Wednesday, October 15, 2008
The General Assembly is not in session.
Tracking Virginia’s General Assembly
since 2007.
SB380: Gas utilities; performance-based regulation.
Be it enacted by the General Assembly of Virginia:
1. That § 56-235.6 of the Code of Virginia is amended and reenacted as follows:
§ 56-235.6. Optional performance-based regulation of gas utilities.
A. Notwithstanding any provision of law to the contrary, the
Commission may authorize, upon application or its own motion, any public
utility engaged in the business of furnishing gas service (for the purposes of
this section a "gas utility"), and after such notice and opportunity
for hearing as the Commission may prescribe, to implement an optional form of
rate regulation under which the cost-of-service ratemaking methodology set
forth in § 56-235.2 may be is
replaced with a performance-based ratemaking methodology.
B. The Commission shall approve such performance-based
ratemaking methodology if it finds that it: (i) preserves adequate service to
all classes of customers, including transportation-only customers; (ii) does
not unreasonably prejudice or disadvantage any class of gas utility customers;
(iii) provides incentives for improved performance by the gas utility in the
conduct of its public duties; (iv) results in rates that are not excessive; and
(v) is in the public interest. Performance-based forms of regulation may
include, but not be limited to, the use of revenue indexing, price indexing, ranges of authorized return, gas cost indexing and innovative
utilization of utility-related assets and activities (such as off-system sales
of excess gas supplies, release of upstream pipeline capacity and performance
of billing services for other gas suppliers) in ways that benefit both the gas
utility and its customers and may include a mechanism for automatic annual
adjustments to revenues or prices to reflect changes in any index adopted for
the implementation of such performance-based form of regulation.
C. Each gas utility shall have the option to apply for
implementation of a performance-based form of regulation. If the Commission
approves the application with modifications, the gas utility may, at its
option, withdraw its application and continue to be regulated under the form of
regulation that existed immediately prior to the filing of the application. The
Commission may, after notice and opportunity for hearing, alter, amend or
revoke, or authorize a gas utility to discontinue, a performance-based form of
regulation previously implemented under this section if it finds that (i) gas
service to one or more classes of customers has deteriorated, or will
deteriorate, to the point that the public interest will not be served by
continuation of the performance-based form of regulation; (ii) any class of gas
utility customer is being unreasonably prejudiced or disadvantaged by the
performance-based form of regulation; (iii) the performance-based form of
regulation does not, or will not, provide reasonable incentives for improved
performance by a gas utility in the conduct of its public duties (which
determination may include, but not be limited to, consideration of whether
rates are inadequate to recover gas utility cost of service); (iv) the
performance-based form of regulation is resulting in rates that are excessive compared to a gas utility's cost of service; (v)
the terms ordered by the Commission in connection with approval of a gas
utility's implementation of a performance-based form of regulation have been
violated; or (vi) the performance-based form of regulation is no longer in the
public interest. Any request by a gas utility to discontinue its implementation
of a performance-based form of regulation may include application pursuant to
this chapter for approval of new rates under the standards of § 56-235.2.
D. The Commission shall use the annual review process established in § 56-234.2 to monitor each performance-based form of regulation approved under this section and to make any annual prospective adjustments to revenues or prices necessary to reflect increases or decreases in any index adopted for the implementation of such performance-based form of regulation.
2. That the provisions of this act are declaratory of existing law.
Additional Data
Explanation
This is the actual text of the bill — the legislation itself. Generally this is amending existing law, proposing the addition or removal of words from laws that are already on the books.
Words that are highlighted in yellow are
proposed additions, and words that are crossed out in
red are proposed removals.
The numbers with the § symbol before them are references to existing laws, and if you click on them they’ll take you to that part of the law on the state's website.