{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/56-235.10.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/56-235.10.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/56-235.10.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/56-235.10.html"}],"law_id":57116,"edition_id":1,"section_id":57116,"structure_id":14465,"section_number":"56-235.10","catch_line":"Recovery of eligible safety activity costs; administration; procedure","history":"2013, cc. 281, 406.","full_text":"A\n\nAs used in this section:\n\t\t\t&#8220;Eligible safety activity costs&#8221; means a natural gas utility&#8217;s operation and maintenance expenditures that are related to (i) the development, implementation, or execution of the natural gas utility&#8217;s integrity management program developed in conformance with 49 CFR Part 192, Subpart P &#8212; Gas Distribution Pipeline Integrity Management or (ii) programs or measures implemented to comply with regulations issued by the Commission or a federal regulatory body with jurisdiction over pipeline safety.\n\t\t\t&#8220;Natural gas utility&#8221; means any investor-owned public service company engaged in the business of furnishing natural gas service to the public.B\n\nIn order to enhance pipeline safety in the Commonwealth, when the requirements of this section have been satisfied, a natural gas utility shall be permitted to recover eligible safety activity costs incurred on and after January 1, 2013, in future rates as provided in this section. The natural gas utility shall maintain the burden of demonstrating that the eligible safety activity costs have been reasonably and prudently incurred and that the criteria of this section have been satisfied.C\n\nA natural gas utility may account for eligible safety activity costs to be recovered pursuant to this section as deferred costs. The accumulated unrecovered balance of eligible safety activity costs deferred pursuant to this section shall not exceed four percent of the natural gas utility&#8217;s net plant investment that was utilized in establishing or confirming base rates in the natural gas utility&#8217;s most recent rate case using the cost of service methodology set forth in &#xA7; 56-235.2 or performance-based regulation plan authorized by &#xA7; 56-235.6. The eligible safety activity costs deferred hereunder shall be included in new base rates and charges instituted pursuant to a Commission order establishing or confirming customer rates in a rate case using the cost of service methodology set forth in &#xA7; 56-235.2 or a performance-based regulation plan authorized by &#xA7; 56-235.6. Such deferred costs shall not be subject to write-off or write-down by the Commission in an earnings test filing made pursuant to Commission rules governing utility rate increases and annual informational filings except as provided in this subsection. The natural gas utility shall be deemed to have recovered eligible safety activity costs to the extent that the return on equity earned by the natural gas utility in an earnings test filing for a given year, after consideration of the treatment of regulatory assets, is in excess of the mid-point of the rate of return on equity range specified or confirmed in the natural gas utility&#8217;s most recent rate case or performance-based regulation plan. Notwithstanding the foregoing, in the event that a utility&#8217;s base rates include eligible safety activity costs, the utility shall only be permitted to defer the level of eligible safety activity costs that are in excess of the level reflected in base rates.D\n\nAny natural gas utility that has on its books eligible safety activity costs deferred pursuant to this section shall include an earnings test filing as part of any application for an annual informational filing or rate proceeding.","order_by":null,"text":{"0":{"id":209160,"text":"As used in this section:\n\t\t\t&#8220;Eligible safety activity costs&#8221; means a natural gas utility&#8217;s operation and maintenance expenditures that are related to (i) the development, implementation, or execution of the natural gas utility&#8217;s integrity management program developed in conformance with 49 CFR Part 192, Subpart P &#8212; Gas Distribution Pipeline Integrity Management or (ii) programs or measures implemented to comply with regulations issued by the Commission or a federal regulatory body with jurisdiction over pipeline safety.\n\t\t\t&#8220;Natural gas utility&#8221; means any investor-owned public service company engaged in the business of furnishing natural gas service to the public.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":209161,"text":"In order to enhance pipeline safety in the Commonwealth, when the requirements of this section have been satisfied, a natural gas utility shall be permitted to recover eligible safety activity costs incurred on and after January 1, 2013, in future rates as provided in this section. The natural gas utility shall maintain the burden of demonstrating that the eligible safety activity costs have been reasonably and prudently incurred and that the criteria of this section have been satisfied.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"C"},"2":{"id":209162,"text":"A natural gas utility may account for eligible safety activity costs to be recovered pursuant to this section as deferred costs. The accumulated unrecovered balance of eligible safety activity costs deferred pursuant to this section shall not exceed four percent of the natural gas utility&#8217;s net plant investment that was utilized in establishing or confirming base rates in the natural gas utility&#8217;s most recent rate case using the cost of service methodology set forth in &#xA7; 56-235.2 or performance-based regulation plan authorized by &#xA7; 56-235.6. The eligible safety activity costs deferred hereunder shall be included in new base rates and charges instituted pursuant to a Commission order establishing or confirming customer rates in a rate case using the cost of service methodology set forth in &#xA7; 56-235.2 or a performance-based regulation plan authorized by &#xA7; 56-235.6. Such deferred costs shall not be subject to write-off or write-down by the Commission in an earnings test filing made pursuant to Commission rules governing utility rate increases and annual informational filings except as provided in this subsection. The natural gas utility shall be deemed to have recovered eligible safety activity costs to the extent that the return on equity earned by the natural gas utility in an earnings test filing for a given year, after consideration of the treatment of regulatory assets, is in excess of the mid-point of the rate of return on equity range specified or confirmed in the natural gas utility&#8217;s most recent rate case or performance-based regulation plan. Notwithstanding the foregoing, in the event that a utility&#8217;s base rates include eligible safety activity costs, the utility shall only be permitted to defer the level of eligible safety activity costs that are in excess of the level reflected in base rates.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"D"},"3":{"id":209163,"text":"Any natural gas utility that has on its books eligible safety activity costs deferred pursuant to this section shall include an earnings test filing as part of any application for an annual informational filing or rate proceeding.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C"}},"ancestry":[{"id":14465,"edition_id":1,"name":"Services, Rates, Charges, Etc","identifier":"2","label":"article","depth":3,"order_by":1,"parent_id":13238,"metadata":{},"date_created":"2026-06-26 03:48:13","date_modified":"2026-06-26 03:48:13","permalink":{"id":248755,"object_type":"structure","relational_id":14465,"identifier":"2","token":"56\/10\/2","url":"\/56\/10\/2\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13238,"edition_id":1,"name":"Heat, Light, Power, Water and Other Utility Companies Generally","identifier":"10","label":"chapter","depth":2,"order_by":1,"parent_id":12881,"metadata":{},"date_created":"2026-06-26 03:44:30","date_modified":"2026-06-26 03:44:30","permalink":{"id":248721,"object_type":"structure","relational_id":13238,"identifier":"10","token":"56\/10","url":"\/56\/10\/","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":87361,"structure_id":14465,"section_number":"56-234","catch_line":"Duty to furnish adequate service at reasonable and uniform rates","url":"\/56-234\/","token":"56\/10\/2\/56-234","metadata":false},{"id":74382,"structure_id":14465,"section_number":"56-234.1","catch_line":"Liability to customer for violation of duty to determine and charge lowest rate applicable","url":"\/56-234.1\/","token":"56\/10\/2\/56-234.1","metadata":false},{"id":56457,"structure_id":14465,"section_number":"56-234.2","catch_line":"Review of rates","url":"\/56-234.2\/","token":"56\/10\/2\/56-234.2","metadata":false},{"id":78493,"structure_id":14465,"section_number":"56-234.3","catch_line":"Approval of expenditures for and monitoring of new generation facilities and projected operation programs of electric utilities","url":"\/56-234.3\/","token":"56\/10\/2\/56-234.3","metadata":false},{"id":72152,"structure_id":14465,"section_number":"56-234.4","catch_line":"Authority to investigate utility operations to determine efficiency","url":"\/56-234.4\/","token":"56\/10\/2\/56-234.4","metadata":false},{"id":84236,"structure_id":14465,"section_number":"56-234.5","catch_line":"Required disclosure by certain officers and directors of certain utilities","url":"\/56-234.5\/","token":"56\/10\/2\/56-234.5","metadata":false},{"id":77453,"structure_id":14465,"section_number":"56-235","catch_line":"When Commission may fix rates, schedules, etc.; conformance with chapter","url":"\/56-235\/","token":"56\/10\/2\/56-235","metadata":false},{"id":85095,"structure_id":14465,"section_number":"56-235.1","catch_line":"Conservation of energy and capital resources","url":"\/56-235.1\/","token":"56\/10\/2\/56-235.1","metadata":false},{"id":57116,"structure_id":14465,"section_number":"56-235.10","catch_line":"Recovery of eligible safety activity costs; administration; procedure","url":"\/56-235.10\/","token":"56\/10\/2\/56-235.10","metadata":false},{"id":68057,"structure_id":14465,"section_number":"56-235.11","catch_line":"Retail rates of affiliated water utilities","url":"\/56-235.11\/","token":"56\/10\/2\/56-235.11","metadata":false},{"id":69890,"structure_id":14465,"section_number":"56-235.12","catch_line":"Economic development programs","url":"\/56-235.12\/","token":"56\/10\/2\/56-235.12","metadata":false},{"id":80899,"structure_id":14465,"section_number":"56-235.1:1","catch_line":"Rates for stand-by electric service at renewable cogeneration facilities","url":"\/56-235.1_1\/","token":"56\/10\/2\/56-235.1_1","metadata":false},{"id":80993,"structure_id":14465,"section_number":"56-235.1:2","catch_line":"Costs of using small, women-owned, or minority-owned businesses","url":"\/56-235.1_2\/","token":"56\/10\/2\/56-235.1_2","metadata":false},{"id":62621,"structure_id":14465,"section_number":"56-235.2","catch_line":"All rates, tolls, etc., to be just and reasonable to jurisdictional customers; findings and conclusions to be set forth; alternative forms of regulation for electric companies","url":"\/56-235.2\/","token":"56\/10\/2\/56-235.2","metadata":false},{"id":66652,"structure_id":14465,"section_number":"56-235.3","catch_line":"Procedures for investigation of rate applications","url":"\/56-235.3\/","token":"56\/10\/2\/56-235.3","metadata":false},{"id":63163,"structure_id":14465,"section_number":"56-235.4","catch_line":"Prohibition of multiple rate increases within any twelve-month period; exception","url":"\/56-235.4\/","token":"56\/10\/2\/56-235.4","metadata":false},{"id":55844,"structure_id":14465,"section_number":"56-235.5","catch_line":"Telephone regulatory alternatives","url":"\/56-235.5\/","token":"56\/10\/2\/56-235.5","metadata":false},{"id":87078,"structure_id":14465,"section_number":"56-235.5:1","catch_line":"Local exchange telephone service competition policy","url":"\/56-235.5_1\/","token":"56\/10\/2\/56-235.5_1","metadata":false},{"id":71641,"structure_id":14465,"section_number":"56-235.6","catch_line":"Optional performance-based regulation of certain utilities","url":"\/56-235.6\/","token":"56\/10\/2\/56-235.6","metadata":false},{"id":77670,"structure_id":14465,"section_number":"56-235.7","catch_line":"Jurisdiction of Commission when federal governmental facility ceases to be retail customer of electric utility","url":"\/56-235.7\/","token":"56\/10\/2\/56-235.7","metadata":false},{"id":78685,"structure_id":14465,"section_number":"56-235.8","catch_line":"Retail supply choice for natural gas customers","url":"\/56-235.8\/","token":"56\/10\/2\/56-235.8","metadata":false},{"id":62516,"structure_id":14465,"section_number":"56-235.9","catch_line":"Recovery of funds used for capital projects prior to a rate case for strategic natural gas facilities","url":"\/56-235.9\/","token":"56\/10\/2\/56-235.9","metadata":false},{"id":59697,"structure_id":14465,"section_number":"56-236","catch_line":"Public utilities required to file schedules of rates and charges; rules and regulations; when detariffing of telephone services to be permitted","url":"\/56-236\/","token":"56\/10\/2\/56-236","metadata":false},{"id":85571,"structure_id":14465,"section_number":"56-236.1","catch_line":"Rates to be charged churches","url":"\/56-236.1\/","token":"56\/10\/2\/56-236.1","metadata":false},{"id":74562,"structure_id":14465,"section_number":"56-236.2","catch_line":"Suspension of service to sewerage system","url":"\/56-236.2\/","token":"56\/10\/2\/56-236.2","metadata":false},{"id":57569,"structure_id":14465,"section_number":"56-237","catch_line":"How changes in rates effected; notice required; changes to be indicated on schedules","url":"\/56-237\/","token":"56\/10\/2\/56-237","metadata":false},{"id":64233,"structure_id":14465,"section_number":"56-237.1","catch_line":"Notification of intent to seek rate change in schedules required to be filed under \u00a7 56-236","url":"\/56-237.1\/","token":"56\/10\/2\/56-237.1","metadata":false},{"id":67487,"structure_id":14465,"section_number":"56-237.2","catch_line":"Public hearings on protests or objections to rate changes","url":"\/56-237.2\/","token":"56\/10\/2\/56-237.2","metadata":false},{"id":80068,"structure_id":14465,"section_number":"56-238","catch_line":"Suspension of proposed rates, etc.; investigation; effectiveness of rates pending investigation and subject to bond; fixing reasonable rates, etc","url":"\/56-238\/","token":"56\/10\/2\/56-238","metadata":false},{"id":78378,"structure_id":14465,"section_number":"56-239","catch_line":"Appeal from action of Commission","url":"\/56-239\/","token":"56\/10\/2\/56-239","metadata":false},{"id":64527,"structure_id":14465,"section_number":"56-240","catch_line":"Proposed rates, etc., or changes thereof, not suspended effective subject to later change by Commission; refund or credit; appeal; investor-owned public utilities required to show increase complies with \u00a7 56-235.2","url":"\/56-240\/","token":"56\/10\/2\/56-240","metadata":false},{"id":57241,"structure_id":14465,"section_number":"56-241","catch_line":"Rates of telephone companies","url":"\/56-241\/","token":"56\/10\/2\/56-241","metadata":false},{"id":83712,"structure_id":14465,"section_number":"56-241.1","catch_line":"Flat and measured telephone rates; certain rates prohibited","url":"\/56-241.1\/","token":"56\/10\/2\/56-241.1","metadata":false},{"id":74999,"structure_id":14465,"section_number":"56-241.2","catch_line":"Approval of rates for resale of telephone service","url":"\/56-241.2\/","token":"56\/10\/2\/56-241.2","metadata":false},{"id":72101,"structure_id":14465,"section_number":"56-242","catch_line":"Temporary reduction of rates","url":"\/56-242\/","token":"56\/10\/2\/56-242","metadata":false},{"id":79154,"structure_id":14465,"section_number":"56-243","catch_line":"Duration of such temporary reduction","url":"\/56-243\/","token":"56\/10\/2\/56-243","metadata":false},{"id":84025,"structure_id":14465,"section_number":"56-244","catch_line":"Increase to make up for losses due to excessive temporary reduction","url":"\/56-244\/","token":"56\/10\/2\/56-244","metadata":false},{"id":67793,"structure_id":14465,"section_number":"56-245","catch_line":"Temporary increase in rates","url":"\/56-245\/","token":"56\/10\/2\/56-245","metadata":false},{"id":75868,"structure_id":14465,"section_number":"56-245.1","catch_line":"Meters to be kept in good working condition; defective meters","url":"\/56-245.1\/","token":"56\/10\/2\/56-245.1","metadata":false},{"id":80955,"structure_id":14465,"section_number":"56-245.1:1","catch_line":"Customers to be notified about nuclear emergency evacuation plans","url":"\/56-245.1_1\/","token":"56\/10\/2\/56-245.1_1","metadata":false},{"id":61620,"structure_id":14465,"section_number":"56-245.1:2","catch_line":"Customers to be notified of renewable power options","url":"\/56-245.1_2\/","token":"56\/10\/2\/56-245.1_2","metadata":false},{"id":70183,"structure_id":14465,"section_number":"56-245.1:3","catch_line":"Disconnection suspension for utilities","url":"\/56-245.1_3\/","token":"56\/10\/2\/56-245.1_3","metadata":false},{"id":86241,"structure_id":14465,"section_number":"56-245.1:4","catch_line":"Notice procedures for nonpayment; disconnecting utility service","url":"\/56-245.1_4\/","token":"56\/10\/2\/56-245.1_4","metadata":false}],"previous_section":{"id":85095,"structure_id":14465,"section_number":"56-235.1","catch_line":"Conservation of energy and capital resources","url":"\/56-235.1\/","token":"56\/10\/2\/56-235.1","metadata":false},"next_section":{"id":68057,"structure_id":14465,"section_number":"56-235.11","catch_line":"Retail rates of affiliated water utilities","url":"\/56-235.11\/","token":"56\/10\/2\/56-235.11","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/56-235.10\/","history_text":"<p>This law was first created in 2013. The record of its establishment is cataloged in chapters <a href=\"https:\/\/legacylis.virginia.gov\/cgi-bin\/legp604.exe?131+ful+CHAP0281\">281<\/a> and <a href=\"https:\/\/legacylis.virginia.gov\/cgi-bin\/legp604.exe?131+ful+CHAP0406\">406<\/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.<\/p>","references":false,"refers_to":[{"id":62621,"section_number":"56-235.2","catch_line":"All rates, tolls, etc., to be just and reasonable to jurisdictional customers; findings and conclusions to be set forth; alternative forms of regulation for electric companies","order_by":null,"url":"\/56-235.2\/"},{"id":71641,"section_number":"56-235.6","catch_line":"Optional performance-based regulation of certain utilities","order_by":null,"url":"\/56-235.6\/"}],"permalink":{"id":248789,"object_type":"law","relational_id":57116,"identifier":"56-235.10","token":"56\/10\/2\/56-235.10","url":"\/56-235.10\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/56-235.10\/","token":"56\/10\/2\/56-235.10","dublin_core":{"Title":"Recovery of eligible safety activity costs; administration; procedure","Type":"Text","Format":"text\/html","Identifier":"\u00a7 56-235.10","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t<section id=\"A\"><p><span class=\"prefix-number\">A.<\/span> As used in this section:\n\t\t\t&#8220;<span class=\"dictionary\">Eligible safety activity costs<\/span>&#8221; means a <span class=\"dictionary\">natural gas utility<\/span>&#8217;s operation and maintenance expenditures that are related to (i) the development, implementation, or execution of the <span class=\"dictionary\">natural gas utility<\/span>&#8217;s integrity management program developed in conformance with 49 CFR Part 192, Subpart P &#8212; Gas Distribution Pipeline Integrity Management or (ii) programs or measures implemented to comply with regulations issued by the <span class=\"dictionary\">Commission<\/span> or a federal regulatory body with <span class=\"dictionary\">jurisdiction<\/span> over pipeline safety.\n\t\t\t&#8220;<span class=\"dictionary\">Natural gas utility<\/span>&#8221; means any investor-owned <span class=\"dictionary\">public service company<\/span> engaged in the business of furnishing natural gas service to the public. <a id=\"paragraph-209160\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-235.10\/#A\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t<section id=\"B\"><p><span class=\"prefix-number\">B.<\/span> In <span class=\"dictionary\">order<\/span> to enhance pipeline safety in the Commonwealth, when the requirements of this section have been satisfied, a <span class=\"dictionary\">natural gas utility<\/span> shall be permitted to recover <span class=\"dictionary\">eligible safety activity costs<\/span> incurred on and after January 1, 2013, in future <span class=\"dictionary\">rates<\/span> as provided in this section. The <span class=\"dictionary\">natural gas utility<\/span> shall maintain the burden of demonstrating that the <span class=\"dictionary\">eligible safety activity costs<\/span> have been reasonably and prudently incurred and that the criteria of this section have been satisfied. <a id=\"paragraph-209161\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-235.10\/#B\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t<section id=\"C\"><p><span class=\"prefix-number\">C.<\/span> A <span class=\"dictionary\">natural gas utility<\/span> may account for <span class=\"dictionary\">eligible safety activity costs<\/span> to be recovered pursuant to this section as deferred costs. The accumulated unrecovered balance of <span class=\"dictionary\">eligible safety activity costs<\/span> deferred pursuant to this section shall not exceed four percent of the <span class=\"dictionary\">natural gas utility<\/span>&#8217;s net plant investment that was utilized in establishing or confirming base <span class=\"dictionary\">rates<\/span> in the <span class=\"dictionary\">natural gas utility<\/span>&#8217;s most recent <span class=\"dictionary\">rate<\/span> case using the cost of service methodology set forth in &#xA7; <a class=\"law\" title=\"All rates, tolls, etc., to be just and reasonable to jurisdictional customers; findings and conclusions to be set forth; alternative forms of regulation for electric companies\" href=\"\/56-235.2\/\">56-235.2<\/a> or performance-based regulation plan authorized by &#xA7; <a class=\"law\" title=\"Optional performance-based regulation of certain utilities\" href=\"\/56-235.6\/\">56-235.6<\/a>. The <span class=\"dictionary\">eligible safety activity costs<\/span> deferred hereunder shall be included in new base <span class=\"dictionary\">rates<\/span> and charges instituted pursuant to a <span class=\"dictionary\">Commission<\/span> <span class=\"dictionary\">order<\/span> establishing or confirming customer <span class=\"dictionary\">rates<\/span> in a <span class=\"dictionary\">rate<\/span> case using the cost of service methodology set forth in &#xA7; <a class=\"law\" title=\"All rates, tolls, etc., to be just and reasonable to jurisdictional customers; findings and conclusions to be set forth; alternative forms of regulation for electric companies\" href=\"\/56-235.2\/\">56-235.2<\/a> or a performance-based regulation plan authorized by &#xA7; <a class=\"law\" title=\"Optional performance-based regulation of certain utilities\" href=\"\/56-235.6\/\">56-235.6<\/a>. Such deferred costs shall not be subject to write-off or write-down by the <span class=\"dictionary\">Commission<\/span> in an earnings test filing made pursuant to <span class=\"dictionary\">Commission<\/span> rules governing utility <span class=\"dictionary\">rate<\/span> increases and annual informational filings except as provided in this subsection. The <span class=\"dictionary\">natural gas utility<\/span> shall be deemed to have recovered <span class=\"dictionary\">eligible safety activity costs<\/span> to the extent that the return on <span class=\"dictionary\">equity<\/span> earned by the <span class=\"dictionary\">natural gas utility<\/span> in an earnings test filing for a given year, after consideration of the treatment of regulatory <span class=\"dictionary\">assets<\/span>, is in excess of the mid-point of the <span class=\"dictionary\">rate<\/span> of return on <span class=\"dictionary\">equity<\/span> range specified or confirmed in the <span class=\"dictionary\">natural gas utility<\/span>&#8217;s most recent <span class=\"dictionary\">rate<\/span> case or performance-based regulation plan. Notwithstanding the foregoing, in the event that a utility&#8217;s base <span class=\"dictionary\">rates<\/span> include <span class=\"dictionary\">eligible safety activity costs<\/span>, the utility shall only be permitted to defer the level of <span class=\"dictionary\">eligible safety activity costs<\/span> that are in excess of the level reflected in base <span class=\"dictionary\">rates<\/span>. <a id=\"paragraph-209162\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-235.10\/#C\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t<section id=\"D\"><p><span class=\"prefix-number\">D.<\/span> Any <span class=\"dictionary\">natural gas utility<\/span> that has on its books <span class=\"dictionary\">eligible safety activity costs<\/span> deferred pursuant to this section shall include an earnings test filing as part of any application for an annual informational filing or <span class=\"dictionary\">rate<\/span> proceeding. <a id=\"paragraph-209163\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-235.10\/#D\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>","plain_text":"                                 CODE OF VIRGINIA\n\nRECOVERY OF ELIGIBLE SAFETY ACTIVITY COSTS; ADMINISTRATION; PROCEDURE (\u00a7\n56-235.10)\n\nA. As used in this section:\n\t\t\t&#8220;Eligible safety activity costs&#8221; means a natural gas\nutility&#8217;s operation and maintenance expenditures that are related to (i)\nthe development, implementation, or execution of the natural gas utility&#8217;s\nintegrity management program developed in conformance with 49 CFR Part 192,\nSubpart P &#8212; Gas Distribution Pipeline Integrity Management or (ii)\nprograms or measures implemented to comply with regulations issued by the\nCommission or a federal regulatory body with jurisdiction over pipeline safety.\n\t\t\t&#8220;Natural gas utility&#8221; means any investor-owned public service\ncompany engaged in the business of furnishing natural gas service to the public.\n\nB. In order to enhance pipeline safety in the Commonwealth, when the\nrequirements of this section have been satisfied, a natural gas utility shall be\npermitted to recover eligible safety activity costs incurred on and after\nJanuary 1, 2013, in future rates as provided in this section. The natural gas\nutility shall maintain the burden of demonstrating that the eligible safety\nactivity costs have been reasonably and prudently incurred and that the criteria\nof this section have been satisfied.\n\nC. A natural gas utility may account for eligible safety activity costs to be\nrecovered pursuant to this section as deferred costs. The accumulated\nunrecovered balance of eligible safety activity costs deferred pursuant to this\nsection shall not exceed four percent of the natural gas utility&#8217;s net\nplant investment that was utilized in establishing or confirming base rates in\nthe natural gas utility&#8217;s most recent rate case using the cost of service\nmethodology set forth in &#xA7; 56-235.2 or performance-based regulation plan\nauthorized by &#xA7; 56-235.6. The eligible safety activity costs deferred\nhereunder shall be included in new base rates and charges instituted pursuant to\na Commission order establishing or confirming customer rates in a rate case\nusing the cost of service methodology set forth in &#xA7; 56-235.2 or a\nperformance-based regulation plan authorized by &#xA7; 56-235.6. Such deferred\ncosts shall not be subject to write-off or write-down by the Commission in an\nearnings test filing made pursuant to Commission rules governing utility rate\nincreases and annual informational filings except as provided in this\nsubsection. The natural gas utility shall be deemed to have recovered eligible\nsafety activity costs to the extent that the return on equity earned by the\nnatural gas utility in an earnings test filing for a given year, after\nconsideration of the treatment of regulatory assets, is in excess of the\nmid-point of the rate of return on equity range specified or confirmed in the\nnatural gas utility&#8217;s most recent rate case or performance-based\nregulation plan. Notwithstanding the foregoing, in the event that a\nutility&#8217;s base rates include eligible safety activity costs, the utility\nshall only be permitted to defer the level of eligible safety activity costs\nthat are in excess of the level reflected in base rates.\n\nD. Any natural gas utility that has on its books eligible safety activity costs\ndeferred pursuant to this section shall include an earnings test filing as part\nof any application for an annual informational filing or rate proceeding.\n\nHISTORY: 2013, cc. 281, 406.","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}}