to meet the definition. Notices must address eligibility and expected power use, and Commerce must confirm qualifying centers' certification within 14 days of receipt. Information identified as confidential business information is exempt from public disclosure under the Freedom of Information Act.

Grid funding supports plants, not closures

Commerce administers a new Electric Grid Stabilization and Security Fund financed by designated receipts, appropriations, outside money, and investment earnings. It can support grid security, efficiency, environmental upgrades, and upkeep of utility-owned coal and natural gas generation. Funded transmission resources must serve only West Virginia customers, and unspent balances stay in the fund. The fund cannot pay to decommission and replace existing facilities. Utilities also cannot use this fund or specified environmental-control and consumer-rate-relief bonds to retire, close, or permanently disable generating units.

Microgrid businesses gain limited power choices

Beginning July 11, 2025, qualifying district power providers are exempt from specified state rate, service, complaint, and construction-approval rules. Providers qualifying as exempt wholesale generators also receive specified net-metering, connection, and siting exemptions. District facilities qualify as new electric load through no prior regulated utility service or investment in a new district facility; investment cannot reduce an existing West Virginia facility's load. Eligible facilities need not use a public utility, and construction-time utility service does not disqualify them. Service must support new or expanded investment, cannot lure existing regulated-utility customers into relocating, and outside power deliveries are wholesale-only and capped at 10% of district generation.

Microgrid customers get special power contracts

Beginning July 11, 2025, district customers can seek special power contracts with rates and terms different from standard utility rates. Parties generally negotiate for up to 120 days before filing an agreement or asking the Public Service Commission to resolve terms. After a petition, the Commission must establish the contract, including backup and supplemental service, within 90 days. District power demand without a contract is treated as interruptible service. Districts must give the local utility reasonable access and terms to connect its facilities.

Microgrid developers gain certification with limits

Beginning July 11, 2025, Commerce runs a program to certify microgrid districts that bring significant statewide economic benefits. Districts must be nearly contiguous, cover no more than 2,250 acres, and be needed to attract at least two businesses. The two-district limit does not apply when high-impact data centers consume more than 70% of a district's generated electricity. Applicants must submit confidential project details covering finances, investment, location, schedule, generation, customers, and expected power needs and sources. They must document good-faith utility negotiations starting at least 120 days before filing, unless generation reaches 300 megawatts or no post-construction utility connection is planned. Specified 2025 requirements do not apply to districts certified by January 1, 2024, or special contracts approved by January 1, 2025.

Utilities face plant and coal requirements

Utilities must maintain thermal baseload units capable of operating at a capacity factor of at least 69%. They must maximize their own generation when that lowers energy costs for West Virginia customers. Operating at 69% is not required when it raises charges above approved published rates. Each utility-operated coal plant must also plan coal deliveries and use to maintain an average annual minimum 30-day on-site supply.

Utilities need approval before plant closures

Public electric utilities need Public Service Commission approval before retiring, abandoning, closing, or permanently disabling a generating plant or unit. The law sets July 1, 2025, as the deadline for ordering utilities to supplement their resource plans. Supplements must include upgrades, maintenance, schedules, and costs to support operation through planned retirement dates and study longer operation. Interested parties must have a process to submit independent evaluations or challenge required changes. The Commission can approve plans or require changes after notice and comment.

Certified projects still pay local charges

Certified projects must pay applicable municipal taxes, property taxes at other businesses' millage rates, municipal service fees, and utility charges. Their buildings must follow the State Building Code, and available police and fire protection must match that for other businesses. Utility charges must reflect costs under special contracts filed with the Public Service Commission. Capacity or impact fees apply only when utility improvements are needed to serve the project. Outside microgrid customers cannot pay for property built solely to serve the district.

Data centers receive special property valuation

Qualifying data center property receives special tax valuation covering real estate, buildings, equipment, inventories, and certain salvage-eligible property. Covered owners, operators, and microgrid generators supplying high-impact data centers must file sworn property returns with the Board of Public Works. Returns are due May 1 each year and cover the year ending the previous December 31. The special valuation article and its reporting requirement end December 31, 2055. The law does not specify the tax treatment after that expiration.

Sponsors & Cosponsors

Sponsor

Roger Hanshaw
Republican • House

Cosponsors

James Robert "JB" Akers II
Republican • House
William Anderson
Republican • House
Bob Fehrenbacher
Republican • House
Sean Hornbuckle
Democratic • House
Clay Riley
Republican • House
Mark Zatezalo
Republican • House

Roll Call Votes

All Roll Calls

Yes: 301 • No: 61

Senate vote • 4/12/2025

Senate concurred in House amendments and passed bill (Roll No. 591)

Yes: 32 • No: 1

House vote • 4/12/2025

House concurred in Senate amend with amend, passed bill (Roll No. 575)

Yes: 82 • No: 16

House vote • 4/12/2025

Motion for previous question adopted (Roll No. 574)

Yes: 67 • No: 31

Senate vote • 4/11/2025

Passed Senate (Roll No. 516)