Natural gas utilities; qualified projects. (SB511)

Introduced By

Sen. Frank Wagner (R-Virginia Beach) with support from co-patron Sen. Dick Black (R-Leesburg)


Passed Committee
Passed House
Passed Senate
Signed by Governor
Became Law


Natural gas utility infrastructure.  Permits a natural gas utility to construct the necessary facilities of a qualifying project and to recover the eligible infrastructure development costs necessary to develop the eligible infrastructure for designated projects in future rates. Eligible infrastructure development costs include the investment, which includes costs including planning, development, and construction costs and, if applicable, an allowance for funds used during construction, in facilities to be used in the delivery of natural gas, or supplemental or substitute forms of gas. Such costs also include (i) a return on investment calculated using the utility's weighted average cost of capital based on its regulatory capital structure used in determining the natural gas utility's base rates in effect during the construction period; (ii) a revenue conversion factor that includes income taxes and an allowance for bad debt expense; (iii) operating and maintenance expense; (iv) depreciation calculated using the natural gas utility's currently approved depreciation rates applicable to each general plant account; and (v) property taxes, reduced by the non-gas revenue received by the natural gas utility from providing sales or transportation service to the customer occupying the qualifying project and to any other customer served directly from the subject eligible infrastructure. A qualifying project is an economic development project requiring natural gas service as to which the natural gas utility has made a good faith determination that (a) it is located in an area where adequate natural gas infrastructure is not available; (b) eligible infrastructure will provide opportunities for increased natural gas usage and economic development benefits in the area of the eligible infrastructure in addition to those provided by the subject project; (c) either the developer or occupant of the proposed project is prepared to provide a binding commitment to the natural gas utility for needed capacity for a period of at least five years from the date gas is made available, which commitment covers a level of service no less than 50 percent of the capacity of the gas facilities to serve such project, or the natural gas utility receives a financial guaranty from the developer or state or local government in the amount of at least 50 percent of the estimated investment to be made by the natural gas utility in the proposed project; (d) the natural gas utility has negotiated with the project's developer or occupant in an attempt to reach agreement on a commitment for the entire aid to construction otherwise required to cover the cost of the necessary eligible infrastructure; and (e) the projected non-gas revenues from the proposed project will not be sufficient to cover the cost of service associated with the necessary eligible infrastructure after accounting for any aid to construction contributed by the developer of the project or the person that will occupy the proposed project. Natural gas utilities are required to account for the actual monthly eligible infrastructure development costs incurred on the cumulative investment in eligible infrastructure in excess of any aid to construction contributed by the developer of the project or the person that will occupy the proposed project as a deferred cost until new base rates and charges that incorporate eligible infrastructure development costs become effective for the utility. Transportation and storage quantities of contracts entered into by a natural gas utility for the acquisition of upstream pipeline capacity to meet the reasonably anticipated service requirements of a qualifying project and other service requirements to be served through the eligible infrastructure shall be deemed prudent and reasonable. Read the Bill »


Bill Has Passed


01/11/2012Prefiled and ordered printed; offered 01/11/12
01/11/2012Prefiled and ordered printed; offered 01/11/12 12101983D
01/11/2012Referred to Committee on Commerce and Labor
01/18/2012Impact statement from SCC (SB511)
01/23/2012Reported from Commerce and Labor with substitute (15-Y 0-N) (see vote tally)
01/23/2012Committee substitute printed 12104381D-S1
01/25/2012Constitutional reading dispensed (40-Y 0-N) (see vote tally)
01/26/2012Read second time
01/26/2012Reading of substitute waived
01/26/2012Committee substitute agreed to 12104381D-S1
01/26/2012Engrossed by Senate - committee substitute SB511S1
01/27/2012Read third time and passed Senate (39-Y 0-N) (see vote tally)
01/27/2012Impact statement from SCC (SB511S1)
02/13/2012Placed on Calendar
02/13/2012Read first time
02/13/2012Referred to Committee on Commerce and Labor
02/16/2012Reported from Commerce and Labor (22-Y 0-N) (see vote tally)
02/20/2012Read second time
02/21/2012Read third time
02/21/2012Passed House (99-Y 0-N 1-A)
02/21/2012VOTE: PASSAGE (99-Y 0-N 1-A) (see vote tally)
02/24/2012Bill text as passed Senate and House (SB511ER)
02/24/2012Impact statement from SCC (SB511ER)
02/24/2012Signed by Speaker
02/27/2012Signed by President
03/08/2012G Approved by Governor-Chapter 202 (effective 7/1/12)
03/08/2012G Acts of Assembly Chapter text (CHAP0202)


This bill was discussed on the floor of the General Assembly. Below is all of the video that we have of that discussion, 1 clip in all, totaling 55 seconds.

Duplicate Bills

The following bills are identical to this one: HB559.