                                 CODE OF VIRGINIA

RECOVERY OF FUNDS USED FOR CAPITAL PROJECTS PRIOR TO A RATE CASE FOR STRATEGIC
NATURAL GAS FACILITIES (§ 56-235.9)

A. As used in this section:
			&#8220;Capitalized carrying cost&#8221; includes the return on the
investment, depreciation, and tax.
			&#8220;Natural gas transmission company&#8221; means any investor-owned
public service company engaged in the business of transporting natural gas to
more than one electric utility, natural gas utility, or non-jurisdictional
customer.
			&#8220;Natural gas utility&#8221; means any investor-owned public service
company engaged in the business of furnishing natural gas service to the public.
			&#8220;Strategic natural gas facility&#8221; includes, without limitation, a
natural gas distribution or transmission pipeline, storage facility, compressor
station, liquefied natural gas facility, peaking facility or other appurtenant
facility, used to furnish natural gas service in the Commonwealth that, for a
natural gas utility with fewer than 150,000 customers, adds stand-alone design
day deliverability or designed send-out of at least 10,000 dekaTherms per day or
two or more such facilities, regardless of size, that add design day
deliverability or designed send out of at least 75,000 dekaTherms per day in the
aggregate, and for a natural gas utility with 150,000 or more customers, adds
stand-alone design day deliverability or designed send out of at least 20,000
dekaTherms per day or two or more such facilities, regardless of size, that add
design day deliverability or designed send out of at least 100,000 dekaTherms
per day in the aggregate, and for a natural gas transmission company, adds
design day deliverability or designed send out of at least 100,000 dekaTherms
per day in the aggregate.

B. Any natural gas utility that places a strategic natural gas facility into
service on or after July 1, 2008, or natural gas transmission company that
places a strategic natural gas facility into service on or after July 1, 2014,
to serve its customers shall have the right to recover through its rates charged
to those customers the entire prudently incurred costs of the facility
including: planning, development and construction costs; costs of infrastructure
associated therewith; an allowance for funds used during construction; and the
capitalized carrying cost from the time construction is completed and the asset
is placed into service until the time that the Commission establishes new rates
that include recovery of all costs as defined herein. Such recovery shall be
permitted by allowing such costs to be recorded in the utility&#8217;s plant
accounts and included in rate base for purposes of cost recovery (i) in new rate
schedules for service not offered under existing rate schedules or new rate
schedules for expansion of existing services as permitted by &#xA7; 56-235.4,
(ii) in a rate case using the cost of service methodology set forth in &#xA7;
56-235.2, or (iii) in a performance-based regulation plan authorized by &#xA7;
56-235.6, subject to Commission determination that such costs were prudently
incurred. The allowance for funds used during construction and the return on
investment shall be calculated utilizing the weighted average cost of capital,
including the cost of debt and cost of equity used in determining the natural
gas utility&#8217;s base rates in effect during the construction period of the
strategic natural gas facility.

C. Nothing in this section shall be construed to prohibit the Commission from
granting similar treatment to other natural gas facilities when the Commission
deems such treatment to be in the public interest.

HISTORY: 2008, c. 867; 2014, cc. 467, 507.