                                 CODE OF VIRGINIA

UNIVERSAL SERVICE FEE; PERCENTAGE OF INCOME PAYMENT PROGRAM AND FUND (§
56-585.6)

A. The Commission shall, after notice and opportunity for hearing, initiate a
proceeding to establish the rates, terms, and conditions of a non-bypassable
universal service fee to fund the Percentage of Income Payment Program (PIPP).
Such universal service fee shall be allocated to retail electric customers of a
Phase I and Phase II Utility on the basis of the amount of kilowatt-hours used
and be established at such level to adequately address the PIPP&#8217;s
objectives to (i) reduce the energy burden of eligible participants by limiting
electric bill payments directly to no more than six percent of the eligible
participant&#8217;s annual household income if the household&#8217;s heating
source is anything other than electricity, and to no more than 10 percent of an
eligible participant&#8217;s annual household income on electricity costs if the
household&#8217;s primary heating source is electricity; (ii) reduce the amount
of electricity used by the eligible participant&#8217;s household through
participation in weatherization or energy efficiency programs and energy
conservation education programs; and (iii) reduce the amount of energy,
regardless of primary heating source, used by the eligible participant&#8217;s
household through participation in weatherization or energy efficiency programs
and energy conservation education programs. The annual total cost of any
programs implemented pursuant to clauses (i), (ii), and (iii) shall not exceed
costs, including administrative costs, in the aggregate of (a) $25 million for
any Phase I Utility or (b) $100 million for any Phase II Utility in any rate
year in which such program costs are incurred.

B. The Commission shall determine the reasonable administrative costs for the
investor-owned utility to collect the universal service fee and remit such funds
to the Percentage of Income Payment Fund established in subsection E, and any
other administrative costs the investor-owned utility may incur in complying
with the PIPP, and shall determine the proper recovery mechanism for such costs.
A Phase I and Phase II Utility shall not be eligible to earn a rate of return on
any equity or costs incurred to comply with the program requirements or
implementation. The Commission shall initiate proceedings to provide for an
annual true-up of the universal service fee within 60 days of the commencement
of the PIPP and on an annual or semiannual basis thereafter. As part of any
annual true-up case, each Phase I and Phase II Utility shall report to the
Commission any data or forecasting required by the Commission regarding the
participation by PIPP participants in utility energy reduction programs.

C. The Department of Social Services (the Department), in consultation with, as
it deems necessary, the Department of Housing and Community Development, shall
adopt rules or establish guidelines for the adoption, implementation, and
general administration of the PIPP and the Percentage of Income Payment Fund
established in subsection E, consistent with this section. Such rules or
guidelines shall include exemptions for terms of program participation or energy
use reduction as the Department deems appropriate. The PIPP shall commence no
later than one year after the Department publishes such rules or guidelines.
Each Phase I and Phase II Utility shall cooperate with the requests of the
Department in the implementation and administration of the PIPP. The Commission
shall promulgate any rules necessary to ensure that (i) funds collected from
each utility&#8217;s universal service fee are directed to the Percentage of
Income Payment Fund and (ii) utilities receive adequate compensation from the
Fund, on a timely basis, for all reasonable costs of the PIPP, including costs
associated with bill payment credits for eligible customers.

D. In carrying out the PIPP&#8217;s objective of electricity usage reductions,
PIPP-eligible customers may, to the extent reasonably possible, utilize existing
energy efficiency or related programs approved by the Commission for a Phase I
and Phase II Utility and existing and available federal, state, local, or
nonprofit programs. The Department may review the needs of PIPP-eligible
customers and whether gaps remain in serving such customers that are not already
served by existing and available federal, state, local, or nonprofit programs to
meet the energy reduction obligations of this section. The Department shall
report the results of such analysis and review to the Chairs of the House
Committee on Labor and Commerce and the Senate Committee on Commerce and Labor
no later than November 1, 2022.

E. There is hereby created in the state treasury a special nonreverting fund to
be known as the Percentage of Income Payment Fund, referred to in this section
as &#8220;the Fund.&#8221; The Fund shall be established on the books of the
Comptroller. All funds collected from each Phase I and Phase II Utility&#8217;s
universal service fee shall be paid into the state treasury and credited to the
Fund. Interest earned on moneys in the Fund shall remain in the Fund and be
credited to it. Any moneys remaining in the Fund, including interest thereon, at
the end of each fiscal year shall not revert to the general fund but shall
remain in the Fund. Moneys in the Fund shall be used solely for the purposes of
implementation and administration of the PIPP, including any associated start-up
costs. Expenditures and disbursements from the Fund shall be made by the State
Treasurer on warrants issued by the Comptroller upon written request signed by
the Commissioner of the Department of Social Services or by order of the
Commission in conjunction with a true-up proceeding.

HISTORY: 2020, cc. 1193, 1194; 2021, Sp. Sess. I, c. 308.