                                 CODE OF VIRGINIA

DEFINITIONS (§ 56-600)

As used in this chapter:
		&#8220;Allowed distribution revenue&#8221; means the average annual,
weather-normalized, nongas commodity revenue per customer associated with the
rates in effect as adopted in the applicable utility&#8217;s last
Commission-approved rate case or performance-based regulation plan, multiplied
by the average number of customers served.
		&#8220;Conservation and ratemaking efficiency plan&#8221; means a plan filed
by a natural gas utility pursuant to this chapter that includes a decoupling
mechanism.
		&#8220;Cost-effective conservation and energy efficiency program&#8221; means
a program approved by the Commission that is designed to decrease the average
customer&#8217;s annual, weather-normalized consumption of energy, for gas and
nongas elements combined, or avoid energy costs or consumption the customer may
otherwise have incurred, and is determined by the Commission to be
cost-effective if the net present value of the benefits exceeds the net present
value of the costs at the portfolio level as determined by not less than any
three of the following four tests: the Total Resource Cost Test, the Program
Administrator Test (also referred to as the Utility Cost Test), the Participant
Test, and the Ratepayer Impact Measure Test. Such determination shall include an
analysis of all five tests, and a portfolio of programs shall be approved if the
net present value of the benefits exceeds the net present value of the costs as
determined by not less than any three of the four tests. Such determination
shall also be made (i) with the assignment of administrative costs associated
with the conservation and ratemaking efficiency plan to the portfolio as a whole
and (ii) with the assignment of education and outreach costs associated with
each program in a portfolio of programs to such program and not to individual
measures within a program, when such administrative, education, or outreach
costs are not otherwise directly assignable. Without limitation, rate designs or
rate mechanisms, customer education, customer incentives, appliance rebates, and
weatherization programs are examples of conservation and energy efficiency
programs that the Commission may consider. Energy efficiency programs that
provide measurable and verifiable energy savings to low-income customers or
elderly customers may also be deemed cost effective. A cost-effective
conservation and energy efficiency program shall not include a program designed
to convert propane or heating oil customers to natural gas.
		&#8220;Decoupling mechanism&#8221; means a rate, tariff design or mechanism
that decouples the recovery of a utility&#8217;s allowed distribution revenue
from the level of consumption of natural gas by its customers, including (i) a
mechanism that adjusts actual nongas distribution revenues per customer to
allowed distribution revenues per customer, such as a sales adjustment clause,
(ii) rate design changes that substantially align the percentage of fixed charge
revenue recovery with the percentage of the utility&#8217;s fixed costs, such as
straight fixed variable rates, provided such mechanism includes a substantial
demand component based on a customer&#8217;s peak usage, or (iii) a combination
of clauses (i) and (ii) that substantially decreases the relative amount of
nongas distribution revenue affected by changes in per customer consumption of
gas.
		&#8220;Fixed costs&#8221; means any and all of the utility&#8217;s nongas
costs of service, together with an authorized return thereon, that are not
associated with the cost of the natural gas commodity flowing through and
measured by the customer&#8217;s meter.
		&#8220;Measure&#8221; means an individual item, service, offering, or rebate
available to a customer of a natural gas utility as part of the utility&#8217;s
conservation and ratemaking efficiency plan.
		&#8220;Natural gas utility&#8221; or &#8220;utility&#8221; means any
investor-owned public service company engaged in the business of furnishing
natural gas service to the public.
		&#8220;Portfolio&#8221; means the program or programs included in a natural
gas utility&#8217;s conservation and ratemaking efficiency plan.
		&#8220;Program&#8221; means a group of one or more related measures for a
customer class.
		&#8220;Revenue-neutral&#8221; means a change in a rate, tariff design or
mechanism as a component of a conservation and ratemaking efficiency plan that
does not shift annualized allowed distribution revenue between customer classes,
and does not increase or decrease the utility&#8217;s average,
weather-normalized nongas utility revenue per customer for any given rate class
by more than 0.25 percent when compared to (i) the rate, tariff design or
mechanism in effect at the time a conservation and ratemaking efficiency plan is
filed pursuant to this chapter or (ii) the allocation of costs approved by the
Commission in a rate case using the cost of service methodology set forth in §
56-235.2 or a performance-based regulation plan authorized by § 56-235.6, where
a plan is filed in conjunction with such case.

HISTORY: 2008, c. 639; 2012, cc. 210, 821; 2015, c. 694; 2018, c. 296; 2022, cc.
728, 759.