{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/56-231.39.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/56-231.39.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/56-231.39.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/56-231.39.html"}],"law_id":87060,"edition_id":1,"section_id":87060,"structure_id":13183,"section_number":"56-231.39","catch_line":"Organization and purpose","history":"1999, c. 874; 2000, cc. 964, 989.","full_text":"A\n\nSubject to § 56-231.50:1, any utility consumer service cooperative or utility aggregation cooperative may form a cooperative in accordance with this article, either stock or nonstock, not for pecuniary profit, with the exception of for-profit affiliates, for the purpose of purchasing, generating or transmitting energy products and services for sale or resale, operating or participating in an independent system operator, regional transmission entity, regional power exchange, or both, and any other lawful purpose, consistent with sound business principles and prudent management practices; (i) provided, however, that within the certificated service territory of any member distribution cooperative that existed as of January 1, 1999, no such cooperative shall, prior to July 1, 2000, undertake or initiate any new program (a) to buy or maintain an inventory of HVACR equipment or household appliances, (b) to install or service any such equipment or household appliances for customers, unless such service is not provided by the cooperative but by a third party individual, firm or corporation licensed to perform such service, (c) to sell HVACR equipment or household appliances to customers who are metered and billed on residential rates, (d) to sell HVACR equipment to customers other than those metered and billed on residential rates except where such sale is an incidental part of providing other energy services or providing traditional cooperative activities, (e) to sell or distribute propane or fuel oil; sell, install or service propane or fuel oil equipment; or maintain or buy an inventory of propane or fuel oil equipment for resale, or (f) to serve as a coordinator of nonelectric energy services or provide engineering consulting services except when such energy or engineering services are an incidental part of a marketing effort to provide other energy or engineering services or as a part of providing services that are traditional cooperative activities; (ii) provided further, that notwithstanding clause (i), such cooperative may, within the certificated service territory of a specific distribution cooperative that existed as of January 1, 1999, and then only to the extent that such specific distribution cooperative could lawfully do so, engage in any of the activities enumerated in clause (i) that (a) have received State Corporation Commission approval prior to February 1, 1998, (b) such cooperative is ordered or required to undertake by any jurisdictional court or regulatory authority, (c) were lawfully undertaken prior to February 1, 1998, (d) are specifically permitted by statute, or (e) are undertaken by any other regulated public service company or its unregulated affiliate within such distribution cooperative’s certificated service territory; and (iii) also provided that such cooperative or its affiliate may not undertake such activities as are prohibited by clause (i) within the certificated service territory of another public service company unless such activities are undertaken by such public service company or its unregulated affiliate within the certificated service territory of a specific distribution cooperative existing as of January 1, 1999, and the certificated service territories of the public service company and the specific distribution cooperative overlap. In addition, such cooperative may establish one or more subsidiaries to engage in any other business activities not prohibited by law. Notwithstanding the foregoing, no such subsidiary may engage in any business activities that the cooperatives are prohibited from engaging in under this section. For purposes of determining whether a cooperative is formed not for pecuniary profit, the establishment of one or more affiliates thereof on a for-profit basis shall not disqualify such entity from being formed as a cooperative pursuant to this article.B\n\nNothing in this article shall be construed to authorize a cooperative formed pursuant to this article, or any affiliate thereof, to engage, within any political subdivision of the Commonwealth on a not-for-profit basis, in the sale of products, the provision of services, or other business activity, except for electric power services and traditional cooperative activities. However, if such business activities are not currently provided by any person other than a cooperative formed under or subject to this chapter or its affiliate and the Commission determines that no such other person is likely, within a reasonable time, to effectively provide such products and services in such political subdivision, an affiliate of a cooperative may provide such products or services on a not-for-profit basis. The Commission shall also permit an affiliate of a cooperative formed under or subject to this chapter to provide such products or services on a not-for-profit basis upon a finding that the affiliate will not receive the benefit of any federal income tax exemption that is not available to persons other than cooperatives and will not receive the benefit of any federally guaranteed or subsidized financing that is not available to persons other than cooperatives; and provided further, that nothing in this subsection shall prohibit the continued operation of any business activities of any not-for-profit cooperative or affiliate formed, operating, and actively providing products or services to customers on or before July 1, 1999.","order_by":null,"text":{"0":{"id":311757,"text":"Subject to § 56-231.50:1, any utility consumer service cooperative or utility aggregation cooperative may form a cooperative in accordance with this article, either stock or nonstock, not for pecuniary profit, with the exception of for-profit affiliates, for the purpose of purchasing, generating or transmitting energy products and services for sale or resale, operating or participating in an independent system operator, regional transmission entity, regional power exchange, or both, and any other lawful purpose, consistent with sound business principles and prudent management practices; (i) provided, however, that within the certificated service territory of any member distribution cooperative that existed as of January 1, 1999, no such cooperative shall, prior to July 1, 2000, undertake or initiate any new program (a) to buy or maintain an inventory of HVACR equipment or household appliances, (b) to install or service any such equipment or household appliances for customers, unless such service is not provided by the cooperative but by a third party individual, firm or corporation licensed to perform such service, (c) to sell HVACR equipment or household appliances to customers who are metered and billed on residential rates, (d) to sell HVACR equipment to customers other than those metered and billed on residential rates except where such sale is an incidental part of providing other energy services or providing traditional cooperative activities, (e) to sell or distribute propane or fuel oil; sell, install or service propane or fuel oil equipment; or maintain or buy an inventory of propane or fuel oil equipment for resale, or (f) to serve as a coordinator of nonelectric energy services or provide engineering consulting services except when such energy or engineering services are an incidental part of a marketing effort to provide other energy or engineering services or as a part of providing services that are traditional cooperative activities; (ii) provided further, that notwithstanding clause (i), such cooperative may, within the certificated service territory of a specific distribution cooperative that existed as of January 1, 1999, and then only to the extent that such specific distribution cooperative could lawfully do so, engage in any of the activities enumerated in clause (i) that (a) have received State Corporation Commission approval prior to February 1, 1998, (b) such cooperative is ordered or required to undertake by any jurisdictional court or regulatory authority, (c) were lawfully undertaken prior to February 1, 1998, (d) are specifically permitted by statute, or (e) are undertaken by any other regulated public service company or its unregulated affiliate within such distribution cooperative’s certificated service territory; and (iii) also provided that such cooperative or its affiliate may not undertake such activities as are prohibited by clause (i) within the certificated service territory of another public service company unless such activities are undertaken by such public service company or its unregulated affiliate within the certificated service territory of a specific distribution cooperative existing as of January 1, 1999, and the certificated service territories of the public service company and the specific distribution cooperative overlap. In addition, such cooperative may establish one or more subsidiaries to engage in any other business activities not prohibited by law. Notwithstanding the foregoing, no such subsidiary may engage in any business activities that the cooperatives are prohibited from engaging in under this section. For purposes of determining whether a cooperative is formed not for pecuniary profit, the establishment of one or more affiliates thereof on a for-profit basis shall not disqualify such entity from being formed as a cooperative pursuant to this article.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":311758,"text":"Nothing in this article shall be construed to authorize a cooperative formed pursuant to this article, or any affiliate thereof, to engage, within any political subdivision of the Commonwealth on a not-for-profit basis, in the sale of products, the provision of services, or other business activity, except for electric power services and traditional cooperative activities. However, if such business activities are not currently provided by any person other than a cooperative formed under or subject to this chapter or its affiliate and the Commission determines that no such other person is likely, within a reasonable time, to effectively provide such products and services in such political subdivision, an affiliate of a cooperative may provide such products or services on a not-for-profit basis. The Commission shall also permit an affiliate of a cooperative formed under or subject to this chapter to provide such products or services on a not-for-profit basis upon a finding that the affiliate will not receive the benefit of any federal income tax exemption that is not available to persons other than cooperatives and will not receive the benefit of any federally guaranteed or subsidized financing that is not available to persons other than cooperatives; and provided further, that nothing in this subsection shall prohibit the continued operation of any business activities of any not-for-profit cooperative or affiliate formed, operating, and actively providing products or services to customers on or before July 1, 1999.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A"}},"ancestry":[{"id":13183,"edition_id":1,"name":"Utility Aggregation Cooperatives Act","identifier":"2","label":"article","depth":3,"order_by":1,"parent_id":13182,"metadata":{},"date_created":"2026-06-26 03:44:24","date_modified":"2026-06-26 03:44:24","permalink":{"id":251431,"object_type":"structure","relational_id":13183,"identifier":"2","token":"56\/9.1\/2","url":"\/56\/9.1\/2\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13182,"edition_id":1,"name":"Utility Consumer Services Cooperatives and Utility Aggregation Cooperatives","identifier":"9.1","label":"chapter","depth":2,"order_by":1,"parent_id":12881,"metadata":{},"date_created":"2026-06-26 03:44:24","date_modified":"2026-06-26 03:44:24","permalink":{"id":251323,"object_type":"structure","relational_id":13182,"identifier":"9.1","token":"56\/9.1","url":"\/56\/9.1\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12881,"edition_id":1,"name":"Public Service Companies","identifier":"56","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:58","date_modified":"2026-06-26 03:43:58","permalink":{"id":248473,"object_type":"structure","relational_id":12881,"identifier":"56","token":"56","url":"\/56\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":66888,"structure_id":13183,"section_number":"56-231.38","catch_line":"Definitions","url":"\/56-231.38\/","token":"56\/9.1\/2\/56-231.38","metadata":false},{"id":87060,"structure_id":13183,"section_number":"56-231.39","catch_line":"Organization and purpose","url":"\/56-231.39\/","token":"56\/9.1\/2\/56-231.39","metadata":false},{"id":81119,"structure_id":13183,"section_number":"56-231.40","catch_line":"Names","url":"\/56-231.40\/","token":"56\/9.1\/2\/56-231.40","metadata":false},{"id":72635,"structure_id":13183,"section_number":"56-231.41","catch_line":"Articles of incorporation","url":"\/56-231.41\/","token":"56\/9.1\/2\/56-231.41","metadata":false},{"id":84810,"structure_id":13183,"section_number":"56-231.42","catch_line":"Bylaws","url":"\/56-231.42\/","token":"56\/9.1\/2\/56-231.42","metadata":false},{"id":87202,"structure_id":13183,"section_number":"56-231.43","catch_line":"Powers","url":"\/56-231.43\/","token":"56\/9.1\/2\/56-231.43","metadata":false},{"id":84311,"structure_id":13183,"section_number":"56-231.44","catch_line":"Board of directors","url":"\/56-231.44\/","token":"56\/9.1\/2\/56-231.44","metadata":false},{"id":64249,"structure_id":13183,"section_number":"56-231.45","catch_line":"Officers","url":"\/56-231.45\/","token":"56\/9.1\/2\/56-231.45","metadata":false},{"id":60554,"structure_id":13183,"section_number":"56-231.46","catch_line":"Members","url":"\/56-231.46\/","token":"56\/9.1\/2\/56-231.46","metadata":false},{"id":66528,"structure_id":13183,"section_number":"56-231.47","catch_line":"Adoption of article","url":"\/56-231.47\/","token":"56\/9.1\/2\/56-231.47","metadata":false},{"id":81005,"structure_id":13183,"section_number":"56-231.48","catch_line":"Applicability of other laws","url":"\/56-231.48\/","token":"56\/9.1\/2\/56-231.48","metadata":false},{"id":55354,"structure_id":13183,"section_number":"56-231.49","catch_line":"Restructuring costs","url":"\/56-231.49\/","token":"56\/9.1\/2\/56-231.49","metadata":false},{"id":77460,"structure_id":13183,"section_number":"56-231.50","catch_line":"Regulation by State Corporation Commission","url":"\/56-231.50\/","token":"56\/9.1\/2\/56-231.50","metadata":false},{"id":62015,"structure_id":13183,"section_number":"56-231.50:1","catch_line":"Separation of regulated and unregulated businesses","url":"\/56-231.50_1\/","token":"56\/9.1\/2\/56-231.50_1","metadata":false},{"id":54197,"structure_id":13183,"section_number":"56-231.50:2","catch_line":"Right of action; violation of rules or regulations","url":"\/56-231.50_2\/","token":"56\/9.1\/2\/56-231.50_2","metadata":false},{"id":60306,"structure_id":13183,"section_number":"56-231.51","catch_line":"Construction of article and conflicting laws","url":"\/56-231.51\/","token":"56\/9.1\/2\/56-231.51","metadata":false},{"id":80704,"structure_id":13183,"section_number":"56-231.52","catch_line":"Citation to article","url":"\/56-231.52\/","token":"56\/9.1\/2\/56-231.52","metadata":false}],"previous_section":{"id":66888,"structure_id":13183,"section_number":"56-231.38","catch_line":"Definitions","url":"\/56-231.38\/","token":"56\/9.1\/2\/56-231.38","metadata":false},"next_section":{"id":81119,"structure_id":13183,"section_number":"56-231.40","catch_line":"Names","url":"\/56-231.40\/","token":"56\/9.1\/2\/56-231.40","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/56-231.39\/","history_text":"

This law was first created in 1999. The record of its establishment is cataloged in chapter 874<\/a> of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. It has been modified 1 time. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. That modification is as follows: in 2000, chapters 964<\/a> and 989<\/a>.<\/p>","references":false,"refers_to":[{"id":62015,"section_number":"56-231.50:1","catch_line":"Separation of regulated and unregulated businesses","order_by":null,"url":"\/56-231.50_1\/"}],"permalink":{"id":251437,"object_type":"law","relational_id":87060,"identifier":"56-231.39","token":"56\/9.1\/2\/56-231.39","url":"\/56-231.39\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/56-231.39\/","token":"56\/9.1\/2\/56-231.39","dublin_core":{"Title":"Organization and purpose","Type":"Text","Format":"text\/html","Identifier":"\u00a7 56-231.39","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> Subject to § 56-231.50:1<\/a>, any utility consumer service cooperative<\/span> or utility aggregation cooperative<\/span> may form a cooperative<\/span> in accordance with this article, either stock or nonstock, not for pecuniary profit, with the exception of for-profit affiliates<\/span>, for the purpose of purchasing, generating or transmitting energy<\/span> products and services for sale or resale, operating or participating in an independent system<\/span> operator, regional transmission entity, regional power exchange, or both, and any other lawful purpose, consistent with sound business principles and prudent management practices; (i) provided, however, that within the certificated service territory of any member<\/span> distribution cooperative<\/span> that existed as of January 1, 1999, no such cooperative<\/span> shall, prior to July 1, 2000, undertake or initiate any new program (a) to buy or maintain an inventory of HVACR<\/span> equipment or household appliances, (b) to install or service any such equipment or household appliances for customers, unless such service is not provided by the cooperative<\/span> but by a third party<\/span> individual, firm or corporation<\/span> licensed to perform such service, (c) to sell HVACR<\/span> equipment or household appliances to customers who are metered and billed on residential rates<\/span>, (d) to sell HVACR<\/span> equipment to customers other than those metered and billed on residential rates<\/span> except where such sale is an incidental part of providing other energy<\/span> services or providing traditional cooperative<\/span> activities, (e) to sell or distribute propane or fuel oil; sell, install or service propane or fuel oil equipment<\/span>; or maintain or buy an inventory of propane or fuel oil equipment<\/span> for resale, or (f) to serve as a coordinator of nonelectric energy<\/span> services or provide engineering consulting services except when such energy<\/span> or engineering services are an incidental part of a marketing effort to provide other energy<\/span> or engineering services or as a part of providing services that are traditional cooperative<\/span> activities; (ii) provided further, that notwithstanding clause (i), such cooperative<\/span> may, within the certificated service territory of a specific distribution cooperative<\/span> that existed as of January 1, 1999, and then only to the extent that such specific distribution cooperative<\/span> could lawfully do so, engage in any of the activities enumerated in clause (i) that (a) have received State Corporation<\/span> Commission<\/span> approval prior to February 1, 1998, (b) such cooperative<\/span> is ordered or required to undertake by any jurisdictional court<\/span> or regulatory authority, (c) were lawfully undertaken prior to February 1, 1998, (d) are specifically permitted by statute<\/span>, or (e) are undertaken by any other regulated public service company<\/span> or its unregulated affiliate<\/span> within such distribution cooperative<\/span>’s certificated service territory; and (iii) also provided that such cooperative<\/span> or its affiliate<\/span> may not undertake such activities as are prohibited by clause (i) within the certificated service territory of another public service company<\/span> unless such activities are undertaken by such public service company<\/span> or its unregulated affiliate<\/span> within the certificated service territory of a specific distribution cooperative<\/span> existing as of January 1, 1999, and the certificated service territories of the public service company<\/span> and the specific distribution cooperative<\/span> overlap. In addition, such cooperative<\/span> may establish one or more subsidiaries to engage in any other business activities not prohibited by law<\/span>. Notwithstanding the foregoing, no such subsidiary may engage in any business activities that the cooperatives<\/span> are prohibited from engaging in under this section. For purposes of determining whether a cooperative<\/span> is formed not for pecuniary profit, the establishment of one or more affiliates<\/span> thereof on a for-profit basis shall not disqualify such entity from being formed as a cooperative<\/span> pursuant to this article. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> Nothing in this article shall be construed to authorize a cooperative<\/span> formed pursuant to this article, or any affiliate<\/span> thereof, to engage, within any political subdivision of the Commonwealth on a not-for-profit basis, in the sale of products, the provision of services, or other business activity, except for electric power services and traditional cooperative<\/span> activities. However, if such business activities are not currently provided by any person<\/span> other than a cooperative<\/span> formed under or subject to this chapter or its affiliate<\/span> and the Commission<\/span> determines that no such other person<\/span> is likely, within a reasonable time, to effectively provide such products and services in such political subdivision, an affiliate<\/span> of a cooperative<\/span> may provide such products or services on a not-for-profit basis. The Commission<\/span> shall also permit an affiliate<\/span> of a cooperative<\/span> formed under or subject to this chapter to provide such products or services on a not-for-profit basis upon a finding<\/span> that the affiliate<\/span> will not receive the benefit of any federal income tax exemption that is not available to persons<\/span> other than cooperatives<\/span> and will not receive the benefit of any federally guaranteed or subsidized financing that is not available to persons<\/span> other than cooperatives<\/span>; and provided further, that nothing in this subsection shall prohibit the continued operation of any business activities of any not-for-profit cooperative<\/span> or affiliate<\/span> formed, operating, and actively providing products or services to customers on or before July 1, 1999. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nORGANIZATION AND PURPOSE (\u00a7 56-231.39)\n\nA. Subject to § 56-231.50:1, any utility consumer service cooperative or\nutility aggregation cooperative may form a cooperative in accordance with this\narticle, either stock or nonstock, not for pecuniary profit, with the exception\nof for-profit affiliates, for the purpose of purchasing, generating or\ntransmitting energy products and services for sale or resale, operating or\nparticipating in an independent system operator, regional transmission entity,\nregional power exchange, or both, and any other lawful purpose, consistent with\nsound business principles and prudent management practices; (i) provided,\nhowever, that within the certificated service territory of any member\ndistribution cooperative that existed as of January 1, 1999, no such cooperative\nshall, prior to July 1, 2000, undertake or initiate any new program (a) to buy\nor maintain an inventory of HVACR equipment or household appliances, (b) to\ninstall or service any such equipment or household appliances for customers,\nunless such service is not provided by the cooperative but by a third party\nindividual, firm or corporation licensed to perform such service, (c) to sell\nHVACR equipment or household appliances to customers who are metered and billed\non residential rates, (d) to sell HVACR equipment to customers other than those\nmetered and billed on residential rates except where such sale is an incidental\npart of providing other energy services or providing traditional cooperative\nactivities, (e) to sell or distribute propane or fuel oil; sell, install or\nservice propane or fuel oil equipment; or maintain or buy an inventory of\npropane or fuel oil equipment for resale, or (f) to serve as a coordinator of\nnonelectric energy services or provide engineering consulting services except\nwhen such energy or engineering services are an incidental part of a marketing\neffort to provide other energy or engineering services or as a part of providing\nservices that are traditional cooperative activities; (ii) provided further,\nthat notwithstanding clause (i), such cooperative may, within the certificated\nservice territory of a specific distribution cooperative that existed as of\nJanuary 1, 1999, and then only to the extent that such specific distribution\ncooperative could lawfully do so, engage in any of the activities enumerated in\nclause (i) that (a) have received State Corporation Commission approval prior to\nFebruary 1, 1998, (b) such cooperative is ordered or required to undertake by\nany jurisdictional court or regulatory authority, (c) were lawfully undertaken\nprior to February 1, 1998, (d) are specifically permitted by statute, or (e) are\nundertaken by any other regulated public service company or its unregulated\naffiliate within such distribution cooperative’s certificated service\nterritory; and (iii) also provided that such cooperative or its affiliate may\nnot undertake such activities as are prohibited by clause (i) within the\ncertificated service territory of another public service company unless such\nactivities are undertaken by such public service company or its unregulated\naffiliate within the certificated service territory of a specific distribution\ncooperative existing as of January 1, 1999, and the certificated service\nterritories of the public service company and the specific distribution\ncooperative overlap. In addition, such cooperative may establish one or more\nsubsidiaries to engage in any other business activities not prohibited by law.\nNotwithstanding the foregoing, no such subsidiary may engage in any business\nactivities that the cooperatives are prohibited from engaging in under this\nsection. For purposes of determining whether a cooperative is formed not for\npecuniary profit, the establishment of one or more affiliates thereof on a\nfor-profit basis shall not disqualify such entity from being formed as a\ncooperative pursuant to this article.\n\nB. Nothing in this article shall be construed to authorize a cooperative formed\npursuant to this article, or any affiliate thereof, to engage, within any\npolitical subdivision of the Commonwealth on a not-for-profit basis, in the sale\nof products, the provision of services, or other business activity, except for\nelectric power services and traditional cooperative activities. However, if such\nbusiness activities are not currently provided by any person other than a\ncooperative formed under or subject to this chapter or its affiliate and the\nCommission determines that no such other person is likely, within a reasonable\ntime, to effectively provide such products and services in such political\nsubdivision, an affiliate of a cooperative may provide such products or services\non a not-for-profit basis. The Commission shall also permit an affiliate of a\ncooperative formed under or subject to this chapter to provide such products or\nservices on a not-for-profit basis upon a finding that the affiliate will not\nreceive the benefit of any federal income tax exemption that is not available to\npersons other than cooperatives and will not receive the benefit of any\nfederally guaranteed or subsidized financing that is not available to persons\nother than cooperatives; and provided further, that nothing in this subsection\nshall prohibit the continued operation of any business activities of any\nnot-for-profit cooperative or affiliate formed, operating, and actively\nproviding products or services to customers on or before July 1, 1999.\n\nHISTORY: 1999, c. 874; 2000, cc. 964, 989.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}