{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/56-235.2.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/56-235.2.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/56-235.2.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/56-235.2.html"}],"law_id":62621,"edition_id":1,"section_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","history":"1977, c. 336; 1984, c. 312; 1996, c. 156; 2007, cc. 537, 888, 933; 2022, cc. 581, 582.","full_text":"A\n\nAny rate, toll, charge or schedule of any public utility operating in this Commonwealth shall be considered to be just and reasonable only if: (1) the public utility has demonstrated that such rates, tolls, charges or schedules in the aggregate provide revenues not in excess of the aggregate actual costs incurred by the public utility in serving customers within the jurisdiction of the Commission, including such normalization for nonrecurring costs and annualized adjustments for future costs as the Commission finds reasonably can be predicted to occur during the rate year, and a fair return on the public utility’s rate base used to serve those jurisdictional customers, which return shall be calculated in accordance with § 56-585.1 for utilities subject to such section; (1a) the investor-owned public electric utility has demonstrated that no part of such rates, tolls, charges or schedules includes costs for advertisement, except for advertisements either required by law or rule or regulation, or for advertisements which solely promote the public interest, conservation or more efficient use of energy; and (2) the public utility has demonstrated that such rates, tolls, charges or schedules contain reasonable classifications of customers. Notwithstanding § 56-234, the Commission may approve, either in the context of or apart from a rate proceeding after notice to all affected parties and hearing, special rates, contracts or incentives to individual customers or classes of customers where it finds such measures are in the public interest. Such special charges shall not be limited by the provisions of § 56-235.4. In determining costs of service, the Commission may use the test year method of estimating revenue needs. In any Commission order establishing a fair and reasonable rate of return for an investor-owned gas, telephone or electric public utility, the Commission shall set forth the findings of fact and conclusions of law upon which such order is based.\n\t\t\tFor ratemaking purposes, the Commission shall determine the federal and state income tax costs for investor-owned water, gas, or electric utility that is part of a publicly-traded, consolidated group as follows: (i) such utility’s apportioned state income tax costs shall be calculated according to the applicable statutory rate, as if the utility had not filed a consolidated return with its affiliates, and (ii) such utility’s federal income tax costs shall be calculated according to the applicable federal income tax rate and shall exclude any consolidated tax liability or benefit adjustments originating from any taxable income or loss of its affiliates.\n\t\t\tIn any ratemaking proceeding for an investor-owned utility authorized to furnish water or water and sewer service initiated after January 1, 2022, the Commission shall evaluate such utility on a stand-alone basis and, for purposes of establishing any revenue requirement and rates, utilize such utility’s actual end-of-test period capital structure and cost of capital without regard to the cost of capital, capital structure, or investments of any other entities with which such utility may be affiliated, unless the Commission finds based on evidence in the record that the debt to equity ratio of the actual end-of-test period capital structure of such utility is unreasonable, in which case the Commission may utilize a debt to equity ratio that it finds to be reasonable. In all proceedings initiated after January 1, 2022, in which the Commission reviews the rates and associated earnings of an investor-owned utility authorized to furnish water or water and sewer service, the Commission shall conduct such review utilizing the same cost of capital and capital structure adopted in the utility’s most recent rate case in which such rates were set, without regard to any later changes in the cost of capital or capital structure.B\n\nThe Commission shall, before approving special rates, contracts, incentives or other alternative regulatory plans under subsection A, ensure that such action (i) protects the public interest, (ii) will not unreasonably prejudice or disadvantage any customer or class of customers, and (iii) will not jeopardize the continuation of reliable electric service.C\n\nAfter notice and public hearing, the Commission shall issue guidelines for special rates adopted pursuant to subsection A that will ensure that other customers are not caused to bear increased rates as a result of such special rates.","order_by":null,"text":{"0":{"id":228316,"text":"Any rate, toll, charge or schedule of any public utility operating in this Commonwealth shall be considered to be just and reasonable only if: (1) the public utility has demonstrated that such rates, tolls, charges or schedules in the aggregate provide revenues not in excess of the aggregate actual costs incurred by the public utility in serving customers within the jurisdiction of the Commission, including such normalization for nonrecurring costs and annualized adjustments for future costs as the Commission finds reasonably can be predicted to occur during the rate year, and a fair return on the public utility’s rate base used to serve those jurisdictional customers, which return shall be calculated in accordance with § 56-585.1 for utilities subject to such section; (1a) the investor-owned public electric utility has demonstrated that no part of such rates, tolls, charges or schedules includes costs for advertisement, except for advertisements either required by law or rule or regulation, or for advertisements which solely promote the public interest, conservation or more efficient use of energy; and (2) the public utility has demonstrated that such rates, tolls, charges or schedules contain reasonable classifications of customers. Notwithstanding § 56-234, the Commission may approve, either in the context of or apart from a rate proceeding after notice to all affected parties and hearing, special rates, contracts or incentives to individual customers or classes of customers where it finds such measures are in the public interest. Such special charges shall not be limited by the provisions of § 56-235.4. In determining costs of service, the Commission may use the test year method of estimating revenue needs. In any Commission order establishing a fair and reasonable rate of return for an investor-owned gas, telephone or electric public utility, the Commission shall set forth the findings of fact and conclusions of law upon which such order is based.\n\t\t\tFor ratemaking purposes, the Commission shall determine the federal and state income tax costs for investor-owned water, gas, or electric utility that is part of a publicly-traded, consolidated group as follows: (i) such utility’s apportioned state income tax costs shall be calculated according to the applicable statutory rate, as if the utility had not filed a consolidated return with its affiliates, and (ii) such utility’s federal income tax costs shall be calculated according to the applicable federal income tax rate and shall exclude any consolidated tax liability or benefit adjustments originating from any taxable income or loss of its affiliates.\n\t\t\tIn any ratemaking proceeding for an investor-owned utility authorized to furnish water or water and sewer service initiated after January 1, 2022, the Commission shall evaluate such utility on a stand-alone basis and, for purposes of establishing any revenue requirement and rates, utilize such utility’s actual end-of-test period capital structure and cost of capital without regard to the cost of capital, capital structure, or investments of any other entities with which such utility may be affiliated, unless the Commission finds based on evidence in the record that the debt to equity ratio of the actual end-of-test period capital structure of such utility is unreasonable, in which case the Commission may utilize a debt to equity ratio that it finds to be reasonable. In all proceedings initiated after January 1, 2022, in which the Commission reviews the rates and associated earnings of an investor-owned utility authorized to furnish water or water and sewer service, the Commission shall conduct such review utilizing the same cost of capital and capital structure adopted in the utility’s most recent rate case in which such rates were set, without regard to any later changes in the cost of capital or capital structure.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":228317,"text":"The Commission shall, before approving special rates, contracts, incentives or other alternative regulatory plans under subsection A, ensure that such action (i) protects the public interest, (ii) will not unreasonably prejudice or disadvantage any customer or class of customers, and (iii) will not jeopardize the continuation of reliable electric service.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"C"},"2":{"id":228318,"text":"After notice and public hearing, the Commission shall issue guidelines for special rates adopted pursuant to subsection A that will ensure that other customers are not caused to bear increased rates as a result of such special rates.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B"}},"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":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},"next_section":{"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},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/56-235.2\/","history_text":"

This law was first created in 1977. The record of its establishment is cataloged in chapter 336 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. Unfortunately, the 1977 \u201cActs\u201d aren\u2019t available online. It has been modified 4 times. 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. Those modifications are as follows: in 1984, chapter 312; in 1996, chapter 156<\/a>; in 2007, chapters 537<\/a>, 888<\/a>, and 933<\/a>; in 2022, chapters 581<\/a> and 582<\/a>.<\/p>","references":[{"id":57116,"section_number":"56-235.10","catch_line":"Recovery of eligible safety activity costs; administration; procedure","order_by":null,"url":"\/56-235.10\/"},{"id":55844,"section_number":"56-235.5","catch_line":"Telephone regulatory alternatives","order_by":null,"url":"\/56-235.5\/"},{"id":71641,"section_number":"56-235.6","catch_line":"Optional performance-based regulation of certain utilities","order_by":null,"url":"\/56-235.6\/"},{"id":78685,"section_number":"56-235.8","catch_line":"Retail supply choice for natural gas customers","order_by":null,"url":"\/56-235.8\/"},{"id":62516,"section_number":"56-235.9","catch_line":"Recovery of funds used for capital projects prior to a rate case for strategic natural gas facilities","order_by":null,"url":"\/56-235.9\/"},{"id":64527,"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","order_by":null,"url":"\/56-240\/"},{"id":67793,"section_number":"56-245","catch_line":"Temporary increase in rates","order_by":null,"url":"\/56-245\/"},{"id":67687,"section_number":"56-585.1","catch_line":"Generation, distribution, and transmission rates after capped rates terminate or expire","order_by":null,"url":"\/56-585.1\/"},{"id":75688,"section_number":"56-585.1:1","catch_line":"Transitional Rate Period: review of rates, terms and conditions for utility generation facilities","order_by":null,"url":"\/56-585.1_1\/"},{"id":82389,"section_number":"56-585.1:11","catch_line":"Development of offshore wind capacity","order_by":null,"url":"\/56-585.1_11\/"},{"id":76005,"section_number":"56-600","catch_line":"Definitions","order_by":null,"url":"\/56-600\/"},{"id":59830,"section_number":"56-601","catch_line":"Natural gas conservation and ratemaking efficiency","order_by":null,"url":"\/56-601\/"},{"id":77174,"section_number":"56-602","catch_line":"Conservation and ratemaking efficiency plans","order_by":null,"url":"\/56-602\/"},{"id":60555,"section_number":"56-603","catch_line":"Definitions","order_by":null,"url":"\/56-603\/"},{"id":61559,"section_number":"56-604","catch_line":"Filing of petition with Commission to establish or amend a SAVE plan; recovery of certain costs; procedure","order_by":null,"url":"\/56-604\/"},{"id":86694,"section_number":"56-605","catch_line":"Definitions","order_by":null,"url":"\/56-605\/"},{"id":70852,"section_number":"56-607","catch_line":"Application and administration","order_by":null,"url":"\/56-607\/"},{"id":86601,"section_number":"56-609","catch_line":"Upstream natural gas supply infrastructure projects","order_by":null,"url":"\/56-609\/"},{"id":63713,"section_number":"56-610","catch_line":"Definitions","order_by":null,"url":"\/56-610\/"},{"id":81639,"section_number":"56-611","catch_line":"Petition to establish or amend expansion plan; cost recovery; procedures","order_by":null,"url":"\/56-611\/"},{"id":60501,"section_number":"56-625","catch_line":"Biogas supply infrastructure projects","order_by":null,"url":"\/56-625\/"},{"id":78400,"section_number":"56-626","catch_line":"(Expires July 1, 2035) Definitions","order_by":null,"url":"\/56-626\/"}],"refers_to":[{"id":87361,"section_number":"56-234","catch_line":"Duty to furnish adequate service at reasonable and uniform rates","order_by":null,"url":"\/56-234\/"},{"id":63163,"section_number":"56-235.4","catch_line":"Prohibition of multiple rate increases within any twelve-month period; exception","order_by":null,"url":"\/56-235.4\/"},{"id":67687,"section_number":"56-585.1","catch_line":"Generation, distribution, and transmission rates after capped rates terminate or expire","order_by":null,"url":"\/56-585.1\/"}],"permalink":{"id":248809,"object_type":"law","relational_id":62621,"identifier":"56-235.2","token":"56\/10\/2\/56-235.2","url":"\/56-235.2\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/56-235.2\/","token":"56\/10\/2\/56-235.2","dublin_core":{"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","Type":"Text","Format":"text\/html","Identifier":"\u00a7 56-235.2","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> Any rate<\/span>, toll, charge or schedule of any public utility operating in this Commonwealth shall be considered to be just and reasonable only if: (1) the public utility has demonstrated that such rates<\/span>, tolls, charges or schedules<\/span> in the aggregate provide revenues not in excess of the aggregate actual costs incurred by the public utility in serving customers within the jurisdiction<\/span> of the Commission<\/span>, including such normalization for nonrecurring costs and annualized adjustments for future costs as the Commission<\/span> finds reasonably can be predicted to occur during the rate<\/span> year, and a fair return on the public utility’s rate<\/span> base used to serve those jurisdictional customers, which return shall be calculated in accordance with § 56-585.1<\/a> for utilities subject to such section; (1a) the investor-owned public electric utility has demonstrated that no part of such rates<\/span>, tolls, charges or schedules<\/span> includes costs for advertisement, except for advertisements either required by law<\/span> or rule or regulation, or for advertisements which solely promote the public interest, conservation or more efficient use of energy; and (2) the public utility has demonstrated that such rates<\/span>, tolls, charges or schedules<\/span> contain reasonable classifications of customers. Notwithstanding § 56-234<\/a>, the Commission<\/span> may approve, either in the context of or apart from a rate<\/span> proceeding after notice to all affected parties and hearing<\/span>, special rates<\/span>, contracts<\/span> or incentives to individual customers or classes of customers where it finds such measures are in the public interest. Such special charges shall not be limited by the provisions of § 56-235.4<\/a>. In determining costs of service, the Commission<\/span> may use the test year method of estimating revenue needs. In any Commission<\/span> order<\/span> establishing a fair and reasonable rate<\/span> of return for an investor-owned gas, telephone or electric public utility, the Commission<\/span> shall set forth the findings<\/span> of fact<\/span> and conclusions of law<\/span> upon which such order<\/span> is based.\n\t\t\tFor ratemaking purposes, the Commission<\/span> shall determine the federal and state income tax costs for investor-owned water, gas, or electric utility that is part of a publicly-traded, consolidated group as follows: (i) such utility’s apportioned state income tax costs shall be calculated according to the applicable statutory rate<\/span>, as if the utility had not filed a consolidated return with its affiliates, and (ii) such utility’s federal income tax costs shall be calculated according to the applicable federal income tax rate<\/span> and shall exclude any consolidated tax liability or benefit adjustments originating from any taxable income or loss of its affiliates.\n\t\t\tIn any ratemaking proceeding for an investor-owned utility authorized to furnish water or water and sewer service initiated after January 1, 2022, the Commission<\/span> shall evaluate such utility on a stand-alone basis and, for purposes of establishing any revenue requirement and rates<\/span>, utilize such utility’s actual end-of-test period capital structure and cost of capital without regard to the cost of capital, capital structure, or investments of any other entities with which such utility may be affiliated, unless the Commission<\/span> finds based on evidence<\/span> in the record that the debt to equity<\/span> ratio of the actual end-of-test period capital structure of such utility is unreasonable, in which case the Commission<\/span> may utilize a debt to equity<\/span> ratio that it finds to be reasonable. In all proceedings initiated after January 1, 2022, in which the Commission<\/span> reviews the rates<\/span> and associated earnings of an investor-owned utility authorized to furnish water or water and sewer service, the Commission<\/span> shall conduct such review utilizing the same cost of capital and capital structure adopted in the utility’s most recent rate<\/span> case in which such rates<\/span> were set, without regard to any later changes in the cost of capital or capital structure. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> The Commission<\/span> shall, before approving special rates<\/span>, contracts<\/span>, incentives or other alternative regulatory plans under subsection A, ensure that such action (i) protects the public interest, (ii) will not unreasonably prejudice or disadvantage any customer or class of customers, and (iii) will not jeopardize the continuation of reliable electric service. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> After notice and public hearing<\/span>, the Commission<\/span> shall issue<\/span> guidelines for special rates<\/span> adopted pursuant to subsection A that will ensure that other customers are not caused to bear increased rates<\/span> as a result of such special rates<\/span>. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nALL RATES, TOLLS, ETC., TO BE JUST AND REASONABLE TO JURISDICTIONAL CUSTOMERS;\nFINDINGS AND CONCLUSIONS TO BE SET FORTH; ALTERNATIVE FORMS OF REGULATION FOR\nELECTRIC COMPANIES (\u00a7 56-235.2)\n\nA. Any rate, toll, charge or schedule of any public utility operating in this\nCommonwealth shall be considered to be just and reasonable only if: (1) the\npublic utility has demonstrated that such rates, tolls, charges or schedules in\nthe aggregate provide revenues not in excess of the aggregate actual costs\nincurred by the public utility in serving customers within the jurisdiction of\nthe Commission, including such normalization for nonrecurring costs and\nannualized adjustments for future costs as the Commission finds reasonably can\nbe predicted to occur during the rate year, and a fair return on the public\nutility’s rate base used to serve those jurisdictional customers, which\nreturn shall be calculated in accordance with § 56-585.1 for utilities\nsubject to such section; (1a) the investor-owned public electric utility has\ndemonstrated that no part of such rates, tolls, charges or schedules includes\ncosts for advertisement, except for advertisements either required by law or\nrule or regulation, or for advertisements which solely promote the public\ninterest, conservation or more efficient use of energy; and (2) the public\nutility has demonstrated that such rates, tolls, charges or schedules contain\nreasonable classifications of customers. Notwithstanding § 56-234, the\nCommission may approve, either in the context of or apart from a rate proceeding\nafter notice to all affected parties and hearing, special rates, contracts or\nincentives to individual customers or classes of customers where it finds such\nmeasures are in the public interest. Such special charges shall not be limited\nby the provisions of § 56-235.4. In determining costs of service, the\nCommission may use the test year method of estimating revenue needs. In any\nCommission order establishing a fair and reasonable rate of return for an\ninvestor-owned gas, telephone or electric public utility, the Commission shall\nset forth the findings of fact and conclusions of law upon which such order is\nbased.\n\t\t\tFor ratemaking purposes, the Commission shall determine the federal and state\nincome tax costs for investor-owned water, gas, or electric utility that is part\nof a publicly-traded, consolidated group as follows: (i) such utility’s\napportioned state income tax costs shall be calculated according to the\napplicable statutory rate, as if the utility had not filed a consolidated return\nwith its affiliates, and (ii) such utility’s federal income tax costs\nshall be calculated according to the applicable federal income tax rate and\nshall exclude any consolidated tax liability or benefit adjustments originating\nfrom any taxable income or loss of its affiliates.\n\t\t\tIn any ratemaking proceeding for an investor-owned utility authorized to\nfurnish water or water and sewer service initiated after January 1, 2022, the\nCommission shall evaluate such utility on a stand-alone basis and, for purposes\nof establishing any revenue requirement and rates, utilize such utility’s\nactual end-of-test period capital structure and cost of capital without regard\nto the cost of capital, capital structure, or investments of any other entities\nwith which such utility may be affiliated, unless the Commission finds based on\nevidence in the record that the debt to equity ratio of the actual end-of-test\nperiod capital structure of such utility is unreasonable, in which case the\nCommission may utilize a debt to equity ratio that it finds to be reasonable. In\nall proceedings initiated after January 1, 2022, in which the Commission reviews\nthe rates and associated earnings of an investor-owned utility authorized to\nfurnish water or water and sewer service, the Commission shall conduct such\nreview utilizing the same cost of capital and capital structure adopted in the\nutility’s most recent rate case in which such rates were set, without\nregard to any later changes in the cost of capital or capital structure.\n\nB. The Commission shall, before approving special rates, contracts, incentives\nor other alternative regulatory plans under subsection A, ensure that such\naction (i) protects the public interest, (ii) will not unreasonably prejudice or\ndisadvantage any customer or class of customers, and (iii) will not jeopardize\nthe continuation of reliable electric service.\n\nC. After notice and public hearing, the Commission shall issue guidelines for\nspecial rates adopted pursuant to subsection A that will ensure that other\ncustomers are not caused to bear increased rates as a result of such special\nrates.\n\nHISTORY: 1977, c. 336; 1984, c. 312; 1996, c. 156; 2007, cc. 537, 888, 933;\n2022, cc. 581, 582.","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}}