                                 CODE OF VIRGINIA

REGULATION OF RATES SUBJECT TO COMMISSION&#8217;S JURISDICTION (§ 56-581)

A. The Commission shall regulate the rates of investor-owned incumbent electric
utilities for the transmission of electric energy, to the extent not prohibited
by federal law, and for the generation of electric energy and the distribution
of electric energy to retail customers pursuant to this section and &#xA7;
56-585.1.

B. In any proceeding to review base rates for a Phase I Utility that commences
after July 1, 2023, if the Commission determines in its sole discretion that the
utility&#8217;s existing base rates will, on a going-forward basis, either
produce (i) revenues in excess of the utility&#8217;s authorized rate of return
or (ii) revenues below the utility&#8217;s authorized rate of return, then,
notwithstanding any provision of law governing rate proceedings, the Commission
shall order any reductions or increases, as applicable and necessary, to such
base rates that it deems appropriate to ensure the resulting base rates (a) are
just and reasonable and (b) provide the utility an opportunity to recover its
costs of providing services over the rate period ending on December 31 of the
year of the utility&#8217;s succeeding review and earn a fair rate of return
authorized pursuant to the provisions governing such review proceeding. Such
determination shall be limited to the Phase I Utility&#8217;s base rates and
shall not consider the costs or revenues recovered in any rate adjustment clause
authorized pursuant to this chapter.

C. In any proceeding to review base rates for a Phase II Utility that commences
after July 1, 2023, if the Commission determines in its sole discretion that the
utility&#8217;s existing base rates will, on a going-forward basis, either
produce (i) revenues in excess of the utility&#8217;s authorized rate of return
or (ii) revenues below the utility&#8217;s authorized rate of return, then,
notwithstanding any provision of subdivision A 8 of &#xA7; 56-585.1, the
Commission shall order any reductions or increases, as applicable and necessary,
to such base rates that it deems appropriate to ensure the resulting base rates
(a) are just and reasonable and (b) provide the utility an opportunity to
recover its costs of providing services over the rate period ending on December
31 of the year of the utility&#8217;s succeeding review and earn a fair rate of
return on its base rates as determined in subdivision A 2 of &#xA7; 56-585.1.
Such determination shall be limited to the Phase II Utility&#8217;s base rates
and shall not consider the costs or revenues recovered in any rate adjustment
clause authorized pursuant to subdivision A 6 of &#xA7; 56-585.1 that has not
been combined with the utility&#8217;s base rates. The Commission shall use the
most recently ended 12-month test period, along with normalization of
nonrecurring test period costs and annualized adjustments for future costs, as
the basis for determining the appropriateness of any rate adjustment. In any
such filing to review base rates, a Phase II Utility shall separately project
future costs over each 12-month period ending on December 31 of the year of the
utility&#8217;s succeeding rate periods. The Commission may, to the extent it
finds such action aligns with the utility&#8217;s projected cost of service,
direct that any reduction or increase to the utility&#8217;s rates for
generation and distribution services be implemented on a staggered basis at the
commencement and midpoint of the succeeding review or rate period.

D. Beginning July 1, 1999, and thereafter, no cooperative that was a member of a
power supply cooperative on January 1, 1999, shall be obligated to file any rate
rider as a consequence of an increase or decrease in the rates, other than fuel
costs, of its wholesale supplier, nor must any adjustment be made to such
cooperative&#8217;s rates as a consequence thereof.

E. Except for the provision of default services under &#xA7; 56-585 or emergency
services in &#xA7; 56-586, nothing in this chapter shall authorize the
Commission to regulate the rates or charges for electric service to the
Commonwealth and its municipalities.

F. As used in this section:
			&#8220;Base rates&#8221; means rates for generation and distribution
services.
			&#8220;Phase I Utility&#8221; has the same meaning as provided in subdivision
A 1 of &#xA7; 56-585.1.
			&#8220;Phase II Utility&#8221; has the same meaning as provided in
subdivision A 1 of &#xA7; 56-585.1.

HISTORY: 1999, c. 411; 2000, c. 991; 2007, cc. 888, 933; 2023, cc. 497, 498,
757, 775.