                                 CODE OF VIRGINIA

APPROVAL OF EXPENDITURES FOR AND MONITORING OF NEW GENERATION FACILITIES AND
PROJECTED OPERATION PROGRAMS OF ELECTRIC UTILITIES (§ 56-234.3)

Prior to construction or financial commitments therefor, any electric utility
subject to the jurisdiction of the State Corporation Commission intending to
construct any new generation facility capable of producing 100 megawatts or more
of electric energy shall submit to the State Corporation Commission a petition
setting forth the nature of the proposed construction and the necessity therefor
in relation to its projected forecast of programs of operation. Such petition
shall include (i) the utility&#8217;s preliminary construction plans, (ii) the
methods by which the work will be contracted, by competitive bid or otherwise,
(iii) the names and addresses of the contractors and subcontractors, when known,
proposed to do such work, and (iv) the plan by which the public utility will
monitor such construction to ensure that the work will be done in a proper,
expeditious and efficient manner. The Commission, upon receipt of the petition,
shall order that a public hearing be held to assist it in accumulating as much
relevant data as possible in reaching its determination for the necessity of the
proposed generation facility. The Commission shall review the petition, consider
the testimony given at the public hearing, and determine whether the proposed
improvements are necessary to enable the public utility to furnish reasonably
adequate service and facilities at reasonable and just rates. After making its
determination, the Commission shall enter an order within nine months after the
filing of such petition either approving or disapproving the proposed
expenditure. Upon approval, the Commission shall set forth in its order terms
and conditions it deems necessary for the efficient and proper construction of
the generation facility.
		Every electric utility capable of producing 100 megawatts or more of electric
energy shall file with the Commission a projected forecast of its programs of
operation, on such terms and for such time periods as directed by the
Commission. Such a forecast shall include, but not be limited to, the
anticipated required capacity to fulfill the requirements of the forecast, how
the utility will achieve such capacity, the financial requirements for the
period covered, the anticipated sources of those financial requirements, the
research and development procedures, where appropriate, of new energy sources,
and the budget for the research and development program.
		In addition, the Commission shall investigate and monitor the major
construction projects of any public utility to assure that such projects are
being conducted in an economical, expeditious, and efficient manner.
		Whenever uneconomical, inefficient or wasteful practices, procedures, designs
or planning are found to exist, the Commission shall have the authority to
employ, at the sole expense of the utility, qualified persons, answerable solely
to the Commission, who shall audit and investigate such practices, procedures,
designs or planning and recommend to the Commission measures necessary to
correct or eliminate such practices, procedures, designs or planning.
		Consistent with § 56-235.3, any public utility, electric or otherwise,
seeking to pass through the cost of any capital project to its customers, shall
have the burden of proving that such cost was incurred through reasonable,
proper and efficient practices, and to the extent that such public utility fails
to bear such burden of proof, such costs shall not be passed on to its customers
in its rate base.
		The Commission shall have the authority to approve, disapprove, or alter the
utility&#8217;s program in a manner consistent with the best interest of the
citizens of the Commonwealth. The petitioning or filing public utility may
appeal the decision of the Commission to the Supreme Court of Virginia.

HISTORY: 1976, c. 701; 1977, c. 261; 1978, c. 700; 1984, cc. 453, 454; 1997, c.
138.