{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/56-626.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/56-626.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/56-626.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/56-626.html"}],"law_id":78400,"edition_id":1,"section_id":78400,"structure_id":16131,"section_number":"56-626","catch_line":"(Expires July 1, 2035) Definitions","history":"2025, cc. 501, 599.","full_text":"As used in this chapter, unless the context requires a different meaning:\n\t\t&#8220;EIRE&#8221; means eligible infrastructure replacement and enhancement.\n\t\t&#8220;EIRE plan&#8221; means a plan filed by a utility that identifies proposed eligible infrastructure projects and an EIRE rider.\n\t\t&#8220;EIRE rider&#8221; means a recovery mechanism that will allow for recovery of the eligible infrastructure costs, through a separate mechanism from the customer rates established in a rate case using the cost of service methodology set forth in \u00a7 56-235.2.\n\t\t&#8220;Eligible infrastructure&#8221; means water utility projects or wastewater utility projects that maintain or enhance safety, reliability, or efficiency or that facilitate compliance with state or federal environmental requirements. Eligible infrastructure does not include (i) the investment in water utility or wastewater utility infrastructure included in the utility&#8217;s rate base in its most recent rate case or (ii) projects designed primarily to serve new customers and increase revenues.\n\t\t&#8220;Eligible infrastructure costs&#8221; includes the following:\n\n1\n\nReturn on investment. In calculating the return on investment, the Commission shall use the utility&#8217;s regulatory capital structure as calculated utilizing the weighted average cost of capital, including the cost of debt and the cost of equity used in determining the utility&#8217;s base rates in effect during the construction period of the water or wastewater utility project. If the utility&#8217;s cost of capital has not been changed by order of the Commission within the preceding five years, the Commission may require the utility to file an updated weighted average cost of capital, and the utility may propose an updated weighted average cost of capital. The utility may recover the external costs associated with establishing its updated weighted average cost of capital through the EIRE rider. Such external costs shall include legal costs and consultant costs;2\n\nA revenue conversion factor, which factor, including income taxes and an allowance for bad debt expense, shall be applied to the required operating income resulting from the eligible infrastructure costs;3\n\nDepreciation. In calculating depreciation, the Commission shall use the utility&#8217;s current depreciation rates specific to the applicable asset;4\n\nProperty taxes;5\n\nCarrying costs on the over-recovery or under-recovery of the eligible infrastructure costs. In calculating the carrying costs, the Commission shall use the utility&#8217;s regulatory capital structure as determined in subdivision 1 of the definition of eligible infrastructure costs;6\n\nUnreimbursed costs of relocating facilities due to highway projects; and7\n\nOperation and maintenance expenses that the Commission determines are associated with eligible infrastructure and that were not included in the revenue requirement of the utility last approved by the Commission.\n\t\t\t&#8220;Investment&#8221; means costs incurred on eligible infrastructure projects including planning, development, removal, and construction costs; costs of infrastructure associated therewith; and an allowance for funds used during construction. In calculating the allowance for funds used during construction, the Commission shall use the utility&#8217;s actual regulatory capital structure as determined in subdivision 1 of the definition of eligible infrastructure costs.\n\t\t\t&#8220;In-kind replacement&#8221; means replacement with new materials or equipment designed, constructed, and sized to meet current industry standards and to comply with federal, state, and local regulation.\n\t\t\t&#8220;Utility&#8221; means water utility or wastewater utility.\n\t\t\t&#8220;Wastewater utility&#8221; means an investor-owned public service company engaged in the business of furnishing wastewater service to the public.\n\t\t\t&#8220;Wastewater utility project&#8221; includes:1\n\nNon-growth-related collection main extensions;2\n\nFacilities necessary to comply with applicable state and federal laws and regulations;3\n\nImprovements that enable compliance with National Pollutant Discharge Elimination System permits;4\n\nUnreimbursed costs of relocating facilities due to highway construction or relocation projects; and5\n\nIn-kind replacement of pumps, motors, blowers, tanks, or mechanical equipment.\n\t\t\t&#8220;Water utility&#8221; means an investor-owned public service company engaged in the business of furnishing water service to the public.\n\t\t\t&#8220;Water utility project&#8221; includes:1\n\nIn-kind replacement of transmission or distribution system mains as well as replacement of valves, utility service lines, including meter boxes and appurtenances, meters, including radio frequency meters, and hydrants connected to a replaced transmission or distribution system main;2\n\nNon-growth-related main extensions installed to eliminate dead ends that will address primary and secondary drinking water standards as defined by the Department of Environmental Quality, the Department of Health, and the federal Environmental Protection Agency;3\n\nEquipment and facilities installed to address primary and secondary drinking water standards as defined by the Department of Environmental Quality, the Department of Health, and the federal Environmental Protection Agency; and4\n\nUnreimbursed costs of relocating facilities due to highway projects.","order_by":null,"text":{"0":{"id":280979,"text":"As used in this chapter, unless the context requires a different meaning:\n\t\t&#8220;EIRE&#8221; means eligible infrastructure replacement and enhancement.\n\t\t&#8220;EIRE plan&#8221; means a plan filed by a utility that identifies proposed eligible infrastructure projects and an EIRE rider.\n\t\t&#8220;EIRE rider&#8221; means a recovery mechanism that will allow for recovery of the eligible infrastructure costs, through a separate mechanism from the customer rates established in a rate case using the cost of service methodology set forth in \u00a7 56-235.2.\n\t\t&#8220;Eligible infrastructure&#8221; means water utility projects or wastewater utility projects that maintain or enhance safety, reliability, or efficiency or that facilitate compliance with state or federal environmental requirements. Eligible infrastructure does not include (i) the investment in water utility or wastewater utility infrastructure included in the utility&#8217;s rate base in its most recent rate case or (ii) projects designed primarily to serve new customers and increase revenues.\n\t\t&#8220;Eligible infrastructure costs&#8221; includes the following:","type":"section","prefixes":[""],"prefix":"","entire_prefix":"","prefix_anchor":"","level":1,"next_prefix":"1"},"1":{"id":280980,"text":"Return on investment. In calculating the return on investment, the Commission shall use the utility&#8217;s regulatory capital structure as calculated utilizing the weighted average cost of capital, including the cost of debt and the cost of equity used in determining the utility&#8217;s base rates in effect during the construction period of the water or wastewater utility project. If the utility&#8217;s cost of capital has not been changed by order of the Commission within the preceding five years, the Commission may require the utility to file an updated weighted average cost of capital, and the utility may propose an updated weighted average cost of capital. The utility may recover the external costs associated with establishing its updated weighted average cost of capital through the EIRE rider. Such external costs shall include legal costs and consultant costs;","type":"section","prefixes":["1"],"prefix":"1","entire_prefix":"1","prefix_anchor":"1","level":1,"prior_prefix":"","next_prefix":"2"},"2":{"id":280981,"text":"A revenue conversion factor, which factor, including income taxes and an allowance for bad debt expense, shall be applied to the required operating income resulting from the eligible infrastructure costs;","type":"section","prefixes":["2"],"prefix":"2","entire_prefix":"2","prefix_anchor":"2","level":1,"prior_prefix":"1","next_prefix":"3"},"3":{"id":280982,"text":"Depreciation. In calculating depreciation, the Commission shall use the utility&#8217;s current depreciation rates specific to the applicable asset;","type":"section","prefixes":["3"],"prefix":"3","entire_prefix":"3","prefix_anchor":"3","level":1,"prior_prefix":"2","next_prefix":"4"},"4":{"id":280983,"text":"Property taxes;","type":"section","prefixes":["4"],"prefix":"4","entire_prefix":"4","prefix_anchor":"4","level":1,"prior_prefix":"3","next_prefix":"5"},"5":{"id":280984,"text":"Carrying costs on the over-recovery or under-recovery of the eligible infrastructure costs. In calculating the carrying costs, the Commission shall use the utility&#8217;s regulatory capital structure as determined in subdivision 1 of the definition of eligible infrastructure costs;","type":"section","prefixes":["5"],"prefix":"5","entire_prefix":"5","prefix_anchor":"5","level":1,"prior_prefix":"4","next_prefix":"6"},"6":{"id":280985,"text":"Unreimbursed costs of relocating facilities due to highway projects; and","type":"section","prefixes":["6"],"prefix":"6","entire_prefix":"6","prefix_anchor":"6","level":1,"prior_prefix":"5","next_prefix":"7"},"7":{"id":280986,"text":"Operation and maintenance expenses that the Commission determines are associated with eligible infrastructure and that were not included in the revenue requirement of the utility last approved by the Commission.\n\t\t\t&#8220;Investment&#8221; means costs incurred on eligible infrastructure projects including planning, development, removal, and construction costs; costs of infrastructure associated therewith; and an allowance for funds used during construction. In calculating the allowance for funds used during construction, the Commission shall use the utility&#8217;s actual regulatory capital structure as determined in subdivision 1 of the definition of eligible infrastructure costs.\n\t\t\t&#8220;In-kind replacement&#8221; means replacement with new materials or equipment designed, constructed, and sized to meet current industry standards and to comply with federal, state, and local regulation.\n\t\t\t&#8220;Utility&#8221; means water utility or wastewater utility.\n\t\t\t&#8220;Wastewater utility&#8221; means an investor-owned public service company engaged in the business of furnishing wastewater service to the public.\n\t\t\t&#8220;Wastewater utility project&#8221; includes:","type":"section","prefixes":["7"],"prefix":"7","entire_prefix":"7","prefix_anchor":"7","level":1,"prior_prefix":"6","next_prefix":"1"},"8":{"id":280987,"text":"Non-growth-related collection main extensions;","type":"section","prefixes":["1"],"prefix":"1","entire_prefix":"1","prefix_anchor":"1","level":1,"prior_prefix":"7","next_prefix":"2"},"9":{"id":280988,"text":"Facilities necessary to comply with applicable state and federal laws and regulations;","type":"section","prefixes":["2"],"prefix":"2","entire_prefix":"2","prefix_anchor":"2","level":1,"prior_prefix":"1","next_prefix":"3"},"10":{"id":280989,"text":"Improvements that enable compliance with National Pollutant Discharge Elimination System permits;","type":"section","prefixes":["3"],"prefix":"3","entire_prefix":"3","prefix_anchor":"3","level":1,"prior_prefix":"2","next_prefix":"4"},"11":{"id":280990,"text":"Unreimbursed costs of relocating facilities due to highway construction or relocation projects; and","type":"section","prefixes":["4"],"prefix":"4","entire_prefix":"4","prefix_anchor":"4","level":1,"prior_prefix":"3","next_prefix":"5"},"12":{"id":280991,"text":"In-kind replacement of pumps, motors, blowers, tanks, or mechanical equipment.\n\t\t\t&#8220;Water utility&#8221; means an investor-owned public service company engaged in the business of furnishing water service to the public.\n\t\t\t&#8220;Water utility project&#8221; includes:","type":"section","prefixes":["5"],"prefix":"5","entire_prefix":"5","prefix_anchor":"5","level":1,"prior_prefix":"4","next_prefix":"1"},"13":{"id":280992,"text":"In-kind replacement of transmission or distribution system mains as well as replacement of valves, utility service lines, including meter boxes and appurtenances, meters, including radio frequency meters, and hydrants connected to a replaced transmission or distribution system main;","type":"section","prefixes":["1"],"prefix":"1","entire_prefix":"1","prefix_anchor":"1","level":1,"prior_prefix":"5","next_prefix":"2"},"14":{"id":280993,"text":"Non-growth-related main extensions installed to eliminate dead ends that will address primary and secondary drinking water standards as defined by the Department of Environmental Quality, the Department of Health, and the federal Environmental Protection Agency;","type":"section","prefixes":["2"],"prefix":"2","entire_prefix":"2","prefix_anchor":"2","level":1,"prior_prefix":"1","next_prefix":"3"},"15":{"id":280994,"text":"Equipment and facilities installed to address primary and secondary drinking water standards as defined by the Department of Environmental Quality, the Department of Health, and the federal Environmental Protection Agency; and","type":"section","prefixes":["3"],"prefix":"3","entire_prefix":"3","prefix_anchor":"3","level":1,"prior_prefix":"2","next_prefix":"4"},"16":{"id":280995,"text":"Unreimbursed costs of relocating facilities due to highway projects.","type":"section","prefixes":["4"],"prefix":"4","entire_prefix":"4","prefix_anchor":"4","level":1,"prior_prefix":"3"}},"ancestry":[{"id":16131,"edition_id":1,"name":"Eligible Infrastructure Replacement and Enhancement","identifier":"31","label":"chapter","depth":2,"order_by":1,"parent_id":12881,"metadata":{},"date_created":"2026-06-26 04:07:04","date_modified":"2026-06-26 04:07:04","permalink":{"id":251087,"object_type":"structure","relational_id":16131,"identifier":"31","token":"56\/31","url":"\/56\/31\/","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":78400,"structure_id":16131,"section_number":"56-626","catch_line":"(Expires July 1, 2035) Definitions","url":"\/56-626\/","token":"56\/31\/56-626","metadata":false},{"id":63984,"structure_id":16131,"section_number":"56-627","catch_line":"(Expires July 1, 2035) Filing of petition with Commission to establish or amend EIRE plan and rider; cost recovery; procedure","url":"\/56-627\/","token":"56\/31\/56-627","metadata":false}],"next_section":{"id":63984,"structure_id":16131,"section_number":"56-627","catch_line":"(Expires July 1, 2035) Filing of petition with Commission to establish or amend EIRE plan and rider; cost recovery; procedure","url":"\/56-627\/","token":"56\/31\/56-627","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/56-626\/","history_text":"<p>This law was first created in 2025. The record of its establishment is cataloged in chapters <a href=\"https:\/\/legacylis.virginia.gov\/cgi-bin\/legp604.exe?251+ful+CHAP0501\">501<\/a> and <a href=\"https:\/\/legacylis.virginia.gov\/cgi-bin\/legp604.exe?251+ful+CHAP0599\">599<\/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\/"}],"permalink":{"id":251089,"object_type":"law","relational_id":78400,"identifier":"56-626","token":"56\/31\/56-626","url":"\/56-626\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/56-626\/","token":"56\/31\/56-626","dublin_core":{"Title":"(Expires July 1, 2035) Definitions","Type":"Text","Format":"text\/html","Identifier":"\u00a7 56-626","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t<section><p>As used in this chapter, unless the context requires a different meaning:\n\t\t&#8220;EIRE&#8221; means eligible infrastructure replacement and enhancement.\n\t\t&#8220;<span class=\"dictionary\">EIRE plan<\/span>&#8221; means a plan filed by a utility that identifies proposed eligible infrastructure projects and an <span class=\"dictionary\">EIRE rider<\/span>.\n\t\t&#8220;<span class=\"dictionary\">EIRE rider<\/span>&#8221; means a recovery mechanism that will allow for recovery of the <span class=\"dictionary\">eligible infrastructure costs<\/span>, through a separate mechanism from the customer <span class=\"dictionary\">rates<\/span> established in a <span class=\"dictionary\">rate<\/span> case using the cost of service methodology set forth in \u00a7&nbsp;<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>.\n\t\t&#8220;Eligible infrastructure&#8221; means <span class=\"dictionary\">water utility<\/span> projects or <span class=\"dictionary\">wastewater utility<\/span> projects that maintain or enhance safety, reliability, or efficiency or that facilitate compliance with state or federal environmental requirements. Eligible infrastructure does not include (i) the <span class=\"dictionary\">investment<\/span> in <span class=\"dictionary\">water utility<\/span> or <span class=\"dictionary\">wastewater utility<\/span> infrastructure included in the utility&#8217;s <span class=\"dictionary\">rate<\/span> base in its most recent <span class=\"dictionary\">rate<\/span> case or (ii) projects designed primarily to serve new customers and increase revenues.\n\t\t&#8220;<span class=\"dictionary\">Eligible infrastructure costs<\/span>&#8221; includes the following:<\/p><\/section>\n\t\t\t\t\t\t<section id=\"1\"><p><span class=\"prefix-number\">1.<\/span> Return on <span class=\"dictionary\">investment<\/span>. In calculating the return on <span class=\"dictionary\">investment<\/span>, the <span class=\"dictionary\">Commission<\/span> shall use the utility&#8217;s regulatory capital structure as calculated utilizing the weighted average cost of capital, including the cost of debt and the cost of <span class=\"dictionary\">equity<\/span> used in determining the utility&#8217;s base <span class=\"dictionary\">rates<\/span> in effect during the construction period of the water or <span class=\"dictionary\">wastewater utility<\/span> project. If the utility&#8217;s cost of capital has not been changed by <span class=\"dictionary\">order<\/span> of the <span class=\"dictionary\">Commission<\/span> within the preceding five years, the <span class=\"dictionary\">Commission<\/span> may require the utility to file an updated weighted average cost of capital, and the utility may propose an updated weighted average cost of capital. The utility may recover the external costs associated with establishing its updated weighted average cost of capital through the <span class=\"dictionary\">EIRE rider<\/span>. Such external costs shall include legal costs and consultant costs; <a id=\"paragraph-280980\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-626\/#1\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t<section id=\"2\"><p><span class=\"prefix-number\">2.<\/span> A revenue conversion factor, which factor, including income taxes and an allowance for bad debt expense, shall be applied to the required operating income resulting from the <span class=\"dictionary\">eligible infrastructure costs<\/span>; <a id=\"paragraph-280981\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-626\/#2\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t<section id=\"3\"><p><span class=\"prefix-number\">3.<\/span> Depreciation. In calculating depreciation, the <span class=\"dictionary\">Commission<\/span> shall use the utility&#8217;s current depreciation <span class=\"dictionary\">rates<\/span> specific to the applicable asset; <a id=\"paragraph-280982\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-626\/#3\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t<section id=\"4\"><p><span class=\"prefix-number\">4.<\/span> Property taxes; <a id=\"paragraph-280983\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-626\/#4\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t<section id=\"5\"><p><span class=\"prefix-number\">5.<\/span> Carrying costs on the over-recovery or under-recovery of the <span class=\"dictionary\">eligible infrastructure costs<\/span>. In calculating the carrying costs, the <span class=\"dictionary\">Commission<\/span> shall use the utility&#8217;s regulatory capital structure as determined in subdivision 1 of the definition of <span class=\"dictionary\">eligible infrastructure costs<\/span>; <a id=\"paragraph-280984\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-626\/#5\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t<section id=\"6\"><p><span class=\"prefix-number\">6.<\/span> Unreimbursed costs of relocating facilities due to highway projects; and <a id=\"paragraph-280985\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-626\/#6\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t<section id=\"7\"><p><span class=\"prefix-number\">7.<\/span> Operation and maintenance expenses that the <span class=\"dictionary\">Commission<\/span> determines are associated with eligible infrastructure and that were not included in the revenue requirement of the utility last approved by the <span class=\"dictionary\">Commission<\/span>.\n\t\t\t&#8220;<span class=\"dictionary\">Investment<\/span>&#8221; means costs incurred on eligible infrastructure projects including planning, development, removal, and construction costs; costs of infrastructure associated therewith; and an allowance for funds used during construction. In calculating the allowance for funds used during construction, the <span class=\"dictionary\">Commission<\/span> shall use the utility&#8217;s actual regulatory capital structure as determined in subdivision 1 of the definition of <span class=\"dictionary\">eligible infrastructure costs<\/span>.\n\t\t\t&#8220;<span class=\"dictionary\">In-kind replacement<\/span>&#8221; means replacement with new <span class=\"dictionary\">materials<\/span> or equipment designed, constructed, and sized to meet current industry standards and to comply with federal, state, and local regulation.\n\t\t\t&#8220;Utility&#8221; means <span class=\"dictionary\">water utility<\/span> or <span class=\"dictionary\">wastewater utility<\/span>.\n\t\t\t&#8220;<span class=\"dictionary\">Wastewater utility<\/span>&#8221; means an investor-owned <span class=\"dictionary\">public service company<\/span> engaged in the business of furnishing wastewater service to the public.\n\t\t\t&#8220;<span class=\"dictionary\">Wastewater utility<\/span> project&#8221; includes: <a id=\"paragraph-280986\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-626\/#7\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t<section id=\"1\"><p><span class=\"prefix-number\">1.<\/span> Non-growth-related collection main extensions; <a id=\"paragraph-280987\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-626\/#1\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t<section id=\"2\"><p><span class=\"prefix-number\">2.<\/span> Facilities necessary to comply with applicable state and federal <span class=\"dictionary\">laws<\/span> and regulations; <a id=\"paragraph-280988\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-626\/#2\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t<section id=\"3\"><p><span class=\"prefix-number\">3.<\/span> Improvements that enable compliance with National Pollutant Discharge Elimination System permits; <a id=\"paragraph-280989\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-626\/#3\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t<section id=\"4\"><p><span class=\"prefix-number\">4.<\/span> Unreimbursed costs of relocating facilities due to highway construction or relocation projects; and <a id=\"paragraph-280990\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-626\/#4\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t<section id=\"5\"><p><span class=\"prefix-number\">5.<\/span> <span class=\"dictionary\">In-kind replacement<\/span> of pumps, motors, blowers, tanks, or mechanical equipment.\n\t\t\t&#8220;<span class=\"dictionary\">Water utility<\/span>&#8221; means an investor-owned <span class=\"dictionary\">public service company<\/span> engaged in the business of furnishing water service to the public.\n\t\t\t&#8220;<span class=\"dictionary\">Water utility<\/span> project&#8221; includes: <a id=\"paragraph-280991\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-626\/#5\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t<section id=\"1\"><p><span class=\"prefix-number\">1.<\/span> <span class=\"dictionary\">In-kind replacement<\/span> of transmission or distribution system mains as well as replacement of valves, utility service lines, including meter boxes and appurtenances, meters, including radio frequency meters, and hydrants connected to a replaced transmission or distribution system main; <a id=\"paragraph-280992\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-626\/#1\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t<section id=\"2\"><p><span class=\"prefix-number\">2.<\/span> Non-growth-related main extensions installed to eliminate dead ends that will address primary and secondary drinking water standards as defined by the Department of Environmental Quality, the Department of Health, and the federal Environmental Protection Agency; <a id=\"paragraph-280993\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-626\/#2\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t<section id=\"3\"><p><span class=\"prefix-number\">3.<\/span> Equipment and facilities installed to address primary and secondary drinking water standards as defined by the Department of Environmental Quality, the Department of Health, and the federal Environmental Protection Agency; and <a id=\"paragraph-280994\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-626\/#3\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t<section id=\"4\"><p><span class=\"prefix-number\">4.<\/span> Unreimbursed costs of relocating facilities due to highway projects. <a id=\"paragraph-280995\" class=\"section-permalink\" href=\"https:\/\/vacode.org\/56-626\/#4\"><i class=\"fa fa-link\"><\/i><\/a><\/p><\/section>","plain_text":"                                 CODE OF VIRGINIA\n\n(EXPIRES JULY 1, 2035) DEFINITIONS (\u00a7 56-626)\n\nAs used in this chapter, unless the context requires a different meaning:\n\t\t&#8220;EIRE&#8221; means eligible infrastructure replacement and enhancement.\n\t\t&#8220;EIRE plan&#8221; means a plan filed by a utility that identifies\nproposed eligible infrastructure projects and an EIRE rider.\n\t\t&#8220;EIRE rider&#8221; means a recovery mechanism that will allow for\nrecovery of the eligible infrastructure costs, through a separate mechanism from\nthe customer rates established in a rate case using the cost of service\nmethodology set forth in \u00a7 56-235.2.\n\t\t&#8220;Eligible infrastructure&#8221; means water utility projects or\nwastewater utility projects that maintain or enhance safety, reliability, or\nefficiency or that facilitate compliance with state or federal environmental\nrequirements. Eligible infrastructure does not include (i) the investment in\nwater utility or wastewater utility infrastructure included in the\nutility&#8217;s rate base in its most recent rate case or (ii) projects designed\nprimarily to serve new customers and increase revenues.\n\t\t&#8220;Eligible infrastructure costs&#8221; includes the following:\n\n1. Return on investment. In calculating the return on investment, the Commission\nshall use the utility&#8217;s regulatory capital structure as calculated\nutilizing the weighted average cost of capital, including the cost of debt and\nthe cost of equity used in determining the utility&#8217;s base rates in effect\nduring the construction period of the water or wastewater utility project. If\nthe utility&#8217;s cost of capital has not been changed by order of the\nCommission within the preceding five years, the Commission may require the\nutility to file an updated weighted average cost of capital, and the utility may\npropose an updated weighted average cost of capital. The utility may recover the\nexternal costs associated with establishing its updated weighted average cost of\ncapital through the EIRE rider. Such external costs shall include legal costs\nand consultant costs;\n\n2. A revenue conversion factor, which factor, including income taxes and an\nallowance for bad debt expense, shall be applied to the required operating\nincome resulting from the eligible infrastructure costs;\n\n3. Depreciation. In calculating depreciation, the Commission shall use the\nutility&#8217;s current depreciation rates specific to the applicable asset;\n\n4. Property taxes;\n\n5. Carrying costs on the over-recovery or under-recovery of the eligible\ninfrastructure costs. In calculating the carrying costs, the Commission shall\nuse the utility&#8217;s regulatory capital structure as determined in\nsubdivision 1 of the definition of eligible infrastructure costs;\n\n6. Unreimbursed costs of relocating facilities due to highway projects; and\n\n7. Operation and maintenance expenses that the Commission determines are\nassociated with eligible infrastructure and that were not included in the\nrevenue requirement of the utility last approved by the Commission.\n\t\t\t&#8220;Investment&#8221; means costs incurred on eligible infrastructure\nprojects including planning, development, removal, and construction costs; costs\nof infrastructure associated therewith; and an allowance for funds used during\nconstruction. In calculating the allowance for funds used during construction,\nthe Commission shall use the utility&#8217;s actual regulatory capital structure\nas determined in subdivision 1 of the definition of eligible infrastructure\ncosts.\n\t\t\t&#8220;In-kind replacement&#8221; means replacement with new materials or\nequipment designed, constructed, and sized to meet current industry standards\nand to comply with federal, state, and local regulation.\n\t\t\t&#8220;Utility&#8221; means water utility or wastewater utility.\n\t\t\t&#8220;Wastewater utility&#8221; means an investor-owned public service\ncompany engaged in the business of furnishing wastewater service to the public.\n\t\t\t&#8220;Wastewater utility project&#8221; includes:\n\n1. Non-growth-related collection main extensions;\n\n2. Facilities necessary to comply with applicable state and federal laws and\nregulations;\n\n3. Improvements that enable compliance with National Pollutant Discharge\nElimination System permits;\n\n4. Unreimbursed costs of relocating facilities due to highway construction or\nrelocation projects; and\n\n5. In-kind replacement of pumps, motors, blowers, tanks, or mechanical\nequipment.\n\t\t\t&#8220;Water utility&#8221; means an investor-owned public service company\nengaged in the business of furnishing water service to the public.\n\t\t\t&#8220;Water utility project&#8221; includes:\n\n1. In-kind replacement of transmission or distribution system mains as well as\nreplacement of valves, utility service lines, including meter boxes and\nappurtenances, meters, including radio frequency meters, and hydrants connected\nto a replaced transmission or distribution system main;\n\n2. Non-growth-related main extensions installed to eliminate dead ends that will\naddress primary and secondary drinking water standards as defined by the\nDepartment of Environmental Quality, the Department of Health, and the federal\nEnvironmental Protection Agency;\n\n3. Equipment and facilities installed to address primary and secondary drinking\nwater standards as defined by the Department of Environmental Quality, the\nDepartment of Health, and the federal Environmental Protection Agency; and\n\n4. Unreimbursed costs of relocating facilities due to highway projects.\n\nHISTORY: 2025, cc. 501, 599.","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}}