                                 CODE OF VIRGINIA

PETITION TO ESTABLISH OR AMEND EXPANSION PLAN; COST RECOVERY; PROCEDURES (§
56-611)

A. Notwithstanding the provisions of &#xA7; 56-235.4, a natural gas utility may
file a system expansion plan as provided in this chapter. Such a plan shall
provide for (i) a business rationale explaining that the expansion plan is in
the public interest and of benefit to the affected customers served under the
system expansion plan, (ii) the period the system expansion rider is proposed to
be in effect, (iii) the estimated eligible system expansion infrastructure costs
and a maximum level of investment to be included in the program, (iv) a maximum
level of investment per affected customer, (v) the projected number of customers
by rate class that will be served by the proposed investment, (vi) a schedule
for recovery of the related eligible system expansion infrastructure costs
through a system expansion rider, (vii) a methodology for deferral of
unrecovered eligible system expansion infrastructure costs, calculated as
determined pursuant to &#xA7; 56-612, (viii) the class or classes of customers
eligible to participate in a system expansion plan, and (ix) the period of time
that a customer at a premises receiving natural gas service from eligible system
expansion infrastructure will be considered an affected customer for purposes of
this chapter. The natural gas utility shall demonstrate that the system
expansion plan is prudent and reasonable. The Commission may approve such a plan
after such notice and opportunity for a hearing as the Commission may prescribe,
subject to the provisions of this chapter.

B. The Commission shall approve a natural gas utility&#8217;s system expansion
plan if it finds that the plan (i) includes the components set forth in
subsection A, (ii) provides for the recovery of eligible system expansion
infrastructure costs in accordance with the provisions of this chapter, and
(iii) is prudent and reasonable. In a final order approving a natural gas
utility&#8217;s system expansion plan, the Commission may require the natural
gas utility to file an annual report with the Commission demonstrating whether
the natural gas utility&#8217;s recovery of eligible system expansion
infrastructure costs pursuant to its system expansion plan complies with the
requirements of clause (ii). Upon a finding by the Commission that a natural gas
utility&#8217;s system expansion plan does not comply with the requirements of
clause (ii), the Commission may direct, by order, the natural gas utility to
exclude from deferral any unrecovered costs in excess of costs that may be
recovered by a system expansion rider.

C. The Commission shall act on a natural gas utility&#8217;s initial application
for a system expansion plan within 180 days. Within that time period, the
Commission shall approve, deny, or modify the plan as required by the public
interest. A plan filed pursuant to this section shall not require the filing of
rate schedules typically filed in conjunction with a rate case using the
cost-of-service methodology set forth in &#xA7; 56-235.2 or a performance-based
rate regulation plan authorized by &#xA7; 56-235.6. The Commission shall act on
a natural gas utility&#8217;s application to amend a previously approved plan
within 120 days. Within that time period, the Commission shall approve, deny, or
modify the amended plan as required by the public interest. If the Commission
denies such a plan or amendment or any part thereof, it shall set forth with
specificity the reasons for such denial, and the utility shall have the right to
refile, without prejudice, an amended plan or amendment within 60 days, and the
Commission shall thereafter have 90 days to approve or deny the amended plan or
amendment. The time period for Commission review provided for in this subsection
shall not apply if the system expansion plan is filed in conjunction with a rate
case using the cost-of-service methodology set forth in &#xA7; 56-235.2 or a
performance-based rate regulation plan authorized by &#xA7; 56-235.6.

D. Any system expansion plan and any system expansion rider that is submitted to
and approved by the Commission shall allocate and charge costs in accordance
with the appropriate cost causation principles in order to avoid any undue
cross-subsidization between rate classes.

E. No other revenue requirement or ratemaking issues may be examined in
consideration of the application filed pursuant to the provisions of this
chapter.

F. Costs recovered pursuant to this chapter shall be in addition to all other
costs that the natural gas utility is permitted to recover, shall not be
considered an offset to other Commission-approved costs of service or revenue
requirements, and shall not be included in any computation relative to a
performance-based regulation plan revenue-sharing mechanism.

G. A natural gas utility shall have the opportunity to seek recovery of any
costs associated with eligible expansion investment not yet recovered at the end
of a system expansion plan in a rate case using the cost-of-service methodology
set forth in &#xA7; 56-235.2 or performance-based regulation plan authorized by
&#xA7; 56-235.6. Such recovery shall be subject to Commission approval based
upon a determination that the benefits provided by affected customers added
under the system expansion plan or plans equal or exceed the impact of
recovering such costs from existing customers of the natural gas utility.

H. The provisions of this chapter shall not preclude the filing of other plans
or tariff provisions related to extending natural gas infrastructure.

I. The provisions of this chapter shall not apply to interstate pipeline
companies regulated by the Federal Energy Regulatory Commission.

HISTORY: 2015, cc. 28, 231.