                                 CODE OF VIRGINIA

FURNISHING NON-UTILITY GAS SERVICE (§ 56-265.4:6)

A. In this section the following terms shall have the following meanings:
			&#8220;Affiliated interest&#8221; shall have the same meaning as set forth in
&#xA7; 56-76 and shall be applied in this statute to non-utility gas service
providers.
			&#8220;Commercial customer&#8221; means any person that purchases non-utility
gas service for its own consumption at one or more metering points or nonmetered
points of delivery located in the Commonwealth and who if served by a natural
gas utility would be classified as a nonresidential customer under the
applicable natural gas utility&#8217;s tariff.
			&#8220;Municipally-owned gas service&#8221; means the sale and distribution
of natural gas by a municipal corporation that has the authority to provide
natural gas distribution service through the provisions of its charter.
			&#8220;Natural gas line&#8221; means a distribution or transmission pipeline
owned and operated by the natural gas utility and subject to the jurisdiction of
the Commission but excluding such lines that serve only a single residence or
retail establishment.
			&#8220;Natural gas utility&#8221; or &#8220;utility&#8221; means an
investor-owned public service company engaged in the business of furnishing
natural gas service to the public and which is regulated as to rates and service
pursuant to this title.
			&#8220;Non-utility gas service&#8221; means the sale and distribution of
propane, propane-air mixtures, or other natural or manufactured gas to two or
more customers by way of underground or aboveground distribution lines by a
person other than a natural gas utility or an affiliated interest of a natural
gas utility, master meter operator, or any person operating in compliance with
&#xA7; 56-1.2.
			&#8220;Non-utility gas service provider&#8221; means a person, other than a
natural gas utility, providing non-utility gas service.
			&#8220;Person&#8221; means any individual, corporation, partnership,
association, company, business trust, joint venture or other private legal
entity.
			&#8220;Pipeline safety standards&#8221; means all gas pipeline safety
requirements established pursuant to &#xA7; 56-257.2.
			&#8220;Residential customer&#8221; means any person that purchases
non-utility gas service for its own consumption at one or more metering points
or nonmetered points of delivery located in the Commonwealth and who if served
by a natural gas utility would be classified as a residential customer under the
applicable natural gas utility&#8217;s tariff.

B. A person, individually or together with its affiliated interests, other than
the natural gas utility that holds the certificate to provide natural gas
service in a particular territory or one of its affiliated interests, shall
apply to the Commission for and obtain approval prior to providing non-utility
gas service to:

   1. Two or more residential or commercial customers located one-half mile or
   less from any existing underground natural gas line operated by a utility
   under the jurisdiction of the Commission;

   2. More than 10 residential or two commercial customers located more than
   one-half mile but within one mile or less from any existing underground
   natural gas line operated by a utility under the jurisdiction of the
   Commission;

   3. More than 20 residential or five commercial customers located more than one
   mile but within three miles or less from any existing underground natural gas
   line operated by a utility under the jurisdiction of the Commission; or

   4. More than 50 residential or 10 commercial customers located more than three
   miles but no more than five miles from an existing underground natural gas
   line operated by a utility under the jurisdiction of the Commission.
   				Approval of any application to provide non-utility gas service pursuant to
   this section shall be granted by the Commission only after opportunity for a
   hearing and after due notice to the natural gas utility that holds the
   certificate to provide service in the defined geographic area proposed to be
   served. The Commission shall approve an application to provide non-utility gas
   service upon finding that: (i) the natural gas utility that holds the
   certificate to provide natural gas service in the defined geographic area
   proposed to be served is not currently offering service to the area desired
   for non-utility gas service and is unable to extend natural gas utility
   service to the requested area within a reasonable period of time; and (ii) the
   provision of non-utility gas service in the defined geographic area proposed
   to be served, and to the estimated number of customers defined in the
   application, is in the public interest.
   				Any order approving an application to provide non-utility gas service
   pursuant to this section shall define the geographic area to be covered and
   the maximum number of customers to whom the non-utility gas service provider
   can provide service before having to apply to the Commission for a revised
   order. The order approving an application to provide non-utility gas service
   shall also provide for compliance with all pipeline safety standards; however,
   nothing in the order shall authorize the Commission to exercise jurisdiction
   over the rates, charges, or services being offered in conjunction with
   non-utility gas service by a non-utility gas service provider. Further, except
   as provided in this section, approval of an application to provide non-utility
   gas service shall not infringe upon or diminish the rights of the natural gas
   utility that holds the certificate to provide natural gas service in the
   specified area.
   				Any fully constructed and operational non-utility gas service system as of
   April 8, 2009, shall be exempt from the requirements of this subsection.

C. A non-utility gas service provider shall comply with the provisions of
subsection B if any proposed new customers (i) are located in or are adjacent to
a residential subdivision, commercial or mixed-use development, currently being
provided non-utility gas service by that non-utility gas service provider and
(ii) the number of such new customers, when added to the number of then existing
customers of such non-utility gas service provider, individually or together
with its affiliated interests, located in the adjacent residential subdivision,
commercial or mixed-use development, would exceed the threshold number of
customers for any of the geographical areas described in subsection B.

D. In any instance in which customers proposed to be served by a non-utility gas
service provider, individually or together with its affiliated interests, are in
the same residential subdivision, commercial or mixed-use development, or any
phase thereof, and that residential subdivision, commercial or mixed use
development, including all parts and phases thereof, straddles any of the
distance thresholds set forth in subsection B, then all of the customers in all
parts and phases of such residential subdivision, commercial or mixed-use
development shall be deemed to be within the distance from the underground
natural gas line operated by a utility under the jurisdiction of the Commission
applicable to the customer located in such residential subdivision, commercial
or mixed-use development that is located closest to such underground natural gas
line operated by a utility under the jurisdiction of the Commission.

E. The distance threshold set forth in subsection B shall be measured in a
linear manner and shall be based upon the underground natural gas lines operated
by a utility under the jurisdiction of the Commission that are in existence at
the time the non-utility gas service provider applies for Commission approval
pursuant to subsection B, if applicable, or at the time the non-utility gas
service provider applies for the initial local government approval necessary to
construct its distribution lines required to serve the proposed new customers,
whichever is earlier.

F. All non-utility gas service providers shall provide notice to the Commission
of any and all non-utility gas service that is subject to pipeline safety
standards and is being provided to two or more customers in the Commonwealth and
shall provide notice of the construction of new non-utility gas service to the
Commission no later than 30 days prior to commencing construction of such
system. Any non-utility gas service provider that is required to provide such
notice shall be subject to the jurisdiction of the Commission for the purpose of
ensuring compliance with the pipeline safety standards and subject to any
penalties that may be applicable under &#xA7; 56-257.2. Upon request of the
Commission, the non-utility gas service provider shall provide, within 30 days
of such request, documentation to show compliance with the requirements of the
pipeline safety standards.

G. Any municipal corporation that provides municipally-owned gas service to
residential or commercial customers located within an area where a natural gas
utility holds a certificate to provide service, must have written authorization
from that certificate holder to provide such service which authorization shall
not be unreasonably withheld. The written authorization shall define the
geographic area to be served by the municipally-owned gas service provider. If
authorization is withheld, the natural gas utility shall provide a written
justification for the decision to the municipally-owned gas service provider.
Any decision to withhold authorization shall be subject to review by the
Commission upon petition by a customer seeking natural gas service. Any natural
gas utility that provides written permission to a municipal corporation to
provide municipally-owned gas service within a territory where it holds a
certificate shall provide a written copy of the authorization to the Commission.
			Notwithstanding the foregoing, a municipally-owned gas service provider shall
not be required to obtain consent to i) provide natural gas service to
facilities or property owned in whole or in part by the municipal corporation,
or ii) install lines that serve only a single residential customer.
			A municipally-owned gas service provider which fails to comply with this
subsection shall be subject to relief in a court having competent jurisdiction.
Nothing herein shall authorize the Commission to impose penalties or fines on
any municipal corporation.
			Any fully constructed and operational municipally-owned gas service system in
place as of April 8, 2009, shall be exempt from the requirements of this
subsection.

H. The Commission is authorized to promulgate any rules consistent with and
necessary to implement this section other than subsection G.

I. The provision of non-utility gas service without complying with subsection B
shall be punishable by a penalty of up to $500 per day to be imposed and
collected by the Commission, in addition to any injunctive or other non-monetary
penalties provided by law.

HISTORY: 2009, c. 794.