                                 CODE OF VIRGINIA

TRANSMISSION AND DISTRIBUTION OF ELECTRIC ENERGY (§ 56-580)

A. Subject to the provisions of &#xA7; 56-585.1, the Commission shall continue
to regulate pursuant to this title the distribution of retail electric energy to
retail customers in the Commonwealth and, to the extent not prohibited by
federal law, the transmission of electric energy in the Commonwealth.

B. The Commission shall continue to regulate, to the extent not prohibited by
federal law, the reliability, quality and maintenance by transmitters and
distributors of their transmission and retail distribution systems.

C. The Commission shall develop codes of conduct governing the conduct of
incumbent electric utilities and affiliates thereof when any such affiliates
provide, or control any entity that provides, generation, distribution, or
transmission services, to the extent necessary to prevent impairment of
competition. Nothing in this chapter shall prevent an incumbent electric utility
from offering metering options to its customers.

D. The Commission shall permit the construction and operation of electrical
generating facilities in Virginia upon a finding that such generating facility
and associated facilities (i) will have no material adverse effect upon
reliability of electric service provided by any regulated public utility, (ii)
are required by the public convenience and necessity, if a petition for such
permit is filed after July 1, 2007, and if they are to be constructed and
operated by any regulated utility whose rates are regulated pursuant to &#xA7;
56-585.1, and (iii) are not otherwise contrary to the public interest. In review
of a petition for a certificate to construct and operate a generating facility
described in this subsection, the Commission shall give consideration to the
effect of the facility and associated facilities on the environment and
establish such conditions as may be desirable or necessary to minimize adverse
environmental impact as provided in &#xA7; 56-46.1, unless exempt as a small
renewable energy project for which the Department of Environmental Quality has
issued a permit by rule pursuant to Article 5 (&#xA7; 10.1-1197.5 et seq.) of
Chapter 11.1 of Title 10.1. In order to avoid duplication of governmental
activities, any valid permit or approval required for an electric generating
plant and associated facilities issued or granted by a federal, state or local
governmental entity charged by law with responsibility for issuing permits or
approvals regulating environmental impact and mitigation of adverse
environmental impact or for other specific public interest issues such as
building codes, transportation plans, and public safety, whether such permit or
approval is prior to or after the Commission&#8217;s decision, shall be deemed
to satisfy the requirements of this section with respect to all matters that (i)
are governed by the permit or approval or (ii) are within the authority of, and
were considered by, the governmental entity in issuing such permit or approval,
and the Commission shall impose no additional conditions with respect to such
matters. Nothing in this section shall affect the ability of the Commission to
keep the record of a case open. Nothing in this section shall affect any right
to appeal such permits or approvals in accordance with applicable law. In the
case of a proposed facility located in a region that was designated as of July
1, 2001, as serious nonattainment for the one-hour ozone standard as set forth
in the federal Clean Air Act, the Commission shall not issue a decision
approving such proposed facility that is conditioned upon issuance of any
environmental permit or approval. The Commission shall complete any proceeding
under this section, or under any provision of the Utility Facilities Act (&#xA7;
56-265.1 et seq.), involving an application for a certificate, permit, or
approval required for the construction or operation by a public utility of a
small renewable energy project as defined in &#xA7; 10.1-1197.5, within nine
months following the utility&#8217;s submission of a complete application
therefore. Small renewable energy projects as defined in &#xA7; 10.1-1197.5 are
in the public interest and in determining whether to approve such project, the
Commission shall liberally construe the provisions of this title.

E. Nothing in this section shall impair the distribution service territorial
rights of incumbent electric utilities, and incumbent electric utilities shall
continue to provide distribution services within their exclusive service
territories as established by the Commission. Subject to the provisions of
&#xA7; 56-585.1, the Commission shall continue to exercise its existing
authority over the provision of electric distribution services to retail
customers in the Commonwealth including, but not limited to, the authority
contained in Chapters 10 (&#xA7; 56-232 et seq.) and 10.1 (&#xA7; 56-265.1 et
seq.) of this title.

F. Nothing in this chapter shall impair the exclusive territorial rights of an
electric utility owned or operated by a municipality as of July 1, 1999, or by
an authority created by a governmental unit exempt from the referendum
requirement of &#xA7; 15.2-5403. Nor shall any provision of this chapter apply
to any such electric utility unless (i) that municipality or that authority
created by a governmental unit exempt from the referendum requirement of &#xA7;
15.2-5403 elects to have this chapter apply to that utility or (ii) that
utility, directly or indirectly, sells, offers to sell or seeks to sell electric
energy to any retail customer eligible to purchase electric energy from any
supplier in accordance with &#xA7; 56-577 if that retail customer is outside the
geographic area that was served by such municipality as of July 1, 1999, except
(a) any area within the municipality that was served by an incumbent public
utility as of that date but was thereafter served by an electric utility owned
or operated by a municipality or by an authority created by a governmental unit
exempt from the referendum requirement of &#xA7; 15.2-5403 pursuant to the terms
of a franchise agreement between the municipality and the incumbent public
utility, or (b) where the geographic area served by an electric utility owned or
operated by a municipality is changed pursuant to mutual agreement between the
municipality and the affected incumbent public utility in accordance with &#xA7;
56-265.4:1. If an electric utility owned or operated by a municipality as of
July 1, 1999, or by an authority created by a governmental unit exempt from the
referendum requirement of &#xA7; 15.2-5403 is made subject to the provisions of
this chapter pursuant to clause (i) or (ii) of this subsection, then in such
event the provisions of this chapter applicable to incumbent electric utilities
shall also apply to any such utility, mutatis mutandis.

G. The applicability of all provisions of this chapter except &#xA7; 56-594 to
any investor-owned incumbent electric utility supplying electric service to
retail customers on January 1, 2003, whose service territory assigned to it by
the Commission is located entirely within Dickenson, Lee, Russell, Scott, and
Wise Counties shall be suspended effective July 1, 2003, so long as such utility
does not provide retail electric services in any other service territory in any
jurisdiction to customers who have the right to receive retail electric energy
from another supplier. During any such suspension period, the utility&#8217;s
rates shall be (i) its capped rates established pursuant to &#xA7; 56-582 for
the duration of the capped rate period established thereunder, and (ii)
determined thereafter by the Commission on the basis of such utility&#8217;s
prudently incurred costs pursuant to Chapter 10 (&#xA7; 56-232 et seq.) of this
title.

H. The expiration date of any certificates granted by the Commission pursuant to
subsection D, for which applications were filed with the Commission prior to
July 1, 2002, shall be extended for an additional two years from the expiration
date that otherwise would apply.

HISTORY: 1999, c. 411; 2000, c. 991; 2001, cc. 738, 748, 755; 2002, c. 483;
2003, c. 719; 2004, cc. 262, 827; 2006, cc. 811, 819, 929, 941; 2007, cc. 877,
888, 933; 2009, cc. 808, 854.