                                 CODE OF VIRGINIA

NATURAL GAS CONSERVATION AND RATEMAKING EFFICIENCY (§ 56-601)

A. Consistent with the objectives pertaining to the energy issues and policy
elements stated in § 45.2-1706.1, it is in the public interest to authorize and
encourage the adoption of natural gas conservation and ratemaking efficiency
plans that promote the wise use of natural gas and natural gas infrastructure
through the development of alternative rate designs and other mechanisms that
more closely align the interests of natural gas utilities, their customers, and
the Commonwealth generally, and improve the efficiency of ratemaking to more
closely reflect the dynamic nature of the natural gas market, the economy, and
public policy regarding conservation and energy efficiency. Such alternative
rate designs and other mechanisms should, where feasible:

   1. Provide utilities with better tools to work with customers to decrease the
   average customer&#8217;s annual average weather-normalized consumption of
   energy;

   2. Provide reasonable assurance of a utility&#8217;s ability to recover costs
   of serving the public, including its cost-effective investments in
   conservation and energy efficiency as well as infrastructure needed to provide
   or maintain reliable service to the public;

   3. Reward utilities for meeting or exceeding conservation and energy
   efficiency goals that may be established pursuant to the Virginia Energy Plan
   (&#xA7; 45.2-1710 et seq.);

   4. Provide customers with long-term, meaningful opportunities to more
   efficiently consume energy, while ensuring that the rate design methodology
   used to set a utility&#8217;s revenue recovery is not inconsistent with such
   conservation and energy efficiency goals;

   5. Recognize the economic and environmental benefits of efficient use of
   natural gas, biogas, and lower-carbon gases; and

   6. Preserve or enhance the utility bill savings that customers receive when
   they reduce their energy use.

B. Natural gas utilities are authorized pursuant to this chapter to file natural
gas conservation and ratemaking efficiency plans that implement alternative
natural gas utility rate designs and other mechanisms, in addition to or in
conjunction with the cost of service methodology set forth in § 56-235.2 and
performance-based regulation plans authorized by § 56-235.6, that:

   1. Replace existing utility rate designs or other mechanisms that promote
   inefficient use of natural gas with rate designs or other mechanisms that
   ensure a utility&#8217;s recovery of its authorized revenues is independent of
   the amount of customers&#8217; natural gas consumption;

   2. Provide incentives for natural gas utilities to promote conservation and
   energy efficiency by granting recovery of the costs associated with
   cost-effective conservation and energy efficiency programs; and

   3. Reward utilities that meet or exceed conservation and energy efficiency
   goals on a weather-normalized, annualized average customer basis through the
   implementation of cost-effective conservation and energy efficiency programs.

C. This chapter shall be construed liberally to accomplish these purposes.

HISTORY: 2008, c. 639; 2021, Sp. Sess. I, c. 327; 2022, cc. 728, 759.