CODE OF VIRGINIA

NATURAL GAS CONSERVATION AND RATEMAKING EFFICIENCY (§ 56-601)

A. Consistent with the objectives pertaining to energy issues set forth in §
67-101 and the policy elements stated in § 67-102, it is in the public interest
to authorize and encourage the adoption of natural gas conservation and
ratemaking efficiency plans that promote the wise use of natural gas and natural
gas infrastructure through the development of alternative rate designs and other
mechanisms that more closely align the interests of natural gas utilities, their
customers, and the Commonwealth generally, and improve the efficiency of
ratemaking to more closely reflect the dynamic nature of the natural gas market,
the economy, and public policy regarding conservation and energy efficiency.
Such alternative rate designs and other mechanisms should, where feasible:

   1.  Provide utilities with better tools to work with customers to decrease the
   average customer’s annual average weather-normalized consumption of
   natural gas;

   2.  Provide reasonable assurance of a utility’s ability to recover costs
   of serving the public, including its cost-effective investments in
   conservation and energy efficiency as well as infrastructure needed to provide
   or maintain reliable service to the public;

   3.  Reward utilities for meeting or exceeding conservation and energy
   efficiency goals that may be established pursuant to the Virginia Energy Plan
   (§ 67-100 et seq.);

   4.  Provide customers with long-term, meaningful opportunities to more
   efficiently consume natural gas and mitigate their expenditures for the
   natural gas commodity, while ensuring that the rate design methodology used to
   set a utility’s revenue recovery is not inconsistent with such
   conservation and energy efficiency goals;

   5.  Recognize the economic and environmental benefits of efficient use of
   natural gas; and

   6.  Preserve or enhance the utility bill savings that customers receive when
   they reduce their natural gas use.

B. Natural gas utilities are authorized pursuant to this chapter to file natural
gas conservation and ratemaking efficiency plans that implement alternative
natural gas utility rate designs and other mechanisms, in addition to or in
conjunction with the cost of service methodology set forth in § 56-235.2 and
performance-based regulation plans authorized by § 56-235.6, that:

   1.  Replace existing utility rate designs or other mechanisms that promote
   inefficient use of natural gas with rate designs or other mechanisms that
   ensure a utility’s recovery of its authorized revenues is independent of
   the amount of customers’ natural gas consumption;

   2.  Provide incentives for natural gas utilities to promote conservation and
   energy efficiency by granting recovery of the costs associated with
   cost-effective conservation and energy efficiency programs; and

   3.  Reward utilities that meet or exceed conservation and energy efficiency
   goals on a weather-normalized, annualized average customer basis through the
   implementation of cost-effective conservation and energy efficiency programs.

C. This chapter shall be construed liberally to accomplish these purposes.

HISTORY: 2008, c. 639.