                                 CODE OF VIRGINIA

DISTRIBUTION COST SHARING PROGRAM (§ 56-596.6)

A. As used in this section:
			&#8220;Hosting capacity&#8221; means the amount of aggregate generation that
can be accommodated on the electric distribution system without any
infrastructure upgrades.
			&#8220;Program&#8221; means the distribution cost sharing program established
pursuant to this section.
			&#8220;Qualifying upgrade&#8221; means a system upgrade that increases the
hosting capacity of the utility&#8217;s distribution system.
			&#8220;Sharing project&#8221; means any distributed energy resource with an
alternating current (AC) nameplate capacity rating greater than or equal to 250
kilowatts and less than or equal to three megawatts within the Phase I or Phase
II Utility&#8217;s service territory seeking to interconnect to the
utility&#8217;s distribution system and participate in net energy metering
pursuant to &#xA7; 56-594 that utilizes distribution system upgrades that were
necessary to interconnect a triggering project.
			&#8220;Triggering project&#8221; means a project application in the
interconnection queue at a given substation or feeder that requires a qualifying
upgrade to successfully interconnect the project to the electric distribution
system.

B. The Commission shall establish by regulation a distribution cost sharing
program for Phase I and Phase II Utilities, as those terms are defined in
subdivision A 1 of &#xA7; 56-585.1, to construct distribution system upgrades
required to interconnect triggering projects. Under the program, when a Phase I
or Phase II Utility determines that a qualifying upgrade is required to
interconnect a triggering project, such utility shall determine the costs of the
qualifying upgrade and the net increase in hosting capacity that would result
from the construction of the qualifying upgrade. The costs of the qualifying
upgrade shall be subject to approval by the Commission that the costs are
reasonable and prudent. The program shall require each Phase I and Phase II
Utility to allocate the costs of qualifying upgrades among any sharing projects
based on the AC nameplate capacity rating of each sharing project, except that a
project shall be exempted from the program if the owner or developer of such
project elects to pay in full the approved cost of any associated qualifying
upgrade. The Commission shall determine limits on cost recovery for ratepayers
and the appropriate time period for cost recovery under the program. The program
shall also require that the costs attributed to jurisdictional triggering
projects are recovered from jurisdictional sharing projects and costs attributed
to nonjurisdictional triggering projects are recovered from nonjurisdictional
sharing projects. The Commission may establish a system to refund projects for
any interconnection upgrade costs collected during time periods in which such
projects are not operational and may provide such refunds upon the petition of
the owner of a participating project.

HISTORY: 2025, cc. 615, 658.