§ 56-1. Definitions.

Whenever used in this title, unless the context requires a different meaning:

"Broadband connection," for purposes of this section, means a connection where transmission speeds exceed 200 kilobits per second in at least one direction.

"Commission" means the State Corporation Commission.

"Corporation" or "company" includes all corporations created by acts of the General Assembly of Virginia, or under the general incorporation laws of this Commonwealth, or doing business therein, and shall exclude all municipal corporations, other political subdivisions, and public institutions owned or controlled by the Commonwealth.

"Electric vehicle charging service" means the replenishment of the battery of a plug-in electric motor vehicle, which replenishment occurs by plugging the motor vehicle into an electric power source in order to charge or recharge its battery.

"Interexchange telephone service" means telephone service between points in two or more exchanges that is not classified as local exchange telephone service. "Interexchange telephone service" shall not include Voice-over-Internet protocol service for purposes of regulation by the Commission, including the imposition of certification processing fees and other administrative requirements, and the filing or approval of tariffs. Nothing herein shall be construed to either mandate or prohibit the payment of switched network access rates or other intercarrier compensation, if any, related to Voice-over-Internet protocol service.

"Local exchange telephone service" means telephone service provided in a geographical area established for the administration of communication services and consists of one or more central offices together with associated facilities which are used in providing local exchange service. Local exchange service, as opposed to interexchange service, consists of telecommunications between points within an exchange or between exchanges which are within an area where customers may call at specified rates and charges. "Local exchange telephone service" shall not include Voice-over-Internet protocol service for purposes of regulation by the Commission, including the imposition of certification processing fees and other administrative requirements, and the filing or approval of tariffs. Nothing herein shall be construed to either mandate or prohibit the payment of switched network access rates or other intercarrier compensation, if any, related to Voice-over-Internet protocol service.

"Mail" includes electronic mail and other forms of electronic communication when the customer has requested or authorized electronic bill delivery or other electronic communications.

"Municipality" or "municipal corporation" shall include an authority created by a governmental unit exempt from the referendum requirement of § 15.2-5403 .

"Person" includes individuals, partnerships, limited liability companies, and corporations.

"Plug-in electric motor vehicle" means an on-road motor vehicle that draws propulsion using a traction battery that has at least four kilowatt hours of capacity, uses an external source of electric energy to charge or recharge the battery, has a gross vehicle weight of not more than 14,000 pounds, and meets any applicable emissions standards.

"Public service corporation" or "public service company" includes gas, pipeline, electric light, heat, power and water supply companies, sewer companies, telephone companies, and all persons authorized to transport passengers or property as a common carrier. "Public service corporation" or "public service company" shall not include (i) a municipal corporation, other political subdivision or public institution owned or controlled by the Commonwealth; however, if such an entity has obtained a certificate to provide services pursuant to § 56-265.4:4 , then such entity shall be deemed to be a public service corporation or public service company and subject to the authority of the Commission with respect only to its provision of the services it is authorized to provide pursuant to such certificate; or (ii) any company described in subdivision (b)(10) of § 56-265.1 .

"Railroad" includes all railroad or railway lines, whether operated by steam, electricity, or other motive power, except when otherwise specifically designated.

"Railroad company" includes any company, trustee or other person owning, leasing or operating a railroad.

"Rate" means rate charged for any service rendered or to be rendered.

"Rate," "charge" and "regulation" include joint rates, joint charges and joint regulations, respectively.

"Regulated operating revenue" includes only revenue from services not found to be competitive.

"Transportation company" includes any railroad company, any company transporting express by railroad, and any ship or boat company.

"Virginia limited liability company" has the same meaning ascribed to "limited liability company" in § 13.1-1002 . A foreign limited liability company, as that term is defined in § 13.1-1002 , may become a Virginia limited liability company, even though also being a limited liability company organized under laws other than the laws of the Commonwealth, by filing articles of organization that meet the requirements of §§ 13.1-1003 and 13.1-1011 and include (i) the name of the foreign limited liability company immediately prior to the filing of the articles of organization; (ii) the date on which and the jurisdiction in which the foreign limited liability company was first formed, organized, created or otherwise came into being; and (iii) the jurisdiction that constituted the seat, siege social, or principal place of business or central administration of the foreign limited liability company, or any equivalent thereto under applicable law, immediately prior to the filing of the articles of organization. With respect to a foreign limited liability company that is also organized as a Virginia limited liability company, the terms and conditions of its organization as a Virginia limited liability company shall be approved in the manner provided for by the document, instrument, agreement or other writing, as the case may be, governing the internal affairs of the foreign limited liability company in the conduct of its business or by applicable law other than the law of the Commonwealth, as appropriate.

"Voice-over-Internet protocol service" or "VoIP service" means any service that: (i) enables real-time, two-way voice communications that originate or terminate from the user's location using Internet protocol or any successor protocol and (ii) uses a broadband connection from the user's location. This definition includes any such service that permits users generally to receive calls that originate on the public switched telephone network and to terminate calls to the public switched telephone network.

(Code 1919, §§ 3693, 3881; 1971, Ex. Sess., c. 23; 1984, c. 382; 2002, cc. 479, 489; 2004, c. 1028; 2006, cc. 691, 912, 929, 941; 2007, c. 619; 2009, c. 746; 2011, cc. 408, 738, 740; 2016, c. 288.)

Cross references. - For definition of a "public utility," see § 56-232 .

For definition of other terms pertaining to corporations, see § 13.1-603 and Va. Const., Art. IX.

As to conduct prohibited by the General Assembly Conflicts of Interest Act, see § 30-103 .

Editor's note. - Acts 2016, c. 288, cl. 3 provides: "That the provisions of this act shall not affect the validity of any filing made, or other action taken, before the effective date of this act with respect to (i) the conversion of a domestic or foreign partnership or limited partnership to a limited liability company or (ii) the domestication of a non-United States entity as a limited liability company."

The 2002 amendments. - The 2002 amendments by cc. 479 and 489 are identical, and in the definition of "public service corporation," deleted "and shall exclude all municipal corporation, other political subdivisions, and public institutions owned or controlled by the Commonwealth" at the end of the first sentence, and added the final sentence.

The 2004 amendments. - The 2004 amendment by c. 1028 added the paragraph defining "Virginia limited liability company."

The 2006 amendments. - The 2006 amendment by c. 691 rewrote the section.

The 2006 amendment by c. 912, in the first sentence of the definition of "Virginia limited liability company," inserted clause (ii), redesignated former clause (ii) as clause (iii) and made related changes, and combined the former second and last sentences by substituting "and the" for "The" and in the second sentence, substituted "With respect to an organization or domestication pursuant to clause (iii), the" for "The" and deleted "of a foreign limited liability company as a limited liability company" preceding "shall be approved" and deleted "in accordance with this process" at the end of the last sentence; and inserted "limited liability companies" in the definition of "Person."

The 2006 amendments by cc. 929 and 941 are identical, and inserted the paragraph defining "municipality."

The definition of "Virginia limited liability company" has been set out in the form above at the direction of the Virginia Code Commission.

The 2007 amendments. - The 2007 amendment by c. 619, in the first sentence of the definition of "Voice-over-Internet service" or "VolP service," inserted "that originate or terminate from the user's location using Internet protocol or any succesor protocol and" in clause (i); substituted "uses" for "requires" in clause (ii); deleted clause (iii) and the clause (iv) designation and added "This definition includes any such service that" at the beginning of the last sentence.

The 2009 amendments. - The 2009 amendment by c. 746, in the paragraph defining "Public service corporation," added the clause (i) designator and added clause (ii).

The 2011 amendments. - The 2011 amendment by c. 408 added the definitions for "Electric vehicle charging service" and "Plug-in electric motor vehicle."

The 2011 amendments by cc. 738 and 740 are identical, and, in the sixth paragraph, inserted "specified" preceding "rates and charges" and deleted "specified in local exchange tariffs filed with the Commission" thereafter; and added the seventh paragraph defining "Mail"; deleted "telegraph companies" following "telephone companies" in the first sentence of the definition of "Public service corporation"; and added definition of "Regulated operating revenue."

The 2016 amendments. - The 2016 amendment by c. 288 rewrote the definition of "Virginia limited liability company."

Law review. - For survey of Virginia law on municipal corporations and administrative law for the year 1970-1971, see 57 Va. L. Rev. 1572 (1971).

For an article, "Disentangling Deregulatory Takings," see 86 Va. L. Rev. 1435 (2000).

Michie's Jurisprudence. - For related discussion, see 3B M.J. Carriers, § 23; 7A M.J. Eminent Domain, § 11; 15 M.J. Public Service and State Corporation Commission, § 21; 15 M.J. Railroads, § 11.

§ 56-1.1. Designation as public service corporation.

The State Corporation Commission may designate a business enterprise operating as a telephone or telecommunications company to be a public service corporation when, upon appropriate inquiry and public hearing, the Commission determines that the enterprise is engaged in any of the public utility services described in § 56-1 . However, this section shall not apply to any mutual telephone association existing prior to January 1, 1984.

(1984, c. 648.)

§ 56-1.2. Persons, localities, and school boards not designated as public utility, public service corporation, etc.

The terms public utility, public service corporation, or public service company, as used in Chapters 1 (§ 56-1 et seq.), 10 (§ 56-232 et seq.), 10.1 (§ 56-265.1 et seq.), and 10.2:1 (§ 56-265.13:1 et seq.) of this title, shall not refer to:

1. Any person who owns or operates property and provides electricity, natural gas, water, or sewer service to residents or tenants on the property, provided that (i) the electricity, natural gas, water, or sewer service provided to the residents or tenants is purchased by the person from a public utility, public service corporation, public service company, or person licensed by the Commission as a competitive provider of energy services, or a county, city or town, or other publicly regulated political subdivision or public body, (ii) the person or his agent charges to the resident or tenant on the property only that portion of the person's utility charges for the electricity, natural gas, water, or sewer service which is attributable to usage by the resident or tenant on the property, and additional service charges permitted by § 55.1-1212 or 55.1-1404 , as applicable, and (iii) the person maintains three years' billing records for such charges.
2. Any (i) person who is not a public service corporation and who provides electric vehicle charging service at retail, (ii) school board that operates retail fee-based electric vehicle charging stations on school property pursuant to § 22.1-131, or (iii) locality that operates a retail fee-based electric vehicle charging station on property owned or leased by the locality pursuant to § 15.2-967.2 . The ownership or operation of a facility at which electric vehicle charging service is sold, and the selling of electric vehicle charging service from that facility, does not render such person, school board, locality, or board of visitors a public utility, public service corporation, or public service company as used in Chapters 1 (§ 56-1 et seq.), 10 (§ 56-232 et seq.), 10.1 (§ 56-265.1 et seq.), and 10.2:1 (§ 56-265.13:1 et seq.) solely because of that sale, ownership, or operation.
3. Any agency, as defined in § 2.2-128, when operating a retail fee-based electric vehicle charging station pursuant to § 2.2-614.5 on any property or facility the agency controls. The ownership or operation of a facility at which electric vehicle charging service is sold, or the selling of electric vehicle charging service from that facility, does not render the agency a public utility, public service corporation, or public service company as used in Chapters 1 (§ 56-1 et seq.), 10 (§ 56-232 et seq.), 10.1 (§ 56-265.1 et seq.), and 10.2:1 (§ 56-265.13:1 et seq.) solely because of that sale, ownership, or operation. (1993, c. 265; 1999, c. 778; 2000, c. 994; 2003, c. 355; 2011, c. 408; 2017, c. 239; 2018, cc. 295, 446; 2019, c. 248; 2020, c. 490.)

Editor's note. - Acts 2018, cc. 295 and 446, cl. 2 provides: "That the provisions of this act shall apply to any electric vehicle charging station existing prior to the effective date of this act [July 1, 2018] that is otherwise in compliance with the requirements of this act."

To conform to the recodification of Title 55 by Acts 2019, c. 712, effective October 1, 2019, the following substitution was made at the direction of the Virginia Code Commission: substituted " § 55.1-1212 or 55.1-1404 , as applicable" for " § 55-226.2."

The 1999 amendment inserted "electricity, natural gas or" preceding "water" throughout the section, deleted "and" following "public body" in clause (i), substituted "56-245.3, and" for "55-248.45:1" in clause (ii), and added clause (iii).

The 2000 amendments. - The 2000 amendment by c. 994, in the introductory language, inserted "this" and deleted "56" near the beginning, and inserted the language beginning "or person licensed" and ending "services, or a" near the middle.

The 2003 amendments. - The 2003 amendment by c. 355, inserted "or sewer service" three times, and substituted "attributable to usage by the resident or tenant on the property, and additional service charges permitted by § 55-226.2" for "permitted by § 56-245.3 ."

The 2011 amendments. - The 2011 amendment by c. 408 subdivided the existing provisions of the section, creating introductory language and the subdivision 1 designation; and added subdivision 2.

The 2017 amendments. - The 2017 amendment by c. 239, in subdivision 2, inserted the clause (i) designation and inserted clause (ii), and made a related change in the first sentence, and substituted "such person or school board" for "the person" in the second sentence.

The 2018 amendments. - The 2018 amendments by cc. 295 and 446 are identical, and in subdivision 2, added clauses (iii) and (iv) in the first sentence and inserted "locality, or board of visitors" in the second sentence; and added subdivisions 3 and 4; and made stylistic changes. For applicability, see Editor's note.

The 2019 amendments. - The 2019 amendment by c. 248 added subdivision 5 and made a stylistic change.

The 2020 amendments. - The 2020 amendment by c. 490, in subdivision 2, deleted clause (iv) in the first sentence, which read: "board of visitors of any baccalaureate public institution of higher education that operates a retail fee-based electric vehicle charging station on the grounds of such institution pursuant to § 23.1-1301.1 "; in subdivision 3, rewrote the first sentence, which read: "The Department of Conservation and Recreation when operating a retail fee-based electric vehicle charging station on property of any existing state park or similar recreational facility the Department controls pursuant to § 10.1-104.01 " and substituted "agency" for "Department of Conservation and Recreation" in the second sentence; deleted subdivision 4, pertaining to the Chancellor of the Virginia Community College System; and deleted subdivision 5, pertaining to the Department of General Services, Department of Motor Vehicles, and Department of Transportation.

§ 56-1.2:1. Retail sale of electricity in connection with the provision of electric vehicle charging service.

1. The provision of electric vehicle charging service by a person, locality, school board, or any agency as defined in § 2.2-128 that is not a public utility, public service corporation, or public service company shall not constitute the retail sale of electricity if:
   1. The electricity furnished in connection with the provision of electric vehicle charging service is used solely for transportation purposes; and
   2. The person, locality, school board, or agency as defined in § 2.2-128 providing the electric vehicle charging service has procured the furnished electricity from the public utility that is authorized by the Commission to engage in the retail sale of electricity within the exclusive service territory in which the electric vehicle charging service is provided.
2. The provision of electric vehicle charging service shall:
   1. Be a permitted electric utility activity of a certificated electric utility; and
   2. Not affect the status as a public utility of a certificated public utility that provides such service.

      (2011, c. 408; 2017, c. 239; 2018, cc. 295, 446; 2019, c. 248; 2020, c. 490.)

Editor's note. - Acts 2018, cc. 295 and 446, cl. 2 provides: "That the provisions of this act shall apply to any electric vehicle charging station existing prior to the effective date of this act [July 1, 2018] that is otherwise in compliance with the requirements of this act."

The 2017 amendments. - The 2017 amendment by c. 239 inserted "or school board" in the introductory language of subsection A and subdivision A 2, and made a minor stylistic change.

The 2018 amendments. - The 2018 amendments by cc. 295 and 446 are identical, and in subsection A, inserted "locality, public institution of higher education" and "or by the Department of Conservation and Recreation" or similar language in the introductory paragraph and in subdivision 2; and made stylistic changes. For applicability, see Editor's note.

The 2019 amendments. - The 2019 amendment by c. 248 inserted "Department of General Services, Department of Motor Vehicles, or Department of Transportation" twice in subsection A; and made stylistic changes.

The 2020 amendments. - The 2020 amendment by c. 490, in subsection A in the introductory language, substituted "locality, school board, or any agency as defined in § 2.2-128" for "locality, public institution of higher education, or a school board" and deleted "or by the Department of Conservation and Recreation, Department of General Services, Department of Motor Vehicles, or Department of Transportation" following "public service company"; and made similar changes in subdivision A 2.

§ 56-1.3. Regulation of Voice-over-Internet protocol service.

Notwithstanding any provision of law, except § 58.1-1730 , to the contrary:

1. "Telecommunications service" and "telephone service" shall not include the provision of Voice-over-Internet protocol service for purposes of regulation by the Commission.
2. The Commission shall not have jurisdiction with respect to the regulation of Voice-over-Internet protocol service, including but not limited to the imposition of regulatory fees, certification requirements, and the filing or approval of tariffs.
3. Nothing herein shall be construed to either mandate or prohibit the payment of switched network access rates or other intercarrier compensation, if any, related to Voice-over-Internet protocol service, as may be determined by the Commission.

   (2006, c. 691; 2018, cc. 532, 533.)

The 2018 amendments. - The 2018 amendments by cc. 532 and 533 are identical, and in the introductory paragraph, deleted " § 56-484.12:1 and" preceding "58.1-1730."

§ 56-2. Public service corporations, etc., governed by provisions of this title.

Every public service corporation heretofore or hereafter incorporated and authorized to construct, maintain, or operate, in this Commonwealth, any work of public service, and every association, person, or partnership constructing, maintaining, or operating any such work, shall be governed by the provisions of this title and Title 13.1, so far as they apply to such corporations, associations, persons, and partnerships, as well as by any laws that may hereafter be enacted relating to such corporations.

(Code 1919, § 3900.)

Cross references. - For constitutional provisions relating to foreign public service corporations, see Va. Const., Art. IX, § 5.

§ 56-3. Expenses prior to organization.

The expenses incurred prior to the organization of any public service corporation, for preliminary surveys, or for stationery or advertising, or any other necessary matter or thing, may, if deemed reasonable by the president and directors, be paid by their order.

(Code 1919, § 3901.)

§ 56-4.

Repealed by Acts 1954, c. 188.

§ 56-5. Triple damages for injury to property of public service corporation.

Any person who shall wilfully destroy, injure, or obstruct any of the works or property of a public service corporation shall be liable to such corporation for three times the amount of the actual damage thereby sustained. This section shall not relieve such person of any liability to criminal prosecution for such offense, or of any fine or imprisonment imposed by law therefor.

(Code 1919, § 3894.)

Cross references. - For offenses relating to railroads and other utilities, see §§ 18.2-153 through 18.2-167.1 .

§ 56-5.1.

Repealed by Acts 2005, c. 35.

Editor's note. - Former § 56-5.1 , pertaining to failure or refusal to obey Commission orders concerning natural gas companies, derived from 1989, c. 211.

§ 56-6. Remedies of persons aggrieved by public service corporation's violation of law.

Any person or corporation aggrieved by anything done or omitted in violation of any of the provisions of this or any other chapter under this title, by any public service corporation chartered or doing business in this Commonwealth, shall have the right to make complaint of the grievance and seek relief by petition against such public service corporation before the State Corporation Commission, sitting as a court of record. If the grievance complained of be established, the Commission, sitting as a court of record, shall have jurisdiction, by injunction, to restrain such public service corporation from continuing the same, and to enjoin obedience to the requirements of this law, and the Commission, sitting as a court of record, shall also have jurisdiction, by mandamus, to compel any public service corporation to observe and perform any public duty imposed upon public service corporations by the laws of this Commonwealth, subject as to any matter arising under this section to the right of appeal to the Supreme Court by either party as of right in the mode prescribed by law; but nothing in this section shall be construed to confer any power upon the Commission which is forbidden to the courts by § 56-429 .

(Code 1919, § 3902.)

Cross references. - For constitutional powers of the State Corporation Commission, see Va. Const., Art. IX, § 2.

Research References. - Friend's Virginia Pleading and Practice (Matthew Bender). Chapter 33 Writs and Injunctions. § 33.02 Injunctions. Friend.

Michie's Jurisprudence. - For related discussion, see 7A M.J. Eminent Domain, § 26.

§ 56-7. Common law, etc., remedies not altered or abridged.

Nothing contained in this title shall in any way abridge or alter existing remedies at common law or under any other statute, but the new remedies given shall be deemed to be in addition to those already existing.

(Code 1919, § 3903.)

§ 56-8. Repeal of charter.

The charter of every public service corporation heretofore or hereafter incorporated may be repealed by any future General Assembly; but no law shall be passed for taking from a company its works or property without making to it just compensation.

(Code 1919, § 3891.)

§ 56-8.1. Free services to members of General Assembly and others prohibited.

No public service corporation doing business in this Commonwealth shall grant to any member of the General Assembly or to any state, county, district, or municipal officer any free pass, free transportation, or any rebate or reduction in the rates charged by such corporation to the general public. Any public service corporation violating this section and any person receiving any privilege or benefit prohibited by this section shall be guilty of a misdemeanor, and upon conviction thereof, shall each be fined an amount not to exceed $1,000 for each such offense. This section shall not be construed to prevent any public service corporation from granting free transportation, services or free passes to any person including those set forth herein who would by virtue of their employment or service as an officer, director or otherwise be entitled thereto, or to members of any police force or fire department while in the discharge of their official duties.

(1971, Ex. Sess., c. 9.)

§ 56-8.2. Appeals in rate cases.

Any public service corporation which is required by law to file a schedule of rates with the Commission, or the Commonwealth, or any other party in interest or party aggrieved may appeal to the Supreme Court from any final decision or order of the Commission concerning such rates. Upon the granting of such appeal, the Supreme Court may award or refuse a writ of supersedeas, and, if a writ of supersedeas be awarded, it may suspend the operation of the action appealed from in whole or in part. Alternatively, the Supreme Court in its discretion may authorize putting into effect of the schedule of rates so filed and suspended by the Commission or the schedule of rates existing at the time of the filing of the schedule upon which the investigation and hearing have been had, or require the inauguration of the schedule of rates as ordered by the Commission, until the final disposition of the appeal. But, prior to the final reversal by the Supreme Court of the order appealed to the Supreme Court, no action of the Commission prescribing or affecting rates or charges shall be delayed, or suspended in its operation, by reason of any appeal by the party whose rates or charges are affected, or by reason of any proceeding resulting from such appeal until a suspending bond payable to the Commonwealth has been executed and filed with the Commission with such conditions, in such penalty, and with such surety thereon as the Commission, subject to review by the Supreme Court, may deem sufficient. In any appeal from action of the Commission prescribing or affecting the rates or charges of a public service corporation, such bond, or if no bond is required, the order of the Supreme Court, shall expressly provide for the prompt refunding to the parties entitled thereto of all charges which may have been collected or received, pending the appeal, in excess of those fixed, or authorized by the final decision on appeal, with interest from the date of the collection thereon. But no bond shall be required of the Commonwealth. Any bond required under this section shall be enforced in the name of the Commonwealth before the Commission or before any court having jurisdiction, and the process and proceedings thereon shall be as provided by law upon bonds of like character required to be taken by courts of record of this Commonwealth.

(1971, Ex. Sess., c. 227.)

Law review. - For article analyzing rate-making issues under the SCC, see 14 Wm. & Mary L. Rev. 601 (1973).

§ 56-9. Sale of public service corporation under deed of trust; how purchaser may form new corporation.

If a sale be made under a deed of trust or mortgage, executed by a public service corporation, on all its works and property, and there be a conveyance pursuant thereto, such sale and conveyance shall pass to the purchaser at the sale not only the works and property of the company as they were at the time of making the deed of trust or mortgage, but any works which the company may, after that time and before the sale, having constructed, and all other property of which it may be possessed at the time of the sale other than debts due to it. Upon such conveyance to the purchaser, the company shall ipso facto be dissolved, and the purchaser shall become a corporation by any name which may be set forth in the conveyance, upon complying with the provisions of § 13.1-604.1 .

(Code 1919, § 3895.)

§ 56-10. Effect of such sale; date for meeting of stockholders.

The corporation created by or in consequence of such sale and conveyance shall succeed to all such franchises, rights, and privileges, and perform all such duties as would have been had or should have been performed by the first company but for such sale and conveyance, including in the case of a railroad corporation the duty of maintaining and operating any branch or lateral road which may have been constructed and operated before the sale, and of transporting freight and passengers thereon; save only, that the corporation so created shall not be entitled to the debts due to the first company, and shall not be liable for any debts of, or claims against, the first company, which may not be expressly assumed in the contract of purchase, and that the whole profits of the business to be done by such corporation shall belong to the purchaser or his assigns. The interest in the corporation of the purchaser or his assigns shall be personal estate, and he or his assigns may create so many shares of stock therein as he or they may think proper, not exceeding together the amount of stock in the first company at the time of the sale, except in pursuance of an amendment to the charter obtained according to law; and such purchaser or his assigns may assign such shares in a book to be kept for that purpose. Such shares shall thereupon be on the footing of shares in corporations generally, except only that the first meeting of the stockholders shall be held on such day and at such place as shall be fixed by the purchaser, of which notice shall be published for two successive weeks in a newspaper.

(Code 1919, § 3896.)

§ 56-11. Debts and claims against corporation so sold.

The debts due to and by, and claims against, the corporation whose works and property are so sold, shall be subject to the provisions contained in § 56-13 , and the corporation, notwithstanding its dissolution, shall, as to such debts and claims, have the power and perform the duties prescribed by that section and be served with process as therein provided.

(Code 1919, § 3897; 1920, p. 20.)

§ 56-12. Works and property sold under court decree subject to provisions of three preceding sections.

The works and property of a public service corporation sold under a decree of a court having competent jurisdiction shall be held by the purchaser thereof subject to all the provisions of §§ 56-9 through 56-11 , so far as the same may be applicable to such a sale.

(Code 1919, § 3898.)

§ 56-13. Effect of dissolution of public service corporation.

When any public service corporation shall expire or be dissolved, or its corporate rights and privileges shall have ceased, all of its works and property, and debts due to it, shall be subject to the payment of debts due by it, and then to distribution among the members or stockholders, according to their respective interests. Such corporation may sue and be sued as before for the purpose of collecting debts due to it, prosecuting rights under previous contracts with it, enforcing its liability, and distributing the proceeds of its works, property, and debts among those entitled thereto. Notice to or process against such company, if necessary in any suit or civil proceeding, shall be sufficiently served by publication thereof once a week for four successive weeks in some newspaper published in the county or corporation wherein the suit or proceeding is; or, if there be no newspaper published in such county or corporation, in a newspaper published in some neighboring county or corporation in this Commonwealth, to be designated by the clerk of the court in which such suit or proceeding is.

(Code 1919, § 3899.)

Applied in Jefferies v. Commonwealth, 121 Va. 425 , 93 S.E. 701 (1917).

§ 56-14. Streets, etc., of city or town not to be occupied without its consent; compensation.

No public service corporation, cold storage, compressed air, viaduct, conduit, or bridge company, nor any corporation, association, person, or partnership, engaged in these or like enterprises, shall use, cross, or occupy with its works the streets or alleys, public or private, or the public grounds, of any incorporated city or town, whether along, over or under the same, without the consent of the corporate authorities thereof; and in case any person shall be damaged in his property by any such use, occupation, or crossing, such corporation, association, person, or partnership shall, before using, crossing, or occupying such streets, alleys or public grounds, make compensation therefor to the person so damaged. Such compensation, if the parties cannot agree upon the same, shall be ascertained in the mode prescribed in the laws regulating the exercise of the right of eminent domain.

(Code 1919, § 3882.)

Cross references. - For constitutional provisions as to power of cities and towns over use of streets, etc., see Va. Const., Art. VII, §§ 8, 9.

For another section providing that public utilities not to use streets without consent, see § 15.2-2017 .

Michie's Jurisprudence. - For related discussion, see 17 M.J. Streets and Highways, § 87.

§ 56-15. Permits to place poles, wires, etc., in roads and streets in certain counties; charge therefor.

1. The governing body of Albemarle County, Chesterfield County, Henrico County, Prince William County, or York County, may adopt an ordinance requiring any person, firm or corporation to obtain a permit from the county engineer or such other officer as may be designated in such ordinance before placing any pole or subsurface structures under, along or in any county road or street in such county which is not included within the primary state highway system or secondary system of state highways, or any lines or wires that cross any such road or street, whether or not such road or street be actually opened, and may provide in such ordinance reasonable charges for the issuance of such a permit and penalties for violations of the terms of such ordinance to be imposed by the court, judge or justice trying the case.
2. In the event the county engineer or such other officer as may be designated fails or refuses to issue any such permit requested within thirty days after application therefor, or attaches to such permit conditions to which such person, firm or corporation is unwilling to consent, then such person, firm or corporation may proceed to make such crossing pursuant and subject to the provisions of §§ 56-23 to 56-32 , as if the application had been made to the board of supervisors or other governing body of the county.
3. The provisions of this section shall not apply with regard to the occupancy and use of any public roads, works, turnpikes, streets, avenues, and alleys by a renewable generator that has acquired the authority to locate distribution facilities therein pursuant to Chapter 29 (§ 56-614 et seq.) of Title 56. (1942, p. 222; Michie Code 1942, § 3885a; 2007, c. 813; 2009, c. 807.)

Editor's note. - Acts 2007, c. 813, cl. 2 provides: "That the provisions of this act shall not affect the powers of any locality with respect to any ordinance, resolution or bylaw validly adopted and not repealed or rescinded prior to July 1, 2007."

At the direction of the Virginia Code Commission, "primary state highway system" was substituted for "state highway system" to conform to changes by Acts 2014, c. 805.

Effective October 1, 2021, "Chapter 29 ( § 56-614 et seq.) of Title 56" was substituted for "Chapter 11 ( § 67-1100 et seq) of Title 67" to conform to the recodification of Title 67 by Acts 2021, Sp. Sess. I, c. 387, at the direction of the Virginia Code Commission.

The 2007 amendments. - The 2007 amendment by c. 813 substituted "The governing body of Albemarle County, Chesterfield County, Henrico County, Prince William County, or York County" for "The board of supervisors or other governing body of any county adjoining a city having a population of 175,000 inhabitants or more according to the last preceding United States census, or of any county which has adopted the county executive form of county government" at the beginning of the first paragraph.

The 2009 amendments. - The 2009 amendment by c. 807 designated the former first and second paragraphs as present subsections A and B, respectively; in subsection A, substituted "state highway system" for "primary"; and added subsection C.

§ 56-16. Wagonways to be constructed across roads, railroads, canals, and other works; enforcement.

For the purpose of this section, "wagonway" means a vehicular crossing adequate to permit the passage of machinery and vehicles used for agricultural or forestal purposes, including but not limited to the transportation of agricultural and forestal products to markets. Every public service corporation whose road, railroad, canal, or works passes through the lands of any person in this Commonwealth shall provide and maintain proper and suitable wagonways across such road, railroad, canal, or other works, from one part of such land to the other, and shall keep such wagonways in good repair. Such wagonways shall be constructed and maintained on the request of the landowner, in writing, by certified mail, made to the registered agent for the corporation owning such road, railroad, canal, or other works at that point, and shall designate the points at which the wagonways are desired. If the company fails or refuses for ninety days after such request to construct and maintain wagonways of a convenient and proper character at the places designated, then the owner may apply to the circuit court of the county or city wherein such land is located for the appointment of three disinterested persons whose lands do not abut on such road, railroad, canal, or other works, who shall constitute a board of commissioners whose duty it shall be to go upon the land and determine whether the requested wagonways should be constructed and maintained.

Any delay in construction or maintenance caused by inclement weather, war, strikes, acts of God, national emergencies, or failure of any local, state, or federal government agencies to grant permits shall extend the aforesaid period. The decision of such board shall be in writing and, if favorable to the landowner, shall set forth the points at which the wagonways should be constructed and maintained, giving also a description of what should be done by the company to make and maintain a suitable and convenient wagonway. The decision of the board of commissioners shall be returned to, and filed in, the clerk's office of such court, and when called up at the next or any succeeding term of such court, it shall be confirmed, unless good cause is shown against it by the company. Either party shall have the right of appeal to the Supreme Court from the judgment of the court. If the company fails, within a reasonable time fixed by the court at the time of the confirmation of a report favorable to the landowner, to make and maintain the wagonways therein referred to, it shall pay the landowner fifty dollars for each day of such failure, which may be recovered on motion by the landowner against the company, in the circuit court of the county or city wherein such land is located having jurisdiction to try the same. The commissioners shall each receive for their services the sum of fifty dollars per day, to be taxed as a part of the costs of the proceeding.

Once the right to such wagonway has been established, should the railroad change the grade of any portion of the tracks across which such wagonway passes, it shall be the duty of the railroad to make whatever reasonable modifications of the wagonway are necessary within the railroad right-of-way to permit the passage of the aforesaid machinery and vehicles.

(Code 1919, § 3883; 1994, c. 352.)

The 1994 amendment rewrote this section.

Research References. - Bryson on Virginia Civil Procedure (Matthew Bender). Chapter 2 Potential Jurisdiction. § 2.03 Courts. Bryson.

Friend's Virginia Pleading and Practice (Matthew Bender). Chapter 1 Courts. § 1.02 Supreme Court of Virginia, etc. Friend.

Michie's Jurisprudence. - For related discussion, see 3A M.J. Canals and Canal Companies, § 2; 15 M.J. Railroads, § 43.

§ 56-16.1. Telephone, telegraph or electric power lines crossing railroads.

1. If a telephone, telegraph or electric power company desires to cross the works of a railroad company and the parties thereto cannot agree on the manner of the crossing or the compensation to be paid or the damages, if any, occasioned by such crossing, then either party may proceed under this section in such case. Such party, after complying with the provisions of §§ 56-17 and 56-18 , insofar as they are applicable, may apply to the Commission within thirty days after the submission of the plans and specifications required in § 56-18 , to inquire into the necessity for such crossing, the propriety of the proposed location, all matters pertaining to its construction and operation, and the crossing fee and damages, if any, to be paid to such railroad.
2. Every such application shall, in addition to the plans and specifications required in § 56-18 , set forth (i) the means applicant proposes to employ to protect persons and property on the premises of the railroad; (ii) the extent to which applicant will safeguard the railroad from damage or destruction of persons or property resulting from such crossing including a provision to save the railroad harmless from claims arising as a result of such crossing; (iii) the conditions under which usage of the crossing will terminate and all interests revert to the railroad; and (iv) the means which applicant proposes to employ to prevent interference with the unlimited use of the property by the railroad including, but without limitation, the communication and transportation system on the property proposed to be crossed. The Commission may, at its discretion, require the applicant to provide a bond or insurance conditioned to save the railroad harmless from claims arising as a result of such crossing. The Commission may, as provided in § 56-19 , employ experts to advise it with reference to such application.
3. If the Commission grants such application in whole or in part, the order of the Commission shall grant a license for such crossing upon compliance with the terms of the order, and shall fix a fee for such crossing and determine the damages, if any; in fixing the amount of such fees the Commission shall consider the costs involved to the company to be crossed and the periodic inspection of such works.
4. Construction shall not begin until permitted under an order provided for in paragraph C hereof unless the parties agree thereto; provided that the Commission may allow construction to proceed pending the determination of the fee and damages, if any.

   (1976, c. 328.)

§ 56-16.2. Public utility lines crossing railroads.

1. As used in this section:

   "Municipality" means a city, county, town, authority, or other political subdivision of the Commonwealth.

   "Public utility line" means any line, wire, pipe, or conduit that is used in connection with the provision of water, sewer, or telecommunications service by a municipality, and includes any poles and other appurtenant fixtures and structures that are necessary and appropriate for the operation and support of such line, wire, pipe, or conduit.

2. If a municipality desires to cross the works of a railroad company with a public utility line and the municipality and railroad company cannot agree on the manner of the crossing or the compensation to be paid or the damages, if any, occasioned by such crossing, then either party, after complying with the provisions of §§ 56-17 and 56-18 , insofar as they are applicable, may apply to the Commission within 30 days after the submission of the plans and specifications required in § 56-18 to inquire into the necessity for such crossing, the propriety of the proposed location, all matters pertaining to its construction and operation, and a fee for such crossing and damages, if any, to be paid to the railroad company.
3. Every such application shall, in addition to the plans and specifications required in § 56-18 , set forth (i) the means the applicant proposes to employ to protect persons and property on the premises of the railroad; (ii) standard railroad liability protection insurance to safeguard the railroad from damage or destruction of persons or property resulting from such crossing, including a provision to save the railroad harmless from claims arising as a result of such crossing; (iii) the conditions under which usage of the crossing will terminate and all interests revert to the railroad; and (iv) the means which the applicant proposes to employ to prevent interference with the unlimited use of the property by the railroad including, but without limitation, the communication and transportation system on the property proposed to be crossed. The Commission may, at its discretion, require the applicant to provide a bond or insurance conditioned to save the railroad harmless from claims arising as a result of such crossing. The Commission may, as provided in § 56-19 , employ experts to advise it with reference to such application.
4. If the Commission grants such application in whole or in part, the order of the Commission shall require the railroad to grant to the municipality a license for such crossing upon compliance with the terms of the order, and shall fix a fee for the crossing and determine the damages, if any. The amount of the fee for the crossing fixed by the Commission shall not exceed the actual costs reasonably expected to be incurred by the railroad company as a result of the crossing and the periodic inspection of such works but shall take into consideration the systemwide administrative and other costs of the railroad to implement utility crossing agreements.
5. Construction shall not begin until permitted under an order provided for in subsection D unless the parties agree thereto; however, the Commission may allow construction to proceed pending the determination of the fee and damages, if any.

   (2006, c. 383.)

§ 56-17. Right of one public service corporation to cross the works of another; cost.

If any public service corporation deems it necessary in the construction of its works to cross the works of any other public service corporation, or if any renewable generator as defined in § 56-614 deems it necessary to cross the works of a public service corporation in the construction of distribution facilities that are required to (i) connect a renewable energy facility that generates electricity to the electric distribution grid, (ii) distribute steam generated at a renewable energy facility, or (iii) distribute landfill gas, it may do so; provided such crossing shall be so located, constructed, and operated as not to impair, impede, or obstruct, in any material degree, the works and operations of the railroad, canal, turnpike, or other works to be crossed; and provided such crossing shall be supported by such permanent and proper structures and fixtures, and shall be controlled by such customary and approved appliances, methods, and regulations as will best secure the safe passage and transportation of persons and property along such crossing, and will not be injurious to the works of the company to be crossed. The cost of such crossings, their appliances and apparatus, and of the repair and operation of the same, shall be borne by the party desiring to make the crossing.

(Code 1919, § 3884; 2009, c. 807.)

Cross references. - As to crossing of highway by public service corporation, see §§ 56-23 through 56-32 .

As to power of General Assembly to require public service corporations to connect, see § 56-34 .

As to crossing of a railroad or highway by another railroad, see §§ 56-362 , 56-363 .

As to condemnation of property of corporations possessing power of eminent domain, see § 25.1-102 .

Editor's note. - Effective October 1, 2021, " § 56-614 " was substituted for " § 67-1100" to conform to the recodification of Title 67 by Acts 2021, Sp. Sess. I, c. 387, at the direction of the Virginia Code Commission.

The 2009 amendments. - The 2009 amendment by c. 807 inserted "or if any renewable generator as defined in § 67-1100 deems it necessary to cross the works of a public service corporation in the construction of distribution facilities that are required to" and added clauses (i) through (iii).

§ 56-18. Submission of plans for such crossing.

Before any such work as is mentioned in § 56-17 is commenced, the president or general managing officer of the company which proposes to cross the works of another company shall submit plans, specifications and descriptions of the proposed crossing and of the proposed appliances and methods of operation thereof to the president or other general officer of the latter company; and if the plans, specifications and descriptions are accepted or if no notice of suspension of the work on such crossing by the Commission pursuant to § 56-19 is received by the first named company within thirty days after such plans, specifications and descriptions have been delivered to the president, or any general officer of the company whose works are to be crossed, the first named company may proceed with the construction and operation of the crossing, under the plans, specifications and descriptions, and with the appliances and methods, so submitted.

(Code 1919, § 3884.)

§ 56-19. Contest by company whose works are crossed.

Any company whose works are to be crossed under the provisions of §§ 56-17 and 56-18 may, within fifteen days from the date of the submission of the plans and specifications mentioned in § 56-18 , apply to the State Corporation Commission to inquire into the necessity for such crossing, and the propriety of the proposed location, and all matters pertaining to its construction and operation; and thereupon, within thirty days from the date of such submission of plans and specifications, the Commission in its discretion may, by notice served upon both companies, suspend work on such crossing for such reasonable time, prescribed in the notice, as it may deem necessary to make such inquiry. The Commission may, in its discretion, where railroads or canals are to be crossed by other railroads or canals, employ expert engineers, at a cost not exceeding $500, to be paid equally by both companies, who shall, with the Commission, or some member thereof, or such person as the Commission may designate, (1) examine the location, plans, specifications and descriptions of appliances, and methods proposed to be employed, (2) hear any objections and consider any modifications that the company whose line is to be crossed desires to offer, and (3) within such time as the Commission may fix, reject, approve, or modify such plans and specifications. The final order of the Commission shall, unless an appeal be taken to the Supreme Court within thirty days from the date of the same, be final and binding on both companies.

(Code 1919, § 3884.)

§ 56-20. Payment for damage occasioned by crossing works of public service corporations.

If any such crossing as is provided for in §§ 56-17 to 56-19 cause damage to the works of any company, or to the owner or occupant of any lands, the company exercising the privileges granted by such sections shall make proper compensation for such damage.

(Code 1919, § 3884.)

§ 56-21. When work on crossing works of public service corporation to proceed; no injunction to be awarded.

Upon the failure of the company desiring to make any crossing pursuant to §§ 56-17 to 56-19 to receive notice of the suspension of the work on such crossing by the Commission, within thirty days after submission of the plans, specifications and descriptions as required by § 56-18 , or upon the approval or modification of the plans, specifications and descriptions by the Commission, or, if an appeal be taken as aforesaid, upon the approval or modification by the Supreme Court of the plans, specifications and descriptions, and the payment of the proper compensation for damages by the company desiring to cross the works of another company, such damages to be ascertained according to the laws regulating the exercise of the right of eminent domain, work may be commenced immediately, and no order shall be made, and no injunction awarded, by any court or judge to stay the proceedings or prosecution of the work.

(Code 1919, § 3884.)

§ 56-22. Change of course of railroad, etc., to avoid crossings.

If any public service corporation desires that the course of any other railroad, turnpike, canal, or other works shall be changed to avoid the necessity of any crossing, or frequent crossings of the same, the change may be made in such manner and on such terms as may be agreed on by the company desiring the change, and the company, person, or county owning or having charge of the works to be affected by such change.

(Code 1919, § 3884.)

§ 56-23. Crossing of highway by public service corporation.

If any public service corporation deems it necessary in the construction of its works or in changing its grade or line or in double tracking the same, or if, for any reason, it is required to cross a state highway or county road at grade, or at an elevation above the grade or below the grade, of such highway or road, it may do so under the conditions set forth in §§ 56-24 through 56-32 .

(Code 1919, § 3885; 1920, p. 411.)

Cross references. - As to crossing of highway by a railroad and exception as to cities, towns and electric railways, see § 56-363 .

As to establishment, alteration and discontinuance of highways, see § 33.2-705 et seq.

§ 56-24. Effect of crossing on highway.

Such crossing shall be so located, constructed and operated as not to impair, impede or obstruct, in any material degree, the state highway or county road to be crossed, and so that the use of such highway or road by the public will not be materially interfered with; and shall likewise be so located, constructed and operated as not to render such highway or road less safe and convenient for the passage or transportation of persons or property along the same.

(Code 1919, § 3885; 1920, p. 411.)

§ 56-25. Manner of construction of crossing.

Such crossing shall be supported by such permanent and proper structures and fixtures, and shall be controlled by such customary and approved appliances, methods, and regulations as will best secure the safe passage and transportation of persons and property at and along the state highway or county road along the line of the public service corporation, and will not be injurious to the highway or road to be crossed. If an underpass or overhead or grade crossing be provided for the state highway or county road, it shall be constructed with proper approaches and proper drainage of the approaches and underpass or overhead or grade crossing, so that the road therein may be safe, convenient and dry.

(Code 1919, § 3885; 1920, p. 411.)

§ 56-26. Cost of crossing.

The cost of any such crossing, its appliances and apparatus, and of the repair and operation of the same, shall be borne by the railroad, canal, or other public service corporation desiring or required to make the crossing.

(Code 1919, § 3885; 1920, p. 412.)

§ 56-27. Applications required for crossings.

Before the work is commenced upon any such crossing, the public service corporation which proposes to cross the public road shall make written application to and submit to the board of supervisors or other governing body of the county in which such highway is located and to the Commissioner of Highways plans, specifications and descriptions of the proposed crossing and of the proposed appliances and methods of operation thereof; and if the plans, specifications and descriptions are not accepted by such board of supervisors or other governing body aforesaid and by the Commissioner of Highways within sixty days after the same shall have been delivered to the clerk of such board of supervisors or other governing body aforesaid and to the Commissioner of Highways, such public service corporation may then proceed with the construction and operation of the crossing, under the plans, specifications and descriptions and with the appliances and methods so submitted.

(Code 1919, § 3885; 1920, p. 412.)

Editor's note. - Acts 2011, cc. 36 and 152, cl. 3 provides: "That the Virginia Code Commission shall carry out such editorial changes to the Code of Virginia as may be required to reflect the provisions of this act changing the title 'Commonwealth Transportation Commissioner' to 'Commissioner of Highways."' "Commissioner of Highways" was substituted for "Commonwealth Transportation Commissioner" in this section.

Applied in Seaboard Air Line R.R. v. Board of Supvrs., 197 Va. 130 , 87 S.E.2d 799 (1955).

§ 56-28. Contest by county or Commissioner of Highways.

The board of supervisors or other governing body aforesaid or the Commissioner of Highways may, however, within thirty days from the date of the submission of such plans, specifications and descriptions, reject the same, and may apply to the Commission to inquire into the necessity for such crossing, and the propriety of the proposed location, and all matters pertaining to its construction and operation; and, thereupon the Commission, in its discretion, may, after notice served upon the public service corporation, the board of supervisors or other governing body aforesaid, and the Commissioner of Highways, suspend work on such crossing for such reasonable time prescribed in such notice as it may deem necessary to make such inquiry. The Commission may, in its discretion, employ expert engineers, at a cost not to exceed $500, to be paid by the public service corporation desiring the crossing, who shall, with the Commission, or some member thereof, or such person as the Commission may designate, (1) examine the location, plans, specifications and descriptions of appliances and methods proposed to be employed, (2) hear any objection, and consider any modification that the board of supervisors or other governing body aforesaid, or the Commissioner of Highways, may desire to offer, and, (3) within such time as the Commission may fix, reject, approve, or modify such plans, specifications and descriptions. The final order of the Commission shall, unless an appeal be taken to the Supreme Court by any party to the proceeding within thirty days of the date of such final order, be final and binding on the public service corporation and the board of supervisors or other governing body aforesaid, and the Commissioner of Highways.

(Code 1919, § 3885; 1920, p. 412.)

Editor's note. - Acts 2011, cc. 36 and 152, cl. 3 provides: "That the Virginia Code Commission shall carry out such editorial changes to the Code of Virginia as may be required to reflect the provisions of this act changing the title 'Commonwealth Transportation Commissioner' to 'Commissioner of Highways."' "Commissioner of Highways" was substituted for "Commonwealth Transportation Commissioner" in this section.

§ 56-29. Change of course of highway to avoid crossings.

If any public service corporation desires that the course of any public road shall be changed to avoid the necessity of any crossing, or frequent crossings of the same, or for any other purpose in connection with the crossing, the change may be made in such manner, and on such terms as may be agreed on by the company desiring the change and by the board of supervisors or other governing body aforesaid and the Commissioner of Highways, after changes shall have been first clearly indicated on plans and specifications submitted to the board of supervisors or other governing body aforesaid, and the Commissioner of Highways, and after the plans and specifications shall have been approved in writing both by the board of supervisors or other governing body aforesaid, and the Commissioner of Highways.

(Code 1919, § 3885; 1920, p. 412.)

Editor's note. - Acts 2011, cc. 36 and 152, cl. 3 provides: "That the Virginia Code Commission shall carry out such editorial changes to the Code of Virginia as may be required to reflect the provisions of this act changing the title 'Commonwealth Transportation Commissioner' to 'Commissioner of Highways."' "Commissioner of Highways" was substituted for "Commonwealth Transportation Commissioner" in this section.

§ 56-30. Payment of damages occasioned by crossing highway.

If any such crossing or change as is provided for in §§ 56-23 to 56-32 cause damage to any county property or public highway, or to the owners or occupants of any lands, the company exercising the privileges granted by such sections shall make proper compensation for such damage.

(Code 1919, § 3885; 1920, p. 413.)

§ 56-31. When work of crossing highway to proceed.

Upon failure of the company desiring to make any crossing pursuant to § 56-23 to receive notice of suspension of the work on such crossing by the Commission within sixty days after submission of the plans, specifications and descriptions as required by § 56-27 , or upon the approval or modification of plans, specifications and descriptions by the Commission, or, if an appeal be taken as aforesaid, upon the approval or modification by the Supreme Court of the plans, specifications and descriptions prescribed by the Commission and the payment of the proper compensation to the state or county for damages to the state or county property, or to the owner or occupant of lands, such damage to be ascertained according to the laws regulating the exercise of eminent domain, work may be commenced immediately.

(Code 1919, § 3885; 1920, p. 413.)

§ 56-32. Limitation on crossing rights if altering, closing or obstructing highway or stream involved.

No state highway or county road or stream, or watercourse, shall be altered, closed or obstructed by any public service corporation for any of the purposes mentioned in § 56-23 until it shall have first submitted plans and specifications to the board of supervisors or other governing body aforesaid, and to the Commissioner of Highways, of the proposed alteration, closing or obstruction, and until after the plans and specifications shall have been first approved in writing both by the board of supervisors or other governing body aforesaid, and by the Commissioner of Highways. And in any such case such public service corporation shall provide and construct an equally convenient highway or waterway in lieu of any such highway or waterway so altered, closed or obstructed.

(Code 1919, § 3885; 1920, p. 413.)

Editor's note. - Acts 2011, cc. 36 and 152, cl. 3 provides: "That the Virginia Code Commission shall carry out such editorial changes to the Code of Virginia as may be required to reflect the provisions of this act changing the title 'Commonwealth Transportation Commissioner' to 'Commissioner of Highways."' "Commissioner of Highways" was substituted for "Commonwealth Transportation Commissioner" in this section.

Research References. - Virginia Forms (Matthew Bender). No. 5-406 Complaint to Enjoin a Continuing Trespass (Flooding).

Michie's Jurisprudence. - For related discussion, see 15 M.J. Railroads, §§ 41, 84; 17 M.J. Streets and Highways, § 89.

§ 56-33. Duty of corporation whose wires cross other works.

Every corporation, association, person, or partnership erecting or maintaining any wires over or across the works of a public service corporation shall support the same by, and shall maintain, all proper and needful structures, fixtures, and approved appliances, so as to afford the utmost protection to the employees of such public service corporation and to all persons traveling upon or using the facilities of such corporation.

(Code 1919, § 3888.)

Cross references. - As to penalty for endangering public by wires crossing public works, see § 56-468 .

§ 56-34. General Assembly may require connections between public service corporations.

The General Assembly reserves the right to provide for connecting any work of a railroad, canal, or turnpike company, or other public service corporation, with any other work of companies of the like character, at such point as may seem to it proper.

(Code 1919, § 3887.)

Cross references. - For other provisions as to connecting public service corporations, see §§ 56-360, 56-361.

Michie's Jurisprudence. - For related discussion, see 3B M.J. Carriers, § 76; 15 M.J. Railroads, § 37.

§ 56-35. Regulation of public service companies.

The Commission shall have the power, and be charged with the duty, of supervising, regulating and controlling all public service companies doing business in this Commonwealth, in all matters relating to the performance of their public duties and their charges therefor, and of correcting abuses therein by such companies.

(Const., § 156, par. (b); Code 1919, § 3709; 1971, Ex. Sess., c. 38; 1973, c. 377.)

Cross references. - For constitutional provision as to power of State Corporation Commission, see Va. Const., Art. IX, § 2.

As to powers of the State Corporation Commission generally, see §§ 12.1-12 through 12.1-17 .

Law review. - For article analyzing ratemaking issues under the SCC, see 14 Wm. & Mary L. Rev. 601 (1973). For special section on ratemaking and public policy in Virginia, see 18 Wm. & Mary L. Rev. 73 (1976).

For 2000 survey of Virginia property law, see 34 U. Rich. L. Rev. 981 (2000).

Michie's Jurisprudence. - For related discussion, see 3B M.J. Carriers, § 23; 9A M.J. Gas Companies, § 8; 15 M.J. Railroads, § 11.

§ 56-36. Inspection of books and documents; special reports; rules and regulations to prevent unjust discrimination.

The Commission shall also have the right at all times to inspect the books, papers and documents of all public service companies doing business in this Commonwealth, and to require from such companies, from time to time, special reports and statements, under oath, concerning their business. It shall keep itself fully informed of the physical condition of all railroads of the Commonwealth, as to the manner in which they are operated, with reference to the security and accommodation of the public, and shall, from time to time, make and enforce such requirements, rules and regulations as may be necessary to prevent unjust or unreasonable discrimination by any public service company in favor of, or against, any person, locality, community, connecting line, or kind of traffic in the matter of car service, train or boat schedule, efficiency of transportation or otherwise, in connection with the public duties of such company.

(Const., § 156, par. (b); Code 1919, § 3710; 1971, Ex. Sess., c. 38.)

Cross references. - As to power of Commission to revise rates, etc., see § 56-542 .

§ 56-37. Regulation of services performed under municipal or county franchise.

Nothing in § 56-36 shall impair the right which has heretofore been, or may hereafter be, conferred by law upon the authorities of any city, town or county to prescribe rules, regulations or rates of charge to be observed by any public service corporation in connection with any services performed by it under a municipal or county franchise granted by such city, town or county, so far as such services may be wholly within the limits of the city, town or county granting the franchise.

(Const., § 156, par. (b); Code 1919, § 3712; 1971, Ex. Sess., c. 39.)

Cross references. - As to the granting of franchises generally, see § 15.2-2100 et seq.

§ 56-38. Adjustment of claims and controversies.

Upon the request of the parties interested, it shall be the duty of the Commission, as far as possible, to effect, by mediation, the adjustment of claims, and the settlement of controversies, between public service companies and their employees and patrons.

(Const., § 156, par. (b); Code 1919, § 3713; 1971, Ex. Sess., c. 24.)

§ 56-39.

Repealed by Acts 1995, c. 647.

§ 56-40. Reduction of rates and charges.

The Commission, in the exercise of its discretion, may permit any public utility corporation to put into effect any proposed revision of its rate schedules, or any part thereof, without notice when the proposed revision effects no increases.

(1928, p. 726; Michie Code 1942, § 4065a.)

Law review. - For article analyzing ratemaking issues under the SCC, see 14 Wm. & Mary L. Rev. 601 (1973). For special section on ratemaking and public policy in Virginia, see 18 Wm. & Mary L. Rev. 73 (1976).

§ 56-41.

Repealed by Acts 1971, Ex. Sess., c. 39.

§ 56-41.1. Rates and charges for use of poles by telephone cooperatives, mutual telephone associations and small investor-owned telephone utilities.

1. The General Assembly has determined that the joint use of poles by electric light, heat and power companies, telephone cooperatives, mutual telephone associations and small investor-owned telephone utilities is in the public interest and should be encouraged to the maximum extent possible.
2. The terms and rates for the joint use of poles by electric light, heat and power companies, telephone cooperatives, mutual telephone associations and small investor-owned telephone utilities shall be by agreement between the parties.  In the event that the terms and rates cannot be agreed upon by the interested parties, it shall be the duty of the Commission to determine and establish such terms and the rates to be paid for joint use.

   (1989, c. 605.)

§ 56-42.

Repealed by Acts 1971, Ex. Sess., c. 39.

§ 56-43. Examination of public service company; notice; fines and penalties.

Upon the complaint and application of the mayor or council of any city or town or the board of supervisors or other governing body of any county within which any part of any public service company is located, it shall be the duty of the Commission to make an examination of the physical condition and operation thereof. Before proceeding to make such examination in accordance with such application, the Commission shall give to the applicants and the corporation or person operating any such line reasonable notice in writing of the time and place of entering upon the same. If upon such examination it shall appear to the Commission that the complaint alleged by the applicant is well founded, it shall so adjudge and shall notify such corporation or person of its adjudication; and, if such corporation or person fails for sixty days after such notification to remove the cause of complaint, the Commission shall impose the fines and penalties provided by law for its failure to obey the orders and requirements of the Commission and enforce the collection thereof by its judgments and processes.

(Code 1919, § 3721; 1971, Ex. Sess., c. 39.)

Cross references. - As to other provisions as to fines, penalties and power to enforce orders, see §§ 12.1-13 through 12.1-15 , 56-140 , 56-446 .

§§ 56-44 through 56-46.

Repealed by Acts 1996, cc. 114 and 157.

§ 56-46.1. Commission to consider environmental, economic and improvements in service reliability factors in approving construction of electrical utility facilities; approval required for construction of certain electrical transmission lines; notice and hearings.

1. Whenever the Commission is required to approve the construction of any electrical utility facility, it shall give consideration to the effect of that facility on the environment and establish such conditions as may be desirable or necessary to minimize adverse environmental impact. In order to avoid duplication of governmental activities, any valid permit or approval required for an electric generating plant and associated facilities issued or granted by a federal, state or local governmental entity charged by law with responsibility for issuing permits or approvals regulating environmental impact and mitigation of adverse environmental impact or for other specific public interest issues such as building codes, transportation plans, and public safety, whether such permit or approval is granted prior to or after the Commission's decision, shall be deemed to satisfy the requirements of this section with respect to all matters that (i) are governed by the permit or approval or (ii) are within the authority of, and were considered by, the governmental entity in issuing such permit or approval, and the Commission shall impose no additional conditions with respect to such matters. Nothing in this section shall affect the ability of the Commission to keep the record of a case open. Nothing in this section shall affect any right to appeal such permits or approvals in accordance with applicable law. In the case of a proposed facility located in a region that was designated as of July 1, 2001, as serious nonattainment for the one-hour ozone standard as set forth in the federal Clean Air Act, the Commission shall not issue a decision approving such proposed facility that is conditioned upon issuance of any environmental permit or approval. In every proceeding under this subsection, the Commission shall receive and give consideration to all reports that relate to the proposed facility by state agencies concerned with environmental protection; and if requested by any county or municipality in which the facility is proposed to be built, to local comprehensive plans that have been adopted pursuant to Article 3 (§ 15.2-2223 et seq.) of Chapter 22 of Title 15.2. Additionally, the Commission (a) shall consider the effect of the proposed facility on economic development within the Commonwealth, including but not limited to furtherance of the economic and job creation objectives of the Commonwealth Clean Energy Policy set forth in § 45.2-1706.1 , and (b) shall consider any improvements in service reliability that may result from the construction of such facility.
2. Subject to the provisions of subsection J, no electrical transmission line of 138 kilovolts or more shall be constructed unless the State Corporation Commission shall, after at least 30 days' advance notice by (i) publication in a newspaper or newspapers of general circulation in the counties and municipalities through which the line is proposed to be built, (ii) written notice to the governing body of each such county and municipality, and (iii) causing to be sent a copy of the notice by first class mail to all owners of property within the route of the proposed line, as indicated on the map or sketch of the route filed with the Commission, which requirement shall be satisfied by mailing the notice to such persons at such addresses as are indicated in the land books maintained by the commissioner of revenue, director of finance or treasurer of the county or municipality, approve such line. Such notices shall include a written description of the proposed route the line is to follow, as well as a map or sketch of the route including a digital geographic information system (GIS) map provided by the public utility showing the location of the proposed route. The Commission shall make GIS maps provided under this subsection available to the public on the Commission's website. Such notices shall be in addition to the advance notice to the chief administrative officer of the county or municipality required pursuant to § 15.2-2202 . As a condition to approval the Commission shall determine that the line is needed and that the corridor or route chosen for the line will avoid or reasonably minimize adverse impact to the greatest extent reasonably practicable on the scenic assets, historic resources recorded with the Department of Historic Resources, and environment of the area concerned. To assist the Commission in this determination, as part of the application for Commission approval of the line, the applicant shall summarize its efforts to avoid or reasonably minimize adverse impact to the greatest extent reasonably practicable on the scenic assets, historic resources recorded with the Department of Historic Resources, and environment of the area concerned. In making the determinations about need, corridor or route, and method of installation, the Commission shall verify the applicant's load flow modeling, contingency analyses, and reliability needs presented to justify the new line and its proposed method of installation. If the local comprehensive plan of an affected county or municipality designates corridors or routes for electric transmission lines and the line is proposed to be constructed outside such corridors or routes, in any hearing the county or municipality may provide adequate evidence that the existing planned corridors or routes designated in the plan can adequately serve the needs of the company. Additionally, the Commission shall consider, upon the request of the governing body of any county or municipality in which the line is proposed to be constructed, (a) the costs and economic benefits likely to result from requiring the underground placement of the line and (b) any potential impediments to timely construction of the line.
3. If, prior to such approval, any interested party shall request a public hearing, the Commission shall, as soon as reasonably practicable after such request, hold such hearing or hearings at such place as may be designated by the Commission. In any hearing the public service company shall provide adequate evidence that existing rights-of-way cannot adequately serve the needs of the company.

   If, prior to such approval, written requests therefor are received from the governing body of any county or municipality through which the line is proposed to be built or from 20 or more interested parties, the Commission shall hold at least one hearing in the area that would be affected by construction of the line, for the purpose of receiving public comment on the proposal. If any hearing is to be held in the area affected, the Commission shall direct that a copy of the transcripts of any previous hearings held in the case be made available for public inspection at a convenient location in the area for a reasonable time before such local hearing.

4. As used in this section, unless the context requires a different meaning: "Environment" or "environmental" shall be deemed to include in meaning "historic," as well as a consideration of the probable effects of the line on the health and safety of the persons in the area concerned. "Interested parties" shall include the governing bodies of any counties or municipalities through which the line is proposed to be built, and persons residing or owning property in each such county or municipality. "Public utility" means a public utility as defined in § 56-265.1 . "Qualifying facilities" means a cogeneration or small power production facility which meets the criteria of 18 C.F.R. Part 292. "Reasonably accommodate requests to wheel or transmit power" means:
   1. That the applicant will make available to new electric generation facilities constructed after January 9, 1991, qualifying facilities and other nonutilities, a minimum of one-fourth of the total megawatts of the additional transmission capacity created by the proposed line, for the purpose of wheeling to public utility purchasers the power generated by such qualifying facilities and other nonutility facilities which are awarded a power purchase contract by a public utility purchaser in compliance with applicable state law or regulations governing bidding or capacity acquisition programs for the purchase of electric capacity from nonutility sources, provided that the obligation of the applicant will extend only to those requests for wheeling service made within the 12 months following certification by the State Corporation Commission of the transmission line and with effective dates for commencement of such service within the 12 months following completion of the transmission line; and
   2. That the wheeling service offered by the applicant, pursuant to subdivision D 1, will reasonably further the purposes of the Public Utilities Regulatory Policies Act of 1978 (P. L. 95-617), as demonstrated by submitting to the Commission, with its application for approval of the line, the cost methodologies, terms, conditions, and dispatch and interconnection requirements the applicant intends, subject to any applicable requirements of the Federal Energy Regulatory Commission, to include in its agreements for such wheeling service.
5. In the event that, at any time after the giving of the notice required in subsection B, it appears to the Commission that consideration of a route or routes significantly different from the route described in the notice is desirable, the Commission shall cause notice of the new route or routes to be published and mailed in accordance with subsection B. The Commission shall thereafter comply with the provisions of this section with respect to the new route or routes to the full extent necessary to give affected localities and interested parties in the newly affected areas the same protection afforded to affected localities and interested parties affected by the route described in the original notice.
6. Approval of a transmission line pursuant to this section shall be deemed to satisfy the requirements of § 15.2-2232 and local zoning ordinances with respect to such transmission line.
7. The Commission shall enter into a memorandum of agreement with the Department of Environmental Quality regarding the coordination of their reviews of the environmental impact of electric generating plants and associated facilities.
8. An applicant that is required to obtain (i) a certificate of public convenience and necessity from the Commission for any electric generating facility, electric transmission line, natural or manufactured gas transmission line as defined in 49 Code of Federal Regulations § 192.3, or natural or manufactured gas storage facility (hereafter, an energy facility) and (ii) an environmental permit for the energy facility that is subject to issuance by any agency or board within the Secretariat of Natural and Historic Resources, may request a pre-application planning and review process. In any such request to the Commission or the Secretariat of Natural and Historic Resources, the applicant shall identify the proposed energy facility for which it requests the pre-application planning and review process. The Commission, the Department of Environmental Quality, the Marine Resources Commission, the Department of Wildlife Resources, the Department of Historic Resources, the Department of Conservation and Recreation, and other appropriate agencies of the Commonwealth shall participate in the pre-application planning and review process. Participation in such process shall not limit the authority otherwise provided by law to the Commission or other agencies or boards of the Commonwealth. The Commission and other participating agencies of the Commonwealth may invite federal and local governmental entities charged by law with responsibility for issuing permits or approvals to participate in the pre-application planning and review process. Through the pre-application planning and review process, the applicant, the Commission, and other agencies and boards shall identify the potential impacts and approvals that may be required and shall develop a plan that will provide for an efficient and coordinated review of the proposed energy facility. The plan shall include (a) a list of the permits or other approvals likely to be required based on the information available, (b) a specific plan and preliminary schedule for the different reviews, (c) a plan for coordinating those reviews and the related public comment process, and (d) designation of points of contact, either within each agency or for the Commonwealth as a whole, to facilitate this coordination. The plan shall be made readily available to the public and shall be maintained on a dedicated website to provide current information on the status of each component of the plan and each approval process including opportunities for public comment.
9. The provisions of this section shall not apply to the construction and operation of a small renewable energy project, as defined in § 10.1-1197.5 , by a utility regulated pursuant to this title for which the Department of Environmental Quality has issued a permit by rule pursuant to Article 5 (§ 10.1-1197.5 et seq.) of Chapter 11.1 of Title 10.1.
10. Approval under this section shall not be required for any transmission line for which a certificate of public convenience and necessity is not required pursuant to subdivision A of § 56-265.2 . (1972, c. 652; 1973, c. 307; 1974, c. 498; 1983, c. 438; 1984, cc. 287, 562; 1985, c. 282; 1991, cc. 90, 148; 1996, c. 254; 2001, c. 758; 2002, c. 483; 2007, cc. 756, 761, 776, 825; 2009, cc. 808, 854; 2011, cc. 236, 243; 2012, cc. 54, 284; 2016, cc. 192, 276; 2020, cc. 450, 958; 2021, Sp. Sess. I, c. 327.)

Cross references. - As to limitation of State Corporation Commission authority, see § 10.1-1197.8 .

Editor's note. - Clause 2 of Acts 1983, c. 438 provides that construction of any electrical transmission line that is the subject of litigation under § 56-46.1 on the effective date of this act shall be governed by § 56-46.1 as in effect on January 1, 1983.

The Public Utilities Regulatory Policies Act of 1978 (P.L. 95-617), referred to in subdivision D 2 of this section, is codified generally as 16 U.S.C. § 2601 et seq.

Acts 2009, cc. 808 and 854, cl. 2 provides: "That the provisions of this act may result in a net increase in periods of imprisonment or commitment. Pursuant to § 30-19.1:4 , the estimated amount of the necessary appropriation cannot be determined for periods of imprisonment in state adult correctional facilities and is $0 for periods of commitment to the custody of the Department of Juvenile Justice."

Acts 2009, cc. 808 and 854, cl. 3 provides: "That the provisions of this act shall not apply to any small renewable energy project that has applied for or been granted approval by the State Corporation Commission prior to the effective date of regulations promulgated by the Department of Environmental Quality, as set forth in this act; provided, however, that a small renewable energy project that has not yet received a final order from the State Corporation Commission shall not be precluded from withdrawing its application at the State Corporation Commission and filing without prejudice with the Department of Environmental Quality for a permit-by-rule pursuant to this act."

At the direction of the Virginia Code Commission, "Secretariat of Natural and Historic Resources" was twice substituted for "Secretariat of Natural Resources" in subsection H to conform to Acts 2021, Sp. Sess. I, c. 401.

Effective October 1, 2021, " § 45.2-1706.1 " was substituted for " § 67-101.1" to conform with recodification of Title 67 by Acts 2021, Sp. Sess. I, c. 387 at the direction of the Virginia Code Commission.

The 1996 amendment added the third sentence in subsection A.

The 2001 amendments. - The 2001 amendment by c. 758 substituted "Article 3 ( § 15.2-2223 et seq.) of Chapter 22 of Title 15.2" for "Article 4 ( § 15.1-446.1 et seq.) of Chapter 11 of Title 15.1" in subsection A; in subsection B, inserted "(i)," substituted "(ii)" for "and," and inserted the language beginning "and (iii) causing to be sent" and ending "the county or municipality"; inserted "and mailed" in the first sentence in subsection E; and substituted " § 15.2-2232 " for " § 15.1-456" in subsection F.

The 2002 amendments. - The 2002 amendment by c. 483, in subsection A, inserted the second to fourth sentences, substituted "every proceeding under this subsection, the Commission" for "such proceedings it" in the fifth sentence, and substituted "shall" for "may" in clause (i) in that sentence; and added subsection G.

The 2007 amendments. - The 2007 amendment by c. 756, in subsection B, added the language beginning "including a digital" to the end of the third sentence, inserted the fourth sentence [now the third sentence], and added the last sentence [now the fifth sentence].

The 2007 amendment by c. 761, in subsection B, inserted the fourth sentence and added the last two sentences.

The 2007 amendment by c. 776 added subsection H.

The 2007 amendment by c. 825, in subsection B, deleted "overhead" preceding "electrical transmission," substituted "138 kilovolts" for "150 kilovolts" in the first sentence; deleted the former second sentence, which read: "Such approval shall not be required for transmission lines constructed prior to January 1, 1983, for which the Commission has issued a certificate of convenience and necessity."; added the language beginning "including a digital" at the end of the second sentence; inserted the present third sentence; deleted "and, in the case of any" at the end of the present fourth sentence; and added the last sentence [now the fifth sentence].

Subsection B is set out in the form above at the direction of the Virginia Code Commission.

The 2009 amendments. - The 2009 amendments by cc. 808 and 854 are identical, and added subsection I.

The 2011 amendments. - The 2011 amendment by c. 236 inserted "including but not limited to furtherance of the economic and job creation objectives of the Commonwealth Energy Policy set forth in §§ 67-101 and 67-102" in the last sentence in subsection A.

The 2011 amendment by c. 243 added the sixth sentence in subsection B.

The 2012 amendments. - The 2012 amendments by cc. 54 and 284 are identical, and substituted designators (a) and (b) for (i) and (ii) in the last sentence of subsections A and B, added "Subject to the provisions of subsection J" at the beginning of subsection B, rewrote the portion of subsection D preceding subdivision 1, added subsection J, and made stylistic and related changes throughout the section.

The 2016 amendments. - The 2016 amendments by cc. 192 and 276 are identical, and in the second paragraph of subsection C, inserted "the governing body of any county or municipality through which the line is proposed to be built or from" and substituted "that" for "which"; in subsection E, inserted "affected localities and" and "to affected localities and."

The 2020 amendments. - The 2020 amendment by c. 450, in the second paragraph of subsection B, rewrote the first two sentences, which formerly read: "As a condition to approval the Commission shall determine that the line is needed and that the corridor or route the line is to follow will reasonably minimize adverse impact on the scenic assets, historic districts and environment of the area concerned. To assist the Commission in this determination, as part of the application for Commission approval of the line, the applicant shall summarize its efforts to reasonably minimize adverse impact on the scenic assets, historic districts, and environment of the area concerned."

The 2020 amendment by c. 958 substituted "Department of Wildlife Resources" for "Department of Game and Inland Fisheries" in subsection H, third sentence.

The 2021 Sp. Sess. I amendments. - The 2021 amendment by Sp. Sess. I, c. 327, effective July 1, 2021, substituted "Commonwealth Clean Energy Policy set forth in § 67-101.1" for "Commonwealth Energy Policy set forth in §§ 67-101 and 67-102."

Law review. - For article on state constitutions and the environment, see 58 Va. L. Rev. 193 (1972). For survey of Virginia law on administrative law for the year 1971-1972, see 58 Va. L. Rev. 1159 (1972). For article entitled "Regulation of Electric Utilities by the State Corporation Commission," see 14 Wm. & Mary L. Rev. 589 (1973). For survey of Virginia municipal corporations for the year 1973-1974, see 60 Va. L. Rev. 1563 (1974). For survey of Virginia administrative law for the year 1974-1975, see 61 Va. L. Rev. 1632 (1975). For special section on ratemaking and public policy in Virginia, see 18 Wm. & Mary L. Rev. 73 (1976).

For article, "Siting Power Lines in Historic Areas of Virginia," see 29 U. Rich. L. Rev. 381 (1995).

For article surveying changes in environmental law in Virginia from June 2001 to June 2002, see 37 U. Rich. L. Rev. 117 (2002).

For article on developments in the field of Virginia public utility law from June 2002 through May 2003, see 38 U. Rich. L. Rev. 195 (2003).

For article, "Public Utility Law," see 43 U. Rich. L. Rev. 295 (2008).

For comment, "(Mis)Understanding 'Undue Discrimination': FERC's Misguided Effort to Extend the Boundaries of the Federal Power Act," see 19 Geo. Mason L. Rev. 549 (2012).

Michie's Jurisprudence. - For related discussion, see 6B M.J. Electricity, § 2.

§ 56-46.2. Construction of electrical transmission lines.

The construction of all overhead electrical transmission lines shall adhere to the standards set forth in the National Electrical Safety Code. The Commission shall, upon receipt of a written complaint concerning the lack of compliance with these standards in the construction of a particular transmission line, investigate the situation and, if appropriate, exercise its powers granted under § 12.1-12 to enforce adherence to the standards.

(1985, c. 187.)

§ 56-46.3. Foreign utility companies; penalties.

1. The provisions of the Public Utility Holding Company Act of 2005 (PUHCA), which is set out at § 1261 et seq. of the Energy Policy Act of 2005, stipulate that certain exemptions afforded a foreign utility company (FUCO) under PUHCA are not applicable unless every state commission having jurisdiction over the retail electric or gas rates of a public utility company that is an associate company or an affiliate of a company (other than a public utility company that is an associate company or an affiliate of a registered holding company under PUHCA) has certified to the U.S. Securities and Exchange Commission (SEC) that it has the authority and resources to protect ratepayers subject to its jurisdiction and that it intends to exercise its authority.
2. Upon application to the Commission by any person that (i) is an affiliated interest of a public service company, as such terms are defined in Chapter 4 (§ 56-76 et seq.) of this title, (ii) proposes to invest in or acquire a specific FUCO, and (iii) is not a registered holding company under PUHCA, and subject to the proviso contained herein, the Commission shall have the authority to impose upon, and require of, the applicant, the public service company, and any other "affiliated interests" of such public service company, such terms, conditions, limitations, restrictions, undertakings and commitments as the Commission deems necessary to protect the public interest from any adverse effects attributable to such proposed FUCO investment or acquisition, including such provisions for the enforcement thereof as the Commission shall deem necessary; and, upon doing so, may certify to the SEC that the Commission has the authority and resources to protect the ratepayers of such public service company subject to its jurisdiction and that it intends to exercise its authority; provided, however, that such applicant, the public service company, and such other affiliated interests of such public service company shall have furnished to the Commission, prior to delivery of said certification to the SEC, and in the manner prescribed by the Commission, a written statement accepting all such terms, conditions, limitations, restrictions, undertakings and commitments, as the Commission shall have so specified.
3. The Commission shall have the power to enforce the terms, conditions, limitations, restrictions, undertakings and commitments upon which said certification was based, including the power to penalize for and enjoin the violation or attempted violation thereof, and to issue mandatory injunctions requiring such actions as may be in the public interest to remedy any such violation or attempted violation. Any person committing any such violation or attempted violation, or failing or refusing to obey any order or injunction of the Commission issued under this section, may be fined by the Commission such sum, not exceeding $100,000, as the Commission may deem proper, and each day's continuance of such condition shall be a separate offense.

   (1997, c. 110; 2014, c. 192.)

The 2014 amendments. - The 2014 amendment by c. 192 in subsection A, substituted "the Public Utility Holding Company Act of 2005 (PUHCA), which is set out as § 1261 et seq. of the Energy Policy Act of 2005" for " § 33(a)(2) of the Public Utility Holding Company Act of 1935 (PUHCA), as amended, 15 U.S.C. § 79, et seq." and "U.S." for "United States," deleted " § 33(a)(1) of" preceding "PUHCA are not," and deleted "otherwise exempted under said § 33(a)(1)" following "of a company"; and substituted "any person that" for "any person which" in subsection B.

§§ 56-47, 56-48.

Repealed by Acts 1956, c. 438.

§ 56-49. Powers.

In addition to the powers conferred by Title 13.1, each public service corporation of this Commonwealth organized to conduct a public service business other than a railroad shall have the power:

1. To cause to be made such examinations and surveys for its proposed line or location of its works as are necessary to the selection of the most advantageous location or route or for the improvement or straightening of its line or works, or changes of location or construction, or providing additional facilities, and for such purposes, by its officers and servants, to enter upon the lands or waters of any person but subject to responsibility for all damages that are done thereto, and subject to permission from, or notice to, the landowner as provided in § 25.1-203 .
2. To acquire by the exercise of the right of eminent domain any lands or estates or interests therein, sand, earth, gravel, water or other material, structures, rights-of-way, easements or other interests in lands, including lands under water and riparian rights, of any person, which are deemed necessary for the purposes of construction, reconstruction, alteration, straightening, relocation, operation, maintenance, improvement or repair of its lines, facilities or works, and for all its necessary business purposes incidental thereto, for its use in serving the public either directly or indirectly through another public service corporation, including permanent, temporary, continuous, periodical or future use, whenever the corporation cannot agree on the terms of purchase or settlement with any such person because of the incapacity of such person or because of the inability to agree on the compensation to be paid or other terms of settlement or purchase, or because any such person cannot with reasonable diligence be found or is unknown, or is a nonresident of the Commonwealth, or is unable to convey valid title to such property. Such proceeding shall be conducted in the manner provided by Chapter 2 (§ 25.1-200 et seq.) of Title 25.1 and shall be subject to the provisions of § 25.1-102 . However, the corporation shall not take by condemnation proceedings a strip of land for a right-of-way within 60 feet of the dwelling house of any person except (i) when the court having jurisdiction of the condemnation proceeding finds, after notice of motion to be granted authority to do so to the owner of such dwelling house, given in the manner provided in §§ 25.1-209 , 25.1-210 , and 25.1-212 , and a hearing thereon, that it would otherwise be impractical, without unreasonable expense, to construct the proposed works of the corporation at another location; (ii) in case of occupancy of the streets or alleys, public or private, of any county, city or town, in pursuance of permission obtained from the board of supervisors of such county or the corporate authorities of such city or town; or (iii) in case of occupancy of the highways of this Commonwealth or of any county, in pursuance of permission from the authorities having jurisdiction over such highways. A public service corporation which has not been (i) allotted territory for public utility service by the State Corporation Commission or (ii) issued a certificate to provide public utility service shall acquire lands or interests therein by eminent domain as provided in this subdivision for lines, facilities, works or purposes only after it has obtained any certificate of public convenience and necessity required for such lines, facilities, works or purposes under Chapter 10.1 (§ 56-265.1 et seq.) of this title. And provided, further, that notwithstanding the foregoing nor any other provision of the law the right of eminent domain shall not be exercised for the purpose of acquiring any lands or estates or interests therein nor any other property for the construction, reconstruction, maintenance or operation of any pipeline for the transportation of coal. For the purposes of this section, the words "public service corporation" shall include any Virginia limited liability company as defined in § 56-1 that has been issued a certificate of public convenience and necessity authorizing it to furnish telecommunications services of a public utility set forth in subdivision (b) of § 56-265.1 and that seeks to construct or acquire facilities for use in providing the certificated telecommunications service. (1944, p. 539; Michie Suppl. 1946, § 3866a; 1952, c. 497; 1956, c. 438; 1962, c. 222; 1972, c. 657; 1988, c. 649; 1990, c. 630; 1999, cc. 484, 531; 2003, c. 940; 2004, c. 1028.)

Editor's note. - Acts 2004, c. 1028, which added the last paragraph of this section, in cl. 3 provides: "That notwithstanding the provisions of this act amending § 56-49 of the Code of Virginia, no limited liability company that was issued its certificate of public convenience and necessity prior to July 1, 2004 shall be deemed to have the power of eminent domain to construct or acquire facilities for use in providing the certificated telecommunications service until it has obtained from the State Corporation Commission, after notice and an opportunity for a hearing, authority to exercise eminent domain powers, which authority shall be granted only if the Commission finds that (i) the public convenience and necessity require the exercise by the limited liability company of such powers; (ii) the limited liability company's use of such powers is appropriate for, and will be limited to, its acquisition of or entry upon properties or interests therein that are necessary for providing the certificated telecommunications service; and (iii) the granting of such authority is in the public interest."

Acts 2004, c. 1028, cl. 4 provides: "That notwithstanding the provisions of this act amending § 56-49 of the Code of Virginia, no limited liability company that was issued its certificate of public convenience and necessity prior to July 1, 2004 shall be authorized to exercise the power of eminent domain with respect to any real property, including any portion thereof, that is the subject of any action for trespass or related cause of action, which action has been brought in any court of competent jurisdiction in the Commonwealth, in which action the owner of property asserts in any manner that the same limited liability company, prior to the effective date of this act, entered upon and damaged his property without prior authorization of the owner, unless the State Corporation Commission has found, after notice and an opportunity for hearing, that such action for trespass or related cause of action has been dismissed following a ruling on the merits in favor of the limited liability company or pursuant to an agreement settling the matter, or, if judgment has been rendered against the limited liability company, it has satisfied the judgment in full."

The 1999 amendments. - The 1999 amendments by cc. 484 and 531, are identical, and in subdivision (2), in the middle of the second sentence, deleted "or" preceding "(ii) in case," and in the third sentence, inserted "(i)" preceding "allotted territory," inserted "or (ii) issued a certificate to provide public utility service" preceding "shall acquire lands," and deleted "electric" following "this subdivision for."

The 2003 amendments. - The 2003 amendment by c. 940 in the first paragraph of subdivision 2, in the second sentence, substituted "Chapter 2 ( § 25.1-200 et seq.) of Title 25.1" for "Chapter 1.1 ( § 25-46.1 et seq.) of Title 25" and " § 25.1-102 " for " § 25-233," and substituted " §§ 25.1-209 , 25.1-210 , and 25.1-212 " for " §§ 25-46.9, 25-46.10 and 25-46.12" in clause (i) of the third sentence.

The 2004 amendments. - The 2004 amendment by c. 1028, in subdivision 2, substituted "60" for "sixty" in the third sentence and "this title" for "Title 56" at the end of the last sentence; and added the last paragraph.

Law review. - For note discussing the issues of eminent domain and water allocation as related to coal slurry pipelines, see 17 U. Rich. L. Rev. 789 (1983).

For article, "Efficient Compensation for Lost Market Value Due to Fear of Electric Transmission Lines," see 12 G.M.U. L. Rev. 711 (1990).

For 2000 survey of Virginia property law, see 34 U. Rich. L. Rev. 981 (2000).

For student note, "This Land is Your Land? Survey Delegation Laws as a Compensable Taking," see 25 Wash. & Lee J. Civil Rts. & Soc. Just. 545 (2019).

Research References. - Friend's Virginia Pleading and Practice (Matthew Bender). Chapter 27 Property Actions. § 27.22 Condemnation and Eminent Domain. Friend.

Virginia Forms (Matthew Bender). No. 6-401 Petition for Condemnation of Permanent and Temporary Rights of Entry, Etc.

Michie's Jurisprudence. - For related discussion, see 3A M.J. Canals and Canal Companies, § 2; 7A M.J. Eminent Domain, §§ 2, 11, 15, 97; 19 M.J. Turnpikes and Tollroads, §§ 2, 4.

§ 56-49.01. Natural gas companies; right of entry upon property.

1. Any firm, corporation, company, or partnership, organized for the bona fide purpose of operating as a natural gas company as defined in 15 U.S.C. § 717a, as amended, may make such examinations, tests, hand auger borings, appraisals, and surveys for its proposed line or location of its works as are necessary (i) to satisfy any regulatory requirements and (ii) for the selection of the most advantageous location or route, the improvement or straightening of its line or works, changes of location or construction, or providing additional facilities, and for such purposes, by its duly authorized officers, agents, or employees, may enter upon any property without the written permission of its owner if (a) the natural gas company has requested the owner's permission to inspect the property as provided in subsection B, (b) the owner's written permission is not received prior to the date entry is proposed, and (c) the natural gas company has given the owner notice of intent to enter as provided in subsection C. A natural gas company may use motor vehicles, self-propelled machinery, and power equipment on property only after receiving the permission of the landowner or his agent.
2. A request for permission to inspect shall (i) be sent to the owner by certified mail, (ii) set forth the date such inspection is proposed to be made, and (iii) be made not less than 15 days prior to the date of the proposed inspection.
3. Notice of intent to enter shall (i) be sent to the owner by certified mail, (ii) set forth the date of the intended entry, and (iii) be made not less than 15 days prior to the date of mailing of the notice of intent to enter.
4. Any entry authorized by this section shall not be deemed a trespass. The natural gas company shall make reimbursement for any actual damages resulting from such entry. Nothing in this section shall impair or limit any right of a natural gas company obtained by (i) the power of eminent domain, (ii) any easement granted by the landowner or his predecessor in title, or (iii) any right-of-way agreement, lease or other agreement by and between a natural gas company and a landowner or their predecessors in title or interest.

   (2004, c. 829.)

Law review. - For student note, "This Land is Your Land? Survey Delegation Laws as a Compensable Taking," see 25 Wash. & Lee J. Civil Rts. & Soc. Just. 545 (2019).

Research References. - Virginia Forms (Matthew Bender). No. 6-401 Petition for Condemnation of Permanent and Temporary Rights of Entry, Etc.

§§ 56-49.1 through 56-51.

Repealed by Acts 1956, c. 438.

§ 56-51.1.

Repealed by Acts 2011, c. 429, cl. 1.

Editor's note. - Former § 56-51.1 , pertaining to donation of entire capital stock of turnpike or ferry corporations to Commission or to political subdivisions, was derived from Acts 1952, c. 613; 1954, c. 541; 1956, c. 438.

§§ 56-52 through 56-54.1.

Repealed by Acts 1956, c. 438.

§ 56-54.2. Definitions.

As used in this chapter, unless the context requires a different meaning:

"Competitive local exchange telephone company" means (i) a competing telephone company, excluding a city, town, or county, that was granted a certificate on or after January 1, 1996, pursuant to § 56-265.4:4 or (ii) an incumbent local exchange telephone company to the extent such company is providing service outside of its incumbent territory.

"Competitive telephone company" means (i) an incumbent local exchange telephone company whose residential dial tone lines (a) were deemed competitive by the Commission throughout the company's incumbent service territory prior to January 1, 2014, or (b) are declared competitive by the Commission throughout its incumbent service territory on or after January 1, 2014, in a proceeding pursuant to § 56-235.5 or (ii) a competitive local exchange telephone company.

"Incumbent local exchange telephone company" means a public service corporation that was providing local exchange telephone service prior to January 1, 1996, or a successor entity to such a public service corporation.

"Incumbent territory" means the area in which an incumbent local exchange telephone company was providing local exchange telephone service prior to July 1, 2002, except as its incumbent certificate may have been amended by the Commission after that date pursuant to subdivision B 1 of § 56-265.4:4 .

(2014, cc. 340, 376.)

Editor's note. - Acts 2014, cc. 340 and 376, cl. 2 provides: "That any order issued by the State Corporation Commission pursuant to any authority the Commission had to regulate, supervise, or promulgate rules relating to the retail services, rates, and terms of service of a telephone company, which authority ceases to exist upon the effective date of this act, shall have no effect from and after such date. Orders issued by the Commission pursuant to authority granted, continued, or otherwise preserved under this act, including rules promulgated under such orders, shall continue in effect."

Acts 2014, cc. 340 and 376, cl. 3 provides: "That notwithstanding the provisions of this act, (i) the residential price cap approved by the State Corporation Commission in Case No. PUC-2012-00008 shall continue in effect until it expires as currently scheduled on December 31, 2014, and (ii) any safeguards ordered by the Commission in response to competitive service applications filed pursuant to subsection F of § 56-235.5 of the Code of Virginia after January 1, 2014, shall continue in effect as ordered by the Commission."

§ 56-54.3. Election to be regulated as a competitive telephone company.

Any telephone company meeting the definition of a competitive telephone company may elect to be regulated as a competitive telephone company pursuant to the provisions of this chapter by providing written notice to the Commission of such election. The election shall be effective 30 days after receipt of the notice by the Commission unless (i) the Commission notifies the electing telephone company within that 30-day period that the telephone company does not meet the definition of a competitive telephone company and (ii) the Commission then commences a proceeding to challenge the election. In such a proceeding, interested parties shall be provided notice and an opportunity for a hearing. The Commission shall issue a final decision on any such proceeding challenging the election within 60 days of the electing telephone company's receipt of the Commission's notification of the commencement of the proceeding to challenge the election. A telephone company's election to be regulated as a competitive telephone company shall be deemed approved if the Commission fails to act within this 60-day period. A new entrant may elect to be regulated under this chapter when it applies for certification pursuant to § 56-265.4:4 . Such an election will be effective upon its certification as a competitive local exchange carrier.

(2014, cc. 340, 376.)

§ 56-54.4. Commission authority over competitive telephone companies.

Notwithstanding any other provision of law, the Commission shall not have any jurisdiction and authority, including jurisdiction and authority over any obligation of a competitive telephone company to seek approval from the Commission, to regulate, supervise, or promulgate rules relating to the retail services, rates, and terms of service of a competitive telephone company, except as specifically enumerated in this chapter. The Commission shall have discretion as to the extent to which it will exercise the authority granted to it in this chapter. Nothing in this chapter grants, affects, modifies, or limits any rights, duties, obligations, or authority of any entity, including the Commission, (i) pursuant to the provisions of 47 U.S.C. § 251 and 47 U.S.C. § 252 or (ii) related to wholesale telephone services and issues, including the payment of switched network access rates or other intercarrier compensation, interconnection, porting, and numbering.

(2014, cc. 340, 376.)

§ 56-54.5. Powers of the Commission.

1. The Commission may ensure competitive telephone companies provide reasonably adequate retail voice service, including rendering timely and accurate bills for service, by receiving customer complaints and requiring the competitive telephone company to reasonably address bona fide complaints as promptly as is reasonably possible under the circumstances.
2. The Commission shall continue to have jurisdiction and authority to ensure the reasonably adequate provision by competitive telephone companies of the telecommunications portions of emergency 911 services provided to PSAPs, as that term is defined in § 56-484.12 .
3. The Commission shall continue to have jurisdiction and authority over Lifeline telephone service such as the Virginia Universal Service Plan, but shall not impose Lifeline telephone service obligations on competitive telephone companies that do not seek designation as eligible telecommunications carriers or impose Lifeline telephone service obligations over and above that imposed by the default Lifeline plan imposed by the Federal Communications Commission.
4. The Commission shall continue to have jurisdiction and authority to permit existing and new retail tariffs to be filed by competitive telephone companies; however, nothing in this chapter shall be construed to require a competitive telephone company to file tariffs concerning retail services.
5. Existing extended local service calling plans ordered by the Commission pursuant to Article 4 (§ 56-484.1 et seq.) of Chapter 15 that are applicable to competitive telephone companies shall remain in effect, but shall not be expanded by the Commission. The Commission shall continue to have jurisdiction and authority to enforce these extended local service calling plans, but shall not create any new plans.
6. The Commission shall continue to have jurisdiction and authority to grant, amend, reissue, and cancel certificates of public convenience and necessity of competitive telephone companies.
7. The Commission may promulgate such rules, including the revision and repeal of current rules, as may be necessary to implement the specific authority granted in this chapter.
8. The Commission shall continue to enforce the Utility Transfers Act (§ 56-88 et seq.) regarding competitive telephone companies. (2014, cc. 340, 376.)

§ 56-54.6. Duties of a competitive telephone company.

1. A competitive telephone company that is an incumbent telephone carrier shall have the duty in its incumbent territory to extend or expand its facilities to furnish retail voice service and facilities when the person, firm, or corporation does not have service available from one or more alternative providers of wireline or terrestrial wireless communications services at prevailing market rates.
2. A competitive telephone company shall continue to have the powers and duties provided in the first sentence of subdivision A 2 of § 56-234 .
3. For the purposes of subsections A and B, the Commission shall have the authority, upon request of an individual, corporation, or other entity, or a competitive telephone company, to determine whether the wireline or terrestrial wireless communications service available to the party requesting service is a reasonably adequate alternative to local exchange telephone service.
4. The use by a competitive telephone company of wireline and terrestrial wireless technologies shall not be construed to grant any additional jurisdiction or authority to the Commission over such technologies.
5. For purposes of subsection A, "prevailing market rates" means rates similar to those generally available to consumers in competitive areas for the same services.
6. A competitive telephone company shall have the obligation to provide access to emergency 911 service to its end-user retail customers.

   (2014, cc. 340, 376.)

§ 56-54.7. Service provided to the Commonwealth.

The Commission shall have no jurisdiction or authority over (i) schedules of rates for any telecommunications service provided to the public by virtue of any contract with, (ii) any service provided under or relating to a contract for telecommunications services with, or (iii) contracts for service rendered by any competitive telephone company to, the Commonwealth or any agency thereof.

(2014, cc. 340, 376.)

§ 56-55. Definitions.

The term "public service company" when used in this chapter shall mean every person, firm, corporation or association, or their lessees, trustees or receivers, other than a municipal corporation, now or hereafter engaged in business in this Commonwealth as a public utility and subject to regulation as to rates and service by the State Corporation Commission under the provisions of Chapter 10 (§ 56-232 et seq.) of this title; however, the term shall not include and the provisions of this chapter shall not be deemed to refer to common carrier railroad companies, the issuance of the stocks and securities of which are under regulation by the Interstate Commerce Commission.

The term "total capitalization" as used in § 56-65.1 shall mean total common stockholders' equity (common stock, additional paid-in capital and retained earnings), preferred stock, and total debt (long- and short-term debt) as shown on the utility's books.

The terms "securities" and "loan" as used in §§ 56-68 and 56-75 shall include every obligation, written or otherwise, the issuance of, or entry into, which is required to be approved or validated by this chapter.

(1934, p. 221; Michie Code 1942, §§ 4073(1), 4073(16); 1984, c. 721; 1987, c. 479.)

Law review. - For article entitled "Regulation of Electric Utilities by the State Corporation Commission," see 14 Wm. & Mary L. Rev. 589 (1973).

§ 56-56. Issue of securities a special privilege subject to regulation.

The power of public service companies to issue stocks and stock certificates or other evidences of interest or ownership, and bonds, notes and other evidences of indebtedness and to create liens on their property situated within this Commonwealth is a special privilege, the right of supervision, regulation, restriction, and control of which is and shall continue to be vested in the Commonwealth; and such power shall be exercised as provided by law and under such rules and regulations as the Commission may prescribe; provided that this section shall not apply to obligations incurred for purchase of machinery or equipment where such obligations are secured by conditional sales contracts.

(1934, p. 221; Michie Code 1942, § 4073(2); 1958, c. 11.)

§ 56-57. Securities to which chapter is applicable.

1. This chapter shall apply to every stock or stock certificate or other evidence of interest or ownership, and, except as otherwise provided by § 56-65 , every bond, note or other evidence of indebtedness, of a public service company, which may be issued, and to every obligation or liability as guarantor, endorser, surety or otherwise in respect of the securities of any other person, firm, association or corporation, when such securities are payable at periods of twelve months or more after the date thereof, which may be or may have been assumed after March 24, 1934, notwithstanding the fact that any preparatory steps, whether by the issuance or amendment of a certificate of incorporation, or by the action of the board of directors, or the stockholders or otherwise, may have been taken prior to such date.
2. Notwithstanding subsection A, this chapter shall not apply to any stock or stock certificate or other evidence of interest or ownership, or any bond, note or other evidence of indebtedness of a (i) public service company that operates under an alternative form of regulation approved by the Commission pursuant to § 56-235.5 , unless the Commission rescinds such exemption as hereafter authorized, or (ii) competitive telephone company as defined in § 56-54.2 , provided such securities are issued for lawful purposes pursuant to § 56-58 . Any public service company exempt from this chapter shall instead provide notice to the Commission of the issuance of any stock or stock certificate or other evidence of interest or ownership, or, except as otherwise provided by §§ 56-65 and 56-65.1 , any bond, note or other evidence of indebtedness, within ninety days of issuance. The Commission may rescind the exemption from this chapter provided by this subsection to any public service company that operates under an alternative form of regulation approved by the Commission pursuant to § 56-235.5 if the Commission finds, after notice and an opportunity for a hearing, that such exemption is not in the public interest. (1934, p. 225; Michie Code 1942, § 4073(11); 2001, c. 347; 2014, cc. 340, 376.)

Editor's note. - Acts 2014, cc. 340 and 376, cl. 2 provides: "That any order issued by the State Corporation Commission pursuant to any authority the Commission had to regulate, supervise, or promulgate rules relating to the retail services, rates, and terms of service of a telephone company, which authority ceases to exist upon the effective date of this act, shall have no effect from and after such date. Orders issued by the Commission pursuant to authority granted, continued, or otherwise preserved under this act, including rules promulgated under such orders, shall continue in effect."

Acts 2014, cc. 340 and 376, cl. 3 provides: "That notwithstanding the provisions of this act, (i) the residential price cap approved by the State Corporation Commission in Case No. PUC-2012-00008 shall continue in effect until it expires as currently scheduled on December 31, 2014, and (ii) any safeguards ordered by the Commission in response to competitive service applications filed pursuant to subsection F of § 56-235.5 of the Code of Virginia after January 1, 2014, shall continue in effect as ordered by the Commission."

The 2001 amendments. - The 2001 amendment by c. 347 added the subsection A designator and added subsection B.

The 2014 amendments. - The 2014 amendments by cc. 340 and 376 are identical, and in subsection B inserted "(i)" and "or (ii) competitive telephone company as defined in § 56-54.2 ."

§ 56-58. Purposes for which stock, etc., may issue.

A public service company may issue stocks and stock certificates or other evidences of interest or ownership, and bonds, notes and other evidences of indebtedness payable at periods of twelve months or more after the date thereof, for the following purposes and no others, namely:

1. For the acquisition of property (including stocks, stock certificates or other evidences of interest or ownership, and bonds, notes and other evidences of indebtedness of other persons, firms, associations or corporations when the acquisition thereof has been approved and authorized by the Commission);
2. For the construction, completion, extension or improvement of its facilities;
3. For the improvement or maintenance of its service;
4. For the discharge or lawful refunding of its obligations; or
5. For the reimbursement of moneys actually expended from income, or from any other moneys in the treasury of the public service company not secured by or obtained from the issue of its stocks or stock certificates or other evidences of interest or ownership of bonds, notes or other evidences of indebtedness payable at periods of twelve months or more after the date thereof, for any of the aforesaid purposes except maintenance of service in cases where the applicant shall have kept its accounts and vouchers for such expenditures in such manner as to enable the Commission to ascertain the amount of moneys so expended and the purposes for which such expenditures were made.

   (1934, p. 221; Michie Code 1942, § 4073(3).)

§ 56-59. Order required before acting as surety, guarantor, etc.

No public service company shall henceforth assume any obligation or liability as guarantor, endorser, surety or otherwise in respect to the securities of any other person, firm, association or corporation, when such securities are payable at periods of twelve months or more after the date thereof, without having first secured from the Commission an order authorizing it so to do.

(1934, p. 222; Michie Code 1942, § 4073(4).)

§ 56-60. Application for order authorizing issuance of securities or assumption of liabilities.

An application for an order authorizing the issue of such stocks and stock certificates or other evidences of interest or ownership, and bonds, notes or other evidences of indebtedness for any purpose described in § 56-58 or the assumption of the obligations or liabilities of any other person, firm, association or corporation as provided in § 56-59 shall be made to the Commission stating the amount, character, terms and purposes of the stocks, stock certificates or other evidences of interest or ownership, and bonds, notes and other evidences of indebtedness to be issued or assumed, and stating such other pertinent details as the Commission may require.

(1934, p. 222; Michie Code 1942, § 4073(5).)

§ 56-61. Action of Commission on such application.

When an application is filed with the Commission under § 56-60 it shall consider and pass upon the same within twenty-five days, and when the application sets forth that such securities are to be issued or such obligations or liabilities are to be assumed for any purpose set forth in § 56-58 , and the Commission so finds, it shall approve the application and issue the order applied for, unless the Commission shall find, for reasons stated by it, that the issuance of such securities or the assumption of such obligations or liabilities is not reasonably necessary to carry out one or more of the purposes set forth in the application. The Commission may by its order grant permission for any such issuance or assumption in the amount or on the terms applied for, or in a less amount, or on different terms, or not at all, and may include in its order such terms and conditions fairly relating to the matter of such issuance or assumption as it may deem reasonable or necessary. Whenever the Commission refuses, in whole or in part, an application to issue securities or assume obligations or liabilities, or grants such an application with modifications, it shall state specifically its reasons so that such refusal or modifications may be reviewed judicially on appeal. If at the end of twenty-five days after the filing of such an application, or at the end of any extension or extensions of that time, which may have been ordered by the Commission, no order of disapproval is entered, the application shall be deemed in fact and law to have been approved, and an order shall be issued by the Commission authorizing the issuance of the securities or the assumption of the obligations or liabilities as applied for and such securities may be issued or such obligations or liabilities assumed accordingly. But the Commission may extend the original twenty-five-day period not to exceed an additional thirty days unless the Commission shall conclude that fifty-five days is not a sufficient time in which fully to investigate and determine whether such certificate shall be issued, in which event it shall by written order extend the time for a specified reasonable period, and in such order set forth the reasons for such extension, which order shall be viewed in law as a final order for purposes of appeal, and upon appeal the court shall approve or decrease the period specified in the order.

To enable it to determine whether it will issue such order, the Commission may hold a hearing and may make such additional inquiry or investigation, and examine such witnesses, books, papers, documents and contracts, and require the filing of such data as it may deem of assistance.

(1934, p. 222; Michie Code 1942, § 4073(5); 1980, c. 246.)

§ 56-62. Joint action with commission of another state.

If a commission or other agency or agencies is empowered by another state to regulate and control the amount and character of securities to be issued by any public service company within such other state, then the Commission shall have the power to agree with such other commission or other agency or agencies of such other state on the issuance of stocks or stock certificates or other evidences of interest or ownership, and bonds, notes or other evidences of indebtedness by a public service company owning or operating a public utility both in such state and in this Commonwealth, and shall have the power to approve such issue jointly with such commission or other agency or agencies and to issue a joint certificate of such approval; provided, however, that no such joint approval shall be required in order to express the consent to and approval of such issue by the Commonwealth of Virginia if such issue is separately approved by the Commission.

(1934, p. 223; Michie Code 1942, § 4073(5).)

§ 56-63. Appeal from decision of Commission on issuance of securities.

The public service company making any application under § 56-60 may have the decision or order of the Commission reviewed on appeal to the Supreme Court in the same manner and by the same procedure as any other order, action, or decision of the Commission, when the public service company shall deem such decision or order to be in any respect or manner improper, unjust or unreasonable.

(1934, p. 223; Michie Code 1942, § 4073(5).)

§ 56-64.

Repealed by Acts 1975, c. 500.

§ 56-65. Exceptions as to issue of stock, etc., in treasury, etc.

The provisions of this chapter shall not apply to the sale or other disposition of any stock or stock certificate or other evidence of interest or ownership, or bond, note or other evidence of indebtedness, which may be held in the treasury of a public service company if title thereto, or possession by pledge thereof, shall have at some previous time once lawfully passed from such public utility company, nor to the issuance of bonds, notes or other evidences of indebtedness, payable at a period of less than twelve months, nor to the pledging or replacing of stocks, trust certificates, bonds, or other evidences of indebtedness to secure such bonds, notes, or evidences of indebtedness, payable at periods of less than twelve months; but if such bonds, notes, or other evidences of indebtedness shall, in whole or in part, directly or indirectly, be refunded by any issue of bonds, notes, or other evidences of indebtedness running for twelve months or more then the aforesaid mentioned provisions with regard to certificates of public convenience and applications therefor shall apply to such refunding.

(1934, p. 224; Michie Code 1942, § 4073(7).)

§ 56-65.1. Short-term indebtedness.

Notwithstanding the provisions of §§ 56-57 and 56-65 , the provisions of this chapter shall apply to the issuance of any note or notes by any public service company which has total capitalization, including securities having a maturity date of less than twelve months from the time of issue, of five million dollars or more, unless such note or notes together with all other outstanding notes and drafts of a maturity of less than twelve months on which such utility is primarily or secondarily liable, aggregates not more than twelve percent of the total capitalization of such utility.

(1952, c. 148; 1976, c. 408; 1987, c. 479; 1995, c. 137.)

The 1995 amendment substituted "twelve percent" for "five percent" near the end of the section.

§ 56-65.2.

Repealed by Acts 1976, c. 408.

§ 56-66. No authority to capitalize permit, franchise or contract for consolidation.

The Commission shall have no power to authorize the capitalization of any franchise or permit whatsoever or the right to own, operate or enjoy any such franchise or permit, in excess of the amount (exclusive of any tax or annual charge) actually paid to the Commonwealth or to a political subdivision thereof as the consideration for the grant of such franchise, permit or right. No contract for consolidation shall be capitalized, and no public service company hereafter shall issue any bonds, notes or other evidences of indebtedness against or as a lien upon any contract for consolidation or merger.

(1934, p. 224; Michie Code 1942, § 4073(8); 1987, c. 204.)

§ 56-67. Issuance of securities or assumption of liability void if order not obtained.

Any stock, or stock certificate or other evidence of interest or ownership, and, except as otherwise provided by § 56-65 , any bond, note or other evidence of indebtedness, of a public service company, and every assumption of obligation or liability as a guarantor, endorser, surety or otherwise in respect to the securities of any other person, firm, association or corporation, when such securities are payable at periods of twelve months, or more, after the date thereof, shall be void if issued or assumed without an order of the Commission authorizing the same, or if issued or assumed contrary in any substantial respect to any term or condition of such order as issued, or as modified prior to such issuance or assumption; but no such issuance or assumption, if made in accordance in every substantial respect with all terms and conditions of such order as issued or as modified prior to such issuance or assumption, shall be rendered void because of failure to comply with any provision of this chapter relating to procedure or other matters preceding the entry of such order.

(1934, p. 224; Michie Code 1942, § 4073(10).)

§ 56-67.1. Validity of authorized securities.

Securities of a public service company, and assumptions by a public service company of obligations or liabilities in respect of the securities of another person, firm, association or corporation, issued or assumed pursuant to an authorizing order of the Commission and valid at the time of their issuance or assumption, shall not cease to be valid because such order is subsequently suspended, vacated, superseded or reversed.

(1977, c. 631.)

§ 56-68. No licensed salesman required when securities approved under this chapter.

No licensed salesman shall be necessary in case of orders of approval or validation of securities under the provisions of this chapter.

(1934, p. 227; Michie Code 1942, § 4073(16).)

§ 56-69. Purposes to which proceeds of security issues may be applied.

No public service company shall, without the consent of the Commission, apply the proceeds of the issue of any stock or stock certificate or other evidence of interest or ownership, or bond, note or other evidence of indebtedness, or any part thereof, to any purpose not specified in the Commission's order, or to any purpose specified in the Commission's order in excess of the amount authorized for such purpose, or issue or dispose of the same on any terms less favorable than those specified in such order or any modification thereof.

(1934, p. 223; Michie Code 1942, § 4073(6).)

§ 56-70. Accounting for disposition of proceeds of issue of securities.

The Commission shall have the power to require public service companies to account for the disposition of the proceeds of all sales of stocks and stock certificates or other evidences of interest or ownership, and bonds, notes, and other evidences of indebtedness, in such form and detail as it may deem advisable, and to establish such rules and regulations as it may deem reasonable and necessary to insure the disposition of such proceeds for the purpose or purposes specified in its order.

(1934, p. 224; Michie Code 1942, § 4073(9).)

§ 56-71. Violations of provisions of chapter; penalty.

Every public service company which, directly or indirectly, issues or causes to be issued any stock or stock certificate or other evidence of interest or ownership, or bond, note or other evidence of indebtedness, otherwise than in conformity with the order of the Commission authorizing the same, or contrary to the provisions of this chapter, or which applies the proceeds from the sale thereof, or any part thereof, to any purpose other than the purpose or purposes specified in the Commission's order, as provided in this chapter, or to any purpose specified in such order in excess of the amount in such order authorized for such purpose, shall be subject, in a proceeding before the Commission under rule to show cause, to a penalty of not more than $1,000 for each offense. Every violation of any such order, rule, direction, demand or requirement of the Commission, or of any provision of this chapter, shall be a separate and distinct offense and in case of continuing violation every day's continuance thereof shall be deemed to be a separate and distinct offense. The Commission shall also have jurisdiction, in a proceeding under § 13.1-519 , to issue a cease and desist order enjoining any further or threatened violation of the provisions of this chapter.

(1934, p. 225; Michie Code 1942, § 4073(12).)

§ 56-72. Acts of officers, etc., bind company.

For the purposes of this chapter the act, omission or failure of any officer, agent or employee of any public service company acting within the scope of his official duties or employment shall in every case be deemed to be the act, omission or failure of such public service company.

(1934, p. 225; Michie Code 1942, § 4073(12).)

§ 56-73. Penalty as to officers, etc., for violation of provisions of chapter.

Every officer, agent or employee of a public service company, and every other person (1) who knowingly authorizes, directs, aids in, issues or executes, or causes to be issued or executed, any stock or stock certificate or other evidence of interest or ownership, or bond, note or other evidence of indebtedness, otherwise than in conformity with the order of the Commission authorizing the same, or contrary to the provisions of this chapter; or (2) who, in any proceedings before the Commission, knowingly makes any false statement or representation or, with knowledge of its falsity, files or causes to be filed with the Commission any false statement or representation which statement or representation so made, filed or caused to be filed may tend in any way to influence the Commission to make an order authorizing the issuance of any stock or stock certificate or other evidence of interest or ownership, or any bond, note, or other evidence of indebtedness, or which results in procuring from the Commission the making of any such order; or (3) who, with knowledge that any false statement or representation was made to the Commission in any proceedings tending in any way to influence the Commission to make such order, issues or executes or originally negotiates, or causes to be issued, executed or originally negotiated any such stock or stock certificate or other evidence of interest or ownership, or bond, note or other evidence of indebtedness; or (4) who, directly or indirectly, knowingly applies, or causes or assists to be applied the proceeds, or any part thereof, from the sale of any stock or stock certificate or other evidence of interest or ownership, or bond, note or other evidence of indebtedness, to any purpose not specified in the Commission's order or to any purpose specified in the Commission's order in excess of the amount authorized for such purpose; or (5) who, with knowledge that any stock or stock certificate or other evidence of interest or ownership, or bond, note or other evidence of indebtedness, has been issued or executed in violation of any of the provisions of this chapter, originally negotiates the same, or causes the same to be originally negotiated, shall be guilty of a misdemeanor.

(1934, p. 225; Michie Code 1942, § 4073(13).)

§ 56-74. State not obligated to pay or guarantee.

No provision of this chapter, and no deed or act done or performed under or in connection therewith, shall be held or construed to obligate the Commonwealth of Virginia to pay or guarantee, in any manner whatsoever, any stock or stock certificate or other evidence of interest or ownership, or bond, note or other evidence of indebtedness, authorized, issued or executed under the provisions of this chapter, nor shall any approval given under this chapter involve, or be construed or represented as involving, an expression of opinion on the part of the Commission as to value, and any person who shall make, directly or by implication, any statement or representation to the contrary shall be guilty of a misdemeanor.

(1934, p. 226; Michie Code 1942, § 4073(14).)

§ 56-75. Fees in connection with applications for authority to issue securities.

Upon the filing of an application for the approval of any issue of securities or the making of any loan under the provisions of this chapter, a filing fee in the amount of $25 shall be paid, and upon the approval or validation of any such issue of securities or upon the approval or validation of the making of any such loan, and as a condition precedent to the entry of the order of approval or validation, there shall be paid an additional fee equal to one tenth of one percent of the proposed selling price of the securities and the amount of the loan, subject to credit by the amount of such filing fee, and limited, as to any one issue of securities, whether issued at once or from time to time, and as to any one loan to the amount of $250.

A public service company may seek approval in one application of more than one issue of securities and more than one loan. In that event, the filing fee shall be twenty-five dollars, and the additional fees shall be computed as if all the issues and loans were one issue or one loan.

A public service company that has paid filing fees and additional fees aggregating $250 on account of the approval of loans from the United States may apply for the approval of further loans from the United States on payment of a filing fee and without payment of additional fees.

A filing fee shall in no case be returnable, but additional fees paid in advance of approval shall be returned, in whole or in part, should the application be withdrawn or modified or disapproved in whole or in part.

(1934, p. 226; Michie Code 1942, § 4073(16); 1956, c. 429.)

§ 56-76. Definitions.

The term "public service company" when used in this chapter shall mean every person, firm, corporation or association, or their lessees, trustees or receivers, other than a municipal corporation, now or hereafter engaged in business in this Commonwealth as a public utility and subject to regulation as to rates and service by the State Corporation Commission under the provisions of Chapter 10 (§ 56-232 et seq.) of this title and, subject to the conditions specified therein, such companies as specified by the Commission pursuant to subsection C of § 56-77 ; however, the term shall not include and the provisions of this chapter shall not be deemed to refer to transportation companies subject directly or indirectly to the control of the Interstate Commerce Commission.

The term "affiliated interest" when used in this chapter shall mean and include the following:

1. Every corporation, partnership, association, or person owning or holding directly or indirectly ten percent or more of the voting securities of any public service company engaged in any intrastate business in this Commonwealth.
2. Every corporation, partnership, association, or person, other than those specified in subdivision 1 hereof, in any chain of successive ownership of ten percent or more of voting securities, the chain beginning with the holder or holders of the voting securities of such public service company.
3. Every corporation, partnership, association, or person ten percent or more of whose voting securities are owned by any person, corporation, partnership, or association owning ten percent or more of the voting securities of such public service company or by any person, corporation, association, or partnership in any such chain of successive ownership of ten percent or more of voting securities.
4. Every corporation, partnership, association, or person with which such public service company has a management or service contract.
5. Every corporation in which two or more of the corporate directors are common to those of such public service company, or which is managed or supervised by the same individual, group or corporation.
6. Every corporation or person which the Commission may determine as a matter of fact after investigation and hearing is actually exercising any substantial influence over the policies and actions of such public service company even though such influence is not based upon stockholding, stockholders, directors or officers to the extent specified in this section.
7. Every person or corporation which the Commission may determine as a matter of fact after investigation and hearing is actually exercising such substantial influence over the policies and action of such public service company in conjunction with one or more other corporations or persons with which or whom they are so connected or related by ownership or blood relationship or by action in concert that when taken together they are affiliated with such public service company within the meaning of this section even though no one of them alone is so affiliated.

   But no such person or corporation shall be considered as affiliated within the meaning of this section if such person or corporation shall not have had transactions or dealings other than the holding of stock and the receipt of dividends thereon with such public service company during the two-year period next preceding.

   (1934, p. 743; Michie Code 1942, § 3774(b); 1984, c. 721; 1987, c. 385; 1996, c. 19.)

The 1996 amendment inserted "and, subject to the conditions specified therein, such companies as specified by the Commission pursuant to subsection C of § 56-77 " following "of this title" in the first paragraph.

Law review. - For article entitled "Regulation of Electric Utilities by the State Corporation Commission," see 14 Wm. & Mary L. Rev. 589 (1973). For note, "Captive Coal Pricing and the Regulation of Utility-Affiliate Transactions," see 68 Va. L. Rev. 1409 (1982).

Michie's Jurisprudence. - For related discussion, see 4B M.J. Corporations, § 209.

§ 56-77. Certain contracts must be approved by the Commission.

1. No contract or arrangement providing for the furnishing of management, supervisory, construction, engineering, accounting, legal, financial, or similar services, and no contract or arrangement for the purchase, sale, lease or exchange of any property, right or thing, other than those above enumerated, or for the purchase or sale of treasury bonds or treasury capital stock made or entered into between a public service company and any affiliated interest shall be valid or effective unless and until it shall have been filed with and approved by the Commission. The Commission shall, after the filing of such a contract or arrangement, approve or disapprove the contract or arrangement within sixty days. The sixty-day period may be extended by Commission order for an additional period not to exceed thirty days. The contract or arrangement shall be deemed approved if the Commission fails to act within sixty days or any extended period ordered by the Commission. It shall be the duty of every public service company to file with the Commission a verified copy of any such contract or arrangement, regardless of the amount involved, and the general rule herein referred to shall remain in full force and effect as to all other public service companies.
2. The Commission may, in its discretion and upon petition of the public service company or upon the Commission's own action, choose to exempt a public service company from all or any part of the requirements imposed by subsection A if the Commission determines that such an exemption is in the public interest. In addition to exemptions for individual public service companies, the Commission may adopt rules implementing exemptions from all or any part of the requirements imposed by subsection A. The Commission may revoke any exemptions granted under this subsection if it finds that such action is in the public interest.
3. Notwithstanding the provisions of § 56-481.2 , the Commission, after giving notice and an opportunity for a hearing, may, in its discretion, require any company certificated to provide, and engaged in the provision of, local exchange telephone service to meet the requirements of subsection A. (1934, p. 744; Michie Code 1942, § 3774c; 1996, c. 19; 1998, c. 707.)

The 1996 amendment inserted the A designation at the beginning of the first paragraph and added subsections B and C.

The 1998 amendment, in subsection A, inserted the second through fourth sentences.

Law review. - For an article, "Public Utility Law," see 31 U. Rich. L. Rev. 1173 (1997).

Michie's Jurisprudence. - For related discussion, see 15 M.J. Public Service and State Corporation Commissions, § 30.

§ 56-78. Exclusion from accounts of payments to affiliated companies.

In any proceeding, whether upon the Commission's own motion or upon complaint, involving the rates or practices of any public service company, the Commission may exclude in whole or in part from the accounts of such public service company any payment or compensation to an affiliated interest for any services rendered or property or service furnished, as above described, under existing contracts or arrangements with such affiliated interest, if it shall appear and be established upon investigation that such payment or compensation or such contract or arrangement is not consistent with the public interest. In such proceeding any payment or compensation may be disapproved or disallowed by the Commission, in whole or in part, unless satisfactory proof is submitted to the Commission of the cost to the affiliated interest rendering the service or furnishing the property or service above described.

(1934, p. 744; Michie Code 1942, § 3774d.)

§ 56-79. Proof of costs in cases of payment to affiliated companies.

No proof shall be satisfactory, within the meaning of the foregoing sections, unless it includes the original (or verified copies) of the relevant cost records and other relevant accounts of the affiliated interest, or such abstract thereof or summary taken therefrom, as the Commission may deem adequate, properly identified and duly authenticated; provided, however, that the Commission may, where reasonable, approve or disapprove such contracts or arrangements without the submission of such cost records or accounts.

(1934, p. 745; Michie Code 1942, § 3774e.)

Michie's Jurisprudence. - For related discussion, see 15 M.J. Public Service and State Corporation Commissions, § 30.

§ 56-80. Continuing supervisory control over terms and conditions of contracts.

The Commission shall have continuing supervisory control over the terms and conditions of such contracts and arrangements as are herein described so far as necessary to protect and promote the public interest. The Commission shall have the same jurisdiction over the modification or amendment of contracts or arrangements herein described as it has over such original contracts or arrangements. The fact that the Commission shall have approved entry into any such contract or arrangement shall not preclude disallowance or disapproval of payments made pursuant thereto in the future, if upon actual experience under such contract or arrangement, it appears that the payments provided for, or made, were, or are, unreasonable. Every order of the Commission approving any such contract or arrangement shall be expressly conditioned upon the reserved power of the Commission to revise and amend the terms and conditions thereof, if, when and as necessary to protect and promote the public interest.

(1934, p. 745; Michie Code 1942, § 3774f.)

Applied in Lynchburg Gas Co. v. Commonwealth, 217 Va. 855 , 234 S.E.2d 305 (1977).

§ 56-81. Summary order prohibiting treatment of payments as operating expenses, etc.

Whenever the Commission shall find upon investigation (1) that any public service company is giving effect to any contract or arrangement of the character described in § 56-77 , entered into after March 29, 1934, when such contract or arrangement shall not have been filed with the Commission as required by this chapter, or (2) that any public service company is making payment to an affiliated interest, although such payments have been disallowed and disapproved by the Commission under this chapter or in a proceeding involving the public service company's rates or practices, the Commission may, in the former case, and shall, in the latter case, issue a summary order prohibiting the public service company from treating any payments made under the terms of such contract or arrangement or any payments so disallowed and disapproved as operating expenses or as capital expenditures for rate or valuation purposes, unless and until such payments shall have received the approval of the Commission.

(1934, p. 745; Michie Code 1942, §§ 3774g, 3774h.)

§ 56-82. Approval of loans to affiliates, etc.

No public service company shall henceforth make, extend or renew any loan of money to any affiliated interest or assume, extend or renew any obligation or liability whatsoever of any affiliated interest, whether as guarantor, endorser, surety or otherwise, unless the Commission shall first have approved such loan or assumption, or the extension or renewal of such loan, obligation, or liability, as being not inconsistent with the public interest, and then only upon such terms and conditions as may be set forth in the order of the Commission approving such transaction. The Commission shall, after the filing of such a loan, obligation, or liability, approve or disapprove the loan, obligation, or liability within sixty days. The sixty-day period may be extended by Commission order for an additional period not to exceed thirty days. The loan, obligation, or liability shall be deemed approved if the Commission fails to act within sixty days or any extended period ordered by the Commission. This section shall not be construed so as to invalidate or impair any such loan, obligation, or liability lawfully made, extended or renewed, or assumed, extended or renewed, and entered into prior to March 29, 1934.

(1934, p. 745; 1938, p. 21; Michie Code 1942, § 3774i; 1998, c. 707.)

The 1998 amendment inserted the second through fourth sentences.

§ 56-83. Summary order prohibiting payment of dividends to affiliates.

The Commission may, of its own motion, whenever facts of record in any department of the Commission or within its knowledge appear to justify it in so doing, or upon complaint by the Commonwealth, and after reasonable notice, and opportunity to be heard, and upon hearing and consideration, either formal or informal, issue a summary order prohibiting any public service company from declaring or paying any dividend on any common or equity stock in any case in which such dividend or any part thereof would be payable to an affiliated interest as defined in § 56-76 , and such summary order may, in case of emergency, be issued under like circumstances as preliminary injunctions are issued by the courts of equity of this Commonwealth, and in either case such summary order so issued may thereafter be made permanent, or be modified, or be vacated, after such investigation and hearing as may be proper to satisfy the requirements of due process of law. The jurisdiction of the Commission under this section shall be based upon considerations of public interest, and the summary order herein provided for shall be issued only upon a finding that the declaration or payment of any dividends is, as a matter of fact, inconsistent with the public interest on account of the probability of disabling the public service company from continuing to perform adequately its public duties, or that there is a purpose on the part of such affiliated interest to gain unjust advantage or profit to the probable detriment of the public service company, bondholders, other classes of stockholders, or any others having rights in the premises.

(1938, p. 21; Michie Code 1942, § 3774i1.)

§ 56-84. Application or petition by public service company and affiliates; hearing; action of Commission; conditions imposed on foreign corporations.

In every case wherein the approval of the Commission is required of any contract, arrangement, loan, extension or renewal thereof, assumption of obligation or liability, renewal or extension thereof, or any transaction or act, an application or petition, duly executed and verified by any such public service company and by each and every corporation, partnership, association or person constituting an affiliated interest, who are parties to such transaction or act, shall be presented to and filed with the Commission which, upon hearing, either formal or informal, as may be determined by the Commission, may, in addition to passing upon the propriety of the proposed transaction or act subject to approval under this chapter, pass upon all questions of jurisdiction of the Commission and upon whether any party is, as a matter of fact and law, an affiliated interest. And in any such proceeding the Commission may require, as a condition precedent to an approval or action upon the proposed transaction or act, any other corporation, partnership, association or person which it appears to the Commission, prima facie, is or might be an affiliated interest, to join, or to be joined, as a party to the proceeding. And the Commission may, in its discretion, impose any condition as to obtaining a license to transact business in Virginia on the part of any foreign corporation which it appears would contravene any provision of Article 17 (§ 13.1-757 et seq.) of Chapter 9 of Title 13.1 by the performance of the proposed transaction or act or may require any such foreign corporation to submit to the jurisdiction of the Commission under § 13.1-759 or otherwise for a determination of such question, whenever the public interest and the due enforcement of this chapter and of other laws under the jurisdiction of the Commission appear to require such course.

(1938, p. 22; Michie Code 1942, § 3774i2.)

§ 56-85. Offenses.

Every public service company (1) entering into, participating in or acting under any contract or arrangement, required by this chapter to be approved by the Commission, before obtaining such approval, or (2) making any loan, extension or renewal thereof, or assuming any obligation or liability, or extension or renewal of any such obligation or liability, required by this chapter to be approved by the Commission, before obtaining such approval, or (3) making any declaration or payment of any dividends after entry of a summary order, either temporary or permanent, prohibiting such declaration or payment in accordance with the provisions of this chapter, or (4) otherwise violating any provision of this chapter, or of any valid order of the Commission entered in pursuance thereof, shall be subject to a fine, to be imposed in a proceeding before the Commission instituted for the purpose of determining whether there is any liability hereunder, of not less than $10 and not in excess of $500, together with the costs of the proceeding as adjudged by the Commission and as taxed by the clerk of the Commission according to law; and every day of any such violation which, in its nature, is continuing, may be deemed a separate offense.

Every public service company and every affiliated interest participating in any contract, arrangement, loan, or assumption, declaration or payment of dividends, or doing any other act, in violation of this chapter, or in violation of any valid order of the Commission hereunder, and every officer, director, or employee of any such public service company or of any such affiliated interest, knowingly authorizing, directing, aiding in or executing or causing to be executed, any such contract or arrangement, loan or assumption, declaration or payment of dividends, in violation of this chapter, or in violation of any valid order of the Commission hereunder, shall be guilty of a misdemeanor, and such liability for a misdemeanor shall be in addition and cumulative to any liability for the imposition of a fine or penalty as hereinbefore provided in this section.

(1938, p. 22; Michie Code 1942, § 3774i3.)

§ 56-86. Appeal from decisions of Commission under chapter.

Any public service company or affiliated interest or any other interested corporation, partnership, association or person, or the Commonwealth, deeming any decision or order of the Commission, rendered or entered under the provisions of this chapter, and being final in its general character with respect to any such company, interest, corporation, partnership, association, person, or the Commonwealth, to be in any respect or manner improper, unjust or unreasonable, may appeal the same to the Supreme Court in the same manner and by the same procedure as provided by law for review of any other decision or order of the Commission.

(1934, p. 746; 1938, p. 23; Michie Code 1942, § 3774j.)

Michie's Jurisprudence. - For related discussion, see 3A M.J. Canals and Canal Companies, § 10.

§ 56-87. Rules of Commission to carry out chapter.

The Commission is empowered to promulgate such rules and regulations as it may deem necessary or proper to carry out the provisions of this chapter.

(1934, p. 746; 1938, p. 23; Michie Code 1942, § 3774k.)

§ 56-88. Definitions.

In this chapter the following terms shall have the following meanings:

"Acquire" or "acquisition" includes any purchase or other acquisition, whether by payment, exchange, gift, conveyance, lease, license, merger, consolidation or otherwise.

"Company" means a corporation, a partnership, an association, a joint-stock company, a business trust or an organized group of persons, whether incorporated or not; or any receiver, trustee or other liquidating agent of any of the foregoing in his capacity as such; but not a municipal corporation or county.

"Dispose of" or "disposition" includes any sale or other disposition, whether by payment, exchange, gift, conveyance, lease, license, merger, consolidation or otherwise.

"Public utility" means any company which owns or operates facilities within the Commonwealth for the generation, transmission or distribution of electric energy for sale; for the production, transmission or distribution, otherwise than in enclosed portable containers, of natural or manufactured gas for sale for heat, light or power, but excluding any company described in subdivision (b) (8) or (b) (10) of § 56-265.1 ; or for the furnishing of sewerage facilities or water.

"Utility assets" means the facilities in place of any public utility or municipality for the production, transmission or distribution of electric energy or natural or manufactured gas, or for the furnishing of sewerage facilities or water.

"Utility security" means any note, draft, debenture, bond, share of stock, certificate, collateral trust certificate, preorganization certificate or subscription, transferable share, investment contract, receiver's or trustee's certificate or any other instrument or interest commonly known as a security which is issued, assumed or guaranteed by any public utility or any company which would be a public utility if the facilities owned or operated by it were within the Commonwealth, or any company substantially engaged in the ownership of any of the aforesaid securities or in supplying management or advice to any of the aforesaid companies; or any certificate of deposit for, voting trust certificate for, certificate of interest or participation in, temporary or interim certificate for, receipt for, guaranty of, assumption of liability on, or warrant or right to subscribe to or purchase or acquire, any of the aforesaid securities.

(1940, p. 425; Michie Code 1942, § 3774l; 1992, c. 376; 2000, cc. 528, 543; 2009, c. 746.)

Editor's note. - At the direction of the Virginia Code Commission, substituted "(b) (8) or (b) (10)" for "(b)(8) or (b)(10)" in the definition of "public utility."

The 2000 amendments. - The 2000 amendments by cc. 528 and 543 are identical, and inserted "but excluding any company described in subdivision (b)(8) of § 56-265.1 " in the paragraph defining "Public utility."

The 2009 amendments. - The 2009 amendment by c. 746 inserted "or (b)(10)" in the paragraph defining "Public utility."

Law review. - For special section on ratemaking and public policy in Virginia, see 18 Wm. & Mary L. Rev. 73 (1976).

§ 56-88.1. Acquisition or disposition of control of a public utility.

1. No person, whether acting alone or in concert with others, shall, directly or indirectly, acquire or dispose of control of:
   1. A public utility within the meaning of this chapter, or all of the assets thereof, without the prior approval of the Commission. Any person proposing an acquisition or disposition for which Commission approval is required by this section shall seek such approval pursuant to the procedure of § 56-90 ; or
   2. A telephone company, or all of the assets thereof, without the prior approval of the Commission. In determining whether to grant approval, the Commission shall consider only the financial, managerial, and technical resources to render local exchange telecommunications services of the person acquiring control of or all of the assets of the telephone company. The Commission shall, after the filing of a completed application, approve or disapprove the requested acquisition or disposition within 60 days. The 60-day period may be extended by Commission order for a period not to exceed an additional 120 days. The application shall be deemed approved if the Commission fails to act within 60 days or any extended period ordered by the Commission.
2. Any such acquisition or disposition of control without prior approval shall be voidable by the Commission. In addition, the Commission is authorized to revoke any certificate of public convenience and necessity it has issued, order compliance with this chapter, or take such other action as may be appropriate within the authority of the Commission.
3. For purposes of this section, "control" means (i) the acquisition of 25 percent or more of the voting stock or (ii) the actual exercise of any substantial influence over the policies and actions of any public utility or telephone company.
4. This section shall not apply to any company engaged in the business of generating electricity whose rates and services are not regulated by the State Corporation Commission.

   (1992, c. 376; 2011, cc. 738, 740.)

The 2011 amendments. - The 2011 amendments by cc. 738 and 740 are identical, and inserted subsection designations; deleted "(i) a" from the end of subsection A; in subdivision A 1, added "A" to the beginning, and deleted "or (ii) a telephone company" following "meaning of this chapter"; added subdivision A 2; and made minor stylistic changes.

OPINIONS OF THE ATTORNEY GENERAL

Prior approval of the State Corporation Commission is required by the Utility Transfers Act only when (1) control or (2) all of the assets of a telephone company are being transferred. See opinion of Attorney General to The Honorable Phillip P. Puckett, Member, Senate of Virginia, 07-112, 2008 Va. AG LEXIS 3 (1/22/08).

§ 56-89. Acquisition or disposition of utility assets or utility securities.

It shall be unlawful for any public utility, directly or indirectly, to acquire or dispose of any utility assets situated within the Commonwealth or any utility securities of any other company unless such acquisition or disposition shall have been authorized by the Commission. If and when so authorized by the Commission, any public utility may acquire or dispose of any such utility assets or utility securities; but no such authorization by the Commission shall confer upon any county or municipality authority, other than that otherwise conferred by law, to acquire or to dispose of any utility assets or utility securities.

(1940, p. 426; Michie Code 1942, § 3774m.)

OPINIONS OF THE ATTORNEY GENERAL

Prior approval of the State Corporation Commission is required by the Utility Transfers Act only when (1) control or (2) all of the assets of a telephone company are being transferred. See opinion of Attorney General to The Honorable Phillip P. Puckett, Member, Senate of Virginia, 07-112, 2008 Va. AG LEXIS 3 (1/22/08).

§ 56-90. Procedure for authority to acquire or dispose of utility assets or securities.

Application for authority to acquire or dispose of utility assets or utility securities under § 56-89 shall be by petition to the Commission. The petition may be joint or several. It shall be signed and verified by the president or any vice-president and the secretary or any assistant secretary of the petitioner. The petition shall clearly summarize the object in view, the proposed procedure and the terms and conditions thereof. Upon the filing of the petition, if the Commission shall deem a hearing necessary, the Commission shall assign the matter for prompt hearing. If and when the Commission, with or without hearing, shall be satisfied that adequate service to the public at just and reasonable rates will not be impaired or jeopardized by granting the prayer of the petition, the Commission shall make such order in the premises as it may deem proper and the circumstances require, and thereupon it shall be lawful to do the things provided for in such order, subject, however, to the exception contained in § 56-89 as to counties and municipalities.

(1940, p. 426; Michie Code 1942, § 3774o.)

§ 56-90.1. Sale of utility assets or undivided fractional interest therein; taxation.

If the Commission shall have granted a petition filed pursuant to § 56-90 in which a public utility has applied for authority to sell utility assets or associated properties situated within the Commonwealth, or an undivided fractional interest therein, to (i) an association of one or more electric cooperatives or electric membership corporations that are wholesale customers of the electric public utility, (ii) an association of one or more cities or incorporated towns that are wholesale customers of the electric utility, (iii) any combination of such associations, or (iv) another public utility then, notwithstanding any other provisions of law:

1. A waiver made by any such electric public utility, association of cooperatives, cities or towns of any right it may have to compel partition, whether pursuant to the provisions of Article 9 (§ 8.01-81 et seq.) of Chapter 3 of Title 8.01, or otherwise, shall be effective and enforceable against (i) such public utility, association of cooperatives, cities or towns, and their successors and assigns, and (ii) all creditors of such public utility, association of cooperatives, cities and towns, their successors and assigns, who have notice of record of such waiver, so long as the waiver shall be limited so as not to exceed ninety-nine years;
2. No state recording tax shall be payable upon the admission to record of any deed, deed of trust, mortgage, bill of sale, contract, agreement or other writing supplemental to any such instrument which conveys or reconveys such utility assets or properties, or an undivided fractional interest therein or secures any bonds or other obligations of such association of cooperatives, cities or towns or combination thereof; provided, however, that any local recording taxes shall be payable as though the state recording taxes had been collected;
3. No state franchise tax or local license tax shall be payable on the proceeds of any such sale of utility assets or properties, or an undivided fractional interest therein; and
4. Unless otherwise expressly agreed by the joint owners the joint ownership of such utility assets or properties as approved by the Commission shall not constitute a partnership or joint venture among the owners.

   (1979, c. 238; 1980, c. 703.)

§ 56-90.2. Fair market valuations of water and sewer utility asset acquisitions.

The Commission shall establish rules governing petitions by an acquiring public utility that has elected to seek use of the fair market value of a municipal or other governmental selling utility's water or sewer assets to determine the initial rate base for the purpose of post-acquisition rate recovery. Such rules shall identify information to be filed in addition to all other filing requirements in the Utility Transfers Act (§ 56-88 et seq.). Such rules shall:

1. Establish the process for determining the acquired water or sewer utility rate base, taking into consideration the use of the lesser of (i) the agreed-upon purchase price established during a voluntary arm's-length transaction by the selling and acquiring utilities and (ii) the fair market value established using the average of the valuations provided by three qualified and impartial utility valuation experts.
2. Provide for the acquiring utility to submit complete and unredacted copies of two qualified, independent, and impartial utility valuation expert's appraisals of the system assets to be acquired in compliance with the uniform standards of professional appraisal practices. The appraisals shall be treated confidentially. Such appraisals shall be completed and submitted in accordance with the following:
   1. One appraisal shall be sponsored by the public utility acquiring the utility system assets, and one appraisal shall be sponsored by the government entity selling the utility system assets.
   2. The qualifications of such utility valuation experts, specifically as they relate to water or wastewater utility systems, shall be clearly identified in the application.
   3. The appraisals shall clearly identify whether they are based on a cost, market, income, or other methodology.
   4. The appraisals shall quantify only the fair market value associated with assets that are to be currently used and useful in utility service. To the extent assets are acquired beyond those to be currently used and useful in utility service, a narrative shall be provided of the acquiring utility's intended purpose of such assets.
   5. Commission staff and other intervenors may seek discovery to confirm the reasonableness of such appraisals and may provide testimony and recommendations regarding such.
   6. When combined with a third appraisal sponsored by the Commission staff, the average of the three appraisals shall be deemed the fair market value for the purposes of this proceeding. The applicant may seek discovery to confirm the reasonableness of such appraisal and may provide testimony and recommendations regarding such.
3. Provide for the submission of a complete and unredacted copy of an assessment performed by a professional engineer licensed in Virginia, jointly retained by the acquiring and selling utilities, regarding tangible assets of the utility system to be acquired. Such assessment shall be used by the utility valuation experts as a basis for their valuations in determining fair market value and shall be treated confidentially. Such assessments shall be completed and submitted in accordance with the following:
   1. The qualifications of such licensed engineer, specifically as they relate to water or wastewater utility systems, shall be clearly identified in the application.
   2. Commission staff and other intervenors may seek discovery to confirm the reasonableness of the assessment and may provide testimony and recommendations regarding such.
   3. To the extent assets are to be acquired beyond those to be currently used and useful in utility service, such assessment shall separately quantify only the assets that are to be currently used and useful in utility service.
4. Provide that to the extent the proposed purchase price is different from that provided in the appraisals, the application shall identify such proposed purchase price.
5. Provide for the acquiring utility to submit the proposed journal entries resulting from the proposed acquisition, including tax entries, including account numbers recognized by the National Association of Regulatory Utility Commissioners.
6. Provide for the acquiring utility to submit an analysis identifying the qualitative and quantitative benefits and estimated customer rate impacts for the next five years as a result of the proposed acquisition for each of (i) the customers of the desired system and (ii) the legacy customers of the acquiring utility. Such analysis should clearly identify all assumptions relied upon.
7. Provide that if depreciation rates for the acquired system are not based on a depreciation study:
   1. The acquiring utility may apply a three percent composite depreciation rate to the fair market value of the utility system assets acquired.
   2. A depreciation study on the acquired system shall be performed within five years of acquisition and provided for review by Commission staff. Upon acceptance of the depreciation rates by Commission staff for booking purposes, such rates shall be utilized for the system effective as of the date of the study.
   3. However, if the acquired system is of a size that would qualify under the Small Water or Sewer Public Utility Act (§ 56-265.13:1 et seq.), such assets may be exempted from the requirement of performing a depreciation study.
8. Establish the ability to evaluate and include reasonable transaction costs and fees of the utility valuation experts in the fair market value determination in addition to reasonable transaction and closing costs when establishing the rate base.
9. Provide that the rate base value of the acquired system assets shall be the fees and costs of the utility valuation experts authorized by the acquiring and selling utilities in addition to reasonable transaction and closing costs, plus the lesser of (i) the purchase price negotiated between the acquiring utility and selling utility as the result of a voluntary arm's-length transaction and (ii) the fair market value for subsequent rate-making purposes in the acquiring utility's next base rate case. Nothing in the established rules shall be construed to relieve the petitioners from the duty to demonstrate adequate service to the public at just and reasonable rates that will not be impaired or jeopardized by granting the prayer of the petition as provided in § 56-90 . Such rules shall be developed in coordination and consultation with industry experts and stakeholders and established by January 1, 2021. (2020, cc. 518, 519.)

Editor's note. - Acts 2020, cc. 518 and 519 were codified as this section at the direction of the Virginia Code Commission.

§ 56-91. Violations of chapter.

Any company violating any provision of § 56-89 shall upon conviction be fined not more than $1,000.

(1940, p. 426; Michie Code 1942, § 3774n.)

§ 56-92. Short title.

This chapter may be cited as the Utility Transfers Act.

(1940, p. 426; Michie Code 1942, § 3774q.)

§§ 56-93 through 56-99.1.

Repealed by Acts 1996, cc. 114 and 157.

Editor's note. - Sections 56-98 and 56-99 were also previously repealed by Acts 1970, c. 618.

§ 56-99.2. Commission authority over rates, rules, classifications and practices of railroad companies.

Notwithstanding any other provision of law, the State Corporation Commission shall have the authority to administer and prescribe the rates, rules, classifications and practices of railroad companies exclusively in accordance with the provisions of Subtitle IV of Title 49 of the United States Code, as amended by the Staggers Rail Act of 1980, Public Law 96-448. The Commission shall also have the authority to establish, by rule or regulation, standards and procedures to administer the rates, rules, classifications and practices of railroad companies exclusively in accordance with federal law.

(1983, c. 443.)

Michie's Jurisprudence. - For related discussion, see 15 M.J. Railroads, § 11.

§ 56-100.

Repealed by Acts 1970, c. 618.

§§ 56-100.1, 56-101.

Repealed by Acts 1996, cc. 114 and 157.

§ 56-102. Unlawful to charge other than published tariff.

When rates, fares, and charges excluding those covered by contracts have been published in a tariff, it shall be unlawful for any such company to charge, demand, collect, or receive from any person a greater or less compensation for the transportation of passengers or property, or for any services in connection therewith, than is specified in such published schedule of rates, fares, and charges, unless it is determined that a rate, fare or charge has been recorded in error.

(Code 1919, § 3910; 1979, c. 106; 1996, cc. 114, 157.)

The 1996 amendments. - The 1996 amendments by cc. 114 and 157 are identical, and deleted "the Commission shall have either authorized or specified and published any such" preceding "rates," inserted "excluding those covered by contracts have been published in a tariff" following "charges," substituted "unless it is determined" for "so authorized, or prescribed and published by the Commission, unless or until changed by the Commission; provided, however, when the Commission determines," substituted "recorded" for "published," and deleted "it shall order publication of an appropriate correction which shall be effective from the effective date of the erroneous rate, fare or charge" following "error."

Michie's Jurisprudence. - For related discussion, see 3B M.J. Carriers, §§ 23, 26; 15 M.J. Railroads, § 11.

§§ 56-102.1 through 56-110.

Repealed by Acts 1996, cc. 114 and 157.

§ 56-111. When railroads may operate by motor vehicle or aircraft.

Any railroad doing business in this Commonwealth may acquire, own and operate motor vehicles for the purpose of transporting persons or property over the public highways as a common carrier by motor vehicle as that term is defined by § 46.2-2000, subject to the laws of Virginia governing the operations and regulation of common carriers by motor vehicle and all lawful regulations of the Commonwealth made pursuant thereto and applying to other motor vehicles or other common carriers by motor vehicle, including the laws requiring the payment of registration and license fees and other taxes by common carriers by motor vehicle, when lawfully authorized in accordance with the provisions of such laws and regulations.

Any such railroad may also acquire, own and operate equipment for and engage in air transportation, subject to the provisions of the law regulating air transportation.

(1938, p. 1000; Michie Code 1942, § 3857a; 1944, p. 537; 1996, cc. 114, 157.)

Cross references. - For constitutional provision as to the control of transportation companies, see Va. Const., Art. IX, § 2.

The 1996 amendments. - The 1996 amendments by cc. 114 and 157 are identical, and, in the first paragraph, substituted "doing business" for "electric railway or steamboat corporation operating a railroad, electric railway or steamboat line," substituted " § 46.2-2000" for " § 56-273 ," substituted "Commonwealth" for "Commission," and deleted "so to do by the Commission" following "authorized"; deleted the former second paragraph which read: "So long as the gross transportation receipts from operations as a common carrier by motor vehicle are subject to road tax, such gross transportation receipts shall not be included in the gross transportation receipts of any such railroad or steamboat corporation upon which its annual state franchise tax is calculated"; and in the present second paragraph, deleted "electric railway or steamboat corporation" following "railroad" and substituted "air" for "aerial" in two places.

§§ 56-112 through 56-116.

Repealed by Acts 1996, cc. 114 and 157.

Editor's note. - Section 56-114 was also previously repealed by Acts 1975, cc. 77, 547.

§ 56-117. Company to notify consignee of arrival of freight.

It shall be the duty of every railroad company, or carrier, upon the arrival of freight shipped to any of its depots or stations, to notify the consignee by mail, electronic data transfer, or otherwise when such freight is ready for delivery, and to give a reasonable time for the removal of the same, making due allowance for its class and bad weather and holidays.

(Code 1919, § 3916; 1996, cc. 114, 157.)

The 1996 amendments. - The 1996 amendments by cc. 114 and 157 are identical, and substituted "railroad" for "transportation" and inserted "electronic data transfer" following "mail."

§ 56-118. Freight bill; what to contain.

Every railroad company or line, doing business in this Commonwealth, shall, at the time when such company delivers any articles shipped or transported over its line, furnish to the owner or consignee thereof, or to his agent, a bill, plainly stating the class of freight to which the articles belong, the weight thereof, and the rate charged for transporting the same. Bills may be furnished by mail or contemporaneous electronic transmission.

(Code 1919, § 3917; 1996, cc. 114, 157.)

The 1996 amendments. - The 1996 amendments by cc. 114 and 157 are identical, and substituted "railroad" for 'transportation" and added the second sentence.

Michie's Jurisprudence. - For related discussion, see 3B M.J. Carriers, § 23.

§ 56-119. Contracts, etc., limiting liability invalid.

No contract, receipt, rule, or regulation shall exempt any transportation company from the liability of a common carrier which would exist had no contract been made or entered into and no such contract, receipt, rule, or regulation for exemption from liability for injury or loss occasioned by the neglect or misconduct of such transportation company as a common carrier shall be valid. The liability referred to in this section shall mean the liability imposed by law upon a common carrier for any loss, damage, or injury to freight or passengers in its custody and care as a common carrier.

(Code 1919, §§ 3926, 3930; 1979, c. 477.)

Law review. - For survey of Virginia commercial law for the year 1972-1973, see 59 Va. L. Rev. 1426 (1973); for the year 1978-1979, see 66 Va. L. Rev. 217 (1980).

For article, "Virginia's Rule of Non-waiver of Liability for Negligent Acts: Hiett v. Lake Barcroft Community Association, Inc.," see 2 Geo. Mason L. Rev. 27 (1994).

Research References. - Virginia Forms (Matthew Bender). No. 1-206 Complaint Against Common Carrier - Injury to Passenger; No. 1-218 Answer of Common Carrier - Injury to Passenger; No. 1-506 Complaint by Seller Against Common Carrier - Damage to Goods.

Michie's Jurisprudence. - For related discussion, see 3B M.J. Carriers, §§ 19, 21, 34, 67; 15 M.J. Railroads, § 46; 17 M.J. Statutes, § 77.

§§ 56-120, 56-121.

Repealed by Acts 1964, c. 219.

§ 56-122. When railroad, steamship, etc., companies not liable as a common carrier.

Whenever any corporation, company, or association not incorporated by or formed in the Commonwealth, or any person or partnership not a resident thereof, shall obtain from a railroad, steamship, or steamboat company the right or privilege of carrying articles upon the trains, steamships, or steamboats of such railroad, steamship, or steamboat company, such railroad, steamship, or steamboat company shall not in any manner be liable as a common carrier for any article thereafter delivered to such corporation, company, association, person, or partnership for carriage as aforesaid.

(Code 1919, § 4031; 2014, c. 192.)

The 2014 amendments. - The 2014 amendment by c. 192 substituted "the Commonwealth" for "this Commonwealth," deleted "and shall comply with the provisions of §§ 56-266 to 56-269" preceding "such railroad," and made a minor stylistic change.

Michie's Jurisprudence. - For related discussion, see 8A M.J. Express Companies, § 2.

§ 56-123. Adjustment of claims against carriers.

Every claim against a common carrier doing business in the Commonwealth for loss or damage to property while in its possession, and every claim for storage, demurrage and car service against such carrier under the rules and regulations prescribed by the State Corporation Commission, shall be adjusted and paid within 60 days in case of shipments wholly within the Commonwealth, and within 90 days in case of interstate shipment, and within 60 days in case of claims for demurrage or car service after the filing of such claim with the agent of such carrier at the point of destination of such shipment or with the claims department of such common carrier. No such claims shall be filed until after the arrival of shipment or some part thereof at the point of destination or until after the lapse of a reasonable time for the arrival thereof, when such claim is for loss or damage to freight. In every case such carrier shall be liable for the amount of such loss or damage to freight, or such penalty as is prescribed for failure to comply with the rules and regulations of the Commission, relating to storage, demurrage, and car service, together with interest thereon from the date of the filing of the claim therefor, until the payment thereof. Failure to adjust and pay such claim within the periods herein respectively prescribed shall subject such common carrier so failing to a penalty of $25 for each and every such failure, to be recovered by such claimant so aggrieved in the same action or proceedings in any court having jurisdiction in the Commonwealth; provided, that unless such claimant recover in such action the full amount claimed by him no penalty shall be recovered, but only the actual amount of the loss or damage to freight, or amount due for storage, demurrage or car service, with interest as aforesaid; and, provided further, that if in such action or proceedings such claim shall be found to be fraudulent the claimant shall pay to the carrier a penalty of $25, to be recovered along with the costs. If after such periods above prescribed, the carrier shall voluntarily pay the full amount so claimed, then such penalty alone may be recovered as aforesaid by the claimant.

(1918, p. 467; 1922, p. 420; Michie Code 1942, § 3928a; 2005, c. 839.)

The 2005 amendments. - The 2005 amendment by c. 839, effective October 1, 2005, substituted "the Commonwealth" for "this Commonwealth" twice in the first sentence; deleted "or before any trial justice" preceding "having jurisdiction" in the fourth sentence; and made stylistic changes.

Research References. - Virginia Forms (Matthew Bender). No. 1-206 Complaint Against Common Carrier - Injury to Passenger; No. 1-218 Answer of Common Carrier - Injury to Passenger; No. 1-506 Complaint by Seller Against Common Carrier - Damage to Goods.

Michie's Jurisprudence. - For related discussion, see 3B M.J. Carriers, §§ 31, 74.

§ 56-124. Procedure in action on such claims.

In any action which may be instituted pursuant to § 56-123 before a general district court for an amount not exceeding $300, either party at or before the return day of the warrant may, in lieu of or in addition to giving evidence at the hearing, file an affidavit relating to the subject matter and in such case the other party to such action shall have a right to a continuance for a reasonable time; provided, that any party to such action may give reasonable notice to the party filing such affidavit and take the deposition of the affiant, at such time and place as the court may prescribe, the taking of such deposition to be governed by the rules of law in force regarding the cross-examination of witnesses. Such affidavits and depositions shall be read with the same force and effect as if taken in the form of a deposition after due notice to the other party. In the event of appeal of any such action such affidavits and depositions shall be read in the appellate court with the same force and effect as before the general district court.

(1918, p. 467; 1922, p. 421; Michie Code 1942, § 3928b; 2005, c. 839.)

The 2005 amendments. - The 2005 amendment by c. 839, effective October 1, 2005, substituted "general district court" for "trial justice" in the first and last sentences.

Research References. - Virginia Forms (Matthew Bender). No. 1-206 Complaint Against Common Carrier - Injury to Passenger; No. 1-218 Answer of Common Carrier - Injury to Passenger; No. 1-506 Complaint by Seller Against Common Carrier - Damage to Goods.

§ 56-125. Suits against unincorporated carriers.

When transportation lines are owned or operated by persons, partnerships, or associations, not incorporated, any one or more of them may be sued by his or their name or names only, and such suit shall not abate for want of joining any of the copartners or coproprietors.

(Code 1919, § 3931.)

Michie's Jurisprudence. - For related discussion, see 3B M.J. Carriers, § 74.

Research References. - Virginia Forms (Matthew Bender), No. 1-506 Complaint by Seller Against Common Carrier - Damage to Goods.

§§ 56-126, 56-127.

Repealed by Acts 1964, c. 219.

§ 56-128. Commission's examination of all transportation companies, etc.

The Commission may examine all the railroads and other transportation companies, and the works and equipment thereof so that it may keep itself informed as to their physical condition, the manner in which they are operating with reference to the security and accommodation of the public, and whether they are in compliance with the provisions of their charters and the laws of the Commonwealth. The provisions of this section shall apply to all railroads and other transportation companies, and to the corporations, trustees, receivers, or other person owning or operating the same.

(Code 1919, § 3718; 1987, c. 185.)

Cross references. - As to examination of physical condition of public service companies, see § 56-43 .

For provisions concerning the powers and duties of the State Corporation Commission, see Va. Const., Art. IX, § 2; §§ 12.1-12 through 12.1-17 .

§ 56-129.

Repealed by Acts 1996, cc. 114 and 157.

§ 56-129.1. Participation in the Federal Railroad Administration Safety and Inspection Program.

The State Corporation Commission shall have the authority to participate in carrying out safety inspection activities in connection with any rule, regulation, order, or standard prescribed by the Secretary of Transportation of the United States under the authority of the Federal Railroad Safety Act (49 U.S.C. § 20101 et seq.) as delegated to the Commonwealth by the Federal Railroad Administration, provided that the Commission shall comply with all the requirements imposed by the United States Code. The Commission shall employ such expert, professional or other assistance as is necessary to carry out the activities authorized by this section. Safety inspectors shall attain the Federal Railroad Administration qualifications necessary to qualify the Commonwealth for federal funds. A maximum of $200,000 paid to the State Corporation Commission under §§ 58.1-2660 through 58.1-2662 shall be allocated to this program.

The Commission shall have the authority to adopt such rules in conformance with the Federal Railroad Safety Act that are necessary for the promulgation of railroad safety within the Commonwealth.

(1981, c. 363; 1987, c. 145; 1996, cc. 114, 157.)

The 1996 amendments. - The 1996 amendments by cc. 114 and 157 are identical, and, in the first paragraph, in the first sentence, substituted "safety inspection" for "track inspection," substituted "(49 U.S.C. § 20101 et seq.) as delegated to the Commonwealth by the Federal Railroad Administration" for "United States Code, Title 45, Chapter 13," and deleted "Title 45, Section 435" following "United States Code"; substituted "Safety inspectors" for "Such track inspectors" in the third sentence; substituted "$200,000" for "$150,000" in the fourth sentence; and deleted "track" following "railroad" in the second paragraph.

§ 56-130. Penalty for failure to make necessary repairs, etc.

If any railroad, or other railroad company, when directed by a valid order of the Commission, refuses or fails to comply with any requirement imposed pursuant to § 56-129.1 , such company shall, in the discretion of the Commission, be fined in accordance with federal guidelines.

(Code 1919, § 3932; 1996, cc. 114, 157.)

The 1996 amendments. - The 1996 amendments by cc. 114 and 157 are identical, and rewrote this section which formerly read: "If any railroad, or other transportation company, when directed by a valid order of the Commission, refuses or fails to make necessary repairs or additions to its rolling stock, or addition or improvement to its equipment, or any enlargement of or improvement in its stations, station houses, wharves, or landings, or any change in the mode of operating its road or transportation line, or in conducting its business, which the Commission deems reasonable and expedient in order to promote the security, convenience, and accommodation of the public, such company shall, in the discretion of the Commission, be fined not less than $100 nor more than $1,000."

Michie's Jurisprudence. - For related discussion, see 15 M.J. Railroads, § 28.

§ 56-131. Accident Investigation and Reporting.

The Commission shall investigate the cause of any accident on any railroad which, in its judgment, requires investigation. The Commission shall require every common carrier by railroad doing business in this Commonwealth to file all reports required by the Federal Railroad Administration pursuant to the Federal Accidents Reports Act and regulations issued pursuant thereto to the Commission at its office in Richmond, Virginia, provided that neither such report nor any part thereof shall be admitted as evidence in any suit or action for damages growing out of any matter mentioned in such report.

(Code 1919, § 3737; 1996, cc. 114, 157.)

The 1996 amendments. - The 1996 amendments by cc. 114 and 157 are identical, and, in the first sentence, substituted "shall investigate" for "may investigate," substituted "railroad" for "transportation line," substituted "requires" for "shall require," and added the second sentence.

§ 56-132.

Repealed by Acts 1996, cc. 114 and 157.

§§ 56-133 through 56-135.

Repealed by Acts 1956, c. 492.

§§ 56-136 through 56-138.

Repealed by Acts 1979, c. 405.

§ 56-139.

Repealed by Acts 1996, cc. 114 and 157.

§ 56-140. Penalty for violation of chapter, orders, rules or regulations.

Any transportation company which violates any of the provisions of this chapter, or refuses to conform to or obey any lawful rule, order, or regulation of the Commission relating to the provisions of this chapter, may, when not otherwise provided in this chapter, be fined by the Commission, in its discretion, in a sum not exceeding $500 for each offense, and each day such company continues to violate any provision of this chapter, or continues to refuse to obey or perform any lawful rule, order, or regulation prescribed by the Commission, shall be a separate offense.

(Code 1919, § 3925.)

Michie's Jurisprudence. - For related discussion, see 3B M.J. Carriers, § 96.

§ 56-141.

Repealed by Acts 1994, c. 314.

§§ 56-142 through 56-206.

Repealed by Acts 1970, c. 708.

Cross references. - For present provisions as to air carriers, see §§ 5.1-89 through 5.1-151.

§§ 56-207, 56-208.

Repealed by Acts 1981, c. 177.

§§ 56-209 through 56-231.14.

Repealed by Acts 1999, c. 874.

Cross references. - As to present utility cooperative provisions, see § 56-231.15 et seq.

Editor's note. - Section 56-210 was amended by Acts 1999, c. 415. This amendment is reflected in the comparable new section, § 56-231.16 , enacted by Acts 1999, c. 874.

Section 56-224.2, which was enacted by Acts 1999, cc. 939, 940, has been codified at § 56-231.31:1 , at the direction of the Virginia Code Commission.

§ 56-231.15. Definitions.

The following terms, whenever used or referred to in this article, shall have the following meanings, unless a different meaning clearly appears from the context:

"Acquire" means and includes construct, or acquire by purchase, lease, devise, gift or the exercise of the power of eminent domain, or by other mode of acquisition.

"Affiliate" means a separate affiliated or subsidiary corporation or other separate legal entity.

"Board" means the board of directors of a cooperative formed under or subject to this article.

"Commission" means the State Corporation Commission of Virginia.

"Cooperative" means a utility consumer services cooperative formed under or subject to this article or a distribution cooperative formed under the former Distribution Cooperatives Act (§ 56-209 et seq.).

"Energy" means and includes any and all forms of energy no matter how or where generated or produced.

"Federal agency" means and includes the United States of America, the President of the United States of America, the Tennessee Valley Authority, the Federal Administrator of the Rural Utility Service, the Southeastern Power Administration, the Federal Energy Regulatory Commission, the Securities and Exchange Commission, the Federal Communications Commission and any and all other authorities, agencies, and instrumentalities of the United States of America, heretofore or hereafter created.

"HVACR" means heating, ventilation, air conditioning and refrigeration.

"Improve" means and includes construct, reconstruct, replace, extend, enlarge, alter, better or repair.

"Law" means any act or statute, general, special or local, of this Commonwealth.

"Member" means and includes each natural person signing the articles of incorporation of a cooperative and each person admitted to membership therein pursuant to law or its bylaws.

"Municipality" means any city or incorporated town of the Commonwealth.

"Obligations" means and includes bonds, interim certificates or receipts, notes, debentures, and all other evidences of indebtedness either issued by, or the payment of which is assumed or contractually undertaken by, a cooperative.

"Patronage capital" includes all amounts received by a cooperative from sales of electric power or electric distribution services, or both, to members in excess of the cooperative's cost of furnishing electric power or distribution services, or both, to members and such other margins as determined by the board of directors.

"Person" means and includes natural persons, firms, associations, cooperatives, corporations, limited liability companies, business trusts, partnerships, limited liability partnerships and bodies politic.

"Propane or fuel oil equipment" means equipment and related systems to store or use propane or fuel oil products.

"Regulated utility services" means utility services that are subject to regulation as to rates or service by the Commission.

"System" means and includes any plant, works, system, facilities, equipment or properties, or any part or parts thereof, together with all appurtenances thereto, used or useful in connection with the generation, production, transmission or distribution of energy or in connection with other utility services.

"Traditional cooperative activity" means any business, service or activity in which cooperatives in Virginia have traditionally engaged and that is incidental to and substantially related to the electric utility business conducted by a cooperative on or before July 1, 1999, provided that traditional cooperative activity does not include any program to (i) buy or maintain an inventory of HVACR equipment or household appliances; (ii) install or service any such equipment or household appliances for customers, unless such service is not provided by the cooperative but by a third party individual, firm or corporation licensed to perform such service; (iii) sell HVACR equipment or household appliances to customers metered and billed on residential rates; (iv) sell HVACR equipment to customers other than those metered and billed on residential rates except where such sale is an incidental part of providing other energy services or providing other traditional cooperative activities; (v) sell or distribute propane or fuel oil; sell, install or service propane or fuel oil equipment; or maintain or buy an inventory of propane or fuel oil equipment for resale; or (vi) serve as a coordinator of nonelectric energy services or provide engineering consulting services except when such energy or engineering services are an incidental part of a marketing effort to provide other energy or engineering services or as a part of providing services that are other traditional cooperative activities.

"Utility services" means any products, services and equipment related to energy, telecommunications, water and sewerage.

(1999, c. 874; 2000, cc. 944, 964, 989, 999.)

Editor's note. - Acts 2009, c. 824, cl. 2 provides: "That each utility consumer services cooperative (cooperative) organized or operated pursuant to Article 1 ( § 56-231.15 et seq.) of Chapter 9.1 of Title 56 of the Code of Virginia shall, on or before October 31, 2009, file with the State Corporation Commission (Commission) an assessment of the statutory, regulatory, organizational, physical, contractual, financial, and market impediments to cooperative implementation of initiatives relating to dynamic rates, standby rates, interruptible rates, and rates for purchases of electricity generated from renewable sources. Each cooperative shall conduct its assessment and submit such assessment individually, collectively with one or more other cooperatives, or collectively through an association of cooperatives. The Commission shall review each assessment to evaluate its accuracy and completeness. On or before December 1, 2009, the Commission shall forward each assessment to the Governor and the General Assembly along with the Commission's evaluation of the accuracy and completeness of each report."

The 2000 amendments. - The 2000 amendments by cc. 944 and 999 are identical, and rewrote the paragraph defining "Patronage capital" which formerly read: "'Patronage capital' includes all amounts received by a distribution cooperative from sale of electric power to members in excess of the distribution cooperative's cost of furnishing electric power to members," and added the paragraph defining "Traditional cooperative activity."

The 2000 amendments by cc. 964 and 989 are identical, and added the paragraph defining "Traditional cooperative activity."

§ 56-231.16. Organization; purpose.

1. Any number of natural persons not less than five may, by executing, filing and recording articles of incorporation as hereinafter set forth, form a cooperative, either with or without capital stock, not organized for pecuniary profit, for the principal purpose of making energy, energy services, and other utility services available at the lowest cost consistent with sound economy and prudent management of the business of such cooperative and such other purposes as its membership shall approve: (i) provided, however, that within its certificated service territory, no such cooperative shall, prior to July 1, 2000, undertake or initiate any new program (a) to buy or maintain an inventory of HVACR equipment or household appliances, (b) to install or service any such equipment or household appliances for customers, unless such service is not provided by the cooperative but by a third party individual, firm or corporation licensed to perform such service, (c) to sell HVACR equipment or household appliances to customers metered and billed on residential rates, (d) to sell HVACR equipment to customers other than those metered and billed on residential rates except where such sale is an incidental part of providing other energy services or providing traditional cooperative activities, (e) to sell or distribute propane or fuel oil; sell, install or service propane or fuel oil equipment; or maintain or buy an inventory of propane or fuel oil equipment for resale, or (f) to serve as a coordinator of nonelectric energy services or provide engineering consulting services except when such energy or engineering services are an incidental part of a marketing effort to provide other energy or engineering services or as a part of providing services that are traditional cooperative activities; (ii) provided further, that notwithstanding clause (i), such cooperative may engage within its certificated service territory in any of the activities enumerated in clause (i) that (a) have received State Corporation Commission approval prior to February 1, 1998, (b) such cooperative is ordered or required to undertake by any jurisdictional court or regulatory authority, (c) were lawfully undertaken prior to February 1, 1998, (d) are specifically permitted by statute, or (e) are undertaken by any other regulated public service company or its unregulated affiliate within such cooperative's certificated service territory; and (iii) also provided that such cooperative or its affiliate may not undertake such activities as are prohibited by clause (i) within the certificated service territory of another public service company unless such activities are undertaken by such public service company or its unregulated affiliate within such cooperative's certificated service territory. In addition, such cooperative may establish one or more subsidiaries to engage in any other business activities not prohibited by law; notwithstanding the foregoing, no such subsidiary may engage in any business activities that the cooperatives are prohibited from engaging in under this section. For purposes of determining whether a cooperative is formed not for pecuniary profit, the establishment of one or more affiliates thereof on a for-profit basis shall not disqualify such entity from being formed as a cooperative pursuant to this article.
2. Nothing in this article shall be construed to authorize a cooperative formed pursuant to this article, or any affiliate thereof, to engage, on a not-for-profit basis, within either the cooperative's certificated service territory or in the certificated service territory of another public service company, in the sale of products, the provision of services, or other business activity, except for regulated electric utility services, unregulated sales of electric power to its members within its certificated service territory, and traditional cooperative activities. However, if such products or services are not currently provided by any person other than a cooperative formed under or subject to this chapter or its affiliate and the Commission determines that no such other person is likely, within a reasonable time, to effectively provide such products and services in such territory, an affiliate of a cooperative may provide such products or services on a not-for-profit basis. The Commission shall also permit an affiliate of a cooperative formed under or subject to this chapter to provide such products or services on a not-for-profit basis upon a finding that the affiliate will not receive the benefit of any federal income tax exemption that is not available to persons other than cooperatives and will not receive the benefit of any federally guaranteed or subsidized financing that is not available to persons other than cooperatives; and provided further that nothing in this subsection shall prohibit the continued operation of any business activities of any not-for-profit cooperative or affiliate formed, operating, and actively providing products or services to customers on or before July 1, 1999.

   (1999, c. 874; 2000, cc. 964, 989.)

Cross references. - For constitutional provision as to creation of corporation, see Va. Const., Art. IX, § 6.

The 2000 amendments. - The 2000 amendments by cc. 964 and 989 are identical, and redesignated former introductory paragraph as present subsection A, and added the last sentence in subsection A, and present subsection B.

§ 56-231.17. Articles of incorporation.

1. The articles of incorporation mentioned in § 56-231.16 shall be entitled and endorsed "Articles of Incorporation of the . . . . . . . . Electric Cooperative" or "Articles of Incorporation of the . . . . . . . . Utility Consumer Services Cooperative" (the blank space being filled in with the distinguishing part of the name of the cooperative) and shall state:
   1. The name of the cooperative, which name need not contain the word "corporation" or "incorporated" but shall be such as to distinguish it from any other cooperative.
   2. To the extent it conducts regulated electric distribution operations, a reasonable designation of the territory in which such operations are principally to be conducted.
   3. The location of its principal office and post office address thereof.
   4. The maximum number of directors, which shall be not less than five.
   5. The names and post office addresses of the directors who are to manage the affairs of the cooperative for the first year of its existence, or until their successors are chosen.
   6. The period, if any, limited for the duration of the cooperative.
   7. The terms and conditions upon which persons shall be admitted to membership in the cooperative, and in the case of a cooperative incorporating with capital stock, a statement of the maximum and minimum amount of the capital stock of the cooperative and its division into shares.
   8. In the case of a cooperative incorporating on or after July 1, 1999, the registered office and registered agent of the cooperative.
2. The articles of incorporation may also contain any provision not inconsistent with law or the provisions of Chapters 9 (§ 13.1-601 et seq.) and 10 (§ 13.1-801 et seq.) of Title 13.1 which the incorporators may choose to insert for the regulation of the business and the conduct of the affairs of the cooperative; and any provision as to the plan of financial organization, or relating to the internal regulation or government of the cooperative, its directors and members; provided, however, that subsections D through G of § 13.1-620 and subdivision 1 of § 13.1-825 shall not apply to any affiliate or subsidiary of a cooperative. (1999, c. 874.)

§ 56-231.18. Name of other corporations not to include term "electric cooperative" or "utility consumer services cooperative."

The words "electric cooperative" or "utility consumer services cooperative" shall not be used in the corporate name of corporations other than (i) those subject to the provisions of this chapter, (ii) nonstock corporations of which cooperatives are members, and (iii) corporations, all of the stock of which is owned by cooperatives.

(1999, c. 874; 2000, cc. 944, 999.)

The 2000 amendments. - The 2000 amendments by cc. 944 and 999 are identical, and substituted "subject" for "formed pursuant" in clause (i).

§ 56-231.19. Filing articles of incorporation; effect thereof; other provisions of law applicable.

The natural persons executing the articles of incorporation shall be residents of the territory in which the principal operations of the cooperative are to be conducted who intend to use utility services to be furnished by the cooperative. The articles of incorporation shall be subscribed by at least five such persons and acknowledged by them before an officer authorized by the law of this Commonwealth to take and certify acknowledgments of deeds and conveyances. When so acknowledged the articles shall be filed in accordance with the provisions of Article 3 (§ 13.1-618 et seq.) of Chapter 9 or Article 3 (§ 13.1-818 et seq.) of Chapter 10 of Title 13.1. When so filed the articles of incorporation, or certified copies thereof, shall be received in all the courts of this Commonwealth and elsewhere as prima facie evidence of the facts contained therein, and of the due incorporation of such cooperative. All of the provisions of the Virginia Stock Corporation Act (§ 13.1-601 et seq.), and the Virginia Nonstock Corporation Act (§ 13.1-801 et seq.), insofar as not inconsistent with this article are hereby made applicable to such stock and nonstock cooperatives, respectively; provided, however, that subsections D through G of § 13.1-620 and subdivision 1 of § 13.1-825 shall not apply to any affiliate or subsidiary of a cooperative. When the charter is filed in the office of the State Corporation Commission, the proposed cooperative described therein, under its designated name, shall be and constitute a body corporate, and, with respect to its providing regulated utility services, with all of the applicable powers provided for in § 56-49 . A cooperative formed prior to July 1, 1999, need not have a registered office or registered agent. A stock or nonstock cooperative formed thereafter shall comply with § 13.1-634 or § 13.1-833 , respectively.

(1999, c. 874.)

§ 56-231.20.

Repealed by Acts 2000, cc. 944, 999.

§ 56-231.21. Dissolution and termination of cooperatives.

A stock or nonstock cooperative may be dissolved in the manner prescribed by Article 16 (§ 13.1-742 et seq.) of Chapter 9 or Article 13 (§ 13.1-902 et seq.) of Chapter 10 of Title 13.1, respectively.

(1999, c. 874.)

§ 56-231.22. Charter amendments.

A cooperative may amend its articles of incorporation to change its corporate name, to increase or reduce the number of its directors or change any other provision therein; however, no cooperative shall amend its articles of incorporation to embody therein any purpose, power or provision which would not be authorized if original articles including such additional or changed purpose, power or provision were offered for filing at the time articles under this section are offered. Such amendment may be accomplished in the method prescribed in Chapters 9 (§ 13.1-601 et seq.) and 10 (§ 13.1-801 et seq.) of Title 13.1.

(1999, c. 874.)

§ 56-231.23. General powers granted.

Each cooperative formed under this article shall have power to do any and all lawful acts or things including, but not limited to the power:

1. To produce, generate, gather, store, transport, transmit, distribute, buy and sell energy and energy-related products.
2. To sue and be sued.
3. To have a seal and alter the same at pleasure.
4. To acquire, hold and dispose of property, real and personal, tangible and intangible, or interests therein and to pay therefor in cash or property or on credit, and to secure and procure payment of all or any part of the purchase price thereof on such terms and conditions as the board shall determine.
5. To render service and to acquire, own, operate, maintain and improve a system or systems.
6. To accept gifts or grants of money or of property, real or personal, from any person, municipality or federal agency and to accept voluntary or uncompensated services.
7. To sell, lease, mortgage or otherwise encumber or dispose of all or any parts of its property, as hereinafter provided.
8. To contract debts, borrow money and to issue or assume the payment of bonds, and other obligations.
9. To fix, maintain and collect reasonable fees, rents, tolls and other charges for service rendered.
10. To exercise, with respect to its providing regulated utility service, all the powers set forth in § 56-49 , including the power of eminent domain as prescribed for other public service corporations by general law.
11. To assist its members and nonmember customers, by loans or otherwise, in the acquisition by them of such installation and wiring, and the obtaining of such machinery, equipment and appliances, as will enable them to secure the greatest benefit from the use of utility services supplied by the cooperative.
12. To issue nonassessable nonvoting common and preferred capital stock or similar securities and pay dividends thereon.
13. To become a member or stockholder in one or more other cooperatives or corporations created to engage in any business not prohibited by law, including, but not limited to, other types of public service company business.
14. To perform any and all of the foregoing acts and do any and all of the foregoing things under, through or by means of its own officers, agents and employees, or by contracts with any person, federal agency or municipality.

    (1999, c. 874; 2000, cc. 944, 999.)

The 2000 amendments. - The 2000 amendments by cc. 944 and 999 are identical, and in subdivision 12, inserted "or similar securities" following "capital stock"; and deleted "noncumulative" preceding "dividends.

§ 56-231.24. Power to dispose of property.

No cooperative may sell, lease or dispose of all or substantially all of its property (other than property which, in the judgment of the board, is neither necessary nor useful in operating and maintaining the cooperative's system and which in any one year shall not exceed fifty percent in value of the value of all the property of the cooperative, or merchandise), unless authorized to do so by the votes of at least a two-thirds majority of its members; however, a cooperative (i) may mortgage, finance (including, without limitation, pursuant to a sale and leaseback or lease and leaseback transaction), or otherwise encumber its assets by a vote of at least two-thirds of its board of directors; (ii) may sell or transfer its assets to another cooperative upon the vote of a majority of its members at any regular or special meeting if the notice of such meeting contains a copy of the terms of the proposed sale or transfer; (iii) may sell or transfer distribution system facilities to a city or town at any time following the annexation of additional territory pursuant to § 56-265.4:2 by a vote of at least two-thirds of its board of directors; or (iv) may sell, lease or dispose of its property to an affiliate pursuant to a plan approved by the Commission in accordance with subsection B of § 56-590 by a vote of at least two-thirds of the members of the Board.

(1999, c. 874; 2000, cc. 944, 999.)

The 2000 amendments. - The 2000 amendments by cc. 944 and 999 are identical, and substituted "all or substantially all" for "any" near the beginning of the section; substituted "fifty percent" for "ten percent"; deleted "or" preceding (iii); and added "or" and clause (iv) at the end of the section.

§ 56-231.25. Power to issue obligations.

A cooperative shall have power and is hereby authorized, from time to time, to issue its obligations for any corporate purpose. Such obligations may be authorized by resolution of the board, and may bear such date or dates, mature at such time or times, bear such interest, be payable at such times, be in such denominations, be in such form, either coupon or registered, carry such registration privileges, be executed in such manner, be payable in such medium of payment, at such place or places, and be subject to such terms of redemption, as such resolution may provide. Such obligations may be sold in such manner and upon such terms as the board may determine. Pending the preparation or execution of definitive bonds, or obligations, interim receipts or certificates of temporary bonds may be delivered to the purchaser of such obligations.

(1999, c. 874; 2000, cc. 944, 999.)

The 2000 amendments. - The 2000 amendments by cc. 944 and 999 are identical, and deleted "in anticipation of its revenues" following "obligations" in the first sentence; and deleted "not exceeding fifty years from their respective date" following "time or times" in the second sentence.

§ 56-231.26. Covenants in connection with obligations.

In connection with the issuance of any obligations a cooperative may make covenants or agreements and do any and all acts or things that a corporation can make or do under the laws of this Commonwealth.

(1999, c. 874.)

§ 56-231.27. Power to purchase its own obligations.

A cooperative may purchase any obligation issued by it.

(1999, c. 874; 2000, cc. 944, 999.)

The 2000 amendments. - The 2000 amendments by cc. 944 and 999 are identical, and rewrote the section, which formerly read: "A cooperative shall have power out of any funds available therefor to purchase any obligation issued by it at a price not exceeding the principal amount thereof and accrued interest thereon. All bonds so purchased shall be canceled."

§ 56-231.28. Board of directors of cooperatives.

Each cooperative shall have a board of directors of five or more members, which board shall constitute the governing body of the cooperative. Only members and the officers, directors or employees of any member shall be eligible for election to the board of directors. The directors, other than those named in the articles of incorporation, shall be elected annually by the members entitled to vote, unless the bylaws provide that, in lieu of electing the whole number of directors annually, the directors shall be divided into two, three or four classes at the first or any subsequent annual meeting. If the bylaws so provide, each class shall be as nearly equal in number as possible, with the term of office of one class to expire every year. If the number of classes changes, then the board of directors shall have authority to determine how directors will be allocated among the new number of classes, provided that no director's term will exceed, without reelection, a number of years equal to the number of classes of directors. The board of directors shall have authority to fix the compensation of directors. The directors shall elect annually from their own number a president of the board or a chairman of the board; and one or more vice-presidents of the board, vice-chairmen of the board or both. They may also elect or appoint annually (i) a president of the cooperative, (ii) one or more vice-presidents of the cooperative, (iii) a secretary, (iv) a treasurer, and (v) such other officers as the board deems necessary. No person shall hold any office unless that person is a director or employee of the cooperative. The offices of secretary and treasurer may be held by the same person.

(1999, c. 874; 2000, cc. 944, 999.)

The 2000 amendments. - The 2000 amendments by cc. 944 and 999 are identical, and added the second sentence in the section.

§ 56-231.29. Powers of board of directors.

The board of directors of a cooperative shall have power to do all things necessary or incidental in conducting the business of the cooperative, including, but not limited to the power:

1. If authorized by the articles of incorporation, or by resolution of its members having voting power, to adopt and amend bylaws for the management and regulation of the affairs of the cooperative, subject, however, to the right of the members to alter or repeal such bylaws. The bylaws of a cooperative may make provisions, not inconsistent with law or its articles of incorporation, regulating the admission, suspension or expulsion of members; the transfer of membership, the fees and dues of members and the termination of membership on nonpayment of dues or otherwise; the number, times and manner of choosing, qualifications, terms of office, official designations, powers, duties and compensation of its officers and directors; defining a vacancy in the board or in any office and the manner of filling it; the number of members, not less than 2.5 percent of the total number of members, to constitute a quorum at meetings; the date of the annual meeting and the giving of notice thereof and the holding of special meetings and the giving of notice thereof; the terms and conditions upon which the cooperative is to render service to its members; the disposition of the revenues and receipts of the cooperative; and regular and special meetings of the board and the giving of notice thereof.
2. To appoint agents and employees and to fix their compensation and the compensation of the officers of the cooperative.
3. To execute all instruments.
4. To make its own rules and regulations as to its procedure.

   (1999, c. 874.)

§ 56-231.30. Rights and liabilities of members.

1. A cooperative may have one or more classes of members. If the cooperative has more than one class of members, the designation of each class and the qualifications and rights of the members of each class shall be set forth in the bylaws of the cooperative.
2. A cooperative shall issue to its members certificates of membership and each member shall be entitled to only one vote at the meetings of the members of the cooperative. The liability of each member shall be limited to the unpaid portion of his membership fee or subscription to capital stock, and any unpaid bills for utility services or other services, commodities or merchandise purchased from the cooperative, provided that nothing in this section shall be construed to limit the exposure of any unrefunded patronage capital to the lawful creditors of a cooperative. The equity of members of a nonstock cooperative shall be set by the board in accordance with cooperative principles. A cooperative shall be operated on a not-for-profit basis, with the exception of for-profit affiliates, for the mutual benefit of the members. The bylaws of a cooperative or its contract with the members shall contain such provisions relative to the disposition of margins as may be necessary and appropriate to establish and maintain its nonprofit and cooperative character.

   (1999, c. 874; 2000, cc. 944, 964, 989, 999.)

The 2000 amendments. - The 2000 amendments by cc. 944 and 999 are identical, and added subsection A; redesignated the former first undesignated paragraph as subsection B; added "provided that nothing in this section shall be construed to limit the exposure of any unrefunded patronage capital to the lawful creditors of a cooperative" at the end of the second sentence in subsection B; substituted "in accordance with cooperative principles" for "and be in proportion to the revenue or patronage capital paid to the cooperative" at the end of the third sentence in subsection B; and substituted "margins" for "revenues and receipts" in the fifth sentence in subsection B.

The 2000 amendments by cc. 964 and 989 are identical, and inserted "with the exception of for-profit affiliates" in the next-to-last sentence of subsection B.

§ 56-231.31. Payment of certain patronage capital to spouse or next of kin of deceased person.

When there is held by any cooperative any patronage capital to the credit of a deceased person, in an amount not exceeding $10,000, upon whose estate there shall have been no qualification, it shall be lawful for such electric cooperative, after 120 days from the death of such person, to pay such balance to his or her spouse, and if none, to his or her next of kin, whose receipt therefor shall be a full discharge and acquittance to such electric cooperative to all persons whomsoever on account of such patronage capital.

(1999, c. 874.)

§ 56-231.31:1. Donation of certain patronage capital to the cooperative.

Notwithstanding any other provision of law, when there is held by any cooperative any retired patronage capital to the credit of (i) a deceased person who has no spouse or next of kin identified in the records of the cooperative or (ii) a member or former member who has terminated service and who does not have a current address on file with the cooperative, then the bylaws or member agreements of the cooperative may provide that such credits shall be deemed to have been transferred as a gift to the cooperative and shall thereafter be the property of the cooperative; however, after July 1, 1999, such credits may be deemed gifts to the cooperative only if the cooperative publishes notice of such credit in its regular member publication and a publication of general circulation, and such credit is not claimed by such member, former member or next of kin within 120 days of such publication or such longer period as set out in the bylaws or member agreements of the cooperative. If there is no such provision in the cooperative's bylaws or member agreement, or if there is no publication, then any unclaimed credit shall be treated in accordance with the Virginia Disposition of Unclaimed Property Act (§ 55.1-2500 et seq.). This section shall apply only to cooperatives organized under or governed by this article for the purpose of providing regulated electric utilities service on a mutual, not-for-profit basis, with a board democratically elected by its member consumers.

(1999, cc. 939, 940.)

The number of this section was assigned by the Virginia Code Commission, the number in the 1999 acts having been 56-224.2.

Editor's note. - To conform to the recodification of Title 55 by Acts 2019, c. 712, effective October 1, 2019, the following substitution was made at the direction of the Virginia Code Commission: substituted "Virginia Disposition of Unclaimed Property Act ( § 55.1-2500 et seq.)" for "Uniform Disposition of Unclaimed Property Act ( § 55-210.1 et seq.)."

Acts 1999, cc. 939 and 940, cl. 2, provides: "That the notice and publication provisions of this act shall become effective on July 1, 1999, but that the other provisions of this act are declaratory of existing law with respect to cooperatives organized under or governed by this chapter."

§ 56-231.32. Service to members.

No person shall become or remain a member unless such person shall use utility services supplied by such cooperative and shall have complied with the terms and conditions in respect to membership contained in the bylaws of such cooperative. However, nothing in this article shall prevent a cooperative from engaging in other lawful activities or enterprises. Should the cooperative acquire any utility facilities already dedicated or devoted to the public use it may, for the purpose of continuing existing service and avoiding hardship, continue to serve the persons served directly from such facilities at the time of such acquisition without requiring that such persons become members. Such nonmember utility service customers shall have the right to become members upon nondiscriminatory terms. The charges for regulated utility services to such nonmembers shall be on a cost basis similar to the charges to members.

(1999, c. 874.)

§ 56-231.33. Adequate service; rates.

Regulated utility services offered by a cooperative shall be reasonably adequate, subject to the regulations of the Commission, as provided in § 56-231.34 . The charge made by any such cooperative for any regulated utility service rendered or to be rendered, either directly or in connection therewith, shall be nondiscriminatory, reasonable and just, and every discriminatory, unjust or unreasonable charge for such regulated utility service is prohibited and declared unlawful. Reasonable and just charges for service within the meaning of this section shall be such charges as shall produce sufficient revenue to pay all legal and other necessary expenses incident to the operation of the system, and shall include but not be limited to maintenance cost, operating charges, interest charges on bonds or other obligations, to recover such stranded costs and transition costs as may be authorized in this title, to provide for the liquidation of bonds or other evidences of indebtedness, to provide adequate funds to be used as working capital, as well as reasonable reserves and funds for making replacements and also for the payment of any taxes that may be assessed against such cooperative or its property, it being the intent and purpose hereof that such charges shall produce an income sufficient to maintain such cooperative property in a sound physical and financial condition to render adequate and efficient service and additional amounts that must be realized by the cooperative to meet the requirement of any rate covenant with respect to coverage of principal of and interest on its debt contained in any indenture, mortgage, or other contract with holders of its debt, provided that any such indenture, mortgage or other contract must have been approved by the Commission pursuant to Chapter 3 (§ 56-55 et seq.) of this title. Any rate for regulated utility services that is too low to meet the foregoing requirements shall be unlawful.

(1999, c. 874; 2000, cc. 944, 999.)

The 2000 amendments. - The 2000 amendments by cc. 944 and 999 are identical, and deleted "State Corporation" preceding "Commission" in the first sentence; and added the language beginning "and additional amounts" at the end of the third sentence.

§ 56-231.34. Regulation by Commission.

The regulated utility services of a cooperative shall be subject to the jurisdiction of the Commission in the same manner and to the same extent as are regulated utility services provided by other persons under the laws of this Commonwealth. All other business activities of a cooperative and its affiliates shall be subject to the jurisdiction of the Commission to the extent provided by § 56-231.34:1 and any other applicable laws of the Commonwealth.

(1999, c. 874.)

§ 56-231.34:1. Separation of regulated and unregulated businesses.

1. No cooperative that engages in a regulated utility service shall conduct any unregulated business activity, other than traditional cooperative activities, except in or through one or more affiliates of such cooperative, provided that a cooperative that provides regulated utility services shall have the right to offer and make unregulated sales of electric power to its members within its certificated service territory. No such affiliates, formed to engage in any business that is not a regulated utility service, shall engage in regulated utility services.
2. The Commission shall promulgate rules and regulations, governing the conduct of the cooperatives, to promote effective and fair competition between (i) affiliates of cooperatives that are engaged in business activities which are not regulated utility services and (ii) other persons engaged in the same or similar businesses. The rules and regulations shall be effective by July 1, 2000, and shall include provisions:
   1. Prohibiting cost-shifting or cross-subsidies between a cooperative and its affiliates;
   2. Prohibiting anticompetitive behavior or self-dealing between a cooperative and its affiliates;
   3. Prohibiting a cooperative from engaging in discriminatory behavior towards nonaffiliated entities; and
   4. Establishing codes of conduct detailing permissible relations between a cooperative and its affiliates. In establishing such codes, the Commission shall consider, among other things, whether and, if so, under what circumstances and conditions (i) a cooperative may provide its affiliates with customer lists or other customer information, sales leads, procurement advice, joint promotions, and access to billing or mailing systems unless such information or services are made available to third parties under the same terms and conditions, (ii) the cooperative's name, logos or trademarks may be used in promotional, advertising or sales activities conducted by its affiliates, and (iii) the cooperative's vehicles, equipment, office space and employees may be used by its affiliates.
3. Nothing in this article shall be deemed to abrogate or modify the Commission's authority under Chapter 4 (§ 56-76 et seq.) of this title. (1999, c. 874; 2000, cc. 944, 999.)

The 2000 amendments. - The 2000 amendments by cc. 944 and 999 are identical, and rewrote the first sentence in subsection A, which formerly read: "Any business of a cooperative that is not a regulated utility service shall be conducted solely by one or more affiliates of such cooperative."; and substituted "this title" for "title 56" at the end of subsection C.

§ 56-231.34:2. Right of action; violation of rules or regulations.

1. Any person who suffers loss as the proximate result of a violation by a cooperative or its affiliate of any rule or regulation adopted by the Commission pursuant to § 56-231.34:1 shall be entitled to initiate an action to recover actual damages or $500, whichever is greater, and to obtain injunctive relief. Any action pursuant to this section shall be commenced within two years after its accrual.
2. Notwithstanding any other provision of law to the contrary, in addition to any damages awarded, such person may also be awarded reasonable attorney's fees and court costs.
3. In any case arising under this section, no liability shall be imposed upon any cooperative or its affiliate which shows by a preponderance of the evidence that (i) the act or practice alleged to be in violation of any rule or regulation adopted by the Commission pursuant to § 56-231.34:1 was an act or practice over which the same had no control or (ii) the alleged violation resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid a violation. However, nothing in this section shall prevent the court from ordering restitution and payment of reasonable attorney's fees and court costs pursuant to subsection B to any person aggrieved as a result of an unintentional violation. (1999, c. 874.)

§ 56-231.35. Charter fees, etc.

The general laws relating to fees and other charges in connection with issuing charters, amendments thereto and dissolutions of corporations organized on a mutual basis or without capital stock shall apply to cooperatives organized under the provisions of this article.

(1999, c. 874.)

§ 56-231.36. Construction of article; conflicting laws.

This article is to be liberally construed and the enumeration of any object, purpose, power, manner, method or thing shall not be deemed to exclude like or similar objects, purposes, powers, manners, methods or things, and any provisions of other laws in conflict with the provisions of this article shall not apply to cooperatives operating hereunder. Any object, purpose, power, manner, method or thing which is not specifically prohibited is permitted.

(1999, c. 874.)

§ 56-231.37. How article cited.

This article may be cited as the "Utility Consumer Services Cooperatives Act."

(1999, c. 874.)

§ 56-231.38. Definitions.

As used in this article:

"Affiliate" means a separate affiliated or subsidiary corporation or other separate legal entity.

"Board" means any board of directors of a cooperative formed under or which becomes subject to this article.

"Commission" means the State Corporation Commission of Virginia.

"Cooperative" means a power supply cooperative formed under the former Power Supply Cooperatives Act (§ 56-231.1 et seq.) or a utility aggregation cooperative formed under this article or which becomes subject to this article.

"Energy" means and includes all energy, regardless of how or where it is generated or produced.

"HVACR" means heating, ventilation, air conditioning and refrigeration.

"Member" means any person that holds any class of membership in a cooperative.

"Obligations" means all evidences of indebtedness issued by or the payment of which is assumed by a cooperative.

"Patronage capital" includes all amounts received by a cooperative from the sale of electric power to members in excess of the cooperative's cost of furnishing electric power to members and such other margins as determined by the Board.

"Person" means and includes natural persons, firms, associations, cooperatives, corporations, limited liability companies, business trusts, partnerships, limited liability partnerships and bodies politic.

"Propane or fuel oil equipment" means equipment and related systems to store or use propane or fuel oil products.

"Regulated utility services" means utility services that are subject to regulation as to rates or service by the Commission.

"System" means any plant, works, facility, or property used or useful in connection with the purchase, generation, sale or transmission of energy, utility products and services, or both.

"Traditional cooperative activity" means any business, service or activity in which cooperatives in Virginia have traditionally engaged and that is incidental to and substantially related to the electric utility business conducted by a cooperative on or before July 1, 1999; provided, however, that traditional cooperative activity does not include any program to (i) buy or maintain an inventory of HVACR equipment or household appliances; (ii) install or service any such equipment or household appliances for customers, unless such service is not provided by the cooperative but by a third party individual, firm or corporation licensed to perform such service; (iii) sell HVACR equipment or household appliances to customers metered and billed on residential rates; (iv) sell HVACR equipment to customers other than those metered and billed on residential rates except where such sale is an incidental part of providing other energy services or providing other traditional cooperative activities; (v) sell or distribute propane or fuel oil; sell, install or service propane or fuel oil equipment; or maintain or buy an inventory of propane or fuel oil equipment for resale; or (vi) serve as a coordinator of nonelectric energy services or provide engineering consulting services except when such energy or engineering services are an incidental part of a marketing effort to provide other energy or engineering services or as a part of providing services that are other traditional cooperative activities.

"Utility services" means any products, services, and equipment related to energy, telecommunications, water and sewerage.

(1999, c. 874; 2000, cc. 944, 964, 989, 999.)

The 2000 amendments. - The 2000 amendments by cc. 944 and 999 are identical, and added the language beginning "and such other" at the end of the paragraph defining "Patronage capital"; and added the paragraph defining "Traditional cooperative activity."

The 2000 amendment by c. 964 and 989 are identical, and also added the paragraph defining "Traditional cooperative activity."

§ 56-231.39. Organization and purpose.

1. Subject to § 56-231.50:1 , any utility consumer service cooperative or utility aggregation cooperative may form a cooperative in accordance with this article, either stock or nonstock, not for pecuniary profit, with the exception of for-profit affiliates, for the purpose of purchasing, generating or transmitting energy products and services for sale or resale, operating or participating in an independent system operator, regional transmission entity, regional power exchange, or both, and any other lawful purpose, consistent with sound business principles and prudent management practices; (i) provided, however, that within the certificated service territory of any member distribution cooperative that existed as of January 1, 1999, no such cooperative shall, prior to July 1, 2000, undertake or initiate any new program (a) to buy or maintain an inventory of HVACR equipment or household appliances, (b) to install or service any such equipment or household appliances for customers, unless such service is not provided by the cooperative but by a third party individual, firm or corporation licensed to perform such service, (c) to sell HVACR equipment or household appliances to customers who are metered and billed on residential rates, (d) to sell HVACR equipment to customers other than those metered and billed on residential rates except where such sale is an incidental part of providing other energy services or providing traditional cooperative activities, (e) to sell or distribute propane or fuel oil; sell, install or service propane or fuel oil equipment; or maintain or buy an inventory of propane or fuel oil equipment for resale, or (f) to serve as a coordinator of nonelectric energy services or provide engineering consulting services except when such energy or engineering services are an incidental part of a marketing effort to provide other energy or engineering services or as a part of providing services that are traditional cooperative activities; (ii) provided further, that notwithstanding clause (i), such cooperative may, within the certificated service territory of a specific distribution cooperative that existed as of January 1, 1999, and then only to the extent that such specific distribution cooperative could lawfully do so, engage in any of the activities enumerated in clause (i) that (a) have received State Corporation Commission approval prior to February 1, 1998, (b) such cooperative is ordered or required to undertake by any jurisdictional court or regulatory authority, (c) were lawfully undertaken prior to February 1, 1998, (d) are specifically permitted by statute, or (e) are undertaken by any other regulated public service company or its unregulated affiliate within such distribution cooperative's certificated service territory; and (iii) also provided that such cooperative or its affiliate may not undertake such activities as are prohibited by clause (i) within the certificated service territory of another public service company unless such activities are undertaken by such public service company or its unregulated affiliate within the certificated service territory of a specific distribution cooperative existing as of January 1, 1999, and the certificated service territories of the public service company and the specific distribution cooperative overlap. In addition, such cooperative may establish one or more subsidiaries to engage in any other business activities not prohibited by law. Notwithstanding the foregoing, no such subsidiary may engage in any business activities that the cooperatives are prohibited from engaging in under this section. For purposes of determining whether a cooperative is formed not for pecuniary profit, the establishment of one or more affiliates thereof on a for-profit basis shall not disqualify such entity from being formed as a cooperative pursuant to this article.
2. Nothing in this article shall be construed to authorize a cooperative formed pursuant to this article, or any affiliate thereof, to engage, within any political subdivision of the Commonwealth on a not-for-profit basis, in the sale of products, the provision of services, or other business activity, except for electric power services and traditional cooperative activities. However, if such business activities are not currently provided by any person other than a cooperative formed under or subject to this chapter or its affiliate and the Commission determines that no such other person is likely, within a reasonable time, to effectively provide such products and services in such political subdivision, an affiliate of a cooperative may provide such products or services on a not-for-profit basis. The Commission shall also permit an affiliate of a cooperative formed under or subject to this chapter to provide such products or services on a not-for-profit basis upon a finding that the affiliate will not receive the benefit of any federal income tax exemption that is not available to persons other than cooperatives and will not receive the benefit of any federally guaranteed or subsidized financing that is not available to persons other than cooperatives; and provided further, that nothing in this subsection shall prohibit the continued operation of any business activities of any not-for-profit cooperative or affiliate formed, operating, and actively providing products or services to customers on or before July 1, 1999.

   (1999, c. 874; 2000, cc. 964, 989.)

The 2000 amendments. - The 2000 amendments by cc. 964 and 989 are identical, and in subsection A, added the subsection A designation and added "Subject to § 56-231.50:1 " at the beginning, inserted "with the exception of for-profit affiliates" near the beginning and added the last sentence; and added subsection B.

§ 56-231.40. Names.

The words "electric cooperative" or "utility aggregation cooperative" shall not be used in the corporate name of any corporation other than those subject to this chapter, or their wholly owned subsidiaries.

(1999, c. 874; 2000, cc. 944, 999.)

The 2000 amendments. - The 2000 amendments by cc. 944 and 999 are identical, and deleted "formed under or" preceding "subject to."

§ 56-231.41. Articles of incorporation.

1. The articles of incorporation shall be entitled "Articles of Incorporation of . . . . . . . . . Cooperative" (the blank space being filled in with the distinguishing part of the name of the cooperative) and shall state:
   1. The name of the cooperative, which name need not contain the word "corporation" or "incorporated," but shall be such as to distinguish it from any other cooperative;
   2. The location and post office address of its principal office and its registered agent;
   3. The number of directors;
   4. The names and post office addresses of the directors who are to manage the affairs of the cooperative for the first year of its existence, or until their successors are chosen;
   5. The duration of the cooperative if its duration is to be limited; and
   6. In the case of a cooperative incorporating with capital stock, a statement of the maximum and minimum amount of the capital stock of the cooperative, and its division into shares.
2. The articles of incorporation may also contain any provision not inconsistent with law or the provisions of Title 13.1, which the incorporators may choose to insert for the regulation of the business and the conduct of the affairs of the cooperative; and any provision as to the plan of financial organization, or relating to the internal regulation or the government of the cooperative, its directors and members; provided, however, that subsections D through G of § 13.1-620 and subdivision 1 of § 13.1-825 shall not apply to any affiliate or subsidiary of a cooperative. (1999, c. 874.)

§ 56-231.42. Bylaws.

The original bylaws of a cooperative shall be adopted by the members of such cooperative. Thereafter, such cooperative's board shall adopt, amend, or repeal the bylaws unless otherwise provided in the articles of incorporation or bylaws, subject to the rights of the members to alter or repeal such bylaws. The bylaws shall set forth the rights and duties of directors, officers and members and other provisions for the regulation and management of the affairs of the cooperative not inconsistent with this article, the cooperative's articles of incorporation or other applicable law. The bylaws shall contain provisions relative to the disposition of revenues and receipts as may be necessary and appropriate to establish and maintain the cooperative's nonprofit character.

(1999, c. 874.)

§ 56-231.43. Powers.

1. Each cooperative formed under this article shall have power to do any and all lawful acts or things, including, but not limited to the power:
   1. To purchase, sell, generate, store, transport or transmit energy, energy services, products and equipment.
   2. To sue and be sued.
   3. To have a seal and alter the same at pleasure.
   4. To acquire, hold and dispose of property, real and personal, tangible and intangible, or interests therein and to pay in cash or property or on credit, and to secure and procure payment of all or any part of the purchase price thereof on such terms and conditions as the board shall determine.
   5. To render service and to acquire, own, operate, maintain and improve a system or systems.
   6. To accept gifts or grants of money or of property, real or personal, and to accept voluntary and uncompensated services.
   7. To sell, lease, mortgage or otherwise encumber or dispose of all or any parts of its property.
   8. To contract debts, borrow money and to issue or assume the payment of bonds and other obligations.
   9. To fix, maintain and collect reasonable fees, rents, tolls and other charges for service rendered.
   10. To exercise, with respect to its construction of regulated transmission facilities as a power supply cooperative, all the powers set forth in § 56-49 , including the power of eminent domain as prescribed for other public service corporations by general law.
   11. To assist its members, by loans or otherwise, in the acquisition by them of energy and electrical, technological and other equipment related to the business of the cooperative.
   12. To issue nonassessable nonvoting common and preferred capital stock or similar securities and pay dividends thereon.
   13. To perform any and all of the foregoing acts through or by means of its own officers, agents and employees, or by contract.
2. A cooperative shall have the power and is authorized, from time to time, to issue its obligations for any corporate purpose.
   1. The obligations may be authorized by resolution of the board, and may bear any date or dates, mature at any time or times, bear any interest, be payable at any times, be in any denominations, be in any form, either coupon or registered, carry any registration privileges, be executed in any manner, be payable in any medium of payment, at any place or places, and be subject to any terms of redemption, as provided by the resolution.
   2. These obligations may be sold in the manner and upon the terms as the board may determine. Pending the preparation or execution of definitive bonds or obligations, interim receipts or certificates of temporary bonds may be delivered to the purchaser of such obligations.
3. A cooperative may purchase any of its own obligations.
4. The Virginia Securities Act (§ 13.1-501 et seq.) shall not apply to membership certificates issued by a cooperative or its cooperative affiliates, or subsidiaries organized prior to January 1, 1999. (1999, c. 874; 2000, cc. 944, 999.)

The 2000 amendments. - The 2000 amendments by cc. 944 and 999 are identical, and in subdivision A 12, inserted "or similar securities" and deleted "noncumulative" preceding "dividends"; deleted "in anticipation of its revenues" following "obligations" in the introductory language of subsection B; rewrote subsection C, which formerly read: "A cooperative shall have the power, out of any funds available, to purchase any of its own obligations. All obligations so purchased shall be canceled."

§ 56-231.44. Board of directors.

1. Each cooperative shall have a board of directors consisting of at least five directors, which shall constitute the governing body of such cooperative. The board, other than those named in the articles of incorporation, shall be elected annually by the members. The bylaws may provide in lieu of electing the whole number of directors annually, that the directors may be divided into classes and that the terms of office of the several classes need not be uniform. Each director shall hold office for the term for which he or she is elected and until his or her successor is elected except in cases of ex officio directors.

   The directors shall be elected by the members of the cooperative. At a minimum, there shall be at least one director elected from the membership, officers, directors or employees of each member of the cooperative that is itself a cooperative subject to any article of this chapter. Additional directors may be elected from the membership, from the members, officers, directors or employees of any member of the cooperative, or from employees of the cooperative. The board of directors shall have the authority to fix the compensation of the directors.

2. The board of directors of a cooperative shall have the power to do all things necessary or incidental in conducting the business of such cooperative, including, but not limited to the power:
   1. To adopt and amend bylaws for the management and regulation of the affairs of such cooperative unless otherwise provided in the articles of incorporation or bylaws, subject to the rights of the members to alter or repeal such bylaws. The bylaws of a cooperative may make provisions not inconsistent with law or its articles of incorporation, regulating:
      1. The admission, suspension or expulsion of members;
      2. The transfer or classification of membership;
      3. The fees and dues of members and the termination of membership on nonpayment of dues;
      4. The number, times and manner of choosing or electing, qualifications, terms of office, official designations, powers, duties and compensation of its directors and officers;
      5. The filling of a vacancy in the board or in any office;
      6. The number of board members or member-delegates constituting a quorum at meetings;
      7. The date of the annual meeting and the giving of notice thereof and the holding of special meetings and the giving of notice thereof;
      8. The terms and conditions upon which such cooperative is to render service to its members;
      9. The disposition of capital contributions; and
      10. The establishment of classes of membership, the qualifications therefor and the rights and obligations thereof.
   2. To appoint agents and employees and to fix their compensation and the compensation of the officers of the cooperative.
   3. To execute all instruments.
   4. To make its own rules and regulations as to its procedure.

      (1999, c. 874; 2000, cc. 944, 999.)

The 2000 amendments. - The 2000 amendments by cc. 944 and 999 are identical, and in the second paragraph of subsection A, added "that is itself a cooperative subject to any article of this chapter" at the end of the second sentence and inserted "from the members" preceding "officers" in the third sentence.

§ 56-231.45. Officers.

The officers of a cooperative shall consist of a president, vice-president, secretary and treasurer who shall be elected annually by the board and such other officers as may be designated by the board of directors. No person shall hold any offices unless that person is a director or employee of the cooperative. The offices of secretary and treasurer may be held by the same person. Any officer may be removed from office and a successor elected or appointed in accordance with such cooperative's bylaws.

(1999, c. 874.)

§ 56-231.46. Members.

1. A cooperative may have one or more classes of members. If the cooperative has more than one class of members, the designation of each class and the qualifications and rights of the members of each class shall be set forth in the bylaws of the cooperative.
2. Such cooperative shall issue to its members nontransferable certificates of membership. Members shall be entitled to vote in accordance with the articles of incorporation or, if the articles of incorporation so provide, the bylaws. The liability of each member shall be limited to the unpaid portion of its membership fee or subscription to capital stock and its contractual obligations to the cooperative. The equity of members of a nonstock cooperative shall be in proportion to the patronage capital paid such cooperative.
3. No person shall become or remain a member unless it has complied with the terms and conditions of membership contained in the bylaws of the cooperative.

   (1999, c. 874.)

§ 56-231.47. Adoption of article.

Any cooperative of this Commonwealth engaged in the purchase, sale, generation or transmission of electric energy products or services for sale or resale may come under the provisions of this article by filing with the Commission a certificate of adoption in the manner provided by subsection (b) of § 13.1-334 and relinquishing all rights and powers granted by its former charter.

(1999, c. 874.)

§ 56-231.48. Applicability of other laws.

All of the provisions of the Virginia Stock Corporation Act, Chapter 9 (§ 13.1-601 et seq.) of Title 13.1, and the Virginia Nonstock Corporation Act (§ 13.1-801 et seq.), insofar as not inconsistent with this article, are hereby made applicable to stock and nonstock cooperatives, respectively, when the articles of incorporation are filed in the office of the Commission; provided, however, that subsections D through G of § 13.1-620 and subdivision 1 of § 13.1-825 shall not apply to any affiliate or subsidiary of a cooperative. A cooperative must have a registered office and a registered agent, pursuant to § 13.1-634 or § 13.1-833 , as appropriate.

(1999, c. 874.)

§ 56-231.49. Restructuring costs.

To the extent authorized in this title, a cooperative may recover its costs related to the restructuring of the electric utility industry, including stranded costs and transition costs, from its members through its rates and charges.

(1999, c. 874.)

§ 56-231.50. Regulation by State Corporation Commission.

The regulated utility services and operations of any cooperative organized under this article shall be subject to the jurisdiction of the Commission in the same manner and to the same extent as are all other providers of such regulated utility services under the laws of this Commonwealth; but with regard to sales of energy at wholesale, no cooperative shall be subject to the provisions of §§ 56-234 through 56-245 , 56-247 and 56-249 through 56-249.6 . With regard to business activities which are not regulated utility services, no cooperative shall be subject to the provisions of §§ 56-234 through 56-245 and 56-249 through 56-249.6 . All other business activities of a cooperative and its affiliates shall be subject to the jurisdiction of the Commission to the extent provided by § 56-231.50:1 and any other applicable laws of this Commonwealth.

(1999, c. 874.)

§ 56-231.50:1. Separation of regulated and unregulated businesses.

1. No cooperative that engages in a regulated utility service shall conduct any unregulated business activity, other than traditional cooperative activities, except in or through one or more affiliates of such cooperative. No such affiliates, formed to engage in any business that is not a regulated utility service, shall engage in regulated utility services.
2. The Commission shall promulgate rules and regulations to promote effective and fair competition between (i) affiliates of cooperatives that are engaged in business activities which are not regulated utility services and (ii) other persons engaged in the same or similar businesses. The rules and regulations shall be effective by July 1, 2000, and shall include provisions:
   1. Prohibiting cost-shifting or cross-subsidies between a cooperative and its affiliates;
   2. Prohibiting anticompetitive behavior or self-dealing between a cooperative and its affiliates;
   3. Prohibiting a cooperative from engaging in discriminatory behavior towards nonaffiliated entities; and
   4. Establishing codes of conduct detailing permissible relations between a cooperative and its affiliates. In establishing such codes, the Commission shall consider, among other things, whether and, if so, under what circumstances and conditions (i) a cooperative may provide its affiliates with customer lists or other customer information, sales leads, procurement advice, joint promotions, and access to billing or mailing systems unless such information or services are made available to third parties under the same terms and conditions, (ii) the cooperative's name, logos or trademarks may be used in promotional, advertising or sales activities conducted by its affiliates, and (iii) the cooperative's vehicles, equipment, office space and employees may be used by its affiliates.
3. Nothing in this article shall be deemed to abrogate or modify the Commission's authority under Chapter 4 (§ 56-76 et seq.) of this title. (1999, c. 874; 2000, cc. 944, 999.)

The 2000 amendments. - The 2000 amendments by cc. 944 and 999 are identical, and rewrote the first sentence in subsection A, which formerly read: "Any business of a cooperative that is not a regulated utility service shall be conducted solely by one or more affiliates of such cooperative."

§ 56-231.50:2. Right of action; violation of rules or regulations.

1. Any person who suffers loss as the proximate result of a violation by a cooperative or its affiliate of any rule or regulation adopted by the Commission pursuant to § 56-231.50:1 shall be entitled to initiate an action to recover actual damages or $500, whichever is greater, and to obtain injunctive relief. Any action pursuant to this section shall be commenced within two years after its accrual.
2. Notwithstanding any other provision of law to the contrary, in addition to any damages awarded, such person may also be awarded reasonable attorney's fees and court costs.
3. In any case arising under this section, no liability shall be imposed upon any cooperative or its affiliate which shows by a preponderance of the evidence that (i) the act or practice alleged to be in violation of any rule or regulation adopted by the Commission pursuant to § 56-231.50:1 was an act or practice over which the same had no control or (ii) the alleged violation resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid a violation. However, nothing in this section shall prevent the court from ordering restitution and payment of reasonable attorney's fees and court costs pursuant to subsection B to any person aggrieved as a result of an unintentional violation. (1999, c. 874.)

§ 56-231.51. Construction of article and conflicting laws.

This article is to be liberally construed and the enumeration of any object, purpose, power, manner, method or thing shall not be deemed to exclude like or similar objects, purposes, powers, manners, methods or things, and any provisions of other laws in conflict with the provisions of this article shall not apply to cooperatives operating hereunder. Any object, purpose, power, manner, method or thing which is not specifically prohibited is permitted.

(1999, c. 874.)

§ 56-231.52. Citation to article.

This article may be cited as the "Utility Aggregation Cooperatives Act."

(1999, c. 874.)

§ 56-232. Public utility and schedules defined.

1. The term "public utility" as used in §§ 56-233 to 56-240 and 56-246 to 56-250 :
   1. Shall mean and embrace every corporation (other than a municipality), company, individual, or association of individuals or cooperative, their lessees, trustees, or receivers, appointed by any court whatsoever, that now or hereafter may own, manage or control any plant or equipment or any part of a plant or equipment within the Commonwealth for the conveyance of telephone messages or for the production, transmission, delivery, or furnishing of heat, chilled air, chilled water, light, power, or water, or sewerage facilities, either directly or indirectly, to or for the public.
   2. Notwithstanding any provision of subdivision 1 of this subsection or subsection G of § 13.1-620 , shall also include any governmental entity established pursuant to the laws of any other state, corporation (other than a municipality established under the laws of this Commonwealth), company, individual, or association of individuals or cooperative, their lessees, trustees, or receivers, appointed by any court whatsoever, that at any time owns, manages or controls any plant or equipment, or any part thereof, located within the Commonwealth, which plant or equipment is used in the provision of sewage treatment services to or for an authority as defined in § 15.2-5101 ; however, the Commission shall have no jurisdiction to regulate the rates, terms and conditions of sewage treatment services that are provided by any such public utility directly to persons pursuant to the terms of a franchise agreement between the public utility and a municipality established under the laws of this Commonwealth.
   3. Except as provided in subdivision 2, shall not be construed to include any corporation created under the provisions of Title 13.1 unless the articles of incorporation expressly state that the corporation is to conduct business as a public service company.
2. Notwithstanding any provision of law to the contrary, no person, firm, corporation, or other entity shall be deemed a public utility or public service company, solely by virtue of engaging in production, transmission, or sale at retail of electric power as a qualifying small power producer using renewable or nondepletable primary energy sources within the meaning of regulations adopted by the Federal Energy Regulatory Commission in implementation of the Public Utility Regulatory Policies Act of 1978 (P.L. 95-617) and not exceeding 7.5 megawatts of rated capacity, nor solely by virtue of serving as an aggregator of the production of such small power producers, provided that the portion of the output of any qualifying small power producer which is sold at retail shall not be sold to residential consumers.
3. No qualifying small power producer, within the meaning of regulations adopted by the Federal Energy Regulatory Commission, shall be deemed a public utility within the meaning of Chapter 7 (§ 62.1-80 et seq.) of Title 62.1.
4. The term "public utility" as herein defined shall not be construed to include any chilled water air-conditioning cooperative serving residences in less than a one square mile area, or any company that is excluded from the definition of "public utility" by subdivision (b)(4), (b)(8), (b)(9), or (b)(10) of § 56-265.1 .
5. Subject to the provisions of § 56-232.1 , the term "schedules" as used in §§ 56-234 through 56-245 shall include schedules of rates and charges for service to the public and also contracts for rates and charges in sales at wholesale to other public utilities or for divisions of rates between public utilities, but shall not include contracts of telephone companies with the state government or contracts of other public utilities with municipal corporations or the federal or state government, or any contract executed prior to July 1, 1950. (Code 1919, § 4067; 1918, p. 413; 1922, p. 887; 1942, p. 20; 1950, pp. 54, 481; 1954, c. 525; 1956, c. 436; 1964, c. 195; 1966, c. 620; 1975, c. 358; 1981, c. 385; 1984, c. 341; 1985, cc. 2, 41; 1990, c. 488; 1999, c. 419; 2000, cc. 528, 543; 2002, c. 813; 2003, c. 172; 2006, c. 411; 2009, c. 746.)

Cross references. - For the Utility Facilities Act, see §§ 56-265.1 through 56-265.9 .

For definition of "public utility" as used in that act, see § 56-265.1 .

Editor's note. - The Public Utility Regulatory Policies Act of 1978 (P.L. 95-617), referred to in subsection B, is codified generally as 16 U.S.C.S. § 2601 et seq.

Acts 2020, c. 1289, as amended by Acts 2021, Sp. Sess. I, c. 552, Item 145 C 12 h 1, effective for the biennium ending June 30, 2022, provides: "For the purposes of § 56-232 , Code of Virginia, 'Contracts of Telephone Companies with State Government' and for the purposes of § 56-234 'Contracts for Service Rendered by a Telephone Company for the State Government' shall be deemed to include communications lines into public schools which are used for educational technology. The rate structure for such lines shall be negotiated by the Superintendent of Public Instruction and the Chief Information Officer of the Virginia Information Technologies Agency. Further, the Superintendent and Director are authorized to encourage the development of 'by-pass' infrastructure in localities where it fails to obtain competitive prices or prices consistent with the best rates obtained in other parts of the state."

The 1999 amendment, in the second paragraph, in the second sentence, substituted "or sale at retail of electric power as a qualifying small power producer using renewable or nondepletable primary energy sources" for "and sale at retail of electric power as a qualifying small hydroelectric power producer," substituted "7.5 megawatts of rated capacity, nor solely by virtue of serving as an aggregator of the production of such small power producers" for "twenty megawatts of rated capacity," and substituted "shall not be sold to" for "is sold under contract to no more than five end-users, none of whom may be."

The 2000 amendments. - The 2000 amendments by cc. 528 and 543 are identical, and inserted "or (b)(8)" near the end of the second paragraph.

The 2002 amendments. - The 2002 amendment by c. 813 inserted the subsection and subdivision designations; in the introductory language of subsection A, deleted "shall"; inserted "shall" at the beginning of subdivision A 1; inserted subdivision A 2; and substituted "Except as provided in subdivision 2, shall" for "But the term 'public utility' as herein defined shall" at the beginning of subdivision A 3.

The 2003 amendments. - The 2003 amendment by c. 172 inserted "however, the Commission shall have no jurisdiction to regulate the rates, terms and conditions of sewage treatment services that are provided by any such public utility directly to persons pursuant to the terms of a franchise agreement between the public utility and a municipality established under the laws of this Commonwealth" at the end of subdivision A 2.

The 2006 amendments. - The 2006 amendment by c. 411 inserted "(b)(9)" in subsection D and made a related change.

The 2009 amendments. - The 2009 amendment by c. 746, in subsection D, substituted "that is excluded" for "which is excluded," inserted "or (b)(10)" and made a related change.

Law review. - For article entitled "Regulation of Electric Utilities by the State Corporation Commission," see 14 Wm. & Mary L. Rev. 589 (1973). For survey of Virginia law on municipal corporations for the year 1974-1975, see 61 Va. L. Rev. 1788 (1975). For special section on ratemaking and public policy in Virginia, see 18 Wm. & Mary L. Rev. 73 (1976).

For article on developments in the field of Virginia public utility law from June 2002 through May 2003, see 38 U. Rich. L. Rev. 195 (2003).

Research References. - Accounting for Public Utilities (Matthew Bender). Hahne and Aliff.

Michie's Jurisprudence. - For related discussion, see 9A M.J. Gas Companies, § 1; 15 M.J. Public Service and State Corporation Commissions, § 17.

§ 56-232.1. Regulation of service by certain gas pipeline companies to municipalities.

Notwithstanding any provision of law the Commission shall regulate, to the same extent as it regulates other public utilities, the utility service furnished to any municipal corporation by a natural gas pipeline transmission company, all of whose facilities are located within the Commonwealth, and the rates, charges and facilities of such company used to furnish such service.

(1985, c. 41.)

§ 56-232.2. Regulation of compressed natural gas service.

The Commission may refrain from regulating and prescribing the rates, charges, and fees for the provision of retail compressed natural gas service provided by corporations other than public service corporations. Wholesale compressed natural gas sales provided by public service corporations shall continue to be regulated by the Commission to the same extent as are services provided by other public utilities under this chapter. The Commission may adopt regulations implementing this statute.

(1991, c. 263.)

§ 56-232.2:1. Regulation of electric vehicle charging service.

The Commission shall not regulate or prescribe the rates, charges, and fees for the provision of retail electric vehicle charging service provided by any agency as defined in § 2.2-128, persons, localities, or school boards other than public service corporations. Sales of electricity by public utilities to an agency as defined in § 2.2-128, a person, a locality, or a school board that (i) is not a public service corporation and (ii) provides electric vehicle charging service shall continue to be regulated by the Commission to the same extent as are other services provided by public utilities. The Commission may adopt regulations implementing this section.

(2011, c. 408; 2017, c. 239; 2018, cc. 295, 446; 2019, c. 248; 2020, c. 490.)

Editor's note. - Acts 2011, c. 408, cl. 2 provides: "That public utilities in the Commonwealth shall (i) evaluate options to develop and offer off-peak charging rates or other incentives to encourage owners of an electric vehicle to charge or recharge its battery during nonpeak times, when practical, and (ii) file copies of such evaluations with the State Corporation Commission. The State Corporation Commission shall make copies of the evaluations available to the public."

Acts 2011, c. 408, cl. 3 provides: "That the State Corporation Commission (the Commission) shall, notwithstanding § 56-234 of the Code of Virginia, be authorized to approve, after notice to all affected parties and opportunity for hearing, pilot programs conducted by public utilities, including programs offering special rates, contracts, or incentives to individual customers or classes of customers to determine the feasibility, and the implications for the public interest, of allowing public electric utilities to offer time-differentiated rates to users of electric motor vehicles to encourage charging of vehicles during nonpeak periods. Elements of the pilot programs may include voluntary load control options, rate structures with financial incentives, rebates, or other incentives that offset the cost of purchasing or installing electric vehicle charging equipment for users who elect nonpeak rate structures. Before approving such pilot programs, including special rates, contracts, and incentives, the Commission shall ensure that such action meets the provisions of subsection B of § 56-235.2 of the Code of Virginia and that such actions are necessary in order to acquire information which is or may be in furtherance of the public interest. An electric utility that participates in such an approved pilot program shall be entitled to recover annually the costs of its participation in any such pilot program conducted by the utility on or after January 1, 2011."

Acts 2018, cc. 295 and 446, cl. 2 provides: "That the provisions of this act shall apply to any electric vehicle charging station existing prior to the effective date of this act [July 1, 2018] that is otherwise in compliance with the requirements of this act."

The 2017 amendments. - The 2017 amendment by c. 239 inserted "or school boards" twice and made a minor stylistic change.

The 2018 amendments. - The 2018 amendments by cc. 295 and 446 are identical, and inserted "localities, public institutions of higher education, the Department of Conservation and Recreation" or similar language twice; and made stylistic changes. For applicability, see Editor's note.

The 2019 amendments. - The 2019 amendment by c. 248 inserted "the Department of General Services, the Department of Motor Vehicles, the Department of Transportation" twice.

The 2020 amendments. - The 2020 amendment by c. 490, in the first sentence, inserted "any agency as defined in § 2.2-128" and deleted "public institutions of higher education, the Department of Conservation and Recreation, the Department of General Services, the Department of Motor Vehicles, the Department of Transportation" following "localities"; and in the second sentence, inserted "an agency as defined in § 2.2-128" and deleted "a public institution of higher education, the Department of Conservation and Recreation, the Department of General Services, the Department of Motor Vehicles, the Department of Transportation" following "locality."

§ 56-232.3. Regulation of service by certain gas distribution companies to federal, state and local governmental facilities.

Notwithstanding the provisions of § 56-232 , the Commission shall regulate, to the same extent as it regulates other public utility service, the utility service furnished to any federal, state or local governmental facility by a natural gas distribution company for which a service area has been determined by the Federal Energy Regulatory Commission, or its predecessor, under Section 717(f)(1) of the Natural Gas Act, 15 U.S.C. § 717(f)(1).

(1995, c. 454.)

Editor's note. - At the direction of the Virginia Code Commission, substituted "Section 717(f)(1) of the Natural Gas Act, 15 U.S.C. § 717(f)(1)" for "Section 7f(f)(1) of the Natural Gas Act, 15 U.S.C. § 717 et seq."

§ 56-233. Service defined.

The term "service" is used in this chapter in its broadest and most inclusive sense and includes not only the use and quality of accommodations afforded consumers or patrons, but also any product or commodity furnished by any public utility and equipment, apparatus, appliances and facilities devoted to the purposes in which such public utility is engaged and to the use and accommodation of the public.

(Code 1919, § 4068; 1980, c. 249.)

§ 56-233.1. Public utilities purchasing practices.

Every public utility subject to the annual or biennial review provisions of Title 56 shall use competitive bidding to the extent practicable in its purchasing and construction practices. In addition, all such public utilities shall file with the Commission and keep current a description of its purchasing and construction practices.

(1978, c. 627; 2007, cc. 888, 933; 2008, c. 522.)

The 2007 amendments. - The 2007 amendments by cc. 888 and 933 are identical, and substituted "biennial" for "annual."

The 2008 amendments. - The 2008 amendment by c. 522 inserted "annual or" preceding "biennial review provisions" in the first sentence.

Law review. - For an article, "Disentangling Deregulatory Takings," see 86 Va. L. Rev. 1435 (2000).

§ 56-234. Duty to furnish adequate service at reasonable and uniform rates.

1. It shall be the duty of every public utility to furnish reasonably adequate service and facilities at reasonable and just rates to any person, firm or corporation along its lines desiring same. Notwithstanding any other provision of law:
   1. A telephone company shall not have the duty to extend or expand its facilities to furnish service and facilities when the person, firm or corporation has service available from one or more alternative providers of wireline or terrestrial wireless communications services at prevailing market rates; and
   2. A telephone company may meet its duty to furnish reasonably adequate service and facilities through the use of any and all available wireline and terrestrial wireless technologies; however, a telephone company, when restoring service to an existing wireline customer, shall offer the option to furnish service using wireline facilities.

      For purposes of subdivisions 1 and 2, the Commission shall have the authority upon request of an individual, corporation, or other entity, or a telephone company, to determine whether the wireline or terrestrial wireless communications service available to the party requesting service is a reasonably adequate alternative to local exchange telephone service.

      The use by a telephone company of wireline and terrestrial wireless technologies shall not be construed to grant any additional jurisdiction or authority to the Commission over such technologies.

      For purposes of subdivision 1, "prevailing market rates" means rates similar to those generally available to consumers in competitive areas for the same services.

2. It shall be the duty of every public utility to charge uniformly therefor all persons, corporations or municipal corporations using such service under like conditions. However, no provision of law shall be deemed to preclude voluntary rate or rate design tests or experiments, or other experiments involving the use of special rates, where such experiments have been approved by order of the Commission after notice and hearing and a finding that such experiments are necessary in order to acquire information which is or may be in furtherance of the public interest. The Commission's final order regarding any petition filed by an investor-owned electric utility for approval of a voluntary rate or rate design test or experiment shall be entered the earlier of not more than six months after the filing of the petition or not more than three months after the date of any evidentiary hearing concerning such petition. The charge for such service shall be at the lowest rate applicable for such service in accordance with schedules filed with the Commission pursuant to § 56-236 . But, subject to the provisions of § 56-232.1 , nothing contained herein or in § 56-481.1 shall apply to (i) schedules of rates for any telecommunications service provided to the public by virtue of any contract with, (ii) for any service provided under or relating to a contract for telecommunications services with, or (iii) contracts for service rendered by any telephone company to, the state government or any agency thereof, or by any other public utility to any municipal corporation or to the state or federal government. The provisions hereof shall not apply to or in any way affect any proceeding pending in the State Corporation Commission on or before July 1, 1950, and shall not confer on the Commission any jurisdiction not now vested in it with respect to any such proceeding.
3. The Commission may conclude that competition can effectively ensure reasonably adequate retail services in competitive exchanges and may carry out its duty to ensure that a public utility is furnishing reasonably adequate retail service in its competitive exchanges by monitoring individual customer complaints and requiring appropriate responses to such complaints.

   (Code 1919, § 4066; 1918, p. 675; 1924, p. 540; 1927, p. 125; 1950, p. 55; 1964, c. 195; 1970, c. 258; 1976, c. 290; 1985, cc. 2, 41; 2002, c. 833; 2011, cc. 738, 740; 2018, c. 296.)

Cross references. - As to exemption of certain electrical cooperatives from the provisions of §§ 56-234 through 56-245 , see § 56-231.50 .

Editor's note. - Acts 2011, c. 408, cl. 2, provides: "That public utilities in the Commonwealth shall (i) evaluate options to develop and offer off-peak charging rates or other incentives to encourage owners of an electric vehicle to charge or recharge its battery during nonpeak times, when practical, and (ii) file copies of such evaluations with the State Corporation Commission. The State Corporation Commission shall make copies of the evaluations available to the public."

Acts 2011, c. 408, cl. 3, provides: "That the State Corporation Commission (the Commission) shall, notwithstanding § 56-234 of the Code of Virginia, be authorized to approve, after notice to all affected parties and opportunity for hearing, pilot programs conducted by public utilities, including programs offering special rates, contracts, or incentives to individual customers or classes of customers to determine the feasibility, and the implications for the public interest, of allowing public electric utilities to offer time-differentiated rates to users of electric motor vehicles to encourage charging of vehicles during nonpeak periods. Elements of the pilot programs may include voluntary load control options, rate structures with financial incentives, rebates, or other incentives that offset the cost of purchasing or installing electric vehicle charging equipment for users who elect nonpeak rate structures. Before approving such pilot programs, including special rates, contracts, and incentives, the Commission shall ensure that such action meets the provisions of subsection B of § 56-235.2 of the Code of Virginia and that such actions are necessary in order to acquire information which is or may be in furtherance of the public interest. An electric utility that participates in such an approved pilot program shall be entitled to recover annually the costs of its participation in any such pilot program conducted by the utility on or after January 1, 2011."

Acts 2018, c. 296, cl. 20, provides: "That the provisions of this act shall apply to any applications pending with the State Corporation Commission regarding new underground facilities or offshore wind facilities on or after January 1, 2018."

Acts 2018, c. 296, cl. 24, provides: "That this act shall be known as the Grid Transformation and Security Act."

Acts 2020, c. 1289, as amended by Acts 2021, Sp. Sess. I, c. 552, Item 145 C 12 h 1, effective for the biennium ending June 30, 2022, provides: "For the purposes of § 56-232 , Code of Virginia, 'Contracts of Telephone Companies with State Government' and for the purposes of § 56-234 'Contracts for Service Rendered by a Telephone Company for the State Government' shall be deemed to include communications lines into public schools which are used for educational technology. The rate structure for such lines shall be negotiated by the Superintendent of Public Instruction and the Chief Information Officer of the Virginia Information Technologies Agency. Further, the Superintendent and Director are authorized to encourage the development of 'by-pass' infrastructure in localities where it fails to obtain competitive prices or prices consistent with the best rates obtained in other parts of the state."

The 2002 amendments. - The 2002 amendment by c. 833 substituted "nothing contained herein or in § 56-481.1 shall apply to (i) schedules of rates for any telecommunications service provided to the public by virtue of any contract with, (ii) for any service provided under or relating to a contract for telecommunications services with, or (iii) contracts for service rendered by any telephone company to, the state government or any agency thereof" for "nothing herein contained shall be construed as applicable to schedules of rates or contracts for service rendered by any telephone company to, the state government" in the next-to-last sentence.

The 2011 amendments. - The 2011 amendments by cc. 738 and 740 are identical, and inserted subsection designations; inserted the second sentence in the introductory paragraph of subsection A; added subdivisions A 1 and A 2 and subsection C; and made minor stylistic changes.

The 2018 amendments. - The 2018 amendment by c. 296 added the third sentence in subsection B. For applicability, see Editor's note.

Law review. - For note on public utility service charges, see 49 Va. L. Rev. 1161 (1963). For article on siting electric power facilities, see 58 Va. L. Rev. 257 (1972.) For article analyzing ratemaking issues under the SCC, see 14 Wm. & Mary L. Rev. 601 (1973). For special section on ratemaking and public policy in Virginia, see 18 Wm. & Mary L. Rev. 73 (1976).

For note on payment of costs of cancelled utility project, see 43 Wash. & Lee L. Rev. 1499 (1986).

For article on developments in the field of Virginia public utility law from June 2002 through May 2003, see 38 U. Rich. L. Rev. 195 (2003).

Michie's Jurisprudence. - For related discussion, see 6B M.J. Electricity, §§ 3, 5; 9A M.J. Gas Companies, § 8; 15 M.J. Public Service and State Corporation Commissions, §§ 18, 22, 28.

§ 56-234.1. Liability to customer for violation of duty to determine and charge lowest rate applicable.

It shall be the duty of every public utility, upon written request by the customer, to determine the lowest rate applicable, provided that such public utility shall not be required to make such a determination for any single customer more frequently than annually. If the rate charged thereafter is not such lowest rate applicable, such public utility shall be liable to the customer for the amount of the difference between the amount paid by the customer and the amount that would have been paid if the customer had been charged the lowest rate applicable from and after the customer's request; provided that the public utility may require and rely on written information from the customer relating to the customer's expected demand for and use of the utility service where such information is relevant to the determination required hereunder. Where a contract for a specified period of time is lawfully required by the public utility, the rates prescribed by such contract shall be lawful during the term of such contract so long as they are the lowest applicable to the conditions of service specified in the contract, unless the actual conditions of service require the application of a higher rate. This section shall not be applicable to rates charged by any public utility prior to July 1, 1970.

(1970, c. 258.)

§ 56-234.2. Review of rates.

The Commission shall review the rates of any public utility on an annual basis when, in the opinion of the Commission, such annual review is in the public interest, provided that the rates of a public utility subject to § 56-585.1 shall be reviewed in accordance with subsection A of that section.

(1972, c. 537; 2007, cc. 888, 933.)

Cross references. - As to natural gas conservation and ratemaking efficiency plans, see § 56-602 .

The 2007 amendments. - The 2007 amendments by cc. 888 and 933 are identical, and added the proviso to the end.

Law review. - For article on the evolution of the State Corporation Commission, see 14 Wm. & Mary L. Rev. 523 (1973). For article analyzing ratemaking issues under the SCC, see 14 Wm. & Mary L. Rev. 601 (1973).

§ 56-234.3. Approval of expenditures for and monitoring of new generation facilities and projected operation programs of electric utilities.

Prior to construction or financial commitments therefor, any electric utility subject to the jurisdiction of the State Corporation Commission intending to construct any new generation facility capable of producing 100 megawatts or more of electric energy shall submit to the State Corporation Commission a petition setting forth the nature of the proposed construction and the necessity therefor in relation to its projected forecast of programs of operation. Such petition shall include (i) the utility's preliminary construction plans, (ii) the methods by which the work will be contracted, by competitive bid or otherwise, (iii) the names and addresses of the contractors and subcontractors, when known, proposed to do such work, and (iv) the plan by which the public utility will monitor such construction to ensure that the work will be done in a proper, expeditious and efficient manner. The Commission, upon receipt of the petition, shall order that a public hearing be held to assist it in accumulating as much relevant data as possible in reaching its determination for the necessity of the proposed generation facility. The Commission shall review the petition, consider the testimony given at the public hearing, and determine whether the proposed improvements are necessary to enable the public utility to furnish reasonably adequate service and facilities at reasonable and just rates. After making its determination, the Commission shall enter an order within nine months after the filing of such petition either approving or disapproving the proposed expenditure. Upon approval, the Commission shall set forth in its order terms and conditions it deems necessary for the efficient and proper construction of the generation facility.

Every electric utility capable of producing 100 megawatts or more of electric energy shall file with the Commission a projected forecast of its programs of operation, on such terms and for such time periods as directed by the Commission. Such a forecast shall include, but not be limited to, the anticipated required capacity to fulfill the requirements of the forecast, how the utility will achieve such capacity, the financial requirements for the period covered, the anticipated sources of those financial requirements, the research and development procedures, where appropriate, of new energy sources, and the budget for the research and development program.

In addition, the Commission shall investigate and monitor the major construction projects of any public utility to assure that such projects are being conducted in an economical, expeditious, and efficient manner.

Whenever uneconomical, inefficient or wasteful practices, procedures, designs or planning are found to exist, the Commission shall have the authority to employ, at the sole expense of the utility, qualified persons, answerable solely to the Commission, who shall audit and investigate such practices, procedures, designs or planning and recommend to the Commission measures necessary to correct or eliminate such practices, procedures, designs or planning.

Consistent with § 56-235.3 , any public utility, electric or otherwise, seeking to pass through the cost of any capital project to its customers, shall have the burden of proving that such cost was incurred through reasonable, proper and efficient practices, and to the extent that such public utility fails to bear such burden of proof, such costs shall not be passed on to its customers in its rate base.

The Commission shall have the authority to approve, disapprove, or alter the utility's program in a manner consistent with the best interest of the citizens of the Commonwealth. The petitioning or filing public utility may appeal the decision of the Commission to the Supreme Court of Virginia.

(1976, c. 701; 1977, c. 261; 1978, c. 700; 1984, cc. 453, 454; 1997, c. 138.)

The 1997 amendment, in the first sentence of the second paragraph, deleted "annually" preceding "file with the Commission," deleted "five and ten year" preceding "projected forecast," and inserted "on such terms and for such time periods as directed by the Commission" following "programs of operation."

Law review. - For discussion of the powers of the SCC under this section in the survey of Virginia administrative law for the year 1975-1976, see 62 Va. L. Rev. 1360 (1976); for year 1977-1978, see 64 Va. L. Rev. 1365 (1978).

For note on payment of costs of cancelled utility project, see 43 Wash. & Lee L. Rev. 1499 (1986).

§ 56-234.4. Authority to investigate utility operations to determine efficiency.

The Commission shall have the authority to investigate public utilities for the purpose of determining efficiency and economy of operations.

(1977, c. 261.)

§ 56-234.5. Required disclosure by certain officers and directors of certain utilities.

If it comes to the attention of any elected officer or director of a public utility, as defined in § 56-232 , that such public utility has, during the preceding calendar year, let a construction, engineering or equipment contract, including any subcontract, of a value in excess of $750,000 to a contractor or subcontractor in which such officer or director, or the spouse of such officer or director living in the same household, owns stocks or bonds or an equity interest, constituting more than five percent of the ownership of such contractor or subcontractor or valued at more than $50,000, whichever is less, such officer or director shall file with the Commission, by April 30 of each year, a list of every such contractor or subcontractor. This requirement shall only apply to the elected officer or director of a public utility that has its rates, tolls, charges, or schedules set by the Commission based on the public utility's cost of providing service.

(1979, c. 9; 2010, c. 581.)

The 2010 amendments. - The 2010 amendment by c. 581 added the last sentence.

Law review. - For survey of Virginia law on administrative law and utility regulation for the year 1978-1979, see 66 Va. L. Rev. 193 (1980).

§ 56-235. When Commission may fix rates, schedules, etc.; conformance with chapter.

If upon investigation the rates, tolls, charges, schedules, or joint rates of any public utility operating in this Commonwealth shall be found to be unjust, unreasonable, insufficient or unjustly discriminatory or to be preferential or otherwise in violation of any of the provisions of law, the State Corporation Commission shall have power to fix and order substituted therefor such rate or rates, tolls, charges or schedules as shall be just and reasonable. All rates, tolls, charges or schedules set by the Commission shall be valid only if they are in full conformance with the provisions of this chapter.

(Code 1919, § 4071; 1977, c. 336.)

Cross references. - As to how changes in rates effected, see § 56-237 .

As to power of Commission to change regulations, measurements, practices, services or acts, see § 56-247 .

Law review. - For survey of Virginia law on business associations for the year 1970-1971, see 57 Va. L. Rev. 1541 (1971). For special section on ratemaking and public policy in Virginia, see 18 Wm. & Mary L. Rev. 73 (1976). For survey of Virginia corporation law for the year 1976-77, see 63 Va. L. Rev. 1361 (1977).

For note on payment of costs of cancelled utility project, see 43 Wash. & Lee L. Rev. 1499 (1986).

Michie's Jurisprudence. - For related discussion, see 6B M.J. Drains, Sewers and Drainage Districts, § 7; 15 M.J. Public Service and State Corporation Commissions, §§ 22, 28.

§ 56-235.1. Conservation of energy and capital resources.

It shall be the duty of the Commission to investigate from time to time the acts, practices, rates or charges of public utilities so as to determine whether such acts, practices, rates or charges are reasonably calculated to promote the maximum effective conservation and use of energy and capital resources used by public utilities in rendering utility service. Where the Commission finds that the public interest would be served, it may order any public utility to eliminate, alter or adopt a substitute for any act, practice, rate or charge which is not reasonably calculated to promote the maximum effective conservation and use of energy and capital resources used by public utilities in providing utility service and it may further provide for the dissemination of information to the public, either through the Commission staff or through a public utility, in order to promote public understanding and cooperation in achieving effective conservation of such resources; provided, however, that nothing in this section shall be construed to authorize the adoption of any rate or charge which is clearly not cost-based or which is in the nature of a penalty for otherwise permissible use of utility services. This section shall not apply to telephone companies.

(1976, c. 379; 2011, cc. 738, 740.)

The 2011 amendments. - The 2011 amendments by cc. 738 and 740 are identical, and added the last sentence.

Law review. - For discussion of this section in the survey of Virginia administrative law for the year 1975-1976, see 62 Va. L. Rev. 1360 (1976).

§ 56-235.1:1. Rates for stand-by electric service at renewable cogeneration facilities.

1. The Commission shall adopt regulations pursuant to its rules of practice and procedure that require an electric utility to provide a rate for stand-by service to customers that operate a cogeneration facility in the Commonwealth that generates renewable energy, as defined in § 56-576 . Such regulations shall allow the electric utility to recover all of the costs that are identified by the electric utility and determined by the Commission to be related to the provision of the stand-by service, including but not limited to the costs of transformers and other equipment required to provide stand-by service and the costs of capacity and generation, including but not limited to fuel costs.
2. Within 90 days following the effective date of the regulations adopted pursuant to subsection A, each public utility providing electric service in the Commonwealth shall submit a plan setting forth how the utility will comply with the regulations if it does not already have stand-by provisions approved by the Commission that comply with the regulations. The Commission shall, after notice and the opportunity for hearing, determine whether a utility's plan complies with the regulations.

   (2009, c. 745.)

§ 56-235.1:2. Costs of using small, women-owned, or minority-owned businesses.

In any proceeding under this title in which the Commission is required to determine whether costs incurred by a public utility in its delivery or provision of any goods or service are reasonable or prudent, the incremental portion of the costs incurred as a result of the public utility's contracting with a small, woman-owned, or minority-owned business to deliver or provide the goods or service rather than contracting with a business that could have delivered or provided the goods or service at lower costs shall not be found to be unreasonable or imprudently incurred, provided that the costs of the delivery or provision of the goods or services by the small, woman-owned, or minority-owned business do not exceed, by more than three percent, the costs thereof that would have been incurred had the public utility contracted with the lowest-cost qualified business. As used in this section, "small, woman-owned, or minority-owned business" means a business that is certified by the Department of Small Business and Supplier Diversity as a small, women-owned, or minority-owned business pursuant to the conditions and provisions in § 2.2-1604.

(2020, c. 744.)

§ 56-235.2. All rates, tolls, etc., to be just and reasonable to jurisdictional customers; findings and conclusions to be set forth; alternative forms of regulation for electric companies.

1. Any rate, toll, charge or schedule of any public utility operating in this Commonwealth shall be considered to be just and reasonable only if: (1) the public utility has demonstrated that such rates, tolls, charges or schedules in the aggregate provide revenues not in excess of the aggregate actual costs incurred by the public utility in serving customers within the jurisdiction of the Commission, including such normalization for nonrecurring costs and annualized adjustments for future costs as the Commission finds reasonably can be predicted to occur during the rate year, and a fair return on the public utility's rate base used to serve those jurisdictional customers, which return shall be calculated in accordance with § 56-585.1 for utilities subject to such section; (1a) the investor-owned public electric utility has demonstrated that no part of such rates, tolls, charges or schedules includes costs for advertisement, except for advertisements either required by law or rule or regulation, or for advertisements which solely promote the public interest, conservation or more efficient use of energy; and (2) the public utility has demonstrated that such rates, tolls, charges or schedules contain reasonable classifications of customers. Notwithstanding § 56-234 , the Commission may approve, either in the context of or apart from a rate proceeding after notice to all affected parties and hearing, special rates, contracts or incentives to individual customers or classes of customers where it finds such measures are in the public interest. Such special charges shall not be limited by the provisions of § 56-235.4 . In determining costs of service, the Commission may use the test year method of estimating revenue needs. In any Commission order establishing a fair and reasonable rate of return for an investor-owned gas, telephone or electric public utility, the Commission shall set forth the findings of fact and conclusions of law upon which such order is based. For ratemaking purposes, the Commission shall determine the federal and state income tax costs for investor-owned water, gas, or electric utility that is part of a publicly-traded, consolidated group as follows: (i) such utility's apportioned state income tax costs shall be calculated according to the applicable statutory rate, as if the utility had not filed a consolidated return with its affiliates, and (ii) such utility's federal income tax costs shall be calculated according to the applicable federal income tax rate and shall exclude any consolidated tax liability or benefit adjustments originating from any taxable income or loss of its affiliates.
2. The Commission shall, before approving special rates, contracts, incentives or other alternative regulatory plans under subsection A, ensure that such action (i) protects the public interest, (ii) will not unreasonably prejudice or disadvantage any customer or class of customers, and (iii) will not jeopardize the continuation of reliable electric service.
3. After notice and public hearing, the Commission shall issue guidelines for special rates adopted pursuant to subsection A that will ensure that other customers are not caused to bear increased rates as a result of such special rates.

   (1977, c. 336; 1984, c. 312; 1996, c. 156; 2007, cc. 537, 888, 933.)

Cross references. - As to the Natural Gas Conservation and Ratemaking Efficiency Act, see § 56-600 et seq.

Editor's note. - Acts 2011, c. 408, cl. 2, provides: "That public utilities in the Commonwealth shall (i) evaluate options to develop and offer off-peak charging rates or other incentives to encourage owners of an electric vehicle to charge or recharge its battery during nonpeak times, when practical, and (ii) file copies of such evaluations with the State Corporation Commission. The State Corporation Commission shall make copies of the evaluations available to the public."

Acts 2011, c. 408, cl. 3, provides: "That the State Corporation Commission (the Commission) shall, notwithstanding § 56-234 of the Code of Virginia, be authorized to approve, after notice to all affected parties and opportunity for hearing, pilot programs conducted by public utilities, including programs offering special rates, contracts, or incentives to individual customers or classes of customers to determine the feasibility, and the implications for the public interest, of allowing public electric utilities to offer time-differentiated rates to users of electric motor vehicles to encourage charging of vehicles during nonpeak periods. Elements of the pilot programs may include voluntary load control options, rate structures with financial incentives, rebates, or other incentives that offset the cost of purchasing or installing electric vehicle charging equipment for users who elect nonpeak rate structures. Before approving such pilot programs, including special rates, contracts, and incentives, the Commission shall ensure that such action meets the provisions of subsection B of § 56-235.2 of the Code of Virginia and that such actions are necessary in order to acquire information which is or may be in furtherance of the public interest. An electric utility that participates in such an approved pilot program shall be entitled to recover annually the costs of its participation in any such pilot program conducted by the utility on or after January 1, 2011."

The 1996 amendment inserted the A designation at the beginning of the first paragraph, added the present second and third sentences in subsection A, and added subsections B, C, and D.

The 2007 amendments. - The 2007 amendment by c. 537 added the last paragraph in subsection A.

The 2007 amendments by cc. 888 and 933 are identical, and in subsection A, in clause (1) of the first sentence, substituted "including" for "subject to," "annualized adjustments for future costs" for "adjustments for known future increases in costs" and "finds reasonably can be predicted to occur during the rate year" for "may deem reasonable" and inserted "which return shall be ... to such section" at the end and deleted "but shall not consider any adjustments or expenses that are speculative or cannot be predicted with reasonable certainty" from the end of the fourth sentence; deleted former subsection B, pertaining to alternative forms of regulation; redesignated former subsections C and D as subsections B and C; and substituted "subsection A" for "subsections A and B" in subsection B.

Law review. - For survey of Virginia corporation law for the year 1976-77, see 63 Va. L. Rev. 1361 (1977).

For an article, "Public Utility Law," see 31 U. Rich. L. Rev. 1173 (1997).

For article, "Public Utility Law," see 43 U. Rich. L. Rev. 295 (2008).

Michie's Jurisprudence. - For related discussion, see 9A M.J. Gas Companies, § 8.

§ 56-235.3. Procedures for investigation of rate applications.

At any hearing on the application of a public utility for a change in a rate, toll, charge or schedule, the burden of proof to show that the proposed change is just and reasonable, shall be upon the public utility. The Commission shall be authorized to prescribe all necessary rules and regulations for the conduct of such hearings which shall provide for full and fair participation in such hearings by any interested person subject to such guidelines as the Commission may deem appropriate. Upon the conclusion of such hearings, the Commission shall issue an order and such opinion as is necessary to set forth fully the Commission's findings of fact and conclusions of law. Copies of the transcripts of public hearings held to establish a fair rate of return and changes in rates, tolls and charges for investor-owned public utilities involving significant public interest shall be placed in no less than one location nor more than three locations in the geographic area served by the utility. The Commission shall determine which proceedings are of sufficient interest to require the placing of such transcripts and the location or locations to be used; provided, however, that proceedings involving investor-owned utilities serving 25,000 or more customers shall be deemed to be of sufficient public interest.

(1977, c. 336.)

Law review. - For survey of Virginia corporation law for the year 1976-77, see 63 Va. L. Rev. 1361 (1977).

§ 56-235.4. Prohibition of multiple rate increases within any twelve-month period; exception.

1. The regulated operating revenues of a public utility shall not be increased pursuant to Chapter 9.1 (§ 56-231.15 et seq.), 10 (§ 56-232 et seq.) or 19 (§ 56-531 et seq.) of this title more than once within any twelve-month period. This limitation shall not apply to increases in regulated operating revenues resulting from (i) increases in rates pursuant to § 56-245 or § 56-249.6 , (ii) any automatic rate adjustment clause approved by the Commission, (iii) new rate schedules for service not offered under existing rate schedules or for expansion, reduction, or termination of existing services, (iv) initiation, modification or termination of experimental rates under § 56-234 , or (v) the making permanent of an experimental program. Notwithstanding any other provisions of this section, a telephone company may apply to the Commission to pass on to its customers as a part of its rates any changes approved by the Commission in the carrier access charges.
2. The Commission may adopt such rules and regulations as may be necessary to carry out the provisions of this section. The Commission may specify, by rule, the time during the calendar year when application may be filed by electric utility and cooperatives, gas utilities, telephone utilities and cooperatives, and other utilities.

   The Commission may by rule provide standards and procedures for expedited handling of rate increase applications, and such rules may provide that an expedited rate increase may take effect in less than twelve months after the preceding increase so long as regulated operating revenues are not increased pursuant to the provisions of subsection A of this section more than once in any calendar year.

   (1984, c. 725; 1989, c. 666; 1990, c. 787; 1995, c. 382; 1997, c. 707; 2000, c. 994.)

Editor's note. - Acts 1984, c. 725, cl. 2, provides: "That the provisions of this act shall not apply to applications pending on the effective date of this act [January 1, 1985]."

Acts 2010, cc. 1 and 2, cl. 2 provides: "That an incumbent electric utility that was, as of July 1, 1999, not bound by a rate case settlement adopted by the State Corporation Commission that extended in its application beyond January 1, 2002, shall suspend the collection of interim rates during the pendency of the Commission's consideration of the utility's application brought pursuant to subsection A of § 56-585.1 of the Code of Virginia and filed on July 15, 2009. To determine if a refund is required for the period when interim rates were in effect before such suspension, the Commission shall offset any required refund, which is the amount of revenue collected while the interim rates were in effect that exceeds the amount approved by the Commission in its final order on the utility's application, by the amount of revenue that the utility would have collected had the rates ultimately approved by the Commission in its final order on the utility's application been in effect during the period between the date such suspension commenced and the effective date of the rates approved by the Commission in its final order. The Commission shall issue its final order on the utility's application not later than July 15, 2010, for rates to become effective for bills rendered on and after August 1, 2010, notwithstanding the provisions of subsection A of § 56-235.4 of the Code of Virginia."

The 1995 amendment, in subsection A, in the first sentence, deleted "or" following " § 56-249.6 ", inserted "or" following "the Commission", and added clause (iii).

The 1997 amendment, in the second sentence of subsection A, inserted "or for expansion, reduction, or termination of existing services" at the end of clause (iii) and added clauses (iv) and (v).

The 2000 amendments. - The 2000 amendment by c. 994 rewrote the first sentence of subsection A.

§ 56-235.5. Telephone regulatory alternatives.

1. As used in this section, "telephone company" means any public service corporation or public service company which holds a certificate of public convenience and necessity to furnish local exchange telephone service, except that companies which are regulated pursuant to Chapter 16 (§ 56-485 et seq.) or 19 (§ 56-531 et seq.) of this title are not included within this definition.
2. In regulating telephone services of any telephone company, and notwithstanding any provision of law to the contrary, the Commission, after giving notice and an opportunity for hearing, may replace the ratemaking methodology set forth in § 56-235.2 with any alternative form of regulation which: (i) protects the affordability of basic local exchange telephone service, as such service is defined by the Commission; (ii) reasonably ensures the continuation of quality local exchange telephone service; (iii) will not unreasonably prejudice or disadvantage any class of telephone company customers or other providers of competitive services; and (iv) is in the public interest. Alternatives may differ among telephone companies and may include, but are not limited to, the use of price regulation, ranges of authorized returns, categories of services, price indexing or other alternative forms of regulation. A hearing under this section shall include the right to present evidence and be heard. Prior to any hearing under this section, the Commission shall provide parties an opportunity to conduct discovery.
3. Any telephone company or company regulated pursuant to Chapter 16 (§ 56-485 et seq.) or 19 (§ 56-531 et seq.) of this title may apply to the Commission at any time to obtain an alternative form of regulation. The Commission shall approve the application if it finds, after notice to all affected parties and hearing, that the proposal meets the standards for an alternative form of regulation set forth in subsection B.
   1. A Commission order, including appropriate findings of fact and conclusions of law, denying or approving, with or without modification, an application for an alternative form of regulation shall be entered no more than 90 days from the filing of the application, except that the Commission, upon notice to all parties in interest, may extend that period in additional 30-day increments not to exceed an additional 90 days in all.
   2. If the Commission approves the application with modifications, the telephone company, or company regulated pursuant to Chapter 16 (§ 56-485 et seq.) or 19 (§ 56-531 et seq.) of this title, may, at its option, withdraw its application and continue to be regulated under the form of regulation that existed immediately prior to the filing of the application, unless it is modified for a telephone company by the Commission pursuant to subsection B.
4. The Commission may, after notice and opportunity for hearing, alter, amend or revoke any alternative form of regulation previously implemented if it finds that (i) the affordability of basic local exchange service, as such service is defined by the Commission, is threatened by the alternative form of regulation; (ii) the quality of local exchange telephone service has deteriorated or will deteriorate to the point that the public interest will not be served by continuation of the alternative form of regulation; (iii) the terms ordered by the Commission in connection with approval of a company's application for alternative form of regulation have been violated; (iv) any class of telephone company customers or other providers of competitive services are being unreasonably prejudiced or disadvantaged by the alternative form of regulation; or (v) the alternative form of regulation is no longer in the public interest.
5. The Commission shall have the authority, after notice to all affected parties and an opportunity for hearing, to determine whether any telephone service of a telephone company is subject to competition and to provide, either by rule or case-by-case determination, for deregulation, detariffing, or modified regulation determined by the Commission to be in the public interest for such competitive services.
6. The Commission may determine telephone services of any telephone company to be competitive when it finds competition or the potential for competition in the market place is or can be an effective regulator of the price of those services. Such determination may be made by the Commission on a statewide or a more limited geographic basis, such as one or more political subdivisions or one or more telephone exchange areas, or on the basis of a category of customers, such as business or residential customers, or customers exceeding a revenue or service quantity threshold, or some combination thereof. The Commission may also determine bundles composed of a combination of competitive and noncompetitive services to be competitive if the noncompetitive services are available separately pursuant to tariff or otherwise. In determining whether competition effectively regulates the prices of services, the Commission shall consider: (i) the ease of market entry, (ii) the presence of other providers reasonably meeting the needs of consumers, and (iii) other factors the Commission considers relevant. For purposes of this section, the Commission shall consider all wireless communications providers that offer voice communications services to be facilities-based competitors owning wireline network facilities and reasonably meeting the needs of consumers, regardless of whether such wireless providers own wireline network facilities. In its determination, the Commission shall not exclude as a competitor any affiliate of the telephone company. Notwithstanding any other provisions of this subsection, any telephone services that are the functional equivalent of the services offered individually or as part of a bundle of services by a county, city or town pursuant to § 56-265.4:4 or Article 5.1 (§ 56-484.7:1 et seq.) of Chapter 15 of this title, either directly or pursuant to a public-private partnership, shall be deemed competitive services in the geographic area where the services of the county, city or town are offered for purposes of this article and any alternate regulatory plans approved by the Commission.
7. The Commission shall monitor the competitiveness of any telephone service previously found by it to be competitive under any provision of subsection F above and may change that conclusion, if, after notice and an opportunity for hearing, it finds that competition no longer effectively regulates the price of that service.
8. Whenever the Commission adopts an alternative form of regulation pursuant to subsection B or C above, or determines that a service is competitive pursuant to subsections E and F above, the Commission shall adopt safeguards to protect consumers and competitive markets. At a minimum these safeguards must ensure that there is no cross subsidization of competitive services by monopoly services.
9. If the Commission determines pursuant to subsections E and F that 75 percent or more of residential households or businesses in a telephone company's incumbent territory are in areas that have been determined by the Commission to be competitive for a telephone service, the Commission shall expand, for that telephone service throughout the company's incumbent territory, its competitive determination and apply the same regulatory treatment already adopted by the Commission for that telephone service in competitive areas, including any safeguards under subsection H.
10. If a telephone company provides 90 percent or more of its residential and business lines access to fiber optic or copper-based broadband service, as defined by the Federal Communications Commission, within an exchange area, the Commission shall expand, for basic and associated telephone services in that exchange area, its competitive determination and apply the same regulatory treatment already adopted by the Commission for those services in competitive areas, including any safeguards under subsection H.

    (1993, c. 21; 1996, c. 18; 2002, cc. 479, 489; 2003, c. 711; 2009, c. 788.)

Editor's note. - Acts 2014, cc. 340 and 376, cl. 3 provides: "That notwithstanding the provisions of this act, (i) the residential price cap approved by the State Corporation Commission in Case No. PUC-2012-00008 shall continue in effect until it expires as currently scheduled on December 31, 2014, and (ii) any safeguards ordered by the Commission in response to competitive service applications filed pursuant to subsection F of § 56-235.5 of the Code of Virginia after January 1, 2014, shall continue in effect as ordered by the Commission."

The 1996 amendment inserted "an opportunity for" preceding "hearing" in subsection E.

The 2002 amendments. - The 2002 amendments by cc. 479 and 489 are identical, and in subsection F, inserted the second sentence, in the last sentence substituted "shall" for "may" following the first occurrence of "Commission," and substituted the language beginning "any telephone services that are the functional equivalent of the services provided" for "all services classified as actually competitive services under the provisions of the Experimental Plan adopted by the Commission in Case No PUC880035 in its final order of December 15, 1988, and remaining so classified as of the effective date of this section, shall be considered to be competitive services" at the end of that sentence.

The 2003 amendments. - The 2003 amendment by c. 711 substituted "90 days" for "ninety days" twice, and substituted "30-day increments" for "thirty-day increments" once, in subdivision C 1; and in subsection F, inserted "or on the basis of a category of customers, such as business or residential customers, or customers exceeding a revenue or service quantity threshold, or some combination thereof" at the end of the second sentence, added the present third sentence, and substituted "services offered individually or as part of a bundle of services by a county" for "services provided by a county" in the last sentence.

The 2009 amendments. - The 2009 amendment by c. 788 inserted the fifth and sixth sentences in subsection F; and added subsections I and J.

Law review. - For article on developments in the field of Virginia public utility law from June 2002 through May 2003, see 38 U. Rich. L. Rev. 195 (2003).

For article, "Public Utility Law," see 43 U. Rich. L. Rev. 295 (2008).

§ 56-235.5:1. Local exchange telephone service competition policy.

1. The Commission, in resolving issues and cases concerning local exchange telephone service under the federal Telecommunications Act of 1996 (P.L. 104-104), this title, or both, shall, consistent with federal and state laws, consider it in the public interest to, as appropriate, (i) treat all providers of local exchange telephone services in an equitable fashion and without undue discrimination and, to the greatest extent possible, apply the same rules to all providers of local exchange telephone services; (ii) promote competitive product offerings, investments, and innovations from all providers of local exchange telephone services in all areas of the Commonwealth; and (iii) reduce or eliminate any requirement to price retail and wholesale products and services at levels that do not permit providers of local exchange telephone services to recover their costs of those products and services.
2. In order to treat all providers of local exchange telephone service more equitably and without undue discrimination by ensuring that they are subject to the same rules:
   1. Notwithstanding any other provision of law, the Commission shall (i) for incumbent local exchange carriers serving more than 15,000 access lines in its incumbent territory, establish a schedule that eliminates the carrier common line charge element of intrastate carrier switched access charges no later than July 1, 2013, provided that (a) any such carrier that directly receives no later than April 1, 2010, a Broadband Initiatives Program grant and loan for use in the Commonwealth from the Rural Utilities Service of the U.S. Department of Agriculture under the American Recovery and Reinvestment Act of 2009 (P.L. 111-5) shall be considered under clause (ii), and (b) any such carrier that has not been the subject of a Commission proceeding to investigate its carrier common line charge may apply to the Commission for an opportunity to be heard as to why it is in the public interest and why it will not unreasonably prejudice or disadvantage telephone customers throughout the Commonwealth to extend the deadline for the elimination of its carrier common line charge to a date determined by the Commission, but in no case later than July 1, 2014; and (ii) for incumbent local exchange carriers with 15,000 or fewer access lines in its incumbent territory, determine, no later than July 1, 2011, and after notice and an opportunity for a hearing, a schedule for the elimination of the carrier common line charge element of intrastate carrier switched access charges in a manner to be determined by the Commission.
   2. The Commission shall permit any incumbent local exchange carrier to increase its retail rates to recover a reasonable amount of carrier common line charge revenue lost due to the reductions required in subdivision 1.

      (2004, c. 151; 2010, c. 748; 2013, c. 26.)

The 2010 amendments. - The 2010 amendment by c. 748 inserted the subsection A designation; and inserted subsection B.

The 2013 amendments. - The 2013 amendment by c. 26 deleted former subdivision B 3, which read: "The Commission shall (i) not permit any incumbent local exchange carrier to add additional elements of intrastate carrier switched access charges or to increase the charge for any element of intrastate carrier switched access charges above that incumbent local exchange carrier's charges on January 1, 2010; (ii) on July 1, 2010, take any action necessary to eliminate any element of intrastate carrier switched access charges implemented by an incumbent local exchange carrier after January 1, 2010; and (iii) on July 1, 2010, take any action necessary to reduce to its January 1, 2010, level any element of intrastate carrier switched access charges increased by an incumbent local exchange carrier after January 1, 2010."

Law review. - For article, "Public Utility Law," see 43 U. Rich. L. Rev. 295 (2008).

§ 56-235.6. Optional performance-based regulation of certain utilities.

1. Notwithstanding any provision of law to the contrary, the Commission may approve a performance-based ratemaking methodology for any public utility engaged in the business of furnishing gas service (for the purposes of this section a "gas utility") or electricity service (for the purposes of this section an "electric utility"), upon application of the gas utility or electric utility, and after such notice and opportunity for hearing as the Commission may prescribe. For the purposes of this section, "performance-based ratemaking methodology" shall mean a method of establishing rates and charges that are in the public interest, and that departs in whole or in part from the cost-of-service methodology set forth in § 56-235.2 .
2. The Commission shall approve such performance-based ratemaking methodology if it finds that it: (i) preserves adequate service to all classes of customers ( including transportation-only customers if for a gas utility); (ii) does not unreasonably prejudice or disadvantage any class of gas utility or electric utility customers; (iii) provides incentives for improved performance by the gas utility or electric utility in the conduct of its public duties; (iv) results in rates that are not excessive; and (v) is in the public interest. Performance-based forms of regulation may include, but not be limited to, fixed or capped base rates, the use of revenue indexing, price indexing, ranges of authorized return, gas cost indexing for gas utilities, and innovative utilization of utility-related assets and activities (such as a gas utility's off-system sales of excess gas supplies and release of upstream pipeline capacity, performance of billing services for other gas or electricity suppliers, and reduction or elimination of regulatory requirements) in ways that benefit both the utility and its customers and may include a mechanism for automatic annual adjustments to revenues or prices to reflect changes in any index adopted for the implementation of such performance-based form of regulation. In making the findings required by this subsection, the Commission shall include, but not be limited to, in its considerations: (i) any proposed measures, including investments in infrastructure, that are reasonably estimated to preserve or improve system reliability, safety, supply diversity, and gas utility transportation options; and (ii) other customer benefits that are reasonably estimated to accrue from the gas or electric utility's proposal.
3. Each gas utility or electric utility shall have the option to apply for implementation of a performance-based form of regulation. If the Commission approves the application with modifications, the gas utility or electric utility may, at its option, withdraw its application and continue to be regulated under the form of regulation that existed immediately prior to the filing of the application. The Commission may, after notice and opportunity for hearing, alter, amend or revoke, or authorize a gas utility or electric utility to discontinue, a performance-based form of regulation previously implemented under this section if it finds that (i) service to one or more classes of customers has deteriorated, or will deteriorate, to the point that the public interest will not be served by continuation of the performance-based form of regulation; (ii) any class of gas utility customer or electric utility customer is being unreasonably prejudiced or disadvantaged by the performance-based form of regulation; (iii) the performance-based form of regulation does not, or will not, provide reasonable incentives for improved performance by a gas utility or electric utility in the conduct of its public duties (which determination may include, but not be limited to, consideration of whether rates are inadequate to recover a gas utility's or electric utility's cost of service); (iv) the performance-based form of regulation is resulting in rates that are excessive compared to a gas utility's or electric utility's cost of service and any benefits that accrue from the performance-based plan; (v) the terms ordered by the Commission in connection with approval of a gas utility's or electric utility's implementation of a performance-based form of regulation have been violated; or (vi) the performance-based form of regulation is no longer in the public interest. Any request by a gas utility or electric utility to discontinue its implementation of a performance-based form of regulation may include application pursuant to this chapter for approval of new rates under the standards of § 56-235.2 for a gas utility or pursuant to § 56-585.1 for an investor-owned incumbent electric utility.
4. The Commission shall use the annual review process established in § 56-234.2 to monitor each performance-based form of regulation approved under this section and to make any annual prospective adjustments to revenues or prices necessary to reflect increases or decreases in any index adopted for the implementation of such performance-based form of regulation. (1996, c. 350; 2006, c. 574; 2007, cc. 888, 933.)

Cross references. - As to the Natural Gas Conservation and Ratemaking Efficiency Act, see § 56-600 et seq.

Editor's note. - Acts 2006, c. 574, cl. 2 provides: "That the provisions of this act shall not apply to any plan for performance-based regulation pending with the State Corporation Commission on January 1, 2006."

The 2006 amendments. - The 2006 amendments by c. 574 rewrote subsection A; in subsection B, inserted "fixed or capped base rates," deleted "and" following "upstream pipeline capacity," inserted "and reduction or eliminaton of regulatory requirements," added the last sentence of the subsection; inserted "and any benefits that accrue from the performance-based plan" at the end of clause (iv) in subsection C; and made minor stylistic changes.

The 2007 amendments. - The 2007 amendments by cc. 888 and 933 are identical, and in subsection A, substituted "or electricity service (for the purposes of this section an 'electric utility')" for "either" and "electric utility" for "upon its own motion"; inserted "or electric utility" and "a gas utility" and made similar and related changes throughout subsections B and C; added "for a gas utility or pursuant to § 56-585.1 for an investor-owned incumbent electric utility" to the end of subsection C; and made minor stylistic changes.

Law review. - For article, "Public Utility Law," see 43 U. Rich. L. Rev. 295 (2008).

§ 56-235.7. Jurisdiction of Commission when federal governmental facility ceases to be retail customer of electric utility.

Notwithstanding anything to the contrary in § 56-234 , the rates and charges for service to any federal governmental facility that is a retail customer of any electric utility prior to January 1, 1996, and which ceases, in whole or in part, to be a retail customer of that electric utility after January 1, 1996, because of its purchase of electricity from another supplier shall be subject to the jurisdiction of the Commission for the limited purpose of determining the proper rate, if any, to be paid by the federal government to the electric utility for any and all costs stranded due to the cessation of such retail service, and payments of such costs shall be made pursuant to a tariff filed and approved by the Commission; provided, however, the Commission's jurisdiction shall not arise unless and until the effective date of any federal action that allows any federal governmental facility to purchase electricity from a supplier other than the electric public service company now providing electric service to such federal facility.

(1996, c. 466.)

The number of this section was assigned by the Virginia Code Commission, the number in the 1996 act having been 56-235.6 .

Law review. - For an article, "Public Utility Law," see 31 U. Rich. L. Rev. 1173 (1997).

§ 56-235.8. Retail supply choice for natural gas customers.

1. Notwithstanding any provision of law to the contrary, each public utility authorized to furnish natural gas service in Virginia (gas utility) is authorized to offer to all of the gas utility's customers not eligible for transportation service under tariffs in effect on the effective date of this section, direct access to gas suppliers (retail supply choice) by filing a plan for implementing retail supply choice with the State Corporation Commission for approval. The provisions of this section shall not apply to any retail supply choice pilot program in effect on July 1, 1999. The Commission shall accept such a plan for filing within thirty days of filing if it contains, at a minimum:
   1. A schedule for implementing retail supply choice for all of its customers;
   2. Tariff revisions, including proposed unbundled rates for firm and interruptible service (which may utilize a cost allocation and rate design formulated to recover the gas utility's nongas fixed costs on a nonvolumetric basis) and terms and conditions of service designed to provide nondiscriminatory open access over its transportation system, comparable to the transportation service provided by the gas utility to itself, to allow competitive suppliers to sell natural gas directly to the gas utility's customers. Any proposed unbundling rates shall include an explanation of the methodology used to develop the rates and a calculation of revenues, by customer class, thereby produced;
   3. Nonbypassable, competitively neutral annual surcharges for the gas utility to properly allocate and recover from its firm service customers not eligible for nonpilot transportation service under tariffs in effect on the effective date of this section, its nonmitigable costs associated with the provision of retail supply choice, including prudently incurred contract obligation costs and transition costs. For the purposes of this section, contract obligation costs are costs associated with acquiring, maintaining or terminating interstate and intrastate pipeline and storage capacity contracts, less revenues generated by mitigating such contract obligations, whether by off-system sales, capacity release, pipeline supplier refunds or otherwise; and transition costs are costs incurred by the gas utility associated with educating the public on retail supply choice and redesigning its facilities, operations and systems to permit retail supply choice;
   4. Tariff provisions to balance the receipts and deliveries of gas supplies to retail supply choice customers and allocate the gas utility's gas costs so that one class of customers is not subsidized by another class of customers;
   5. Tariff provisions requiring the gas utility, at a minimum, to offer gas suppliers or retail supply choice customers the right to acquire the gas utility's upstream transmission and/or storage capacity in a manner that assures that one class of customers is not subsidized by another class of customers, provided that nothing contained herein shall deny the gas utility the right to request Commission approval of such tariff provisions as are designed to ensure the safe and reliable delivery of natural gas to firm service customers on its system, including provisions requiring gas suppliers to accept assignment of upstream transportation and storage capacity, and/or allowing the gas utility to retain a portion of its upstream transportation and storage capacity to ensure safe and reliable natural gas service to its customers;
   6. A code of conduct governing the activities and relationships between the gas utility and gas suppliers to prevent anticompetitive or discriminatory conduct and the unlawful exercise of market power. Such codes of conduct shall incorporate or be consistent with any rule or guideline established by the Commission; and
   7. Any other requirement established by Commission rule or regulation.

      The Commission may, by rule or regulation, impose such additional filing requirements as it deems necessary in the public interest. The Commission may also require a gas utility to continue to serve as a gas supplier to its customers after the gas utility's plan becomes effective and under such terms and conditions as are necessary to protect the public interest.

2. After the Commission has accepted a filing as provided in subsection A, the Commission shall review and approve a plan filed by a gas utility unless it determines, after notice and an opportunity for public hearing, that the plan would:
   1. Adversely affect the quality, safety, or reliability of natural gas service by the gas utility or the provision of adequate service to the gas utility's customers;
   2. Result in rates charged by the gas utility that are not just and reasonable rates within the contemplation of § 56-235.2 or that are in excess of levels approved by the Commission under § 56-235.6 , as the case may be;
   3. Adversely affect the gas utility's customers not participating in the retail supply choice plan;
   4. Unreasonably discriminate against one class of the gas utility's customers in favor of another class (provided, however, that a gas utility's recovery of nongas fixed costs on a nonvolumetric basis shall not necessarily constitute unreasonable discrimination); or
   5. Not be in the public interest. The Commission shall, after the acceptance of a filing of a retail supply choice plan, approve or disapprove the plan within 120 days. The 120-day period may be extended by Commission order for an additional period not to exceed sixty days. The retail supply choice plan shall be deemed approved if the Commission fails to act within 120 days or any extended period ordered by the Commission. The Commission shall approve a retail supply choice plan filed by a gas utility pursuant to this subsection regardless of whether it has promulgated rules and regulations pursuant to subsection A. The Commission may also modify a plan filed by a gas utility to ensure that it conforms to the provisions of this subsection and is otherwise in the public interest. Plans approved pursuant to this section shall not be placed into effect before July 1, 2000.
3. The Commission may, on its own motion, direct a gas utility to file a retail supply choice plan, which shall comply with subsection A, shall include such other details in the plan as the Commission may require, and does not cause the effects set forth in subsection B, or the Commission may, on its own motion, propose a plan for a gas utility for retail supply choice that complies with the requirements of subsection A and does not cause the effects set forth in subsection B. The Commission may approve any plans under this subsection after notice to all affected parties and an opportunity for hearing.
4. Once a plan becomes effective pursuant to this section, if the Commission determines, after notice and opportunity for hearing, that the plan is causing, or is reasonably likely to cause, the effects set forth in subsection B, it may order revisions to the plan to remove such effects. Any such revisions to the plan will operate prospectively only.
5. If, upon application of at least twenty-five percent of retail supply choice customers or of 500 retail choice customers, whichever number is lesser, or by the gas utility, it is alleged that the marketplace for retail supply choice customer is not reasonably competitive or results in rates unreasonably in excess of what would otherwise be charged by the gas utility, or if the Commission renders such a determination upon its own motion, then the Commission may, after notice, and opportunity for hearing, terminate the gas utility's retail supply choice program and provide for an orderly return of the retail choice customers to the gas utility's traditional retail natural gas sales service. In such event, the gas utility shall be given the opportunity to acquire, under reasonable and competitive terms and conditions and within a reasonable time period, such upstream transportation and storage capacity as is necessary for it to provide traditional retail natural gas sales service to former retail supply choice customers.
6. Licensure of gas suppliers.
   1. No person, other than a gas utility, shall engage in the business of selling natural gas to the residential and small commercial customers of a gas utility that has an approved plan implementing retail supply choice unless such person (for the purpose of this section, gas supplier) holds a license issued by the Commission. An application for a gas supplier license must be made to the Commission in writing, be verified by oath or affirmation and be in such form and contain such information as the Commission may, by rule or regulation, require. For purposes of this subsection, the Commission shall require a gas supplier to demonstrate that it has the means to provide natural gas to essential human needs customers. A gas supplier license shall be issued to any qualified applicant within forty-five days of the date of filing such application, authorizing in whole or in part the service covered by the application, unless the Commission determines otherwise for good cause shown. A person holding such a license shall not be considered a "public service corporation," "public service company" or a "public utility" and shall not be subject to regulation as such; however, nothing contained herein shall be construed to affect the liability of such a person for any license tax levied pursuant to Article 2 (§ 58.1-2620 et seq.) of Chapter 26 of Title 58.1. No license issued under this chapter shall be transferred without prior Commission approval finding that such transfer is not inconsistent with the public interest. If the Commission determines, after notice and opportunity for public hearing, that a gas supplier has failed to comply with the provisions of this subsection or the Commission's rules, regulations or orders, the Commission may enjoin, fine, or punish any such failure pursuant to the Commission's authority under this statute and under Title 12.1 of the Code of Virginia. The Commission may also suspend or revoke the gas supplier's license or take such other action as is necessary to protect the public interest.
   2. The Commission shall establish rules and regulations for the implementation of this subsection, provided that:
      1. The Commission's rules and regulations shall not govern the rates charged by licensed gas suppliers, except that the Commission's rules and regulations may govern the terms and conditions of service of licensed gas suppliers to protect the gas utility's customers from commercially unreasonable terms and conditions; and
      2. The Commission's rules and regulations shall permit an affiliate of the gas utility to be licensed as a gas supplier and to participate in the gas utility's retail supply choice program under the same terms and conditions as gas suppliers not affiliated with the gas utility.
   3. The Commission shall also have the authority to issue rules and regulations governing the marketing practices of gas suppliers.
7. Retail customers' private right of action; marketing practices.
   1. No gas supplier shall use any deception, fraud, false pretense, misrepresentation, or any deceptive or unfair practices in providing or marketing gas service.
   2. Any person who suffers loss (i) as the result of fraudulent marketing practices, including telemarketing practices, engaged in by any gas supplier providing any service made competitive under this section, or of any violation of rules and regulations issued by the Commission pursuant to subdivision F 3, or (ii) as the result of any violation of subdivision 1 of this subsection, shall be entitled to initiate an action to recover actual damages, or $500, whichever is greater. If the trier of fact finds that the violation was willful, it may increase damages to an amount not exceeding three times the actual damages sustained, or $1,000, whichever is greater. Notwithstanding any other provisions of law to the contrary, in addition to any damages awarded, such person also may be awarded reasonable attorney's fees and court costs.
   3. The Attorney General, the attorney for the Commonwealth or the attorney for the city, county or town may cause an action to be brought in the appropriate circuit court for relief of violations referenced in subdivision 2 of this subsection.
   4. Notwithstanding any other provision of law to the contrary, in addition to any damages awarded, such person or governmental agency initiating an action pursuant to this section may be awarded reasonable attorney's fees and court costs.
   5. Any action pursuant to this subsection shall be commenced by persons other than the Commission within two years after its accrual. The cause of action shall accrue as provided in § 8.01-230 . However, if the Commission initiates proceedings, or any other governmental agency files suit for violations under this section, the time during which such proceeding or governmental suit and all appeals therefrom are pending shall not be counted as any part of the period within which an action under this section shall be brought.
   6. The circuit court may make such additional orders or decrees as may be necessary to restore to any identifiable person any money or property, real, personal, or mixed, tangible or intangible, which may have been acquired from such person by means of any act or practice violative of this subsection, provided that such person shall be identified by order of the court within 180 days from the date of any order permanently enjoining the unlawful act or practice.
   7. In any case arising under this subsection, no liability shall be imposed upon any gas supplier who shows by a preponderance of the evidence that (i) the act or practice alleged to be in violation of subdivision 1 of this subsection was an act or practice over which the same had no control or (ii) the alleged violation resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adopted to avoid a violation. However, nothing in this section shall prevent the court from ordering restitution and payment of reasonable attorney's fees and court costs pursuant to subdivision 4 of this subsection to individuals aggrieved as a result of an unintentional violation of this subsection.
8. Authorized public utilities shall file with the Commission tariff revisions reflecting the net effect of the elimination of taxes pursuant to subsection B of § 58.1-2904 and the addition of state income taxes pursuant to § 58.1-400 . Such tariffs shall be effective for service rendered on and after January 1, 2001, and shall be filed at least forty-five days prior to the effective date. Such filing shall not constitute a rate increase for the purposes of § 56-235.4 .
9. Consumer education.
   1. The Commission shall develop a consumer education program designed to provide the following information to retail customers concerning retail supply choice for natural gas customers:
      1. Opportunities and options in choosing natural gas suppliers;
      2. Marketing and billing information gas suppliers will be required to furnish retail customers;
      3. Retail customers' rights and obligations concerning the purchase of natural gas and related services; and
      4. Such other information as the Commission may deem necessary and appropriate and in the public interest.
   2. The consumer education program authorized herein may be conducted in conjunction with the program provided for in § 56-592 .
   3. The Commission shall establish or maintain a complaint bureau for the purpose of receiving, reviewing and investigating complaints by retail customers against gas utilities, public service companies, licensed suppliers and other providers of any services affected by this section. Upon the request of any interested person or the Attorney General, or upon its own motion, the Commission shall be authorized to inquire into possible violations of § 56-235.8 and to enjoin or punish any violations thereof pursuant to its authority under § 56-235.8 , this title, or Title 12.1. The Attorney General shall have a right to participate in such proceedings consistent with the Commission's Rules of Practice and Procedure.
   4. For all billing statements sent on and after August 1, 2000, all gas utilities, as defined in subsection A, shall enclose the following information in all billing statements for retail natural gas service:
      1. Gas utilities shall separately state an approximate amount of the tax imposed under §§ 58.1-2626 , 58.1-2660 and 58.1-3731 which is included in the customer's bill until such tax is no longer imposed; and
      2. For all such billing statements, a statement which reads as follows shall be included: "Beginning January 1, 2001, the current state and local gross receipts taxes on sales of natural gas will be replaced by a tax based on the consumption of natural gas by consumers. In the past, the current gross receipts tax has always been included in the rate charged for natural gas. Now, this tax is being separately stated. The total gross receipts tax imposed by Virginia and the localities is approximately two percent of the amount charged to consumers. The new state and local consumption tax will be charged at an approximate rate of $0.02 per 100 cubic feet (CCF) of natural gas consumed. While this rate was designed to be less than, or equal to, the effect of the current gross receipts tax which is being replaced, the tax you pay may actually be higher in your locality. This statement is being provided for your information." (1999, c. 494; 2000, cc. 691, 706.)

Editor's note. - Acts 1999, c. 494, cl. 2, provides: "That the Senate Committee on Finance, the House Finance Committee, the Senate Committee on Local Government, and the House Committee on Counties, Cities and Towns shall conduct a joint study of the taxation of gas utilities and natural gas suppliers. In conducting this study, the committees shall seek assistance from (i) representatives of gas utilities, natural gas suppliers, industrial gas customers, and electric cooperatives, (ii) organizations representing localities, (iii) the Virginia State Corporation Commission, and (iv) the Department of Taxation. In formulating their findings and recommendations, the committees shall consider and assess the effect of state and local taxation of gas utilities and natural gas suppliers on the economic development goals and objectives of the Commonwealth. Furthermore, the committees shall formulate and recommend specific statutory language to ensure (i) revenue neutrality for the Commonwealth and its local governments and (ii) that any revisions to the existing regime of local and state taxation of gas utilities and natural gas suppliers do not increase the tax rate applicable to, or tax burdens borne by, gas utilities, natural gas suppliers and gas customers, as of the date of enactment of this legislation. The committees shall submit a report of their findings and recommendations to the General Assembly not later than December 15, 1999."

Acts 1999, c. 494, cl. 3, had provided that the provisions of the act would expire July 1, 2000. However, Acts 2000, cc. 691 and 706, cl. 3, repealed this provision.

The 2000 amendments. - The 2000 amendments by cc. 691 and 706 are identical, and substituted "the gas utility's" for "its" in the first sentence of subsection A; rewrote the first sentence in subdivision A 3, which formerly read: "A nonbypassable, competitively neutral mechanism for the gas utility to recover from its customers its nonmitigable costs prudently incurred to support its merchant obligation and to facilitate retail supply choice, including reasonable contract obligation costs and transition costs," substituted "by mitigating" for "with mitigating" in the second sentence of subdivision A 3; in subdivision A 4, substituted "one class of customers is" for "the retail supply choice customers are," and substituted "another class of" for "nonretail choice"; added the language following "storage capacity" through the end of the paragraph in subdivision A 5; inserted "After the Commission has accepted a filing as provided in subsection A," at the beginning of the introductory paragraph in subsection B; inserted "quality" in subdivision B 1; added subdivision B 5; added the first three sentences at the beginning of the first undesignated paragraph in subsection B; added present subsection C, redesignated former subsections C through F as present subsections D through G; substituted "finding that such transfer is" for "as being" in the sixth sentence of present subsection F, added the language beginning "enjoin" through the end of the present seventh sentence of present subsection F, rewrote the eighth present sentence in present subsection F; in present subdivision G 2, inserted "fraudulent" and substituted "subdivision F 3" for "subdivision E" in clause (i), and in clause (ii), substituted "subdivision 1 of this subsection" for "subdivision F"; in present subdivision F 3, substituted "subdivision 2 of this subsection" for "subdivision F"; in present subdivision F 5, substituted "subsection" for "section" near the beginning of the first sentence, and inserted "by persons other than the Commission" in the first sentence; substituted "this subsection" for "subsection F" in subdivision G 6; and added subsection H.

Law review. - For article on developments in the field of Virginia public utility law from June 2002 through May 2003, see 38 U. Rich. L. Rev. 195 (2003).

§ 56-235.9. Recovery of funds used for capital projects prior to a rate case for strategic natural gas facilities.

1. As used in this section:

   "Capitalized carrying cost" includes the return on the investment, depreciation, and tax.

   "Natural gas transmission company" means any investor-owned public service company engaged in the business of transporting natural gas to more than one electric utility, natural gas utility, or non-jurisdictional customer.

   "Natural gas utility" means any investor-owned public service company engaged in the business of furnishing natural gas service to the public.

   "Strategic natural gas facility" includes, without limitation, a natural gas distribution or transmission pipeline, storage facility, compressor station, liquefied natural gas facility, peaking facility or other appurtenant facility, used to furnish natural gas service in the Commonwealth that, for a natural gas utility with fewer than 150,000 customers, adds stand-alone design day deliverability or designed send-out of at least 10,000 dekaTherms per day or two or more such facilities, regardless of size, that add design day deliverability or designed send out of at least 75,000 dekaTherms per day in the aggregate, and for a natural gas utility with 150,000 or more customers, adds stand-alone design day deliverability or designed send out of at least 20,000 dekaTherms per day or two or more such facilities, regardless of size, that add design day deliverability or designed send out of at least 100,000 dekaTherms per day in the aggregate, and for a natural gas transmission company, adds design day deliverability or designed send out of at least 100,000 dekaTherms per day in the aggregate.

2. Any natural gas utility that places a strategic natural gas facility into service on or after July 1, 2008, or natural gas transmission company that places a strategic natural gas facility into service on or after July 1, 2014, to serve its customers shall have the right to recover through its rates charged to those customers the entire prudently incurred costs of the facility including: planning, development and construction costs; costs of infrastructure associated therewith; an allowance for funds used during construction; and the capitalized carrying cost from the time construction is completed and the asset is placed into service until the time that the Commission establishes new rates that include recovery of all costs as defined herein. Such recovery shall be permitted by allowing such costs to be recorded in the utility's plant accounts and included in rate base for purposes of cost recovery (i) in new rate schedules for service not offered under existing rate schedules or new rate schedules for expansion of existing services as permitted by § 56-235.4 , (ii) in a rate case using the cost of service methodology set forth in § 56-235.2 , or (iii) in a performance-based regulation plan authorized by § 56-235.6 , subject to Commission determination that such costs were prudently incurred. The allowance for funds used during construction and the return on investment shall be calculated utilizing the weighted average cost of capital, including the cost of debt and cost of equity used in determining the natural gas utility's base rates in effect during the construction period of the strategic natural gas facility.
3. Nothing in this section shall be construed to prohibit the Commission from granting similar treatment to other natural gas facilities when the Commission deems such treatment to be in the public interest.

   (2008, c. 867; 2014, cc. 467, 507.)

Editor's note. - Acts 2008, c. 867, cl. 2 provides: "That nothing in this act shall either authorize or deny the recovery of any costs submitted to the Commission prior to January 1, 2008, where such costs were the subject of a final order of the Commission entered by that date that expressly determined whether such costs were prudently incurred, and such order expressly provided for the final accounting and ratemaking treatment of such costs."

The 2014 amendments. - The 2014 amendments by cc. 467 and 507 are identical, and in subsection A, added the definition of "Natural gas transmission company," and in the definition of "Strategic natural gas facility" inserted "and for a natural gas transmission company, adds design day deliverability or designed send out of at least 100,000 dekaTherms per day in the aggregate"; and in subsection B, inserted "or natural gas transmission company that places a strategic natural gas facility into service on or after July 1, 2014."

§ 56-235.10. Recovery of eligible safety activity costs; administration; procedure.

1. As used in this section:

   "Eligible safety activity costs" means a natural gas utility's operation and maintenance expenditures that are related to (i) the development, implementation, or execution of the natural gas utility's integrity management program developed in conformance with 49 CFR Part 192, Subpart P - Gas Distribution Pipeline Integrity Management or (ii) programs or measures implemented to comply with regulations issued by the Commission or a federal regulatory body with jurisdiction over pipeline safety.

   "Natural gas utility" means any investor-owned public service company engaged in the business of furnishing natural gas service to the public.

2. In order to enhance pipeline safety in the Commonwealth, when the requirements of this section have been satisfied, a natural gas utility shall be permitted to recover eligible safety activity costs incurred on and after January 1, 2013, in future rates as provided in this section. The natural gas utility shall maintain the burden of demonstrating that the eligible safety activity costs have been reasonably and prudently incurred and that the criteria of this section have been satisfied.
3. A natural gas utility may account for eligible safety activity costs to be recovered pursuant to this section as deferred costs. The accumulated unrecovered balance of eligible safety activity costs deferred pursuant to this section shall not exceed four percent of the natural gas utility's net plant investment that was utilized in establishing or confirming base rates in the natural gas utility's most recent rate case using the cost of service methodology set forth in § 56-235.2 or performance-based regulation plan authorized by § 56-235.6 . The eligible safety activity costs deferred hereunder shall be included in new base rates and charges instituted pursuant to a Commission order establishing or confirming customer rates in a rate case using the cost of service methodology set forth in § 56-235.2 or a performance-based regulation plan authorized by § 56-235.6 . Such deferred costs shall not be subject to write-off or write-down by the Commission in an earnings test filing made pursuant to Commission rules governing utility rate increases and annual informational filings except as provided in this subsection. The natural gas utility shall be deemed to have recovered eligible safety activity costs to the extent that the return on equity earned by the natural gas utility in an earnings test filing for a given year, after consideration of the treatment of regulatory assets, is in excess of the mid-point of the rate of return on equity range specified or confirmed in the natural gas utility's most recent rate case or performance-based regulation plan. Notwithstanding the foregoing, in the event that a utility's base rates include eligible safety activity costs, the utility shall only be permitted to defer the level of eligible safety activity costs that are in excess of the level reflected in base rates.
4. Any natural gas utility that has on its books eligible safety activity costs deferred pursuant to this section shall include an earnings test filing as part of any application for an annual informational filing or rate proceeding.

   (2013, cc. 281, 406.)

§ 56-235.11. Retail rates of affiliated water utilities.

1. As used in this section, unless the context requires a different meaning:

   "Affiliate" of a specific water utility or a water utility "affiliated" with a specific water utility means a water utility that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with the water utility specified.

   "Control," including the terms "controlling," "controlled by," and "under common control with," means direct or indirect possession of the power to direct or cause the direction of the management and policies of a water utility through the ownership of an equity interest. Control shall be presumed to exist with respect to another water utility if any water utility directly or indirectly owns, controls, or holds with the power to vote 50 percent or more of the equity interest of the other water utility.

   "Rates" includes rates, tolls, charges, or schedules.

   "Subsidiary" of a specified water utility means an affiliate directly or indirectly controlled by that water utility through one or more intermediaries.

   "Water utility" means an investor-owned public utility authorized to furnish water or water and sewer service within a certificated service territory in the Commonwealth except any such investor-owned public utility for which the Commission has approved, after July 1, 2009, and prior to July 1, 2017, a consolidated rate structure consisting of three or more rate groups for the same class of service and in one or more subsequent orders has approved additional consolidation of such rate groups.

   "Water utility network" means a water utility and all other water utilities that the water utility is an affiliate of, is affiliated with, controls, is controlled by, is under common control with, or is a subsidiary of. "Water utility network" also means, with respect to a water utility that is authorized to furnish water or water and sewer service within multiple certificated service territories in the Commonwealth, all of the certificated service territories that the water utility is certificated to serve.

2. In any proceeding commenced on and after July 1, 2017, to establish or approve the rates of a water utility that is in a water utility network, the Commission shall ensure that the rates of each water utility in the water utility network are not unjustly discriminatory by ensuring that equal fixed and volumetric rates are charged for each customer class of each water utility that is in the water utility network.
3. Upon the commencement of a proceeding described in subsection B, the Commission shall make each water utility that is a member of the applicable water utility network a party to the proceeding and may review each member water utility's rates. In such proceeding:
   1. The Commission shall review the rates of each member of the applicable water utility network and order gradual adjustments to such water utility's rates over an appropriate period in order to implement the provisions of subsection B; and
   2. The Commission is authorized to aggregate the revenues and costs of the water utilities that are members of the applicable water utility network.

      (2017, c. 822.)

§ 56-235.12. Economic development programs.

1. As used in this section:

   "Acquire utility rights-of-way" means the planning, surveying, permitting, and acquisition of land, including options, easements, and other estates in land.

   "Costs" includes depreciation, taxes, return on investment, and other land-related costs associated with costs incurred to acquire utility rights-of-way pursuant to a Program.

   "Economic Development Program" or "Program" means a program under which a utility is authorized by the Commission under this section to acquire utility rights-of-way for one or more qualified economic development sites.

   "Partnership" means the Virginia Economic Development Partnership Authority.

   "Qualified economic development site" means an industrial site within the Commonwealth that has been certified by the Partnership pursuant to subsection B.

   "Utility" means a public utility providing water, sewer, electric, or natural gas service to retail customers in the Commonwealth.

2. The Partnership is authorized to certify that an industrial site is a qualified economic development site if it finds that:
   1. The person with legal authority to develop the site is authorized to contract for the extension of utility service to the site;
   2. The development of the site is compliant with applicable zoning requirements and is consistent with the locality's comprehensive plan;
   3. Applicable environmental surveys and reviews, including any wetlands survey, geotechnical borings, a topographical survey, a cultural resources review, an Endangered Species review, or a Phase 1 Environmental Assessment, if required, are completed;
   4. An estimate of the costs of the development of the site has been prepared and provided to the Partnership; and
   5. The acquisition of utility rights-of-way for the site will further the creation of new jobs and capital investment in the Commonwealth by facilitating the location of one or more significant economic development projects in the Commonwealth.
3. A utility proposing an Economic Development Program shall file a proposal with the Commission for review. A proposal for approval of a Program shall include an analysis of how acquiring utility rights-of-way will enhance the Commonwealth's infrastructure and promote the Commonwealth's competitive business environment by improving the readiness of a qualified economic development site.
4. The Commission shall approve, or approve with appropriate modifications, a Program if it finds that:
   1. The implementation of the Program will provide material economic development benefits that might not otherwise be attained absent the Commission's approval of the Program;
   2. The Program proposes a rate mechanism, including base rates or a rate adjustment clause, that authorizes the utility to recover its costs incurred in implementing the Program until such time as the investment is placed in service;
   3. The proposal to acquire utility rights-of-way would not otherwise be immediately supported by expected revenues from new loads served under the Program at the qualified economic development site;
   4. The utility's capital investment does not exceed one percent of gross plant investment in the aggregate or $5 million for any specific qualified economic development site;
   5. The associated charges resulting from implementation of the Program will apply only to firm service customers;
   6. The Virginia Economic Development Partnership has certified pursuant to subsection B that the site for which the utility proposes to acquire utility rights-of-way under the Program is a qualified economic development site;
   7. The Program is designed only to acquire utility rights-of-way to a qualified economic development site and not to provide service to other customers or potential customers;
   8. The utility's assumptions regarding costs to acquire utility rights-of-way under the Program are not unduly speculative; and
   9. The Program is not otherwise contrary to the public interest.
5. After Commission review and absent action by the Commission to the contrary, the Program shall take effect 120 days following the date on which the proposal for the Program was filed. Any amendment to a Program following its implementation shall be submitted to the Commission at least 60 days prior to the proposed effective date thereof and, absent action by the Commission to the contrary, the amendment shall become effective on such date.
6. The Commission's approval of a Program shall authorize the utility to:
   1. Acquire utility rights-of-way for the ordinary extension of utility facilities in the normal course of business to one or more qualified economic development sites; and
   2. Recover costs incurred in implementing the Program, including costs deferred and associated carrying costs, from the time incurred until the time the Commission establishes new rates that include recovery of such deferred costs.
7. A utility, in implementing a Program, shall in good faith coordinate the acquisition of rights-of-way with communications providers and other utilities, including water, sewer, electric, or natural gas utilities, so that any facilities ultimately to be constructed may be collocated to the extent feasible.
8. In calculating the utility's return on the investment with regard to costs incurred in implementing a Program, the Commission shall use the utility's regulatory capital structure, including the cost of equity most recently approved by the Commission. If the utility's cost of capital at the time its Economic Development Program is filed has not been changed by order of the Commission within the preceding five years, the Commission may require the utility to file an updated weighted average cost of capital, and the utility may propose an updated weighted average cost of capital.
9. Nothing in this section shall:
   1. Be deemed to prevent one or more utilities from jointly filing a Program under this section, and the Commission may consolidate consideration of Programs filed to serve the same qualified economic development site;
   2. Otherwise impair or enlarge the powers granted to public service companies by this title;
   3. Permit a Program to include conversion of existing retail propane customers to electric or natural gas; or
   4. Prohibit an electric utility from recovering its transmission-related costs incurred in implementing the Program through a rate adjustment clause pursuant to subdivision A 4 of § 56-585.1 .
10. A utility may request proprietary treatment of any and all supporting materials provided in support of a Program.

    (2019, cc. 494, 495.)

§ 56-236. Public utilities required to file schedules of rates and charges; rules and regulations; when detariffing of telephone services to be permitted.

1. Unless the Commission determines otherwise, every public utility shall be required to file with the Commission and to keep open to public inspection schedules showing rates and charges, either for itself, or joint rates and charges between itself and any other public utility. Every public utility shall file with, and as a part of, such schedules, copies of all rules and regulations that in any manner affect the rates charged or to be charged.
2. The Commission shall permit, but may not mandate, the detariffing of any or all terms, conditions, or rates for (i) any retail telephone service classified by the Commission to be competitive and (ii) any other retail telephone service not found by the Commission prior to January 1, 2011, to be a basic local exchange telephone service.
3. As of July 1, 2013, the Commission shall permit, but may not mandate, the detariffing of any or all terms, conditions, or rates for any or all retail telephone services.

   (Code 1919, § 4066; 1918, p. 674; 1924, p. 538; 1927, p. 123; 2011, cc. 738, 740.)

The 2011 amendments. - The 2011 amendments by cc. 738 and 740 are identical, and substituted "A. Unless the Commission determines otherwise" for "Every" at the beginning of subsection A; and added subsections B and C.

Law review. - For survey of the Virginia law on business associations for the year 1970-1971, see 57 Va. L. Rev. 1541 (1971).

§ 56-236.1. Rates to be charged churches.

No electric utility, subject to regulation by the Commission, shall charge a church for its services by any method other than actual kilowatt hour consumption; nor shall any such electric utility charge a church for its electrical service at a rate in excess of the applicable residential rate for the area in which it is located. As used in this section, "church" shall be limited to the synagogue or church building in which the sanctuary or principal place of worship is located and to all educational buildings which are physically attached by enclosed corridors or hallways to the building in which the sanctuary or principal place of worship is located.

Notwithstanding the requirements of the first sentence of this section, the Commission may, after a hearing upon application by an electric utility, set a rate for churches in excess of the applicable residential rate if the utility proves that the cost of service for churches exceeds the cost of service for those other customers under the residential rate. In setting such a rate, the Commission shall consider the special use characteristics of churches, such as the amount of electricity utilized during off-peak power periods for the utility. The provisions of this section shall not apply to churches which are served by an electric utility having a time of usage rate approved by the Commission and which have elected to be on such time of usage rate.

(1978, c. 531; 1980, c. 259.)

§ 56-236.2. Suspension of service to sewerage system.

No public utility furnishing heat, light or power to a sewerage system, after receiving notice pursuant to § 56-261 or § 56-265.11:1 from the person operating such system, may suspend service for nonpayment without giving at least ten days' advance notice in writing to the Commission and the Director of the Department of Environmental Quality.

(2000, c. 183.)

§ 56-237. How changes in rates effected; notice required; changes to be indicated on schedules.

No change shall be made in any schedule required to be filed pursuant to § 56-236 , including schedules of joint rates, except after 30 days' notice to the Commission, in such manner as the Commission may require, and to the public, in such manner as prescribed in § 56-237.1 , and all such changed rates, tolls, charges, rules, and regulations shall be plainly indicated upon existing schedules or by filing new schedules in lieu thereof not less than 30 days prior to the time the same are to take effect; provided, that the Commission may, in particular cases, authorize or prescribe less time in which changes may be made; and provided further that, in the case of water companies, the notice to the public shall set forth the proposed rates and charges.

(Code 1919, § 4066; 1918, p. 674; 1924, p. 539; 1927, p. 123; 1954, c. 298; 1976, c. 763; 2011, cc. 738, 740.)

The 2011 amendments. - The 2011 amendments by cc. 738 and 740 are identical, and inserted "required to be" preceding "filed pursuant to" and deleted "the preceding section" thereafter, substituted " § 56-236 " for "( § 56-236 )," and "30" for "thirty" twice.

Law review. - For article analyzing ratemaking issues under the SCC, see 14 Wm. & Mary L. Rev. 601 (1973). For special section on rate-making and public policy in Virginia, see 18 Wm. & Mary L. Rev. 73 (1976).

Michie's Jurisprudence. - For related discussion, see 15 M.J. Public Service and State Corporation Commissions, § 30.

§ 56-237.1. Notification of intent to seek rate change in schedules required to be filed under § 56-236.

1. Every public utility, other than a public utility providing water or sewer service, that indicates upon existing required schedules, or upon new schedules required to be filed in lieu thereof, changes in rates, tolls, charges, rules and regulations, shall cause to have published, once a week for four successive weeks, in one or more newspapers in circulation in its franchise area and approved by the Commission, a notice of its intention to change its rates, tolls, charges, rules and regulations. Every public utility providing water or sewer service that indicates upon existing required schedules, or upon new schedules required to be filed in lieu thereof, changes in rates, tolls, charges, rules and regulations, shall cause to have published at least once in one or more newspapers in circulation in its franchise area and approved by the Commission, a notice of its intention to change its rates, tolls, charges, rules and regulations. The last such publication shall appear no less than 30 days prior to the time any changed rates, tolls, charges, rules and regulations shall take effect. This notice shall be in such form and contain such information as prescribed by the Commission.
2. Every public utility that indicates upon existing required schedules, or upon new schedules required to be filed in lieu thereof, changes in rates, tolls, charges, rules, and regulations shall mail to each of its customers who receive periodic statements of charges by mail or send electronically to each of its customers who receive periodic statements of charges electronically, along with its periodic invoice, bill, or other statement advising the customer of its charges, a notice of its intention to change its rates, tolls, charges, rules, and regulations. This notice shall be mailed or sent electronically no less than 30 days prior to the time any such changed rate, toll, charge, rule, and regulation shall take effect. This notice shall be in such form and contain such information as prescribed by the Commission.
3. Except for public utilities providing water or sewer service, the Commission may dispense with either or both of the requirements contained in subsections A and B if either or both such requirements are not necessary to provide adequate notice to all of the public utilities' customers. The Commission may prescribe additional requirements for notification to a public utility's customers of its intention to change its rates, tolls, charges, rules, and regulations.

   (1976, c. 763; 2011, cc. 738, 740; 2016, cc. 191, 283.)

The 2011 amendments. - The 2011 amendments by cc. 738 and 740 are identical, and, in subsection A, inserted "required" following "every public utility which indicates upon existing," inserted "required to be" thereafter in the first sentence, substituted "30" for "thirty" in the second sentence; in subsection B, inserted "required" preceding "schedules, or upon new schedules" and inserted required to be" thereafter; in subsection C, substituted "subsections" for "paragraphs" preceding "A and B" and deleted "of this section" thereafter; and made minor stylistic changes.

The 2016 amendments. - The 2016 amendments by cc. 191 and 283 are identical, and in subsection A, substituted "other than a public utility providing water or sewer service, that" for "which" and inserted the second sentence; in subsection B, substituted "that" for "which" and inserted "who receive periodic statements of charges by mail or send electronically to each of its customers who receive periodic statements of charges electronically" in the first sentence and inserted "or sent electronically" in the second sentence; and in subsection C, inserted "Except for public utilities providing water or sewer service."

Law review. - For discussion of this section in the survey of Virginia administrative law for the year 1975-1976, see 62 Va. L. Rev. 1360 (1976).

Michie's Jurisprudence. - For related discussion, see 15 M.J. Public Service and State Corporation Commissions, § 30.

§ 56-237.2. Public hearings on protests or objections to rate changes.

Whenever pursuant to § 56-237 there shall be filed with the Commission any schedule required to be filed under § 56-236 stating a change of rate, toll or charge and a protest or objection thereto is filed by or on behalf of the lesser of 150 or five percent of the customers or consumers or other persons subject to such rate, toll or charge, the Commission shall upon reasonable notice conduct a public hearing concerning the lawfulness of the proposed rate, toll or charge. At any such hearing involving a change of such rate, toll or charge, the burden of proof shall be upon the applicant therefor to demonstrate that the proposed change is just and reasonable. The Commission shall prescribe all necessary rules and regulations for the conduct of such hearing, which rules shall afford ample opportunity for participation or representation by persons affected by such change.

(1977, c. 436; 1995, c. 260; 2011, cc. 738, 740.)

The 1995 amendment substituted "the lesser of 150 or five percent (5%) of the" for "twenty or more" near the middle of the first sentence.

The 2011 amendments. - The 2011 amendments by cc. 738 and 740 are identical, and inserted "required to be filed under § 56-236 " in the first sentence; inserted "such" preceding "proposed rate, tolls, charge" in the last sentence, and made minor stylistic changes.

§ 56-238. Suspension of proposed rates, etc.; investigation; effectiveness of rates pending investigation and subject to bond; fixing reasonable rates, etc.

The Commission, either upon complaint or on its own motion, may suspend the enforcement of any or all of the proposed rates, tolls, charges, rules or regulations for schedules required to be filed under § 56-236 of any public utility, except an investor-owned electric public utility, for a period not exceeding 150 days, or if the public utility is an investor-owned water utility not subject to Chapter 10.2:1 (§ 56-265.13:1 et seq.) for a period not exceeding 180 days, from the date of filing, and the Commission shall suspend the enforcement of all of the proposed rates, tolls, charges, rules or regulations of an investor-owned electric public utility until the Commission's final order in the proceeding, during which times the Commission shall investigate the reasonableness or justice of such proposed rates, tolls, charges, rules and regulations and thereupon fix and order substituted therefor such rates, tolls, charges, rules and regulations as shall be just and reasonable. The Commission's final order in such a proceeding involving an investor-owned electric public utility that is filed after January 1, 2010, shall be entered not more than nine months after the date of filing, at which time the suspension period shall expire, and any revisions in rates or credits so ordered shall take effect not more than 60 days after the date of the order. Notice of the suspension of any such proposed rate, toll, charge, rule or regulation shall be given by the Commission to the public utility, prior to the expiration of the 30 days' notice to the Commission and the public heretofore provided for. If the proceeding has not been concluded and an order made at the expiration of the suspension period, after notice to the Commission by the public utility making the filing, the proposed rates, tolls, charges, rules or regulations shall go into effect. Where increased rates, tolls or charges are thus made effective, the Commission shall, by order, require the public utility to furnish a bond, to be approved by the Commission, to refund any amounts ordered by the Commission, to keep accurate accounts in detail of all amounts received by reason of such increase, and upon completion of the hearing and decision, to order such public utility to refund, with interest at a rate set by the Commission, the portion of such increased rates, tolls or charges by its decision found not justified. The Commission shall prescribe all necessary rules and regulations to effectuate the purposes of this section on or before September 1, 1980. This section shall not apply to proceedings conducted pursuant to § 56-245 or 56-249.6 .

(Code 1919, § 4066; 1918, p. 674; 1924, p. 539; 1927, p. 123; 1980, c. 446; 2010, cc. 1, 2; 2011, cc. 738, 740; 2017, c. 619.)

Editor's note. - Acts 2010, cc. 1 and 2, cl. 2 provides: "That an incumbent electric utility that was, as of July 1, 1999, not bound by a rate case settlement adopted by the State Corporation Commission that extended in its application beyond January 1, 2002, shall suspend the collection of interim rates during the pendency of the Commission's consideration of the utility's application brought pursuant to subsection A of § 56-585.1 of the Code of Virginia and filed on July 15, 2009. To determine if a refund is required for the period when interim rates were in effect before such suspension, the Commission shall offset any required refund, which is the amount of revenue collected while the interim rates were in effect that exceeds the amount approved by the Commission in its final order on the utility's application, by the amount of revenue that the utility would have collected had the rates ultimately approved by the Commission in its final order on the utility's application been in effect during the period between the date such suspension commenced and the effective date of the rates approved by the Commission in its final order. The Commission shall issue its final order on the utility's application not later than July 15, 2010, for rates to become effective for bills rendered on and after August 1, 2010, notwithstanding the provisions of subsection A of § 56-235.4 of the Code of Virginia."

The 2010 amendments. - The 2010 amendments by cc. 1 and 2, effective February 24, 2010, are identical, and rewrote the section.

The 2011 amendments. - The 2011 amendments by cc. 738 and 740 are identical, and inserted "for schedules required to be filed under § 56-236 " in the first sentence; and made minor stylistic changes.

The 2017 amendments. - The 2017 amendment by c. 619 inserted "or if the public utility is an investor-owned water utility not subject to Chapter 10.2:1 ( § 56-265.13:1 et seq.) for a period not exceeding 180 days" in the first sentence.

Law review. - For article analyzing rate-making issues under the SCC, see 14 Wm. & Mary L. Rev. 601 (1973).

Applied in Board of Supvrs. v. C & P Tel. Co., 212 Va. 57 , 182 S.E.2d 30 (1971); Commonwealth ex rel. Office of Att'y Gen. v. Central Tel. Co., 219 Va. 883 , 252 S.E.2d 586 (1979).

§ 56-239. Appeal from action of Commission.

The public utility whose schedules shall have been so filed or the Commonwealth or other party in interest or party aggrieved may appeal to the Supreme Court from such decision or order as the Commission may finally enter. Upon the granting of such appeal the Supreme Court may award or refuse a writ of supersedeas, and, if a writ of supersedeas be awarded, it may suspend the operation of the action appealed from in whole or in part. Alternatively, the Supreme Court in its discretion may authorize putting into effect the schedule of rates so filed and suspended by the Commission or the schedule of rates existing at the time of the filing of the schedule upon which the investigation and hearing have been had, or require the inauguration of the schedule of rates as ordered by the Commission, until the final disposition of the appeal. But, prior to the final reversal of the order appealed from by the Supreme Court, no action of the Commission prescribing or affecting rates or charges shall be delayed, or suspended in its operation, by reason of any appeal by the party whose rates or charges are affected, or by reason of any proceeding resulting from such appeal until a suspending bond payable to the Commonwealth has been executed and filed with the Commission with such conditions, in such penalty, and with such surety thereon as the Commission, subject to review by the Supreme Court, may deem sufficient. In any appeal from action of the Commission prescribing or affecting the rates or charges of a public utility, such bond, or if no bond is required, the order of the Supreme Court, shall expressly provide for the prompt refunding to the parties entitled thereto of all charges which may have been collected or received, pending the appeal, in excess of those fixed, or authorized by the final decision on appeal, with interest from the date of the collection thereof. But no bond shall be required of the Commonwealth. Any bond required under this section shall be enforced in the name of the Commonwealth before the Commission or before any court having jurisdiction, and the process and proceedings thereon shall be as provided by law upon bonds of like character required to be taken by courts of record of this State.

(Code 1919, § 4066; 1918, p. 674; 1924, p. 539; 1927, p. 124; 1971, Ex. Sess., c. 31.)

Law review. - For article analyzing the financial barriers to public participation in the regulatory activities of the SCC, see 14 Wm. & Mary L. Rev. 567 (1973). For article analyzing ratemaking issues under the SCC, see 14 Wm. & Mary L. Rev. 601 (1973).

§ 56-240. Proposed rates, etc., or changes thereof, not suspended effective subject to later change by Commission; refund or credit; appeal; investor-owned public utilities required to show increase complies with § 56-235.2.

Unless the Commission so suspends such schedule of rates, tolls, charges, rules and regulations or changes thereof that are required to be filed under § 56-236 , the same shall go into effect as originally filed by any public utility as defined in § 56-232 , upon the date specified in the schedule subject, however, to the power of the Commission, upon investigation thereafter, to fix and order substituted therefor such rate or rates, tolls, charges, rules, or regulations, as shall be just and reasonable, as provided in §§ 56-235 and 56-247 . The Commission may thereupon, in its discretion, order such public utility to refund or give credit promptly to the parties entitled thereto any portion or all of the charges originally filed by the public utility which may have been collected or received in excess of those charges finally fixed and ordered substituted therefor by the Commission. Rates of any utility found to be operating in violation of § 56-265.3 may be deemed subject to refund by the Commission, on its own motion, as of the date of the Commission's order finding that the utility was operating in violation of § 56-265.3 . Such rates shall then be interim in nature and subject to refund until such time as the Commission has determined the appropriateness of the rates. Any amount of the rates found excessive by the Commission shall be subject to refund with interest, as may be ordered by the Commission.

From any action of the Commission in prescribing rates, refunds, credits, tolls, charges, rules and regulations or changes thereof that are required to be filed under § 56-236 , an appeal may be taken by the corporation whose rates, refunds, credits, tolls, charges, rules and regulations or changes thereof are affected, or by the Commonwealth, or by any person deeming himself aggrieved by such action.

No such rate increase shall go into effect under the provisions of this section for an investor-owned gas, telephone or electric public utility unless such public utility has filed with its schedule information and data designed to show that any increase complies with the just and reasonable requirements of § 56-235.2 , and unless based thereon the Commission finds a reasonable probability that the increase will be justified upon full investigation and hearing. The Commission is authorized to promulgate any rules necessary to implement this provision.

(Code 1919, § 4066; 1918, p. 675; 1924, p. 540; 1927, pp. 124, 125; 1971 Ex. Sess., c. 31; 1973, c. 262; 1979, c. 249; 1998, c. 63; 2011, cc. 738, 740.)

The 1998 amendment, in the first paragraph, added the third through the last sentences.

The 2011 amendments. - The 2011 amendments by cc. 738 and 740 are identical, and inserted "that are required to be filed under § 56-236 " in the first sentence of the first and second paragraphs; and made minor stylistic changes.

Law review. - For article analyzing ratemaking issues under the SCC, see 14 Wm. & Mary L. Rev. 601 (1973). For special section on ratemaking and public policy in Virginia, see 18 Wm. & Mary L. Rev. 73 (1976).

Michie's Jurisprudence. - For related discussion, see 15 M.J. Public Service and State Corporation Commissions, §§ 22, 23, 28.

§ 56-241. Rates of telephone companies.

The power of the Commission over the rates of telephone companies shall be as defined (i) by this chapter or (ii) by § 56-481.1 .

(Code 1919, § 4066; 1918, p. 676; 1924, p. 540; 1927, p. 125; 1964, c. 195; 1973, c. 262; 1984, c. 721; 2011, cc. 738, 740.)

The 2011 amendments. - The 2011 amendments by cc. 738 and 740 are identical, and deleted "and § 56-481 " preceding "or (ii) by § 56-481 .1."

Law review. - For article analyzing ratemaking issues under the SCC, see 14 Wm. & Mary L. Rev. 601 (1973). For special section on ratemaking and public policy in Virginia, see 18 Wm. & Mary L. Rev. 73 (1976).

§ 56-241.1. Flat and measured telephone rates; certain rates prohibited.

Every telephone company which offers dial tone line or substantially equivalent local service shall offer to its residential and business customers at least one offering of such service consisting of a single dial tone line, including associated usage, for the purpose of two-way voice communications within a local calling area at a flat rate unless there was no telephone company offering such a class of service at a flat rate in the local calling area on January 1, 1979. No residential or business customer shall be forced to accept local measured rate service for calling within a local calling area based on the number of calls, length of call, distance or time of day, not in effect on January 1, 1979. Nothing contained herein shall prohibit the Commission from approving the voluntary tariff of any telephone company based on the number of calls, length of call, distance or time of day.

(1979, c. 91; 1985, c. 389; 1996, c. 378.)

The 1996 amendment rewrote this section which formerly read: "The Commission shall not approve any mandatory tariff for local service of any telephone company based on the number of calls, length of call, distance or time of day, not in effect on January 1, 1979. Nothing contained herein shall prohibit the Commission from approving the voluntary tariff of any telephone company based on the number of calls, length of call, distance or time of day."

§ 56-241.2. Approval of rates for resale of telephone service.

Notwithstanding the provisions of § 56-241.1 , the Commission may approve a mandatory tariff based only on the number of calls for any telephone company if such tariff is limited to the rates charged for the resale of local business service or for the providing of coin telephone service by a person other than the telephone company.

(1985, c. 389.)

§ 56-242. Temporary reduction of rates.

Whenever the Commission, pending an investigation had upon its own motion, or upon complaint, is of the opinion and so finds after an examination of any report or reports, annual or otherwise, filed with the Commission by any public utility, together with any other facts or information which the Commission may acquire or receive from an investigation of the books, records, or papers, or from an inspection of the property of such public utility, that the net income of such public utility, after reasonable deductions for depreciation and other proper and necessary reserves, is in excess of the amount required for a reasonable return upon the value of such public utility's property, used and useful in rendering its service to the public, and if the Commission is of the opinion and so finds in such cause that a hearing to determine all of the issues involved in a final determination of rates of service will require more than ninety days of elapsed time, the Commission may, in case of such emergency, enter a temporary order, after not less than ten days' notice to such public utility of its contemplated action and affording to it reasonable opportunity to introduce evidence and to be heard thereon, fixing a temporary schedule of rates, which order shall be forthwith binding upon such public utility. But the Commission's power to order reductions in rates and charges of any public utility by means of such a temporary order, is limited to reductions which will absorb not more than the amount found by the Commission to be in excess of the amount of income, as determined by the Commission, necessary to provide a reasonable return on the value of the property of such public utility as found by the Commission as aforesaid.

(1934, p. 365; Michie Code 1942, § 4071a.)

§ 56-243. Duration of such temporary reduction.

No temporary order made under § 56-242 shall remain in force or effect for a longer period than nine months from its effective date, and a further period not to exceed three months in addition if so ordered by the Commission.

(1934, p. 366; Michie Code 1942, § 4071a.)

§ 56-244. Increase to make up for losses due to excessive temporary reduction.

If upon a final disposition of the issues involved in a proceeding mentioned in § 56-242 , the rates or charges as finally determined by the Commission, or the court having jurisdiction of the subject matter, are in excess of the rates and charges prescribed in any temporary order issued in such proceeding, then such public utility shall be permitted, over such reasonable time as the Commission shall fix, to amortize and recover, by means of a temporary increase over and above the rates and charges finally determined, such sum as shall represent the difference between the gross income obtained from the rates and charges prescribed in such temporary reduction order, and the gross income which would have obtained, during the period such temporary reduction order was in effect, based upon the same volume, from the rates and charges finally determined.

(1934, p. 366; Michie Code 1942, § 4071a.)

§ 56-245. Temporary increase in rates.

Whenever the Commission, upon petition of any public utility, is of the opinion and so finds, after an examination of the reports, annual or otherwise, filed with the Commission by such public utility, together with any other facts or information which the Commission may acquire or receive from an investigation of the books, records or papers, or from an inspection of the property of such public utility, or upon evidence introduced by such public utility, that an emergency exists, and that the public utility has made a preliminary showing of all the elements of § 56-235.2 sufficient to demonstrate a reasonable probability that the increase will be justified upon full investigation and hearing and is of the opinion and so finds that a hearing to determine all of the issues involved in the final determination of the rates or service will require more than ninety days of elapsed time, the Commission may, in case of such emergency, enter a temporary order fixing a temporary schedule of rates, which order shall be forthwith binding upon such utility and its customers; provided, however, that when the Commission orders an increase in the rates or charges of any public utility by means of such temporary order, it shall require such utility to enter into bond in such amount and with such security as the Commission shall approve, payable to the Commonwealth, and conditioned to insure prompt refund by such public utility, to those entitled thereto, of all amounts which such public utility shall collect or receive in excess of such rates and charges as may be finally fixed and determined by the Commission; and provided, further, however, that no such temporary order shall remain in force or effect for a longer period than nine months from its effective date, and a further period not to exceed three months in addition if so ordered by the Commission.

(1934, p. 366; Michie Code 1942, § 4071a; 1973, c. 262; 1977, c. 336.)

Law review. - For article analyzing ratemaking issues under the SCC, see 14 Wm. & Mary L. Rev. 601 (1973).

§ 56-245.1. Meters to be kept in good working condition; defective meters.

1. Any person, firm, corporation, county, city, town or association, hereinafter referred to as person, who or which furnishes water, gas or electricity to the premises of another and employs a meter to determine the quantity of water, gas or electricity furnished to such premises and bases its charges thereon shall keep meter in good working condition.
2. When any such person is notified in writing that any such meter is broken or not functioning properly he shall promptly investigate the matter and, if the meter is found to be defective, repair or replace the meter within thirty days of such notice. If the meter is found to be in good working condition, a written report of such determination shall be mailed or delivered to the affected customer within thirty days of such notice. If any defective meter is not repaired or replaced as provided herein, or if the required report is not made, the affected customer shall not be required to pay for the service furnished through the meter, after the expiration of the thirty-day period until the repair or replacement is made, or until the required report is made, and his service shall not be terminated for failure to pay under such circumstances.

   (1972, c. 71.)

The number of this section was assigned by the Virginia Code Commission, the 1972 act having assigned no number.

§ 56-245.1:1. Customers to be notified about nuclear emergency evacuation plans.

At least once in every calendar year after July 1, 1980, each electric public utility which owns, operates or maintains a nuclear generating facility in the Commonwealth shall publish in a newspaper having general circulation within a ten-mile radius of such facility, a statement or notice prepared or approved by the Department of Emergency Management setting forth the evacuation and other protective actions to be taken by persons or concerns located within such ten-mile radius, in the event of a nuclear radiation emergency resulting from the maintenance, operation or failure of such nuclear facility. After the publication of the first statement or notice required hereby, subsequent statements or notices shall be published at time intervals not exceeding twelve months. The provisions hereof shall not be effective when federal laws or regulations providing for yearly dissemination of similar information to members of the public located within a ten-mile radius of any such nuclear generating facility take effect.

(1980, c. 734.)

The number of this section was assigned by the Virginia Code Commission, the number in the 1980 act having been 56-247.2.

§ 56-245.1:2. Customers to be notified of renewable power options.

1. The Commission shall post on its website the names, telephone numbers, and available hyperlinks of suppliers of electric energy licensed to sell retail electric energy pursuant to § 56-587 , that (i) expressly state in their applications for licensure, or for any renewal thereof, that they offer electric energy supplied from renewable energy to retail customers in the Commonwealth as described in subdivision A 5 of § 56-577 and (ii) request in any such applications that they be identified on the Commission's website as making such offers. Provided, however, that by posting such information on its website, the Commission shall not be deemed to provide any guarantees or assurances concerning the bona fides of such offers or that any such offers are in conformance with the laws of the Commonwealth.
2. At least once each calendar quarter, each investor-owned electric utility in the Commonwealth shall include in or on the customer bills a notice directing them to the Commission website described in subsection A. Each investor-owned electric utility shall also feature available options for purchasing electric energy from renewable sources offered by the utility prominently on its website.

   (2008, c. 518; 2016, cc. 248, 259.)

The 2016 amendments. - The 2016 amendments by cc. 248 and 259 are identical, and added subsection A; inserted "B. Beginning January 1, 2009," substituted "the Commission website described in subsection A" for "a toll-free telephone number or Internet website that will provide information on the options to purchase electric energy provided from renewable energy sources from the utility or from any supplier of electric energy licensed to sell retail electric energy within the applicable service territory, pursuant to subdivision A 5 of § 56-577 . The notice shall include instructions for purchasing electric energy from renewable sources from the utility or other licensed supplier of electric energy. The option shall be exercisable, at the customer's option, either via the company's Internet website or toll-free telephone number," inserted "offered by the utility" and substituted "website" for "Internet site."

§ 56-245.2. Definitions.

1. When used in this article, unless expressly stated otherwise: "Apartment house" means a building or buildings with the primary purpose of residential occupancy containing more than two dwelling units all of which are rented primarily for nontransient use, with rental paid at intervals of one week or longer. Apartment house includes residential condominiums and cooperatives, whether rented or owner occupied. "Campground" means the same as the term is defined in § 35.1-1 . "Campsite" means that same as that term is defined in § 35.1-1 . "Dwelling unit" means a room or rooms suitable for occupancy as a residence containing kitchen and bathroom facilities. "Energy allocation equipment" means any device, other than submetering equipment, used to determine approximate electric or natural gas usage for any dwelling unit or nonresidential rental unit within an apartment house, office building or shopping center, or campsite at a campground. "Nonresidential rental unit" means a room or rooms in which retail or commercial services, clerical work or professional duties are carried out. "Office building" means a building or buildings containing more than two rental units which are rented primarily for retail, commercial or professional use, with rental paid at intervals of one month or longer. "Owner-paid areas" means those areas for which the owner bears financial responsibility for energy costs which include but are not limited to areas outside individual residential or nonresidential units or campsites or in owner-occupied or owner-shared areas such as maintenance shops, vacant units, meeting units, meeting rooms, offices, swimming pools, laundry rooms, or model apartments.

   "Shopping center" means a building or buildings containing more than two stores which are rented primarily for commercial, retail or professional use.

   "Submetering equipment" means equipment used to measure actual electricity or natural gas usage in any dwelling unit or nonresidential rental unit or campsite when such equipment is not owned or controlled by the electric or natural gas utility serving the apartment house, office building, shopping center, or campground in which the dwelling unit or nonresidential rental unit or campsite is located.

2. Any building or buildings which qualify as an apartment house, office building, or shopping center shall not be excluded from § 56-245.3 because the apartment house, office building or shopping center contains a mixture of dwelling units and nonresidential rental units. (1978, c. 392; 1979, c. 313; 1992, c. 766; 2012, c. 338.)

The 2012 amendments. - The 2012 amendment by c. 338, in subsection A, added the paragraphs defining "Campground" and "Campsite," added "or campsite at a campground" at the end of the paragraph defining "Energy allocation equipment," substituted "nonresidential units or campsites or in owner-occupied or owner-shared areas" for "nonresidential units or in owner-occupied or -shared areas" in the paragraph defining "Owner-paid areas," and substituted "rental unit or campsite" for "rental unit" twice, added "or campground," and made a related change in the paragraph defining "Submetering equipment."

Law review. - For survey of Virginia administrative law for year 1977-1978, see 64 Va. L. Rev. 1365 (1978).

For survey article on judicial decisions in real estate law from June 1, 2002 through June 1, 2003, see 38 U. Rich. L. Rev. 223 (2003).

Research References. - Virginia Forms (Matthew Bender). No. 16-211 Utilities.

§ 56-245.3. Commission to promulgate regulations and standards.

1. Notwithstanding any law to the contrary, the Commission shall promulgate regulations and standards under which any owner, operator, or manager of an apartment house, office building, shopping center, or campground, which is not individually metered for electricity or gas for each dwelling unit, nonresidential rental unit, or campsite may install submetering equipment or energy allocation equipment for the purpose of fairly allocating (a) the cost of electrical or gas consumption for each dwelling unit, nonresidential rental unit, or campsite and (b) electrical or gas demand and customer charges made by the utility. In addition to other appropriate safeguards for the tenant, the regulations shall require (i) that an apartment house, office building, shopping center, or campground owner shall not impose on the tenant any charges, over and above the cost per kilowatt hour, cubic foot or therm, plus demand and customer charges, where applicable, which are charged by the utility company to the owner, including any sales, local utility, or other taxes, if any, except that additional service charges permitted by § 55.1-1212 or 55.1-1404 , as applicable, may be collected to cover administrative costs and billing, and (ii) that the apartment house, office building, shopping center, or campground owner shall maintain adequate records regarding submetering and energy allocation equipment and shall make such records available for inspection by the Commission during reasonable business hours. The provisions of this section shall not restrict the right of the owner, operator or manager to recover in periodic lease payments the tenant's fair share of electricity or gas costs attributable to owner-paid areas and costs incurred by the owner, operator or manager in establishing and maintaining the submetering or energy allocation equipment.
2. Only for purposes of Commission enforcement of the regulations adopted under this section, the owners, operators, or managers of apartment houses, office buildings, shopping centers, or campgrounds included within the purview of this article shall be treated as public service corporations under §§ 56-5 , 56-6 and 56-7 . All submetering equipment shall be subject to the same regulations and standards established by the Commission for accuracy, testing, and record keeping of meters installed by electric or gas utilities and shall be subject to the meter requirements of § 56-245.1 . All energy allocation equipment shall be subject to regulations and standards established by the Commission to ensure that such systems result in a reasonable determination of energy use and the resulting costs for each dwelling unit, nonresidential rental unit, or campsite. Violations of Commission regulations and orders issued under this section shall be subject to the penalty set forth in § 12.1-33 .
3. In implementing this section, no apartment house, office building, shopping center, or campground shall be considered a public utility or public service corporation engaged in the business of distributing or reselling electricity or gas except as provided in subsection B. The apartment house, office building, shopping center, or campground may use submetering or energy allocation equipment solely to allocate the costs of electric or gas service fairly among the tenants using the apartment house, office building, shopping center, or campground.

   (1978, c. 392; 1979, c. 313; 1980, c. 741; 1986, c. 11; 1988, c. 231; 1989, c. 188; 1991, c. 573; 1992, c. 766; 2003, c. 355; 2012, c. 338.)

Editor's note. - To conform to the recodification of Title 55 by Acts 2019, c. 712, effective October 1, 2019, the following substitution was made at the direction of the Virginia Code Commission: substituted " § 55.1-1212 or 55.1-1404 , as applicable" for " § 55-226.2."

The 2003 amendments. - The 2003 amendment by c. 355, substituted "charges permitted by § 55-226.2" for "charge not to exceed two dollars per dwelling unit or nonresidential rental unit per month" and made a stylistic change in subsection A.

The 2012 amendments. - The 2012 amendment by c. 338 inserted "or campground" and "or campsite" and made related and stylistic changes throughout the section.

Law review. - For article on developments in the field of Virginia public utility law from June 2002 through May 2003, see 38 U. Rich. L. Rev. 195 (2003).

§ 56-246. Tests and equipment therefor.

The Commission may purchase such materials, apparatus and standard measuring instruments for such examinations and tests as it may deem necessary, and may provide for the examinations and testing of the service or any part thereof of any public utility in this Commonwealth at such time and under such circumstances as the Commission may deem best.

(Code 1919, § 4069.)

§ 56-247. Commission may change regulations, measurements, practices, services, or acts.

If upon investigation it shall be found that any regulation, measurement, practice, act or service of any public utility complained of is unjust, unreasonable, insufficient, preferential, unjustly discriminatory or otherwise in violation of law or if it be found that any service is inadequate or that any reasonable service cannot be obtained, the Commission may substitute therefor such other regulations, measurements, practices, service or acts and make such order respecting, and such changes in, such regulations, measurements, practices, service or acts as shall be just and reasonable.

The Commission shall investigate the promotional allowances and practices of public utilities and shall take such action as such investigation may indicate to be in the public interest.

(Code 1919, § 4072; 1966, c. 552.)

Cross references. - As to exemption of certain electrical cooperatives from regulations of Commission, see § 56-231.50 .

Editor's note. - Acts 1998, c. 633, cl. 1 provides: "The State Corporation Commission and those parties involved in electric generating and transmission facilities and the sale of electricity in Virginia shall work together to strive to establish one or more independent system operators and one or more regional power exchanges that serve the public interest in the Commonwealth by January 1, 2001."

Law review. - For note on the application of the Parker antitrust exemption afforded state-regulated conduct, see 58 Va. L. Rev. 1511 (1972). For special section on ratemaking and public policy in Virginia, see 18 Wm. & Mary L. Rev. 73 (1976).

§ 56-247.1. Commission to require public utilities to follow certain procedures.

1. The Commission shall require that public utilities adhere to the following procedures for services not found to be competitive:
   1. Every public utility shall provide its residential customers one full billing period to pay for one month's local or basic services, before initiating any proceeding against a residential customer for nonpayment of local service.
   2. Pay the residential customer a fair rate of interest as determined by the Commission on money deposited and return the deposit with the interest after not more than one year of satisfactory credit has been established.
   3. Every public utility shall establish customer complaint procedures that will ensure prompt and effective handling of all customer inquiries, service requests, and complaints. Such procedure shall be approved by the Commission before its implementation and it shall be distributed to its residential customers. The utility shall disclose to the customer that the Commission is the responsible regulatory agency and that the customer may contact the Commission on regulatory matters and provide the customer with the contact information for the Commission.
   4. No electric or gas utility shall terminate a customer's service without 10 days' notice by mail to the customer.
   5. No public utility shall terminate the residential service of a customer for such customer's nonpayment of basic nonresidential services as defined by its terms and conditions on file with the Virginia State Corporation Commission.
   6. A public utility providing water service shall not terminate service for nonpayment until it first sends the customer written notice by mail 10 days in advance of making the termination but, in no event, shall it terminate the customer's service until 20 days after the customer's bill has become due. Any such notice shall also include contact information for the customer's use in contacting the public utility regarding the notice.
   7. Any electric utility formed under or subject to Chapter 9.1 (§ 56-231.15 et seq.) may install and operate, upon a customer's request and pursuant to an appropriate tariff for any type or classification of service, a prepaid metering equipment and system that is configured to terminate electric service immediately and automatically when the customer has incurred charges for electric service equal to the customer's prepayments for such service. Subdivisions 1, 2, 4, and 5 shall not apply to services provided pursuant to electric service provided on a prepaid basis by a prepaid metering equipment and system pursuant to this subsection. Such tariffs shall be filed with the Commission for its review and determination that the tariff is not contrary to the public interest.
   8. No electric utility shall terminate the residential service of a customer for such customer's nonpayment for metered services when the electric utility believes that the customer is receiving or has received electric utility services for which the customer was not properly billed as the result of tampering with the electric utility's meter in a manner that prevented the meter from accurately recording usage, until the electric utility has complied with the procedure set forth in subsection C. However, the requirement that the electric utility comply with the procedure set forth in subsection C before terminating service shall not apply if (i) the condition of a customer's wiring, equipment, or appliances is either unsafe or unsuitable for receiving the electric utility service; (ii) the customer's use of the electric utility service or equipment interferes with or may be detrimental to the electric utility's facilities or to the provision of electric utility service by the electric utility to any other customer; (iii) a tamper-evident meter seal securing the meter is broken, damaged, or missing; (iv) electric service is furnished over a line that is not owned or leased by the electric utility and the line is either not in a safe and suitable condition or is inadequate to receive electric utility service; (v) emergency repairs or alterations are needed; (vi) there are unavoidable shortages or interruptions in a supply of utility service; (vii) the electric utility is acting upon orders from an authority having jurisdiction; or (viii) the actions taken are to preserve life or property, or to avoid or abate utility or fire hazard.
2. Any and all Commission rules and regulations concerning the denial of telephone service for nonpayment of such service shall not apply to services found to be competitive.
3. If an electric utility believes that a customer is receiving or has received electric utility services for which the customer was not properly billed as the result of tampering with the electric utility's meter in a manner that prevented the meter from accurately recording usage, the electric utility shall (i) retrieve the meter from the customer's premises, which may be done without providing prior notice to the customer; (ii) immediately replace it with a new meter; and (iii) determine whether the meter has been tampered with. Within 60 days after any such determination of meter tampering has been made, the electric utility shall provide evidence of such tampering to the customer. If, after determining the meter has been tampered with, the electric utility seeks payment for electric utility services not properly billed, the electric utility shall provide the customer with an invoice with a reasonable and final estimate of the amount owed by the customer as a result of the meter's failure to accurately record the customer's usage. The invoice shall explain the electric utility's calculation of the estimated amount owed as a result of any suspected failure. The electric utility shall provide the customer one full billing period to pay the amount billed in such invoice before initiating any proceeding against the customer for nonpayment. During such billing period, the customer may submit an informal complaint to the Commission disputing the amount sought by the utility. The customer may commence a formal proceeding after the informal complaint process has been exhausted in accordance with Commission regulations.

   (1976, c. 738; 1977, c. 59; 1980, c. 415; 2010, c. 320; 2011, cc. 500, 738, 740; 2020, c. 668.)

Editor's note. - Acts 2011, c. 500, cl. 2 provides: " § 1. That the State Corporation Commission, in order to promote public health and safety, shall conduct a proceeding for the purpose of establishing limitations on the authority of a public utility providing water service to terminate water service to the residence of any customer who provides the certification of a licensed physician that the customer has a serious medical condition or the customer resides with a family member with a serious medical condition. The limitations shall be consistent with the public interest. In the proceeding establishing such limitations, the State Corporation Commission shall consult with the Commissioner of Health, the Commissioner of Social Services, the Virginia Poverty Law Center, the Virginia League of Social Services Executives, water utilities, and any other persons that the State Corporation Commission deems appropriate. As a part of the proceeding, the State Corporation Commission shall adopt regulations to implement such limitations. The regulations shall (i) be adopted in accordance with the Commission's Rules of Practice and Procedure, (ii) be effective not later than October 31, 2011, (iii) establish a cost recovery mechanism under which water utilities shall be authorized to recover, from approved rates collected from other customers or other sources of revenue, any losses on customer accounts the balance of which is written off or otherwise determined to be uncollectible as the result of the implementation of the regulations, and (iv) define 'serious medical condition.' "

The 2010 amendments. - The 2010 amendment by c. 320 added subsection F and made a minor stylistic change.

The 2011 amendments. - The 2011 amendment by c. 500 added subsection F [now subdivision A 6] and made related changes.

The 2011 amendments by cc. 738 and 740 are identical, and inserted the subsection A designation and "for services not found to be competitive" at the end of the introductory language; redesignated former subsections A through G, as present subdivisions A 1 to A 7; substituted "Subdivisions 1, 2, 4, and 5" for "Subsections A, B, D, and E" in the next-to-last sentence of subdivision A 6 [now A 7]; and added subsection B.

The 2020 amendments. - The 2020 amendment by c. 668, in subdivision A 3, substituted "that will ensure" for "which will insure" in the first sentence and added the last sentence; and added subdivision A 8 and subsection C.

§ 56-248. Commission to prescribe standard units of products or service.

The Commission shall ascertain and prescribe for each kind of public utility suitable standard commercial units of products or service. This section shall not apply to telephone companies.

(Code 1919, § 4070; 2011, cc. 738, 740.)

The 2011 amendments. - The 2011 amendments by cc. 738 and 740 are identical, and added the last sentence.

§ 56-248.1. Commission to monitor fuel prices and utility fuel purchases; fuel price index.

The Commission shall monitor all fuel purchases, transportation costs, and contracts for such purchases of a utility to ascertain that all feasible economies are being utilized.

In addition, the Commission shall establish a fuel price index in order to compare the prices paid for the various types of fuel by Virginia utilities with the average price of the various types of fuel paid by other public utilities at comparable geographic locations in the market. This section shall not apply to telephone companies.

(1976, c. 507; 1982, c. 107; 2011, cc. 738, 740.)

The 2011 amendments. - The 2011 amendments by cc. 738 and 740 are identical, and added the last sentence in the last paragraph.

Law review. - For discussion of this section in the survey of Virginia administrative law for the year 1975-1976, see 62 Va. L. Rev. 1360 (1976).

§ 56-249. Reports by utilities.

The Commission, with or without an investigation, may require any public utility to furnish to it in such form, at such times, and in such detail as the Commission shall require, such accounts, reports and other information of whatsoever kind or character as it may deem proper and in such form and detail as it may prescribe, in order to show completely the entire operation of the public utility in furnishing the unit of its product or service to the public.

(Code 1919, § 4070.)

Cross references. - As to exemption of certain electrical cooperatives from the provisions of §§ 56-249 through 56-249.6 , see § 56-231.50 .

As to filing schedule of rates, see § 56-236 .

§ 56-249.1. Commission may require transfer of gas, water or electricity by one utility to another; compensation.

The Commission may require a public utility to transfer to another public utility of like business, gas, water or electricity, whenever the public health, welfare or safety shall be found to so require; provided, however, that the transferring public utility shall be compensated, at a rate fixed by the Commission, for all such deliveries by the receiving public utility.

(1975, c. 358.)

Law review. - For survey of Virginia administrative law for the year 1974-1975, see 61 Va. L. Rev. 1632 (1975).

Michie's Jurisprudence. - For related discussion, see 15 M.J. Public Service and State Corporation Commissions, § 18.

§ 56-249.2. Certain records to be maintained.

All public utilities doing business in the Commonwealth that file a rate of return statement shall, on and after January 1, 1977, or the beginning of the next fiscal year of the public utility after such date, maintain all records necessary to prepare and submit annually a rate of return statement reflecting that part of its total business under regulation of the Commission.

(1976, c. 742; 1979, c. 617; 2011, cc. 738, 740.)

The 2011 amendments. - The 2011 amendments by cc. 738 and 740 are identical, and substituted "the Commonwealth that file a rate of return statement" for "this State."

§ 56-249.3. Certain electric utilities to file reports in relation to fuel transactions, fuel purchases, fuel adjustment clauses, etc.

The Commission shall require that public electric utilities, owning and operating generating facilities, or privately owned utilities purchasing power at wholesale for retail sales within this State, file monthly with the Commission for its review such information as it may deem necessary, which may include the following:

1. The various types of fuels received such as coal, oil, nuclear fuel or natural gas;
2. The following information on fossil fuels:
   1. The supplier of the fossil fuel, the cost in cents per MBTU of the fuel, with a notation of whether the fuel was contracted for, purchased on the spot market or purchased from an affiliate of the electric utility;
   2. The quantities of the various types of fossil fuels received stated in tons of coal, barrels of oil, millions of cubic feet of natural gas;
   3. The average BTU content per pound, gallon or cubic foot received, whichever is applicable;
   4. The average sulfur and ash content, where applicable, of the fuel received;
3. Total demurrage charges incurred at each generating plant;
4. Total cost of transportation incurred at each generating plant;
5. The quantity of fuel consumed by each generation unit in the generating plant;
6. The average cost of the fossil and nuclear fuel in cents per MBTU's consumed at each plant with and without handling charges;
7. The monthly net heat rate expressed in BTU's per kilowatt-hour for each generating unit;
8. The kilowatt-hour output delivered into the system on a monthly basis;
9. The monthly net kilowatt-hour interchange; and
10. The monthly system kilowatt-hour sales.

    (1977, c. 125; 1979, c. 617.)

§ 56-249.4. How reports shall be filed; reports open to public; rules and regulations.

1. The information filed pursuant to § 56-249.3 shall be filed with the Commission in affidavit form within forty-five days following the close of the reference month.
2. All such information and reports filed pursuant to this section and § 56-249.3 shall be open to the public and available for inspection.
3. The Commission shall promulgate all rules and regulations necessary to implement this section and § 56-249.3 . (1977, c. 125; 1982, c. 107.)

§ 56-249.5.

Repealed by Acts 1979, c. 492.

§ 56-249.6. Recovery of fuel and purchased power costs.

1. 1. Each electric utility that purchases fuel for the generation of electricity or purchases power and that was not, as of July 1, 1999, bound by a rate case settlement adopted by the Commission that extended in its application beyond January 1, 2002, shall submit to the Commission its estimate of fuel costs, including the cost of purchased power, for the 12-month period beginning on the date prescribed by the Commission. Upon investigation of such estimates and hearings in accordance with law, the Commission shall direct each company to place in effect tariff provisions designed to recover the fuel costs determined by the Commission to be appropriate for that period, adjusted for any over-recovery or under-recovery of fuel costs previously incurred. A. 1.  Each electric utility that purchases fuel for the generation of electricity or purchases power and that was not, as of July 1, 1999, bound by a rate case settlement adopted by the Commission that extended in its application beyond January 1, 2002, shall submit to the Commission its estimate of fuel costs, including the cost of purchased power, for the 12-month period beginning on the date prescribed by the Commission. Upon investigation of such estimates and hearings in accordance with law, the Commission shall direct each company to place in effect tariff provisions designed to recover the fuel costs determined by the Commission to be appropriate for that period, adjusted for any over-recovery or under-recovery of fuel costs previously incurred.
   2. The Commission shall continuously review fuel costs and if it finds that any utility described in subdivision A 1 is in an over-recovery position by more than five percent, or likely to be so, it may reduce the fuel cost tariffs to correct the over-recovery.
   3. Beginning July 1, 2009, for all utilities described in subdivision A 1 and subsection B, if the Commission approves any increase in fuel factor charges pursuant to this section that would increase the total rates of the residential class of customers of any such utility by more than 20 percent, the Commission, within six months following the effective date of such increase, shall review fuel costs, and if the Commission finds that the utility is, or is likely to be, in an over-recovery position with respect to fuel costs for the 12-month period for which the increase in fuel factor charges was approved by more than five percent, it may reduce the utility's fuel cost tariffs to correct the over-recovery.
2. All fuel costs recovery tariff provisions in effect on January 1, 2004, for any electric utility that purchases fuel for the generation of electricity and that was, as of July 1, 1999, bound by a rate case settlement adopted by the Commission that extended in its application beyond January 1, 2002, shall remain in effect until the later of (i) July 1, 2007 or (ii) the establishment of tariff provisions under subsection C. Any such utility shall continue to report to the Commission annually its actual fuel costs, including the cost of purchased power.
3. Each electric utility described in subsection B shall submit annually to the Commission its estimate of fuel costs, including the cost of purchased power, for successive 12-month periods beginning on July 1, 2007, and each July 1 thereafter. Upon investigation of such estimates and hearings in accordance with law, the Commission shall direct each such utility to place in effect tariff provisions designed to recover the fuel costs determined by the Commission to be appropriate for such periods, adjusted for any over-recovery or under-recovery of fuel costs previously incurred; however, (i) no such adjustment for any over-recovery or under-recovery of fuel costs previously incurred shall be made for any period prior to July 1, 2007, and (ii) the Commission shall order that the deferral portion, if any, of the total increase in fuel tariffs for all classes as determined by the Commission to be appropriate for the 12-month period beginning July 1, 2007, above the fuel tariffs previously existing, shall be deferred without interest and recovered from all classes of customers as follows: (i) in the 12-month period beginning July 1, 2008, that part of the deferral portion of the increase in fuel tariffs that the Commission determines would increase the total rates of the residential class of customers of the utility by four percent over the level of such total rates in existence on June 30, 2008, shall be recovered; (ii) in the 12-month period beginning July 1, 2009, that part of the balance of the deferral portion of the increase in fuel tariffs, if any, that the Commission determines would increase the total rates of the residential class of customers of the utility by four percent over the level of such total rates in existence on June 30, 2009, shall be recovered; and (iii) in the 12-month period beginning July 1, 2010, the entire balance of the deferral portion of the increase in fuel tariffs, if any, shall be recovered. The "deferral portion of the increase in fuel tariffs" means the portion of such increase in fuel tariffs that exceeds the amount of such increase in fuel tariffs that the Commission determines would increase the total rates of the residential class of customers of the utility by more than four percent over the level of such total rates in existence on June 30, 2007.
4. In proceedings under subsections A and C:
   1. Energy revenues associated with off-system sales of power shall be credited against fuel factor expenses in an amount equal to the total incremental fuel factor costs incurred in the production and delivery of such sales. In addition, 75 percent of the total annual margins from off-system sales shall be credited against fuel factor expenses; however, the Commission, upon application and after notice and opportunity for hearing, may require that a smaller percentage of such margins be so credited if it finds by clear and convincing evidence that such requirement is in the public interest. The remaining margins from off-system sales shall not be considered in the biennial reviews of electric utilities conducted pursuant to § 56-585.1 . In the event such margins result in a net loss to the electric utility, (i) no charges shall be applied to fuel factor expenses and (ii) any such net losses shall not be considered in the biennial reviews of electric utilities conducted pursuant to § 56-585.1 . For purposes of this subsection, "margins from off-system sales" shall mean the total revenues received from off-system sales transactions less the total incremental costs incurred; and
   2. The Commission shall disallow recovery of any fuel costs that it finds without just cause to be the result of failure of the utility to make every reasonable effort to minimize fuel costs or any decision of the utility resulting in unreasonable fuel costs, giving due regard to reliability of service and the need to maintain reliable sources of supply, economical generation mix, generating experience of comparable facilities, and minimization of the total cost of providing service. In any proceeding for the recovery of fuel costs under this subdivision in which the costs a utility seeks to recover include costs incurred under a natural gas capacity contract for a term of more than 10 years that procures more than 250,000 dekatherms per day that has not previously been subject to a review under this subdivision, the Commission shall require the utility to prove by a preponderance of the evidence that the utility has (i) determined that the utility cannot meet its service obligations, giving due regard, in the Commission's sole discretion, to reliability of service and the need to maintain reliable sources of supply, without an additional fuel resource; (ii) reasonably identified and determined the date and amount of the new fuel resource it needs; (iii) objectively studied available alternative fuel resource options, as verified by the Commission, including options other than a new natural gas capacity contract or contracts to meet the identified and determined need; and (iv) determined that the natural gas capacity contract or contracts are the lowest-cost available option, taking into consideration fixed and variable costs and a reasonable projection of utilization. Absent the Commission's finding that the utility has proven by a preponderance of the evidence that the utility had complied with the requirements of clauses (i), (ii), (iii), and (iv), the Commission shall deny the utility's recovery of such costs. Nothing in this subdivision shall limit the Commission's discretion to review and make a determination as to the reasonableness of the recovery by a utility of costs, including costs incurred under a natural gas capacity contract, that were previously subject to a review under this subdivision.
5. The Commission is authorized to promulgate, in accordance with the provisions of this section, all rules and regulations necessary to allow the recovery by electric utilities of all of their prudently incurred fuel costs under subsections A and C, including the cost of purchased power, as precisely and promptly as possible, with no over-recovery or under-recovery, except as provided in subsection C, in a manner that will tend to assure public confidence and minimize abrupt changes in charges to consumers.

   (1978, c. 636; 1979, c. 492; 1980, c. 384; 1982, c. 584; 1984, cc. 716, 725; 1989, c. 666; 2004, c. 827; 2006, c. 939; 2007, cc. 888, 933; 2009, c. 244; 2020, c. 661.)

Editor's note. - Acts 1984, c. 725, cl. 2, provides: "That the provisions of this act shall not apply to applications pending on the effective date of this act [January 1, 1985]."

Acts 2006, c. 939, cl. 3 provides: "That the Department of Mines, Minerals and Energy, working with the Department of General Services, the State Council on Higher Education, and representatives of other agencies and institutions that construct and operate facilities shall analyze current energy performance standards that agencies and institutions use in facility design, make recommendations for changes to the current design and construction practices that will enhance energy performance and efficiency, and research facility energy performance and efficiency benchmarks and metrics that may be used to measure facility performance."

Acts 2006, c. 939, cl. 4 provides: "That the State Corporation Commission and Secretary of Natural Resources shall develop a proposal for a coordinated review of permits for an energy facility requiring (i) an environmental permit that is subject to issuance by any agency or board within the Secretariat of Natural Resources and (ii) a certificate of public convenience and necessity that is subject to issuance by the Commission. The State Corporation Commission and Secretary of Natural Resources shall submit their proposal for a coordinated review process, together with a listing of the types of projects and permits to be reviewed under the coordinated process, an analysis of the potential costs and benefits of such a process, and any legislation required to establish the coordinated review process, to the Governor and the chairmen of the House Committee on Commerce and Labor, the House Committee on Agriculture, Chesapeake and Natural Resources, the Senate Committee on Commerce and Labor, and the Senate Committee on Agriculture, Conservation and Natural Resources by December 1, 2006."

The 2004 amendments. - The 2004 amendment by c. 827 inserted the A 1 designation at the beginning of the first paragraph and inserted the language "or purchases power ... beyond January 1, 2002" near the beginning in subdivision A 1; inserted the A 2 designation at the beginning of the second paragraph and inserted "described in subdivision A 1"; added subsections B and C; inserted the D 1 designation at the beginning of the former third paragraph and in subdivision D 1, added "In proceedings under subsections A and C" at the beginning and deleted "hereunder" following "to be recovered"; inserted the D 2 designation at the beginning of the former fourth paragraph and added "In proceedings under subsections A and C" at the beginning of subdivision D 2; inserted the D 3 designation at the beginning of the former next-to-last paragraph and in subdivision D 3, inserted "under subsections A and C" and "except as provided in subsection C"; and made minor stylistic changes.

The 2006 amendments. - The 2006 amendment by c. 939 rewrote subsection C.

The 2007 amendments. - The 2007 amendments by cc. 888 and 933 are identical, and in subsection B, substituted "later of (i) July 1, 2007 or (ii)" for "earlier of (i) July 1, 2007; (ii) the termination of capped rates pursuant to the provisions of subsection C of § 56-582 ; or (iii)," and deleted "until July 1, 2007" from the end; in subsection C, deleted "Until the capped rates for such utility expire or are terminated pursuant to the provisions of § 56-582 " from the beginning, substituted "and each July 1 thereafter" for "2008, and 2009, and the six month period beginning July 1, 2010," "shall order that the deferral portion, if any of the total increase in fuel tariffs for all classes as" for "may order that up to 40% of any increase in fuel tariffs," and the language beginning "from all classes of customers" for "during the period from July 1, 2008, through December 31, 2010"; rewrote subsection D and made related changes; redesignated former subdivision D 3 as present subsection E; and deleted the former final paragraph, permitting the Commission to dispense with outlined procedures under certain circumstances.

The 2009 amendments. - The 2009 amendment by c. 244 added subdivision A 3.

The 2020 amendments. - The 2020 amendment by c. 661 added the second paragraph of subdivision D 2.

Law review. - For survey of Virginia administrative law for year 1977-1978, see 64 Va. L. Rev. 1365 (1978).

For article, "Public Utility Law," see 43 U. Rich. L. Rev. 295 (2008).

§ 56-249.7. Certain directors and officers of utility to file shareholder information.

The directors and officers of any public utility as defined in § 56-232 shall file with the Commission a record of all officers and directorships and all sources of income in excess of $25,000 per year arising from voting securities in all other corporations which to the knowledge of the director or officer furnishes fuel with a value in excess of $50,000 per year to the public utility. Such records for the past year shall be filed or made current on or before September 1 of each year.

(1985, c. 522.)

§ 56-250. Commission may authorize action by public utility in time of emergency or shortage; plans.

1. Whenever it shall appear by satisfactory evidence that any public utility furnishing in this State power, heat, light or water cannot supply all of its customers the usual requirements of each by reason of strikes, accidents, want of fuel, or for any other reason, the Commission may authorize such public utility to take such action as, in the opinion of the Commission, will minimize adverse impact on the public health and safety and facilitate restoration of normal service to all customers at the earliest time practicable.
2. To facilitate implementation of this section, the Commission may require any such public utility to file, as a part of the rules and regulations referred to in § 56-236 , its plan for curtailment of service in such a condition of emergency or shortage. Such plans shall be considered and shall take effect in the manner provided in this chapter for the schedules of rates and charges and rules and regulations of public utilities. (1920, p. 232; Michie Code 1942, § 4072a; 1974, c. 478; 1975, c. 358.)

Law review. - For special section on ratemaking and public policy in Virginia, see 18 Wm. & Mary L. Rev. 73 (1976).

Michie's Jurisprudence. - For related discussion, see 15 M.J. Public Service and State Corporation Commissions, § 18.

§§ 56-251, 56-252.

Repealed by Acts 1974, c. 478.

§ 56-253. Existing remedies retained.

Nothing contained in this chapter shall in any way abridge or alter the remedies at common law, in equity, or by statute, but the provisions hereof shall be deemed to be in addition to such remedies.

(Code 1919, § 4073.)

Cross references. - As to power of the State Corporation Commission to change rates fixed by city, see § 56-481 .

§ 56-254. Sale or lease of plants to cities or towns.

The board of directors of any public service corporation operating a gas, electric or water plant within the limits of any city or town, or within territory contiguous thereto, is hereby authorized to sell or lease to such city or town the entire plant of such corporation, or any part thereof, including the franchises and easements of such corporation; provided the action of the board of directors be authorized or ratified by an affirmative vote of a majority in interest of the stock issued and outstanding of such corporation, unless a larger interest is required by the charter or bylaws of such corporation.

(1918, p. 463; Michie Code 1942, § 4073g.)

§ 56-255. Extension of electric service to territory not being served.

If, from any rural territory not now being served, application be made to the Commission by a group of five or more persons, natural or artificial, to require an extension of electric service to such territory, the Commission shall, if necessary to accomplish the purposes sought, fix a time for hearing such application, on such terms and conditions as the Commission may prescribe, and, if it be established to the satisfaction of the Commission that a proper guaranteed revenue for a sufficient number of years will accrue to any company which may be required to construct the desired extension, and that a reasonable investment will accrue to the company constructing such extension, then the Commission is hereby authorized and empowered to require the nearest or most advantageously located electric utility company to such territory to construct such extension to such point or points in such territory and to serve such customer or customers therein, as in its judgment is right and proper.

(1936, p. 1056; Michie Code 1942, § 4057(24).)

§ 56-256. Powers of corporations generally; rights, powers, privileges and immunities, etc.

Every corporation organized for the purpose of: (1) constructing, maintaining, and operating an electric railway, or works, (2) supplying and distributing electricity for light, heat, or power, (3) producing, distributing, and selling steam, heat, or power, or compressed air, (4) producing, distributing and selling gas made of coal or other materials, (5) furnishing and distributing a water supply to any city or town, or (6) piping cold air outside of its plant, or (7) constructing and maintaining any public viaduct, bridge or conduit, shall, in addition to the powers conferred upon corporations generally, have all the rights, powers, privileges, and immunities, and be subject to all the rules, regulations, restrictions, pains, and penalties prescribed by §§ 56-458 , 56-459 to 56-462 , 56-466 , 56-467 and 56-484 , which sections shall apply to, and as far as practicable, operate upon the corporations mentioned in this section, unless otherwise provided.

(Code 1919, §§ 4058, 4061.)

§ 56-256.1. Height of electric power distribution lines over agricultural land.

Unless placement at a greater height is required pursuant to § 56-466 or other applicable law, any electric distribution line that is installed, either as a new line or as a replacement for an existing line, on or after July 1, 2018, by or for an electric utility upon or over land upon which agricultural operations, as defined in § 3.2-300 , are conducted shall be placed at a height that is not less than the minimum height requirement that applies to the placement of electric distribution lines above road crossings.

(2018, c. 354.)

§ 56-257. Manner of installing underground utility lines.

1. Every operator, as defined in § 56-265.15 , having the right to install underground utility lines, as defined in § 56-265.15 , except interstate gas pipelines subject to regulation by the U.S. Department of Transportation, shall install such underground utility lines in accordance with accepted industry standards. Such standards shall include, as applicable, standards established by the National Electric Safety Code, the Commission's pipeline safety regulations, the Department of Health's waterworks regulations (12 VAC 5-590-10 et seq.), and standards established by the Utility Industry Coalition of Virginia.
2. The Commission shall promulgate any rules or regulations necessary to enforce the provisions of this section as to those operators that do not comply with such accepted industry standards.
3. This section shall not authorize the Commission to order action by, or impose penalties on, any county, city or town. However, the Commission shall inform counties, cities and towns of alleged violations by the locality of the accepted industry standards or regulations adopted under this section and, at the request of the locality, suggest corrective action.

   (Code 1919, § 4059; 1996, c. 278; 2000, c. 779.)

Editor's note. - Acts 2000, c. 779, cl. 2, provides: "That the State Corporation Commission shall publish for comment the first set of regulations required pursuant to the provisions of this act on or before January 1, 2001."

Acts 2000, c. 779, cl. 3, provides: "That the provisions of this act amending § 56-257 shall become effective on July 1, 2001."

The 1996 amendment rewrote this section which formerly read: "Every corporation organized for any of the purposes enumerated in § 56-256 , in laying any pipe or conduit in any of the public roads in the counties, or in any of the public parks, streets, avenues, or alleys in the cities or towns of this Commonwealth, to be used for the purposes of such company, shall lay the same at a distance of not less than three feet, if possible, from the outside of any water or gas pipe, or other pipe or conduit, already laid, except in cases where it shall be necessary that such pipes or conduits shall cross any water or gas pipe, or other pipe or conduit, and in such cases the pipes or conduits shall be at least twelve inches distant from the outside of any water or gas pipe, or other pipe or conduit, already laid."

The 2000 amendments. - The 2000 amendment by c. 779, effective July 1, 2001, rewrote the section.

Law review. - For note discussing the issues of eminent domain and water allocation as related to coal slurry pipelines, see 17 U. Rich. L. Rev. 789 (1983).

§ 56-257.1. Means of locating nonmetallic underground conduits.

Any plastic or other nonmetallic pressurized conduit installed underground on and after July 1, 1976, shall have affixed thereto a wire conductive of electricity or some other means of locating the conduit while it is underground.

(1976, c. 556.)

Cross references. - For installation requirements for plastic or nonmetallic utility lines installed underground on and after July 1, 2002, see § 56-265.20:1 .

§ 56-257.2. Gas pipeline safety.

1. Notwithstanding any other provision of law, the Commission shall have the authority to regulate the safety of master-metered gas systems, landfill gas transmission or distribution facilities transmitting or distributing landfill gas off premises from a solid waste management facility permitted by the Department of Environmental Quality, and other gas pipeline facilities used in intrastate pipeline transportation, all as defined in the federal regulations promulgated under 49 U.S.C. § 60101 et seq., as amended, and the federal pipeline safety laws, owned or operated by any person, limited liability company, business entity or association of individuals. The authority granted herein shall be exercised in a manner that is not inconsistent with the above-referenced federal regulations and pipeline safety laws.

   This subsection shall not apply to gas systems and pipeline facilities owned or operated by any county, city, or town.

2. For the purposes of pipeline facilities used in the intrastate transportation of gas, all as defined in the federal regulations promulgated under 49 U.S.C. § 60101 et seq., as amended, and the federal pipeline safety laws, and notwithstanding any other provision of law, any person, limited liability company, business entity or association of individuals failing or refusing to obey Commission orders relating to the adoption or enforcement of regulations for the design, construction, operation, and maintenance of intrastate pipeline facilities and temporary or permanent injunctions issued by the Commission shall be fined such sums not exceeding the fines and penalties specified by 49 U.S.C. § 60122(a)(1), as amended. Should the operation of such order be suspended pending an appeal, the period of such suspension shall not be computed against the person in the matter of his liability to fines or penalties. The authority granted herein shall be exercised in a manner that is not inconsistent with the above-referenced federal regulations and pipeline safety laws.

   This subsection shall not apply to gas systems and pipeline facilities owned or operated by any county, city, or town.

3. With respect to the gas systems and pipeline facilities owned or operated by any county, city, or town, the Commission is authorized to act for the United States Secretary of Transportation to conduct safety inspections pursuant to the federal pipeline safety laws, 49 U.S.C. § 60101 et seq., to the extent authorized by certification or agreement with the Secretary under 49 U.S.C. § 60106 of the federal pipeline safety laws, 49 U.S.C. § 60101 et seq., as amended. After each inspection, an exit interview with any county, city, or town shall be conducted prior to promptly reporting to the United States Department of Transportation. This subsection shall not authorize the Commission to impose civil penalties or fines on any county, city, or town and shall not authorize the Commission to exercise jurisdiction over the rates, charges, services, facilities, or service territory of any county, city, or town providing gas service except as is otherwise provided by law.

   (1994, c. 12; 2005, c. 35.)

The 2005 amendments. - The 2005 amendment by c. 35 rewrote subsection A and added subsections B and C.

§ 56-257.2:1. Projects presenting material risk to public safety; licensed professional engineers; regulations.

The Commission shall promulgate regulations requiring that a licensed professional engineer exercise responsible charge, as defined in § 54.1-400, over engineering projects that (i) involve gas pipeline facilities, as defined in the federal regulations promulgated under 49 U.S.C § 60101 et seq., as amended and adopted by the State Corporation Commission, and the federal pipeline safety laws, and (ii) may present a material risk to public safety.

(2020, c. 822.)

Editor's note. - Acts 2020, c. 822, cl. 2 provides: "That prior to promulgating the regulations required by § 56-257.2:1 of the Code of Virginia, as created by this act, the State Corporation Commission (the Commission) shall convene a stakeholder group that shall include representatives of natural gas utilities in the Commonwealth. The Commission shall direct such stakeholder group to develop and propose to the Commission recommendations concerning such regulations no later than December 1, 2020."

Acts 2020, c. 822, cl. 3 provides: "That prior to promulgating the regulations required by § 56-257.2:1 of the Code of Virginia, as created by this act, the State Corporation Commission (the Commission) shall determine the extent to which engineering projects involving gas pipeline facilities present a material risk to public safety and thereby require the seal of a professional engineer. In making its determination, the Commission shall consider solutions that other states and the natural gas industry have proposed or used in addressing such risks and any other information it deems relevant. The Commission shall evaluate (i) the installation of new or replacement transmission class pipelines, distribution mains, distribution services, points of delivery, and district regulator stations; (ii) projects that involve a change in system pressure; (iii) any other projects that may present a material risk to public safety; and (iv) alternative procedures for emergency work."

Acts 2020, c. 822, cl. 4 provides: "That the provisions of the first enactment of this act shall become effective on January 1, 2021."

§ 56-257.3.

Repealed by Acts 2005, c. 35.

Editor's note. - Former § 56-257.3 , pertaining to landfill gas pipeline safety, derived from 1995, c. 643.

§ 56-257.4. Report by the State Corporation Commission on investigation of natural gas utilities incident.

The Commission shall, upon written request, make available for public inspection within 30 days of the receipt of the request a report regarding the finalized enforcement action or investigation related to the death or personal injury necessitating inpatient hospitalization of any person, or estimated damage to property exceeding $50,000, that was the direct result of a leak or other incident involving the intrastate facilities of a natural gas utility operator. The report shall only be available for public inspection, upon written request, after the Commission has concluded the enforcement action or investigation. The report shall not reveal:

1. Infrastructure information for, or the location or operation of security or utility equipment and systems of, any public or private building, structure, or information storage facility;
2. Risk assessment information not provided to the public by the utility operator;
3. Specific security plans and measures of an entity, facility, building structure, information technology system, or software program;
4. Information confidential or sensitive in nature;
5. Information proprietary to the natural gas utility operator; or
6. Information that would jeopardize the safety or security of any (i) person; (ii) governmental facility, building, or structure; or (iii) private commercial office, residential, or retail building.

   (2019, c. 501.)

§ 56-257.5. Manner of installing underground utility lines through agricultural operation.

1. For purposes of this section:

   "Topsoil" means at least 12 inches of the surface soil layer or a six-inch layer of soil that includes the surface soil and the unconsolidated subsoil immediately below it.

   "Underground utility line" means an underground pipeline or conduit of an inside diameter greater than 12 inches or an underground electrical transmission or distribution line of a capacity greater than 115 kilovolts.

2. Every operator, as defined in § 56-265.15 , having the right to install an underground utility line shall install such underground utility line in accordance with regulations adopted pursuant to subsection C.
3. The Commission shall adopt regulations applicable to any operator that is subject to the provisions of subsection B. The regulations shall require that if such operator, in the course of installing the underground utility line, disturbs an area of land that measures 10,000 square feet or more and constitutes one or more agricultural operations, as defined in § 3.2-300 , the operator shall, if desired by the landowner or land management agency, either (i) redistribute the topsoil removed from the disturbed area to graded areas elsewhere on the land of the affected property owner or (ii) if insufficient graded areas are available as sites for such redistribution, stockpile the topsoil removed from the disturbed area until it can be redistributed on the area initially disturbed. The regulations shall require that redistributed topsoil be placed on scarified land and that stockpiled topsoil be protected from erosion and compaction. If the property owner does not agree, then the topsoil shall be disposed of in accordance with applicable law. (2020, c. 666.)

§ 56-258. Who to permit laying of pipelines in roads.

The Commissioner of Highways or the board of supervisors or other governing body in any county that has withdrawn its county roads from the secondary system of state highways is authorized to enter into contract with water companies or other corporations or persons to lay water pipelines along the rights-of-way of public roadways and turnpikes. Such water pipelines shall be laid in such manner as not to obstruct passage thereon when completed, and in any such contract the Commissioner of Highways or any such board of supervisors or other governing body, as the case may be, shall provide that the parties so laying such pipelines shall, at all times, exercise reasonable care not to obstruct such roadways while laying, repairing or replacing such pipe.

(Code 1919, § 4060; 2013, cc. 585, 646.)

Editor's note. - Acts 2013, cc. 585 and 646, cl. 2 provides: "That the provisions of this act shall not be construed to invalidate any action taken or approval rendered by the Commonwealth Transportation Board prior to July 1, 2013, and that any and all actions taken and all approvals rendered by the Board prior to July 1, 2013, shall remain valid and in effect unless modified, superseded, or repealed by subsequent action of the Board."

The 2013 amendments. - The 2013 amendments by cc. 585 and 646 are identical, and substituted "Commissioner of Highways" for "Commonwealth Transportation Board" in the first and second sentences.

§ 56-259. Rights-of-way, etc., may be contracted for; location of easements of public service corporations.

1. Any corporation of the character mentioned in this chapter or in Chapter 2 (§ 56-49 et seq.) may contract with any person or corporation, the owner of lands, or of any interest, franchise, privilege, or easement therein, over, under, or through which any pipeline transmitting petroleum products or natural gas, power or telephone line, sewer or water main or similar works is to be constructed, for the right-of-way for such line, sewer, main or works, and for sufficient land for its necessary offices, plant, or plants, works, stations and structures. All such contracts shall specify with reasonable particularity and definiteness the location of such easement of right-of-way; provided, however, that this provision shall not apply to contracts between any such corporation and any political subdivision of this Commonwealth, but any such corporation shall provide the location of its facilities on land owned by such a political subdivision upon request of such political subdivision.
2. The location of any easement of right-of-way of any public service corporation shall be as specified in the instrument by which such easement was conveyed to such public service corporation; provided that, with respect to all such easements granted after December 31, 1968, if such location is not specified by metes and bounds or by reference to a center line or survey line showing courses and distances from some ascertainable point of beginning, the location of such easement shall be determined by reference to the facilities constructed thereon, and the center line of those facilities shall be the center line of the easement.
3. Prior to acquiring any easement of right-of-way, public service corporations will consider the feasibility of locating such facilities on, over, or under existing easements of rights-of-way. In the event any public service corporation owning a right-of-way shall deny a request of any other public service corporation for joint use of that right-of-way, the corporation whose request is denied shall have the right, within thirty days after the denial to apply to the Commission for an order requiring such joint use. The Commission shall conduct a hearing on such application and shall direct the corporation owning the right-of-way to allow joint use if the Commission finds that such joint use is reasonable and that the present or future public utility service of such corporation will not be adversely affected by such joint use. In making such determination, the Commission may establish the terms and conditions for such joint use, including, without limitation, a requirement of compensation by the utility making the request to the utility owning the right-of-way, if the Commission finds such a requirement to be appropriate.
4. In any case involving an application for a certificate pursuant to § 56-265.2 , the governing body of each locality in which a gas pipeline or electrical transmission line would be located shall have the right to request the Commission to consider directing a joint use of right-of-way within that locality pursuant to the standards in subsection C of this section, provided that the governing body shall file its request no later than the date for public comment on the application established by the Commission.
5. A renewable generator, as defined in § 56-614 , should where feasible locate distribution facilities, as defined in § 56-614 , that are required to connect its renewable energy facility that generates electricity to the electric distribution grid, to distribute steam generated at such facility, or to distribute its landfill gas to customers or a natural gas distribution or transmission pipeline, as applicable, on, over, or under existing easements of rights-of-way of a public service corporation. The renewable generator shall request joint use of the right-of-way from the public service corporation that owns the easement of right-of-way and shall offer to enter into an agreement that will specify the terms and conditions, including rental, under which such joint use will occur. The compensation to be paid to the public service corporation for such joint use shall be as negotiated between the public service corporation and the renewable generator. If any public service corporation owning an easement of right-of-way shall deny a request for the joint use of that right-of-way, the renewable generator shall have the right, exercisable within 30 days after the denial, to apply to the Commission for an order requiring such joint use. The Commission shall conduct a hearing on such application and shall direct the public service corporation owning the easement of right-of-way to allow joint use if the Commission finds that such joint use is reasonable and that the present or future public utility service of such corporation will not be adversely affected by such joint use. In making such determination, the Commission may establish the terms and conditions for such joint use, including, without limitation, the rental compensation that the renewable generator shall pay to the public service corporation owning the easement of right-of-way. The provisions of this subsection shall not apply to railroads. (Code 1919, § 4062; 1964, c. 523; 1968, c. 534; 1972, c. 519; 1979, c. 309; 2001, cc. 745, 752; 2009, c. 807.)

Cross references. - As to limitation of State Corporation Commission authority, see § 10.1-1197.8 .

Editor's note. - Effective October 1, 2021, " § 56-614 " was substituted for " § 67-1100" twice to conform to the recodification of Title 67 by Acts 2021, Sp. Sess. I, c. 387, at the direction of the Virginia Code Commission.

The 2001 amendments. - The 2001 amendment by cc. 745 and 752 are identical, and added the subsection A through C designations; substituted "easement of right-of-way" for "easement or right-of-way" in subsections A, B and C; substituted "easements of rights-of-way" for "easements or rights-of-way" in subsection C; and added subsection D.

The 2009 amendments. - The 2009 amendment by c. 807 added subsection E.

Law review. - For article, "Property Law," see 35 U. Rich. L. Rev. 777 (2001).

Research References. - Virginia Forms (Matthew Bender). No. 16-558 Deed of Easement of Right-of-Way for Utilities, etc.

Michie's Jurisprudence. - For related discussion, see 3A M.J. Canals and Canal Companies, § 3; 7A M.J. Eminent Domain, § 26.

Applied in VEPCO v. Buchwalter, 228 Va. 684 , 325 S.E.2d 95 (1985).

CIRCUIT COURT OPINIONS

Applicability. - Dictates of the statute did not affect the original express easement, as that code section did not come into being until 1964, and the written express easement predated that by twenty-six years. B-A-R-C Elec. Coop. v. Simons, 102 Va. Cir. 104, 2019 Va. Cir. LEXIS 86 (Rockbridge County Apr. 18, 2019).

§ 56-259.1. Instruments conveying easements to public service corporations.

No instrument executed by a landowner after January 1, 2002, by which an easement of right of way in land is conveyed to a public service corporation shall be accepted for recordation in any Clerk's office that maintains property records unless it bears the following provision:

"NOTICE TO LANDOWNER: You are conveying rights to a public service corporation. A public service corporation may have the right to obtain some or all of these rights through exercise of eminent domain. To the extent that any of the rights being conveyed are not subject to eminent domain, you have the right to choose not to convey those rights and you could not be compelled to do so. You have the right to negotiate compensation for any rights that you are voluntarily conveying."

If such an instrument does not bear such a notice provision but is accepted for recordation in any Clerk's office, the absence of such notice provision shall not affect the validity or enforceability of such instrument.

(2001, c. 751.)

Law review. - For article, "Property Law," see 35 U. Rich. L. Rev. 777 (2001).

Research References. - Virginia Forms (Matthew Bender). No. 16-558 Deed of Easement of Right-of-Way for Utilities, etc.

§ 56-260. Compensation for damages.

If any company of the character mentioned in this chapter and such owner as is referred to in § 56-259 cannot agree on the terms of such contract as is referred to in § 56-259 , the company may acquire such right-of-way in the manner provided by the laws of this Commonwealth for the exercise of the right of eminent domain; and in case any person is damaged in his property along the line of any such public road, highway, park, street, avenue, or alley by any such use or occupation of the same, by any company of the character mentioned in this chapter, such corporation shall, before using or occupying with its works such public roads, highways, parks, streets, avenues, or alleys, make compensation therefor to the persons so damaged. If the parties cannot agree upon the same, such compensation shall be ascertained in the mode prescribed by law for the exercise of the right of eminent domain.

(Code 1919, § 4063.)

Law review. - For survey of Virginia law on property for the year 1971-1972, see 58 Va. L. Rev. 1328 (1972).

Research References. - Friend's Virginia Pleading and Practice (Matthew Bender). Chapter 27 Property Actions. § 27.22 Condemnation and Eminent Domain. Friend.

Michie's Jurisprudence. - For related discussion, see 7A M.J. Eminent Domain, §§ 2, 11.

§ 56-260.1. Contract provisions exempting company from liability unlawful.

No contract for an easement of right-of-way for a pipeline, power or telephone line, sewer, main or similar works shall contain any provision which purports to exempt the corporation erecting, laying or installing the same from liability for injuries sustained by any person or property by reason of the laying, constructing, maintaining, operating, repairing, altering, replacing or removal of, or any failure or defect in, such line, sewer, main or works. Any such provision in any such contract is hereby declared to be against public policy and shall be null and void and unenforceable; provided, that this provision shall not apply as to any cause of action arising prior to June 26, 1964.

(1964, c. 523.)

Law review. - For survey of Virginia law on commercial law for the year 1978-1979, see 66 Va. L. Rev. 217 (1980).

Research References. - Virginia Forms (Matthew Bender). No. 16-558 Deed of Easement of Right-of-Way for Utilities, etc.

Michie's Jurisprudence. - For related discussion, see 7A M.J. Eminent Domain, § 26.

§ 56-261. Duties of companies furnishing water or sewerage facilities.

Every public service corporation engaged in the business of furnishing water or sewerage facilities to any city, incorporated town, or county having a population greater than 500 inhabitants per square mile as shown by United States census, in this Commonwealth or to inhabitants thereof (whether or not such business is conducted under or by virtue of a municipal franchise), shall furnish at all times and at a reasonable charge a supply of water, a system of distribution or disposal and services and facilities incidental to such supply, distribution or disposal sufficient and adequate to the protection of the health of such inhabitants and to the public health of the community, and any such water company shall furnish a supply of water adequate for proper fire protection within such city or town or such county and the adjacent territory served by the mains of such corporation. Each person operating a sewerage system which includes one or more sewage treatment plants shall notify in writing, the Commission, the Director of the Department of Environmental Quality and each electric or natural gas utility supplying or distributing energy to such system that such system includes a sewage treatment plant.

(1924, p. 690; 1928, p. 632; Michie Code 1942, § 4073a; 2000, c. 183.)

Cross references. - As to suspension of service to sewerage system and the requirement that public utilities give written notice to the Commission and the Director of the Department of Environmental Quality prior to suspending service to sewage treatment plants, see § 56-236.2 .

The 2000 amendments. - The 2000 amendment by c. 183 added the last sentence.

Michie's Jurisprudence. - For related discussion, see 20 M.J. Water Companies and Waterworks, § 5.

§ 56-261.1. Duties of water and sewerage companies in certain counties.

Chapter 298 of the Acts of 1950, approved April 4, 1950, requiring water and sewerage companies in any county adjoining a county having a population in excess of 2,000 per square mile, to furnish a supply of water sufficient for health and fire protection, is incorporated in this Code by this reference.

The number of this section was assigned by the Virginia Code Commission, the 1950 act having assigned no number.

§ 56-261.2. Hydrant connections and water supply for fire protection in certain counties.

Chapter 319 of the Acts of 1950, approved April 4, 1950, relating to any county adjoining a county having a population in excess of 2,000 per square mile requiring certain water companies to furnish water for fire protection and the necessary hydrant connections, is incorporated in this Code by this reference.

The number of this section was assigned by the Virginia Code Commission, the 1950 act having assigned no number.

§ 56-262. Proceeding upon failure of public service corporation to perform duties.

If any such public service corporation shall fail or refuse to perform any of the duties imposed by § 56-261 or by this chapter, any city or incorporated town, or any such county served or whose inhabitants are served by such corporation may file with the State Corporation Commission a petition setting forth the failure or refusal of such corporation to carry out and perform one or more of such duties, at a reasonable charge, or to the detriment or threatened detriment of the public health or safety from fire of such community.

(1924, p. 690; 1928, p. 632; Michie Code 1942, § 4073b.)

§ 56-263. Commission may order increase in service.

The Commission, after due notice to such public service corporation, shall investigate such complaint and if, upon such investigation, the Commission shall determine that the public health of the community or its safety from fire is impaired or threatened with impairment by reason of the failure of such public service corporation to perform or carry out any of the duties imposed by § 56-261 , or by this chapter, it shall embody such finding in an order to be entered upon its records and at the same time shall enter an order requiring such public service corporation to make such increase in its water supply or such increases, changes, modifications and extensions of its distribution or disposal system and such changes, modifications and extensions in its service charges and facilities as may be requisite to the proper protection of the public health or safety of the community. The Commission shall fix in its order a reasonable time within which such increases, changes, modifications and extensions shall be completed and may require reports from such public service corporation of the progress of the work so ordered.

(1924, p. 690; 1928, p. 632; Michie Code 1942, § 4073c.)

Research References. - Friend's Virginia Pleading and Practice (Matthew Bender). Chapter 33 Writs and Injunctions. § 33.01 Writs. Friend.

§ 56-264. Quo warranto in case of failure to comply with order of Commission.

If any such public service corporation shall fail or refuse to comply with any order of the Commission made pursuant to the provisions of § 56-263 , the Commonwealth, or any person authorized by Article 1 (§ 8.01-635 et seq.) of Chapter 25 of Title 8.01 to institute such a proceeding, may proceed against such corporation by a writ of quo warranto, or information in the nature of a writ of quo warranto, in the circuit or corporation court having jurisdiction in the county or city wherein is located the principal office of the corporation in this Commonwealth. The provisions of Article 1 of Chapter 25 of Title 8.01 shall be applicable to any such proceeding except as herein otherwise provided and if, in such proceeding, there shall be a judgment of dissolution, the provisions of § 13.1-755 shall apply.

(1924, p. 690; 1928, p. 633; Michie Code 1942, § 4073d.)

Research References. - Bryson on Virginia Civil Procedure (Matthew Bender). Chapter 16 Miscellaneous Proceedings. § 16.01 Quo Warranto. Bryson.

Friend's Virginia Pleading and Practice (Matthew Bender). Chapter 33 Writs and Injunctions. § 33.01 Writs. Friend.

§ 56-264.1. Collection of rates, fees and charges.

In the event that the rates, fees or charges charged by any private sewage disposal system company for the services and facilities of any sewage disposal system or sewer improvements by or in connection with any real estate or other property served shall not be paid as and when due, the owner, tenant or occupant, as the case may be, of such property shall, until such rates, fees and charges shall be paid, cease to dispose of sewage or industrial wastes originating from or on such property by discharge thereof directly or indirectly into the sewerage system, and if such owner, tenant or occupant shall not cease such disposal within two months thereafter, it shall be the duty of each county, city, town or other public corporation, board or body, supplying water to or selling water for use on, such property, within five days after receipt of notice of such facts from the private sewage disposal system company to cease supplying water to, and selling water for use on, such property. If such county, city, town or other public corporation, board or body, shall not within such time cease supplying water to, and selling water for use on, such property the private sewage disposal system company may disconnect such property from such sewage disposal system or sewer improvements, and for such purposes may enter on any lands, waters and premises of such county, city, town or other public corporation, board or body. The county, city, town or other public corporation, board or body supplying water to or selling water for use on such property may establish a reasonable fee for discontinuing such service and shall establish administrative regulations to insure proper notice to the customer, to provide for reestablishment of service and to protect it against liability for action taken pursuant hereto.

(1976, c. 405.)

§ 56-264.2. Governing board of multistate entities operating certain sewage treatment facilities; arbitration of issues; condemnation of facilities.

1. As used in this section, "multistate entity" means any corporation, company, political subdivision, association, or other legal entity, without regard to whether such entity is a public utility or public service company, that engages in the provision of sewerage service to persons residing in the Commonwealth and to persons residing in an adjacent state and that operates a sewage treatment facility with a capacity of not less than five million gallons per day that is located in the Commonwealth, the construction or expansion of which treatment facility was financed primarily through the Virginia Revolving Loan Fund or a successor loan fund program administered by the Virginia Resources Authority or Department of Environmental Quality.
2. Notwithstanding any contrary provision of law, all powers of a multistate entity shall be exercised by or under the authority of, and all business and affairs of the multistate entity shall be managed under the direction of, a governing board, which may be titled a board of directors, board of trustees, or similar appellation. The governing board shall be comprised of (i) two members residing in the Commonwealth for each locality of the Commonwealth wherein the multistate entity provides sewage treatment services and (ii) a number of members residing in the adjacent state that is equal to the number of members residing in the Commonwealth. The governing body of each locality of the Commonwealth wherein the multistate entity provides sewerage services shall appoint two individuals to the board, which individuals need not be residents of such locality. The terms of members of the board residing in the Commonwealth shall expire one year following their appointment; however, despite the expiration of such a member's term, the member shall continue to serve until his successor is elected and qualifies. Unless the articles of incorporation, bylaws, charter, or other organic document of the multistate entity requires a greater number for the transaction of particular business, a quorum of the governing board shall consist of a majority of the number of members prescribed by this subsection. If a quorum is present when a vote of the governing board is taken, the affirmative vote of a majority of members present is the act of the governing board unless the articles of incorporation, bylaws, charter, or other organic document of the multistate entity requires the vote of a greater number of members. Except as provided in this section, the provisions of the articles of incorporation, bylaws, charter, or other organic document of a multistate entity in effect prior to July 1, 2006, shall continue to apply with respect to the method of appointing the board members residing in the adjacent state and the duration of their terms, and to other matters relating to the governing board of such multistate entity, except that no amendment to the articles of incorporation, bylaws, charter, or other organic document of the multistate entity that contravenes any provision of this section shall be effective.
3. Upon the filing of a petition by not fewer than one-half of the members of the governing board of a multistate entity requesting the Commission to arbitrate an issue pertaining to the management of the business and affairs of the multistate entity that requires the affirmative vote of the members, upon which issue the governing board is deadlocked, the Commission shall commence a proceeding to arbitrate the issue. The multistate entity and the nonpetitioning members of the governing board shall be parties to the proceeding. With the petition for arbitration, the petitioners shall provide all relevant documentation concerning the issue on which it is alleged that the board is deadlocked and the positions of the petitioners and the other members of the governing board with respect to the issue. The Commission shall conduct the arbitration proceeding in accordance with its Rules of Practice and Procedure (5 VAC 5-20-10 et seq.). The Commission's consideration shall be limited to the issue in the petition. The Commission shall proceed promptly with the hearing and determination of the issue in controversy. The final order of the Commission shall be final and binding on the multistate entity and the governing board, unless notice of appeal to the Supreme Court is filed in the office of the Clerk of the Commission within 30 days after entry of the order appealed from, in the manner provided in the rules of the Supreme Court of Virginia. If the Commission incurs additional costs in conducting such an arbitration proceeding that cannot be recovered through the maximum levy authorized pursuant to § 58.1-2660 , the unrecoverable portion of the costs of the arbitration proceedings shall be assessed against the multistate entity.
4. If the articles of incorporation, bylaws, charter, or other organic document of a multistate entity in existence on July 1, 2006, does not comply with the requirements of subsection B by January 1, 2008, then the locality in the Commonwealth wherein the sewage treatment facility is located shall be authorized to acquire, by exercise of the power of eminent domain if the governing body of the locality deems it appropriate, the sewage treatment facility operated by the multistate entity, without regard to whether such entity is the owner of the sewage treatment facility, and any related pipelines, easements, and other property related to the provision of sewerage services that is located within the locality, for the purpose of providing sewerage services to persons residing within the Commonwealth and the Bluestone Watershed.

   (2006, cc. 576, 591.)

§ 56-264.3. Cost allocation and rate design.

1. The provisions of this section shall apply in any proceeding in which the Commission is required to determine, pursuant to § 56-234 , if (i) rates charged by water and sewerage companies with fewer than 10,000 customer accounts, inclusive of their subsidiaries, are reasonable and just and (ii) customers using water and sewerage services under like conditions are being charged uniformly for such services.
2. Any rate application or proposal submitted to the Commission that would allocate the revenue requirement of a water or sewerage company with fewer than 10,000 customer accounts, inclusive of their subsidiaries, among more than one class of customers shall be supported by a class cost-of-service study that is designed to allocate revenues on the basis of cost causation and to assign credit for contributions in aid of construction, not previously addressed in a utility acquisition transaction or the most recent approved rate case application, to the customer class that made the contributions.
3. In setting rates, the Commission shall not find that any allocation of the revenue requirement to a particular class of customers that is greater than the portion of the revenue requirement that can be attributed to that class on the basis of a cost-of-service study of the type described in subsection B is just and reasonable unless the allocation is otherwise supported by substantial evidence.
4. In any proceeding pursuant to § 56-234 regarding the rates charged by water and sewerage companies, the revenues to be produced by rates as designed for any particular class of customers shall not provide an anticipated return on equity more than 25 percent greater or less than the return on equity used to set rates for the company as a whole, unless otherwise supported by clear and convincing evidence. The effect of this provision on class rate design shall not be considered in establishing the return on equity used to set rates for the company as a whole. (2019, c. 715.)

§ 56-265. Certain sections not to limit Commission's powers.

Nothing in § 56-261 or §§ 56-262 through 56-264 shall be construed so as to limit or curtail the existing powers of the Commission to require of all public service corporations in all cases the rendition of adequate service to the public at reasonable rates nor the existing right of municipalities or individuals to apply to the Commission for the enforcement of such duties, the purpose of such sections being to extend and not to limit the powers of the Commission.

(1924, p. 691; 1928, p. 633; Michie Code 1942, § 4073f.)

§ 56-265.1. Definitions.

In this chapter, the following terms shall have the following meanings:

1. "Company" means a corporation, a limited liability company, an individual, a partnership, an association, a joint-stock company, a business trust, a cooperative, or an organized group of persons, whether incorporated or not; or any receiver, trustee or other liquidating agent of any of the foregoing in his capacity as such; but not a municipal corporation or a county, unless such municipal corporation or county has obtained a certificate pursuant to § 56-265.4:4 .
2. "Public utility" means any company that owns or operates facilities within the Commonwealth of Virginia for the generation, transmission, or distribution of electric energy for sale, for the production, storage, transmission, or distribution, otherwise than in enclosed portable containers, of natural or manufactured gas or geothermal resources for sale for heat, light or power, or for the furnishing of telephone service, sewerage facilities or water. A "public utility" may own a facility for the storage of electric energy for sale that includes one or more pumped hydroelectricity generation and storage facilities located in the coalfield region of Virginia as described in § 15.2-6002 . However, the term "public utility" does not include any of the following:
   1. Except as otherwise provided in § 56-265.3:1 , any company furnishing sewerage facilities, geothermal resources or water to less than 50 customers. Any company furnishing water or sewer services to 10 or more customers and excluded by this subdivision from the definition of "public utility" for purposes of this chapter nevertheless shall not abandon the water or sewer services unless and until approval is granted by the Commission or all the customers receiving such services agree to accept ownership of the company.
   2. Any company generating and distributing electric energy exclusively for its own consumption.
   3. Any company (A) which furnishes electric service together with heating and cooling services, generated at a central plant installed on the premises to be served, to the tenants of a building or buildings located on a single tract of land undivided by any publicly maintained highway, street or road at the time of installation of the central plant, and (B) which does not charge separately or by meter for electric energy used by any tenant except as part of a rental charge. Any company excluded by this subdivision from the definition of "public utility" for the purposes of this chapter nevertheless shall, within 30 days following the issuance of a building permit, notify the State Corporation Commission in writing of the ownership, capacity and location of such central plant, and it shall be subject, with regard to the quality of electric service furnished, to the provisions of Chapters 10 (§ 56-232 et seq.) and 17 (§ 56-509 et seq.) and regulations thereunder and be deemed a public utility for such purposes, if such company furnishes such service to 100 or more lessees.
   4. Any company, or affiliate thereof, making a first or direct sale, or ancillary transmission or delivery service, of natural or manufactured gas to fewer than 35 commercial or industrial customers, which are not themselves "public utilities" as defined in this chapter, or to certain public schools as indicated in this subdivision, for use solely by such purchasing customers at facilities which are not located in a territory for which a certificate to provide gas service has been issued by the Commission under this chapter and which, at the time of the Commission's receipt of the notice provided under § 56-265.4:5 , are not located within any area, territory, or jurisdiction served by a municipal corporation that provided gas distribution service as of January 1, 1992, provided that such company shall comply with the provisions of § 56-265.4:5 . Direct sales or ancillary transmission or delivery services of natural gas to public schools in the following localities may be made without regard to the number of schools involved and shall not count against the "fewer than 35" requirement in this subdivision: the Counties of Dickenson, Wise, Russell, and Buchanan, and the City of Norton.
   5. Any company which is not a public service corporation and which provides compressed natural gas service at retail for the public.
   6. Any company selling landfill gas from a solid waste management facility permitted by the Department of Environmental Quality to a public utility certificated by the Commission to provide gas distribution service to the public in the area in which the solid waste management facility is located. If such company submits to the public utility a written offer for sale of such gas and the public utility does not agree within 60 days to purchase such gas on mutually satisfactory terms, then the company may sell such gas to (i) any facility owned and operated by the Commonwealth which is located within three miles of the solid waste management facility or (ii) any purchaser after such landfill gas has been liquefied. The provisions of this subdivision shall not apply to the City of Lynchburg or Fairfax County.
   7. Any authority created pursuant to the Virginia Water and Waste Authorities Act (§ 15.2-5100 et seq.) making a sale or ancillary transmission or delivery service of landfill gas to a commercial or industrial customer from a solid waste management facility permitted by the Department of Environmental Quality and operated by that same authority, if such an authority limits off-premises sale, transmission or delivery service of landfill gas to no more than one purchaser. The authority may contract with other persons for the construction and operation of facilities necessary or convenient to the sale, transmission or delivery of landfill gas, and no such person shall be deemed a public utility solely by reason of its construction or operation of such facilities. If the purchaser of the landfill gas is located within the certificated service territory of a natural gas public utility, the public utility may file for Commission approval a proposed tariff to reflect any anticipated or known changes in service to the purchaser as a result of the use of landfill gas. No such tariff shall impose on the purchaser of the landfill gas terms less favorable than similarly situated customers with alternative fuel capabilities; provided, however, that such tariff may impose such requirements as are reasonably calculated to recover the cost of such service and to protect and ensure the safety and integrity of the public utility's facilities.
   8. A company selling or delivering only landfill gas, electricity generated from only landfill gas, or both, that is derived from a solid waste management facility permitted by the Department of Environmental Quality and sold or delivered from any such facility to not more than three commercial or industrial purchasers or to a natural gas or electric public utility, municipal corporation or county as authorized by this section. If a purchaser of the landfill gas is located within the certificated service territory of a natural gas public utility or within an area in which a municipal corporation provides gas distribution service and the landfill gas is to be used in facilities constructed after January 1, 2000, such company shall submit to such public utility or municipal corporation a written offer for sale of that gas prior to offering the gas for sale or delivery to a commercial or industrial purchaser. If the public utility or municipal corporation does not agree within 60 days following the date of the offer to purchase such landfill gas on mutually satisfactory terms, then the company shall be authorized to sell such landfill gas, electricity, or both, to the commercial or industrial purchaser, utility, municipal corporation, or county. Such public utility may file for Commission approval a proposed tariff to reflect any anticipated or known changes in service to the purchaser as a result of the purchaser's use of the landfill gas. No such tariff shall impose on such purchaser of the landfill gas terms less favorable than those imposed on similarly situated customers with alternative fuel capabilities; provided, however, that such tariff may impose such requirements as are reasonably calculated to recover any cost of such service and to protect and ensure the safety and integrity of the public utility's facilities.
   9. A company that is not organized as a public service company pursuant to subsection D of § 13.1-620 and that sells and delivers propane air only to one or more public utilities. Any company excluded by this subdivision from the definition of "public utility" for the purposes of this chapter nevertheless shall be subject to the Commission's jurisdiction relating to gas pipeline safety and enforcement.
   10. A farm or aggregation of farms that owns and operates facilities within the Commonwealth for the generation of electric energy from waste-to-energy technology. As used in this subdivision, (i) "farm" means any person that obtains at least 51 percent of its annual gross income from agricultural operations and produces the agricultural waste used as feedstock for the waste-to-energy technology, (ii) "agricultural waste" means biomass waste materials capable of decomposition that are produced from the raising of plants and animals during agricultural operations, including animal manures, bedding, plant stalks, hulls, and vegetable matter, and (iii) "waste-to-energy technology" means any technology, including a methane digester, that converts agricultural waste into gas, steam, or heat that is used to generate electricity on-site.
   11. A company, other than an entity organized as a public service company, that provides non-utility gas service as provided in § 56-265.4:6 .
   12. A company, other than an entity organized as a public service company, that provides storage of electric energy that is not for sale to the public.
3. "Commission" means the State Corporation Commission.
4. "Geothermal resources" means those resources as defined in § 45.2-2000 . (1950, p. 599; 1954, c. 354; 1970, c. 265; 1981, c. 506; 1988, c. 440; 1990, c. 488; 1991, c. 263; 1992, c. 476; 1994, cc. 652, 852; 1995, c. 643; 1997, cc. 105, 148; 1999, c. 768; 2000, cc. 528, 543; 2002, cc. 479, 489; 2004, cc. 748, 1028; 2005, c. 22; 2006, c. 411; 2007, c. 813; 2009, cc. 746, 794; 2018, c. 296; 2020, c. 1190.)

The numbers of §§ 56-265.1 through 56-265.9 (not including § 56-265.4:1 ) were assigned by the Virginia Code Commission, the 1950 act having assigned no numbers.

Editor's note. - Acts 2004, c. 1028, cl. 2 provides: "That the provisions of this act shall not affect the right of any owner of real property to pursue before or after the effective date of this act any remedy at law or in equity with respect to damages done either to person or to real property by a limited liability company that has been issued a certificate of public convenience and necessity authorizing it to furnish the services of a public utility set forth in subdivision (b) of § 56-265.1 of the Code of Virginia, if the said person or real property sustained the damages prior to the effective date of this act."

Acts 2004, c. 1028, cl. 3 provides: "That notwithstanding the provisions of this act amending § 56-49 of the Code of Virginia, no limited liability company that was issued its certificate of public convenience and necessity prior to July 1, 2004 shall be deemed to have the power of eminent domain to construct or acquire facilities for use in providing the certificated telecommunications service until it has obtained from the State Corporation Commission, after notice and an opportunity for a hearing, authority to exercise eminent domain powers, which authority shall be granted only if the Commission finds that (i) the public convenience and necessity require the exercise by the limited liability company of such powers; (ii) the limited liability company's use of such powers is appropriate for, and will be limited to, its acquisition of or entry upon properties or interests therein that are necessary for providing the certificated telecommunications service; and (iii) the granting of such authority is in the public interest."

Acts 2004, c. 1028, cl. 4 provides: "That notwithstanding the provisions of this act amending § 56-49 of the Code of Virginia, no limited liability company that was issued its certificate of public convenience and necessity prior to July 1, 2004 shall be authorized to exercise the power of eminent domain with respect to any real property, including any portion thereof, that is the subject of any action for trespass or related cause of action, which action has been brought in any court of competent jurisdiction in the Commonwealth, in which action the owner of property asserts in any manner that the same limited liability company, prior to the effective date of this act, entered upon and damaged his property without prior authorization of the owner, unless the State Corporation Commission has found, after notice and an opportunity for hearing, that such action for trespass or related cause of action has been dismissed following a ruling on the merits in favor of the limited liability company or pursuant to an agreement settling the matter, or, if judgment has been rendered against the limited liability company, it has satisfied the judgment in full."

Acts 2007, c. 813, cl. 2 provides: "That the provisions of this act shall not affect the powers of any locality with respect to any ordinance, resolution or bylaw validly adopted and not repealed or rescinded prior to July 1, 2007."

Acts 2018, c. 296, cl. 20 provides: "That the provisions of this act shall apply to any applications pending with the State Corporation Commission regarding new underground facilities or offshore wind facilities on or after January 1, 2018."

Acts 2018, c. 296, cl. 24 provides: "That this act shall be known as the Grid Transformation and Security Act."

Effective October 1, 2021, " § 45.2-2000 " was substituted for " § 45.1-179.2" to conform to the recodification of Title 45.1 by Acts 2021, Sp. Sess. I, c. 387, at the direction of the Virginia Code Commission.

The 1994 amendments. - The 1994 amendment by c. 652, inserted "storage" in the introductory paragraph of subdivision (b).

The 1994 amendment by c. 852 added "Except as otherwise provided in § 56-265.3:1 " at the beginning of subdivision (b)(1).

The 1995 amendment added subdivision (b)(6).

The 1997 amendments. - The 1997 amendments by cc. 105 and 148 are identical, and substituted "thirty-five commercial or industrial customers" for "ten commercial or industrial customers" near the beginning of subdivision (b)(4).

The 1999 amendment added subdivision (b)(7).

The 2000 amendments. - The 2000 amendments by cc. 528 and 543 are identical, and added subdivision (b)(8).

The 2002 amendments. - The 2002 amendments by cc. 479 and 489 are identical, and inserted "unless such municipal corporation or county has obtained a certificate pursuant to § 56-265.4:4 " at the end of subdivision (a).

The 2004 amendments. - The 2004 amendment by c. 748 substituted "50" for "fifty" in subdivision (b)(1); substituted "30" for "thirty" in subdivision (b)(3); in subdivision (b)(4), substituted "35" for "thirty-five," inserted "or to certain public schools as indicated in this subdivision," and added the last sentence; and substituted "60" for "sixty" in subdivisions (b)(6) and (b)(8).

The 2004 amendment by c. 1028 inserted "a limited liability company" in paragraph (a); substituted "50" for "fifty" and "10" for "ten" in subdivision (b)(1); substituted "30" for "thirty" in subdivision (b)(3); substituted "35" for "thirty-five" in subdivision (b)(1); and substituted "60" for "sixty" in subdivisions (b)(6) and (b)(8).

The 2005 amendments. - The 2005 amendment by c. 22, substituted "not more than three commercial or industrial purchasers" for "not more than one commercial or industrial purchaser" in the first sentence of subdivision (8) and made minor stylistic changes.

The 2006 amendments. - The 2006 amendment by c. 411 added subdivision (b) (9).

The 2007 amendments. - The 2007 amendment by c. 813 substituted "the City of Lynchburg or Fairfax County" for "any city with a population of at least 64,000 but no more than 69,000 or any county with a population of at least 500,000" in subdivision (b)(6).

The 2009 amendments. - The 2009 amendment by c. 746 added subdivision (b)(10).

The 2009 amendment by c. 794, effective April 8, 2009, added subdivision (b)(10), which was subsequently renumbered as subdivision (b)(11) at the direction of the Virginia Code Commission.

The 2018 amendments. - The 2018 amendment by c. 296, in subsection (b), divided the first sentence into the first and last sentences, inserted "storage" in the first sentence, and added the second sentence, and substituted "does not include" for "shall not include" in the last sentence; added subdivision (b)(12); and made stylistic changes. For applicability, see Editor's note.

The 2020 amendments. - The 2020 amendment by c. 1190, in subdivision (b), deleted "storage" following "generation, transmission" in the first sentence and substituted "A 'public utility' may own" for "As used in this definition" and inserted "that" in the second sentence; in subdivision (b) (10), deleted "but not limited to" preceding "a methane digester" in the last sentence in clause (iii) and made stylistic changes.

Law review. - For article entitled "Regulation of Electric Utilities by the State Corporation Commission," see 14 Wm. & Mary L. Rev. 589 (1973). For survey of Virginia law on municipal corporations for the year 1974-1975, see 61 Va. L. Rev. 1788 (1975).

Michie's Jurisprudence. - For related discussion, see 7A M.J. Eminent Domain, § 11; 13B M.J. Municipal Corporations, § 49; 15 M.J. Public Service and State Corporation Commissions, § 18.

§ 56-265.2. Certificate of convenience and necessity required for acquisition, etc., of new facilities.

1. 1. Subject to the provisions of subdivision 2, it shall be unlawful for any public utility to construct, enlarge or acquire, by lease or otherwise, any facilities for use in public utility service, except ordinary extensions or improvements in the usual course of business, without first having obtained a certificate from the Commission that the public convenience and necessity require the exercise of such right or privilege. Any certificate required by this section shall be issued by the Commission only after opportunity for a hearing and after due notice to interested parties. The certificate for overhead electrical transmission lines of 138 kilovolts or more shall be issued by the Commission only after compliance with the provisions of § 56-46.1 . A. 1.  Subject to the provisions of subdivision 2, it shall be unlawful for any public utility to construct, enlarge or acquire, by lease or otherwise, any facilities for use in public utility service, except ordinary extensions or improvements in the usual course of business, without first having obtained a certificate from the Commission that the public convenience and necessity require the exercise of such right or privilege. Any certificate required by this section shall be issued by the Commission only after opportunity for a hearing and after due notice to interested parties. The certificate for overhead electrical transmission lines of 138 kilovolts or more shall be issued by the Commission only after compliance with the provisions of § 56-46.1 .
   2. For construction of any transmission line of 138 kilovolts and associated facilities, a public utility shall either (i) obtain a certificate pursuant to subdivision 1 or (ii) obtain approval pursuant to the requirements of (a) § 15.2-2232 and (b) any applicable local zoning ordinances by the locality or localities in which the transmission line will be located. Issuance by the Commission of a certificate pursuant to subdivision 1 approving construction of a 138 kilovolt transmission line and any associated facilities shall be deemed to satisfy the requirements of § 15.2-2232 and all local zoning ordinances with respect to the transmission line and its associated facilities. For purposes of this subdivision, "associated facilities" include any station, substation, transition station, and switchyard facilities to be constructed outside of any county operating under the county executive form of government that is located in Planning District 8 in association with a 138 kilovolt transmission line.
2. In exercising its authority under this section, the Commission, notwithstanding the provisions of § 56-265.4 , may permit the construction and operation of electrical generating facilities, which shall not be included in the rate base of any regulated utility whose rates are established pursuant to Chapter 10 (§ 56-232 et seq.), upon a finding that such generating facility and associated facilities including transmission lines and equipment (i) will have no material adverse effect upon the rates paid by customers of any regulated public utility in the Commonwealth; (ii) will have no material adverse effect upon reliability of electric service provided by any such regulated public utility; and (iii) are not otherwise contrary to the public interest. In review of its petition for a certificate to construct and operate a generating facility described in this subsection, the Commission shall give consideration to the effect of the facility and associated facilities, including transmission lines and equipment, on the environment and establish such conditions as may be desirable or necessary to minimize adverse environmental impact as provided in § 56-46.1 . Facilities authorized by a certificate issued pursuant to this subsection may be exempted by the Commission from the provisions of Chapter 10 (§ 56-232 et seq.).
3. A map showing the location of any proposed ordinary extension or improvement outside of the territory in which the public utility is lawfully authorized to operate shall be filed with the Commission, and prior notice of such ordinary extension shall be given to the public utility or other entity authorized to provide the same utility service within said territory. Ordinary extensions outside the service territory of a public utility shall be undertaken only for use in providing its public utility service and shall be constructed and operated so as not to interfere with the service or facilities of any public utility or other entity authorized to provide utility service within any other territory. If, upon objection of the affected utility or entity filed within 30 days of the aforesaid notice and after investigation and opportunity for a hearing the Commission finds an ordinary extension would not comply with this section, it may alter or amend the plan for such activity or prohibit its construction.
4. Whenever a certificate is required under this section for a pipeline for the transmission or distribution of natural or manufactured gas, the Commission may issue such a certificate only after compliance with the provisions of § 56-265.2:1 . As used in this section and § 56-265.2:1 , "pipeline for the transmission or distribution of manufactured or natural gas" shall include the pipeline and any related facilities incidental or necessary to the operation of the pipeline.
5. This section shall be subject to the requirements of § 56-265.3 , if any, and nothing herein shall be construed to supersede § 56-265.3 . (1950, p. 599; 1985, c. 282; 1995, cc. 311, 514; 1998, c. 92; 2012, cc. 54, 284; 2017, c. 728.)

Editor's note. - Acts 2011, c. 771, provides: " § 1. That in order to promote solar energy through distributed generation, the State Corporation Commission shall exercise its existing authority to consider for approval, after notice to all affected parties and opportunity for hearing, petitions filed by a utility to construct and operate distributed solar generation facilities and to offer special tariffs to facilitate customer-owned distributed solar generation as alternatives to net energy metering, with an aggregate amount of rated generating capacity of up to 0.20 percent of each electric utility's adjusted Virginia peak load for the calendar year 2010. Such petitions may be made during the period of July 1, 2011, through July 1, 2015, and the Commission, on its own motion, may extend this period an additional year for good cause. Each distributed solar generation installation approved pursuant to this section shall be considered to be part of a demonstration program to assess benefits to the utility's distribution system, including constrained or high load growth circuits, for a period of five years from the date each installation becomes operational. Thereafter each installation shall cease to be part of a demonstration program and, in the case of a utility-owned installation, shall continue to operate as a utility-owned generating facility, and in the case of a customer-owned installation, shall continue to provide power to the utility pursuant to the terms of the agreed upon tariff arrangement. Subject to review by the Commission, such utility-owned distributed solar generation facilities and tariffs for power generated from customer-owned distributed solar installations shall be prioritized in areas identified by the utility as areas where localized solar generation would provide benefits to the utility's distribution system, including constrained or high-growth areas. The Commission shall approve such programs or distributed generation facilities if it determines that the programs or facilities, including those targeting constrained or high load growth areas, are reasonably designed to be in furtherance of the public interest.

" § 2. A utility participating in demonstration programs pursuant to § 1 of this act shall use reasonable efforts to ensure that at least four of the distributed solar installation sites included in the demonstration projects shall be in a community setting, which shall include, but not be limited to, to the extent permitted by law, participation by local governments, schools, community associations, neighborhood associations, or nonprofit organizations. The capacity of each such community installation shall not exceed 500 kilowatts.

" § 3. When a utility proposes solar distributed generation resources as permitted in § 1 of this act comprised of multiple installations combined collectively, the Commission shall consider such projects as one small non-combustible renewable power generation facility for purposes of project approval pursuant to §§ 10.1-1197.5 , 10.1-1197.8 , 56-265.2 , 56-580 and 56-585.1 of the Code of Virginia. A 'small non-combustible renewable power generation facility' is a small renewable energy project that generates electricity from sunlight and may consist of one or more installations distributed on separate structures or facilities, whether such installations are treated each as a stand-alone small renewable energy project or are combined and treated collectively as one small renewable energy project.

" § 4. The Commission shall provide annual reports on any demonstration programs approved pursuant to this act to the Governor and the chairmen of the House and Senate Committees on Commerce and Labor."

The 1995 amendments. - The 1995 amendment by c. 311, in the first paragraph, inserted the A designation, deleted "within the territory in which it is lawfully authorized to operate" following "course of business" in the first sentence; and, in the second sentence, substituted "Any" for "The", inserted "required by this section", and substituted "opportunity for a hearing" for "formal or informal hearing"; and added subsections B and C.

The 1995 amendment by c. 514, effective March 23, 1995, in the first paragraph, in the first sentence, inserted the A designation and deleted "within the territory in which it is lawfully authorized to operate" following "course of business"; in the second sentence, substituted "Any" for "The", inserted "required by this section", and substituted "opportunity for a hearing" for "formal or informal hearing"; and added subsections B and D.

The 1998 amendment, effective March 13, 1998, added present subsection B, and redesignated former subsections B through D as present subsections C through E, respectively.

The 2012 amendments. - The 2012 amendments by cc. 54 and 284 are identical, and designated the existing provisions of subsection A as subdivision 1 and added "Subject to the provisions of subdivision 2" at the beginning thereof, and substituted "138 kilovolts" for "150 kilovolts" in the last sentence; added subdivision A 2; in subsection B, deleted "of this title" following "( § 56-232 et seq.)" in the first sentence, and deleted "of Title 56" at the end of the last sentence; and made a minor stylistic change.

The 2017 amendments. - The 2017 amendment by c. 728, in subdivision A 2, inserted "and associated facilities" following "138 kilovolts," and added the last two sentences.

Law review. - For article on siting electric power facilities, see 58 Va. L. Rev. 257 (1972). For note on nuclear power plant control, see 62 Va. L. Rev. 738 (1976).

For article, "Siting Power Lines in Historic Areas of Virginia," see 29 U. Rich. L. Rev. 381 (1995).

Michie's Jurisprudence. - For related discussion, see 6B M.J. Electricity, § 2; 7A M.J. Eminent Domain, § 11; 15 M.J. Public Service and State Corporation Commissions, §§ 18, 30; 20 M.J. Water Companies and Waterworks, § 2.

§ 56-265.2:1. Approval by Commission required for construction of certain gas pipelines and related facilities; notice and hearing.

1. Whenever a certificate is required pursuant to § 56-265.2 for the construction of a pipeline for the transmission or distribution of manufactured or natural gas, the Commission shall consider the effect of the pipeline on the environment, public safety, and economic development in the Commonwealth, and may establish such reasonably practical conditions as may be necessary to minimize any adverse environmental or public safety impact. In such proceedings, the Commission shall receive and consider all reports by state agencies concerned with environmental protection; and, if requested by any county or municipality in which the pipeline is proposed to be constructed, local comprehensive plans that have been adopted pursuant to Article 3 (§ 15.2-2223 et seq.) of Chapter 22 of Title 15.2.
2. The Commission shall not approve construction of any such pipeline unless the public utility has provided 30 days' advance public notice of the proposed pipeline by (i) publishing a notice in a newspaper or newspapers of general circulation in each of the counties and municipalities through which the pipeline is proposed to be constructed, (ii) providing written notice to the governing body of each such county and municipality, (iii) causing to be sent a copy of the notice by first class mail to all owners of property within the route of the proposed pipeline, as indicated on the map or sketch of the route filed with the Commission, which requirement shall be satisfied by mailing the notice to such persons at such addresses as are indicated in the land books maintained by the commissioner of revenue, director of finance or treasurer of the county or municipality, and (iv) filing a copy of any plans, specifications, or maps of the proposed pipeline with the Commission, which plans, specifications, or maps shall be made available for public inspection at the Commission's business office, during normal business hours. Any notice required by this subsection shall include a written description of the proposed route the line is to follow, a map or sketch of the route, and information regarding the time period during which persons may request a public hearing under subsection C of this section.
3. If, within 45 days after publication and mailing of the notices required in subsection B of this section, any interested party requests a public hearing, the Commission shall, as soon as reasonably practicable after such request, hold such hearing or hearings at such place as may be designated by the Commission. If written requests therefor are received from 20 or more interested parties, the Commission shall hold at least one hearing in the area that would be affected by construction of the pipeline, for the purpose of receiving public comment on the proposal. If any hearing is to be held in the area affected, the Commission shall direct that a copy of the transcripts of any previous hearings held in the case be made available for public inspection at a convenient location in the area for a reasonable time before such local hearing.
4. For the purposes of this section, "interested parties" means the governing bodies of any counties or municipalities through which the pipeline is to be constructed, and persons residing or owning property within one-half mile of such pipeline. For the purposes of this section, "environment" or "environmental" shall be deemed to include in meaning "historic."
5. If a significantly different route is determined more desirable after the giving of the notice required in subsection B of this section, the Commission shall cause notice of the new route or routes to be published and mailed in accordance with subsection B of this section. The Commission shall thereafter comply with the provisions of this section to the full extent necessary to give interested parties in the newly affected areas the same protection afforded interested parties affected by the route described in the original notice.
6. Approval of a pipeline pursuant to this section shall be deemed to satisfy and supersede the requirements of § 15.2-2232 and local zoning ordinances with respect to such pipeline and related facilities; however, the Commission shall not approve the construction of a natural gas compressor station in an area zoned exclusively for residential use unless the public utility provides certification from the local governing body that the natural gas compressor station is consistent with the zoning ordinance. The certification required by this subsection shall be deemed to have been waived unless the local governing body informs the Commission and the public utility of the natural gas compressor station's compliance or noncompliance within 45 days of the public utility's written request. (1995, c. 311; 2001, c. 758; 2014, cc. 467, 507.)

The 2001 amendments. - The 2001 amendment by c. 758 substituted "Article 3 ( § 15.2-2223 et seq.) of Chapter 22 of Title 15.2" for "Article 4 ( § 15.1-446.1 et seq.) of Chapter 11 of Title 15.1" in subsection A; in subsection B, added present clause (iii), and redesignated former clause (iii) as present clause (iv), and added the last sentence; in subsection C, in the first sentence, substituted "forty-five days after publication and mailing of the notices" for "thirty days after publication of a notice as," substituted "such hearing or hearings" for "a hearing," and added the second and third sentences; and inserted "and mailed" in the first sentence of subsection E.

The 2014 amendments. - The 2014 amendments by cc. 467 and 507 are nearly identical, and in subsection B, substituted "30" for "thirty"; in subsection C, substituted "45" for "forty-five"; and in subsection F, inserted "exclusively" and substituted "45" for "forty-five." An additional technical correction was made by c. 467.

CIRCUIT COURT OPINIONS

Public hearing. - No public hearing by the State Corporation Commission (SCC) was needed by a natural gas company; the statute only requires that a public hearing by the SCC precede construction of a natural gas pipeline when a certificate is required pursuant to § 56-265.2 Va. Natural Gas, Inc. v. Sumner, 98 Va. Cir. 167, 2018 Va. Cir. LEXIS 21 (Chesapeake Feb. 23, 2018).

§ 56-265.3. Certificate to furnish public utility service; allotment of territory transfers, leases or amendments.

1. No public utility shall begin to furnish public utility service within the Commonwealth without first having obtained from the Commission a certificate of public convenience and necessity authorizing it to furnish such service. Any company engaged in furnishing a public utility service in this Commonwealth as of July 1, 1950, shall, upon filing maps with the Commission within ninety days from such date, showing the territory now being served by it, be entitled to receive a certificate of convenience and necessity authorizing it to begin to furnish such public utility service in such territory. Also, any company that is granted authority under the Public Utilities Securities Act, Chapter 3 (§ 56-55 et seq.) of this title to issue securities for the purpose of constructing or extending facilities described in the application for such authority, shall, if the application was filed with the State Corporation Commission before February 1, 1950, have the same right to a certificate of convenience and necessity that it would have had if the facilities had been in operation and serving the public on February 1, 1950. Any company which was engaged in furnishing a public utility service in this Commonwealth as of July 1, 1950, and which is now so engaged in providing the same kind of service, and which could have filed maps with the Commission in accordance with the requirements of this section but failed to do so, may file such maps not later than January 1, 1974, showing the territory now being served by it, and be entitled to receive a certificate of convenience and necessity authorizing it to continue to furnish the same kind of public utility service in such areas to the same extent as if it had filed maps as of July 1, 1950.
2. On initial application by any company, the Commission, after formal or informal hearing upon such notice to the public as the Commission may prescribe, may, by issuance of a certificate of convenience and necessity, allot territory for development of public utility service by the applicant if the Commission finds such action in the public interest.
3. If the initial application provides for the furnishing of water or sewerage service within any political subdivision in which there has been created an authority for either or both of such purposes pursuant to Chapter 51 (§ 15.2-5100 et seq.) of Title 15.2, the Commission shall not hold any hearing on such application or issue any certificate for the allotment of territory unless the application shall first have been approved by the governing body of the political subdivision in which the territory is located. In any area where a water company was in existence and furnishing water prior to the formation of an authority to provide water, the Commission may hold a hearing on an application and issue a certificate to the water company for that territory which was served prior to the creation of the authority whether or not the governing body of the political subdivision has approved the application. In any area where a sewer company was in existence and furnishing sewer services prior to the formation of an authority to provide sewer services, the Commission may hold a hearing on an application and issue a certificate to the sewer company for that territory which was served prior to the creation of the authority whether or not the governing body of the political subdivision has approved the application.
4. If the Commission finds it to be in the public interest, upon the application of a holder of a water or sewer certificate, such certificate may be transferred, leased or amended after such reasonable notice to the public and opportunity to be heard as the Commission by order may prescribe. The Commission may authorize the transfer, lease, or amendment of the certificate subject to such restrictions as the Commission finds will promote the public interest.
5. The Commission is authorized to promulgate any rules necessary to implement this section.

   (1950, c. 599; 1968, c. 720; 1973, c. 397; 1986, c. 521; 1988, c. 233.)

Law review. - For article on state constitutions and the environment, see 58 Va. L. Rev. 193 (1972).

Michie's Jurisprudence. - For related discussion, see 1A M.J. Administrative Law, § 18; 15 M.J. Public Service and State Corporation Commissions, §§ 20, 33; 20 M.J. Water Companies and Waterworks, § 2.

§ 56-265.3:1. Certificates to furnish water and sewer service.

1. Any company proposing to construct facilities after January 1, 1995, ultimately intended to make water or sewer service available to more than fifty residential building lots shall, prior to construction or financial commitments therefor, organize a public service corporation and seek certificates of public convenience and necessity pursuant to §§ 56-265.2 and 56-265.3 . The application for such certificates shall include (i) a comprehensive business plan detailing the technical, managerial and financial resources to be devoted to operation of the water or sewer service; (ii) except in the case of a company seeking a certificate to operate a sewer service only, proof of receipt of, or application for, a permit for the facilities pursuant to Virginia Department of Health requirements under Article 2 (§ 32.1-167 et seq.) of Chapter 6 of Title 32.1; and (iii) such other information as is now or hereafter deemed appropriate by the Commission, including proof of the issuance of a bond or the deposit of funds in escrow as may be required by the Department of Health pursuant to § 32.1-174.1 .
2. Certificates of public convenience and necessity shall not be granted by the Commission unless, in addition to the findings required by §§ 56-265.2 and 56-265.3 , it also finds that the comprehensive business plan presented in the application reasonably assures that system performance requirements for providing water supply can be met over the long term and at reasonable costs. The Commission may issue such certification with any conditions or restrictions as public interest may require.
3. Water or sewer companies existing on or before January 1, 1995 which extend their service at any time following the effective date of this section shall not be required to comply with the requirements thereof.
4. If any applicant under this section so requests, the Commission shall not disclose the contents of the comprehensive business plan except as necessary to perform its duties.

   (1994, c. 852.)

Michie's Jurisprudence. - For related discussion, see 6B M.J. Drains, Sewers and Drainage Districts, § 4; 20 M.J. Water Companies and Waterworks, § 2.

§ 56-265.4. Certificate to operate in territory of another certificate holder.

Except as provided in § 56-265.4:4 , no certificate shall be granted to an applicant proposing to operate in the territory of any holder of a certificate unless and until it shall be proved to the satisfaction of the Commission that the service rendered by such certificate holder in such territory is inadequate to the requirements of the public necessity and convenience; and if the Commission shall be of opinion that the service rendered by such certificate holder in such territory is in any respect inadequate to the requirements of the public necessity and convenience, such certificate holder shall be given reasonable time and opportunity to remedy such inadequacy before any certificate shall be granted to an applicant proposing to operate in such territory. For the purposes of this section, the transportation of natural gas by pipeline, without providing service to end users within the territory, shall not be considered operating in the territory of another certificate holder.

(1950, p. 600; 1984, c. 382; 2014, cc. 467, 507.)

The 2014 amendments. - The 2014 amendments by cc. 467 and 507 are identical, and added the last sentence.

Applied in GTE Sprint Communications Corp. v. AT & T Communications of Va., Inc., 230 Va. 295 , 337 S.E.2d 702 (1985); Potomac Edison Co. v. Town of Luray, 234 Va. 348 , 362 S.E.2d 678 (1987); N. Va. Elec. Coop. v. Va. Elec. & Power Co., 265 Va. 363 , 576 S.E.2d 741, 2003 Va. LEXIS 33 (2003); Martinsville Cable, Inc. v. Time Warner NY Cable, LLC, 445 F. Supp. 2d 668, 2006 U.S. Dist. LEXIS 59905 (W.D. Va. 2006).

OPINIONS OF THE ATTORNEY GENERAL

Whether electric utility customer located in the service territory of one electric utility may obtain service from another utility through a metering point in an adjacent service territory is a determination for the State Corporation Commission. See opinion of Attorney General to The Honorable Terry G. Kilgore, Member, House of Delegates, 05-064, 2005 Va. AG LEXIS 46 (12/15/05).

§ 56-265.4:1. Furnishing of electric public utility service or provision of facilities therefor by municipal corporations and other governmental bodies.

If any municipal corporation or other governmental body, having legal authority by charter or other law, shall desire to supply electric public utility service, or construct, enlarge or acquire, by lease or otherwise, any electric utility facilities, outside its political boundaries, it shall have power to enter into agreements in that regard with affected public utilities which shall be binding in accordance with their terms and for the period therein provided; but no contract entered into under this section shall limit the power of the Commission to fix rates and to otherwise regulate a public utility. No such service by a municipal corporation or other governmental body shall be provided, or facilities constructed, enlarged or acquired, in territory allotted to any public utility by the Commission except in territory served by such municipal corporation or other governmental body on June 26, 1964, unless the affected public utility shall consent by such an agreement or the Commission shall grant a certificate therefor upon application by the municipal corporation or other governmental body pursuant to § 56-265.4 , authority for which certification is hereby granted. Provided, however, this limitation on the extension of public utility service by any municipal corporation or governmental body outside its political boundaries shall not be applicable to cities or towns extending their service in accordance with the provisions of § 56-265.4 :2. No public utility shall extend its electric public utility service, or construct, enlarge or acquire, by lease or otherwise, any electric utility facilities, in territory served exclusively by a municipal corporation or other governmental body on June 26, 1964, unless such municipal corporation or other governmental body shall consent by such an agreement. In case of question as to the scope of the territory served by a municipal corporation or other governmental body on June 26, 1964, the Commission may, and on application by either such public utility or such municipal corporation or other governmental body shall, decide such question and allot such territory accordingly, between such public utility and such municipal corporation or other governmental body, in which event any expansion of service outside the territory so allotted shall be subject to the applicable provisions of this chapter, provided, however, that nothing contained herein shall prevent any municipal corporation from constructing or maintaining facilities in county areas for the purpose of generating or purchasing electricity to be transmitted into the service area of such municipal corporation.

(1964, c. 228; 1978, c. 325.)

§ 56-265.4:2. Extension of service by cities and towns into annexed areas.

1. Any city or town in the Commonwealth which provides electric utility service for the use of its residents may, at any time following annexation of additional territory to such city or town, acquire the distribution system facilities of the electric utility serving the annexed area in the manner provided by Title 25.1. As used in this section (i) the term "distribution system facilities" shall be deemed to include all facilities necessary to distribute electric utility service to any annexed area but shall not include substations of the public utility whose facilities are being acquired, and (ii) the terms "city" and "town" shall not include a shire, a borough or any other subdivision of a city or town. This section shall not apply to the addition of territory to a city or town by consolidation, merger, or through any other procedure that results in an effective combination with another governmental entity.
2. Upon completion of the eminent domain proceedings or upon the negotiation of a settlement between the city or town and the electric utility, the State Corporation Commission shall amend the certificate of convenience and necessity of the public utility whose distribution system facilities have been acquired to reflect the change in its territory.

   (1978, c. 325; 1987, c. 337; 1995, c. 36.)

The 1995 amendment, in the second sentence of subsection A, inserted "(i)" following "this section" and inserted the language beginning "and (ii) the terms . . ."; and added the third sentence.

§ 56-265.4:3.

Repealed by Acts 2011, cc. 738 and 740, cl. 2.

Editor's note. - Former § 56-265.4:3 , pertaining to mobile telephone service or radio paging service in certificated territory of another company, was derived from Acts 1980, c. 294; 1984, c. 449.

§ 56-265.4:4. Certificate to operate as a telephone utility.

1. The Commission may grant certificates to competing telephone companies, or any county, city or town that operates an electric distribution system, for interexchange service where it finds that such action is justified by public interest, and is in accordance with such terms, conditions, limitations, and restrictions as may be prescribed by the Commission for competitive telecommunications services. A certificate to provide interexchange services shall not authorize the holder to provide local exchange services. The Commission may grant a certificate to a carrier, or any county, city or town that operates an electric distribution system, to furnish local exchange services as provided in subsection B.
2. 1. After notice to all local exchange carriers certificated in the Commonwealth and other interested parties and following an opportunity for hearing, the Commission may grant certificates to any telephone company, or any county, city or town that operates an electric distribution system, proposing to furnish local exchange telephone service in the Commonwealth. In determining whether to grant a certificate under this subsection, the Commission may require that the applicant show that it possesses sufficient technical, financial, and managerial resources. Before granting any such certificate, the Commission shall: (i) consider whether such action reasonably protects the affordability of basic local exchange telephone service, as such service is defined by the Commission, and reasonably assures the continuation of quality local exchange telephone service; and (ii) find that such action will not unreasonably prejudice or disadvantage any class of telephone company customers or telephone service providers, including the new entrant and any incumbent local exchange telephone company, and is in the public interest. Except as provided in subsection A of § 15.2-2160 , all local exchange certificates granted by the Commission after July 1, 2002, shall be to provide service in any territory in the Commonwealth unless the applicant specifically requests a different certificated service territory. The Commission shall amend the certificated service territory of each local exchange carrier that was previously certificated to provide service in only part of the Commonwealth to permit such carrier's provision of local exchange service throughout the Commonwealth beginning on September 1, 2002, unless that local exchange carrier notifies the Commission prior to September 1, 2002, that it elects to retain its existing certificated service territory. A local exchange carrier shall only be considered an incumbent in any certificated service territory in which it was considered an incumbent prior to July 1, 2002, except that the Commission may make changes to a local exchange carrier's incumbent certificated service territory at the request of those incumbent local exchange carriers that are directly involved in a proposed change in the certificated service territory. B. 1.  After notice to all local exchange carriers certificated in the Commonwealth and other interested parties and following an opportunity for hearing, the Commission may grant certificates to any telephone company, or any county, city or town that operates an electric distribution system, proposing to furnish local exchange telephone service in the Commonwealth. In determining whether to grant a certificate under this subsection, the Commission may require that the applicant show that it possesses sufficient technical, financial, and managerial resources. Before granting any such certificate, the Commission shall: (i) consider whether such action reasonably protects the affordability of basic local exchange telephone service, as such service is defined by the Commission, and reasonably assures the continuation of quality local exchange telephone service; and (ii) find that such action will not unreasonably prejudice or disadvantage any class of telephone company customers or telephone service providers, including the new entrant and any incumbent local exchange telephone company, and is in the public interest. Except as provided in subsection A of § 15.2-2160 , all local exchange certificates granted by the Commission after July 1, 2002, shall be to provide service in any territory in the Commonwealth unless the applicant specifically requests a different certificated service territory. The Commission shall amend the certificated service territory of each local exchange carrier that was previously certificated to provide service in only part of the Commonwealth to permit such carrier's provision of local exchange service throughout the Commonwealth beginning on September 1, 2002, unless that local exchange carrier notifies the Commission prior to September 1, 2002, that it elects to retain its existing certificated service territory. A local exchange carrier shall only be considered an incumbent in any certificated service territory in which it was considered an incumbent prior to July 1, 2002, except that the Commission may make changes to a local exchange carrier's incumbent certificated service territory at the request of those incumbent local exchange carriers that are directly involved in a proposed change in the certificated service territory.
   2. A Commission order, including appropriate findings of fact and conclusions of law, denying or approving, with or without modification, an application for certification of a new entrant shall be entered no more than 180 days from the filing of the application, except that the Commission, upon notice to all parties in interest, may extend that period in additional 30-day increments not to exceed an additional 90 days in all.
   3. The Commission shall (i) promote and seek to assure the provision of competitive services to all classes of customers throughout all geographic areas of the Commonwealth by a variety of service providers; (ii) require equity in the treatment of the certificated local exchange telephone companies so as to encourage competition based on service, quality, and price differences between alternative providers; (iii) consider the impact on competition of any government-imposed restrictions limiting the markets to be served or the services offered by any provider; (iv) determine the form of rate regulation, if any, for the local exchange services to be provided by the applicant and, upon application, the form of rate regulation for the comparable services of the incumbent local exchange telephone company provided in the geographical area to be served by the applicant; and (v) promulgate standards to assure that there is no cross-subsidization of the applicant's competitive local exchange telephone services by any other of its services over which it has a monopoly, whether or not those services are telephone services. The Commission shall also adopt safeguards to ensure that the prices charged and the revenue received by a county, city or town for providing telecommunications services shall not be cross-subsidized from other revenues of the county, city or town or affiliated entities, except (i) in areas where no offers exist from for-profit providers of such telecommunications services, or (ii) as authorized pursuant to subdivision 5.
   4. The Commission shall discharge the responsibilities of state commissions as set forth in the federal Telecommunications Act of 1996 (P.L. 104-104)(the Act) and applicable law and regulations, including, but not limited to, the arbitration of interconnection agreements between local exchange carriers; however, the Commission may exercise its discretion to defer selected issues under the Act. If the Commission incurs additional costs in arbitrating such agreements or resolving related legal actions or disputes that cannot be recovered through the maximum levy authorized pursuant to § 58.1-2660 , that levy shall be increased above the levy authorized by that section to the extent necessary to recover such additional costs.
   5. Upon the Commission's granting of a certificate to a county, city or town under this section, such county, city, or town (i) shall be subject to regulation by the Commission for intrastate telecommunications services, (ii) shall have the same duties and obligations as other certificated providers of telecommunications services, (iii) shall separately account for the revenues, expenses, property, and source of investment dollars associated with the provision of such services, and (iv) to ensure that there is no unreasonable advantage gained from a government agency's taxing authority and control of government-owned land, shall charge an amount for such services that (a) does not include any subsidies, unless approved by the Commission, and (b) takes into account, by imputation or allocation, equivalent charges for all taxes, pole rentals, rights of way, licenses, and similar costs incurred by for-profit providers. Each certificated county, city, or town that provides telecommunications services regulated by the Commission shall file an annual report with the Commission demonstrating that the requirements of clauses (iii) and (iv) have been met. The Commission may approve a subsidy under this section if deemed to be in the public interest and provided that such subsidy does not result in a price for the service lower than the price for the same service charged by the incumbent provider in the area.
   6. A locality that has obtained a certificate pursuant to this section shall (i) comply with all applicable laws and regulations for the provision of telecommunications services; (ii) make a reasonable estimate of the amount of all federal, state, and local taxes (including income taxes and consumer utility taxes) that would be required to be paid or collected for each fiscal year if the locality were a for-profit provider of telecommunications services, (iii) prepare reasonable estimates of the amount of any franchise fees and other state and local fees (including permit fees and pole rental fees), and right-of-way charges that would be incurred in each fiscal year if the locality were a for-profit provider of telecommunications services, (iv) prepare and publish annually financial statements in accordance with generally accepted accounting principles showing the results of operations of its provision of telecommunications services, and (v) maintain records demonstrating compliance with the provisions of this section that shall be made available for inspection and copying pursuant to the Virginia Freedom of Information Act (§ 2.2-3700 et seq.).
   7. Each locality that has obtained a certificate pursuant to this section shall provide nondiscriminatory access to for-profit providers of telecommunications services on a first-come, first-served basis to rights-of-way, poles, conduits or other permanent distribution facilities owned, leased or operated by the locality unless the facilities have insufficient capacity for such access and additional capacity cannot reasonably be added to the facilities.
   8. The prices charged and the revenue received by a locality for providing telecommunications services shall not be cross-subsidized by other revenues of the locality or affiliated entities, except (i) in areas where no offers exist from for-profit providers of such telecommunications services, or (ii) as permitted by the provisions of subdivision 5. The provisions of this subdivision shall not apply to Internet access, broadband, information, and data transmission services provided by any locality providing telecommunications services on March 1, 2002, except for an authority created pursuant to the BVU Authority Act (§ 15.2-7200 et seq.).
   9. The Commission shall promulgate rules necessary to implement this section. In no event, however, shall the rules necessary to implement clauses (iii) and (iv) of subdivision 5, clauses (ii) through (v) of subdivision 6, and subdivision 8 impose any obligations on a locality that has obtained a certificate pursuant to this section, but is not yet providing telecommunications services regulated by the Commission.
   10. Public records of a locality that has obtained a certificate pursuant to this section, which records contain confidential proprietary information or trade secrets pertaining to the provision of telecommunications service, shall be exempt from disclosure under the Freedom of Information Act (§ 2.2-3700 et seq.). As used in this subdivision, a public record contains confidential proprietary information or trade secrets if its acquisition by a competing provider of telecommunications services would provide the competing provider with a competitive benefit. However, the exemption provided by this subdivision shall not apply to any authority created pursuant to the BVU Authority Act (§ 15.2-7200 et seq.).
3. Article 5.1 (§ 56-484.7:1 et seq.) of Chapter 15 shall not apply to a county, city, or town that has obtained a certificate pursuant to this section.
4. Any county, city, or town that has obtained a certificate pursuant to this section may construct, own, maintain, and operate a fiber optic or communications infrastructure to provide consumers with Internet services, data transmission services, and any other communications service that its infrastructure is capable of delivering; provided, however, nothing in this subsection shall authorize the provision of cable television services or other multi-channel video programming service. Furthermore, nothing in this subsection shall alter the authority of the Commission.
5. Any county, city, or town that has obtained a certificate pursuant to this section and that had installed a cable television headend prior to December 31, 2002, is authorized to own and operate a cable television system or other multi-channel video programming service and shall be exempt from the provisions of §§ 15.2-2108.4 through 15.2-2108.8 . Nothing in this subsection shall authorize the Commission to regulate cable television service. (1984, c. 382; 1995, cc. 22, 35, 187; 2001, c. 75; 2002, cc. 479, 489; 2003, cc. 677, 711, 720; 2005, c. 258; 2006, cc. 73, 76; 2009, c. 330; 2016, cc. 724, 725.)

Cross references. - As to exclusions under Virginia Freedom of Information Act for proprietary records and trade secrets, see § 2.2-3705.6. As to enterprise funds for cable television services, see § 15.2-2108.9 .

As to the BVU Authority Act, creating an Authority by entity conversion of Bristol Virginia Utilities, see Chapter 72 ( § 15.2-7200 et seq.) of Title 15.2.

The 1995 amendments. - The 1995 amendments by cc. 22, 35, and 187 are identical, and added subdivisions C 1, C 2, and C 3.

The 2001 amendments. - The 2001 amendment by c. 75 deleted former subsection A, concerning "granting a certificate to furnish local exchange telephone service," and redesignated former subsections B and C as present subsections A and B; in present subsection A, deleted "however" preceding "grant certificates" in the first sentence, deleted the former second sentence, which read: "Any company so certificated shall not be allowed to offer services within local market areas as defined by the State Corporation Commission or in local access and transport areas as established under federal court order until January 1, 1986," and added the last two sentences; and in the first sentence of subdivision B 1, deleted "Effective January 1, 1996" at the beginning, substituted "all local exchange carriers certificated in the Commonwealth" for "the incumbent local exchange telephone company," substituted "an opportunity for" for "a," and deleted "however" preceding "grant certificates."

The 2002 amendments. - The 2002 amendments by cc. 479 and 489 are identical, and twice inserted "or any county, city or town that operates an electric distribution system" in subsection A; in subdivision B 1, in the first sentence substituted "any telephone company, or any county, city or town that operates an electric distribution system" for "applicants" following "certificates to," substituted "Commonwealth" for "service territory of another certificate holder" at the end of that sentence, and added the last three sentences; in subdivision B 3, deleted "promulgate rules necessary to implement this subsection. These rules shall" preceding clause (i), in clause (ii), substituted "certificated" for "applicant and incumbent," and substituted "companies" for "company," deleted "require that the Commission" at the beginning of clause (iv), and added the last sentence of subdivision B 3; added subdivisions B 4 and B 5 (now subdivisions B 5 and B 9); and added subsection C.

The 2003 amendments. - The 2003 amendment by c. 677 substituted "30-day" for "thirty-day" and "90 days" for "ninety days" near the end of subdivision B 2, and added subsections D and E.

The 2003 amendment by c. 711 added "Except as provided in subsection A of § 15.2-2160 " at the beginning of the fourth sentence of subdivision B 1; substituted "30-day" for "thirty-day" and "90 days" for "ninety days" near the end of subdivision B 2; added the present second sentence of subdivision B 4 (now subdivision B 5); added present subdivisions B 5 through B 7 (now subdivisions B 6 through B 8); and redesignated former subdivision B 5 as present subdivision B 8 (now subdivision B 9) and substituted "section" for "subsection" at the end of the first sentence and added the second sentence thereof.

The 2003 amendment by c. 720 substituted "30-day" for "thirty day" and "90 days" for "ninety days" near the end of subdivision B 2; inserted present subdivision B 4; redesignated former subdivisions B 4 and B 5 as present subdivisions B 5 and B 6 (now subdivision B 9).

The 2005 amendments. - The 2005 amendment by c. 258 added subdivision B 10.

The 2006 amendments. - The 2006 amendments by cc. 73 and 76 are identical, and added the last sentence in subdivision B 8.

The 2009 amendments. - The 2009 amendment by c. 330 added the exception in the last sentence of subdivision B 1.

The 2016 amendments. - The 2016 amendments by cc. 724 and 725 are identical, effective April 8, 2016, and in subdivision B 3, deleted "of this subsection" from the end of the subdivision; in subdivision B 5, deleted "of this subdivision" following "(iv)"; in subdivision B 8, substituted "5" for "B 5"; and added "except for an authority created pursuant to the BVU Authority Act ( § 15.2-7200 et seq.)"; in subdivision B 9, substituted "clauses (iii) and (iv) of subdivision 5, clauses (ii) through (v) of subdivision 6, and subdivision 8" for "subdivisions B 5 (iii) and (iv), B ii through v, and B 8"; added the last sentence in subdivision B 10; and in subsection C, deleted "of this title" following "Chapter 15."

Law review. - For article on developments in the field of Virginia public utility law from June 2002 through May 2003, see 38 U. Rich. L. Rev. 195 (2003).

§ 56-265.4:5. Furnishing gas service to commercial and industrial customers in an area not certificated for public utility gas service.

1. Any company desiring to make an exempt sale, transmission or service under subdivision (b) (4) of § 56-265.1 shall notify the Commission of its plans for furnishing such gas service. The Commission shall make a determination of whether the customers' facilities are located within a territory for which a certificate has been granted, or, as of the time of the Commission's receipt of the notice provided hereunder, within any area, territory, or jurisdiction served by a municipal corporation that provided gas distribution service as of January 1, 1992, and shall prohibit the furnishing of gas service to any facility so located.  The Commission shall provide notice of such plans to furnish gas service to all public utilities providing gas service in the Commonwealth. Within sixty days of such notice, any public utility so notified may make application to the Commission to provide such service.  If an application is filed, the Commission shall determine, after a public hearing, which company shall furnish the gas service.
2. In the event a gas utility is issued a certificate to serve the area where customers to whom service is being provided pursuant to this section are located, the gas utility shall have the right, subject to existing contracts regarding gas service to such customers and to the gas utility's effective transportation tariff, to acquire any facilities installed to serve such customers, at a price to be mutually agreed upon, or if not so agreed, at a price to be determined by the Commission.

   (1990, c. 488; 1992, c. 476.)

§ 56-265.4:6. Furnishing non-utility gas service.

1. In this section the following terms shall have the following meanings: "Affiliated interest" shall have the same meaning as set forth in § 56-76 and shall be applied in this statute to non-utility gas service providers. "Commercial customer" means any person that purchases non-utility gas service for its own consumption at one or more metering points or nonmetered points of delivery located in the Commonwealth and who if served by a natural gas utility would be classified as a nonresidential customer under the applicable natural gas utility's tariff. "Municipally-owned gas service" means the sale and distribution of natural gas by a municipal corporation that has the authority to provide natural gas distribution service through the provisions of its charter. "Natural gas line" means a distribution or transmission pipeline owned and operated by the natural gas utility and subject to the jurisdiction of the Commission but excluding such lines that serve only a single residence or retail establishment. "Natural gas utility" or "utility" means an investor-owned public service company engaged in the business of furnishing natural gas service to the public and which is regulated as to rates and service pursuant to this title. "Non-utility gas service" means the sale and distribution of propane, propane-air mixtures, or other natural or manufactured gas to two or more customers by way of underground or aboveground distribution lines by a person other than a natural gas utility or an affiliated interest of a natural gas utility, master meter operator, or any person operating in compliance with § 56-1.2 . "Non-utility gas service provider" means a person, other than a natural gas utility, providing non-utility gas service. "Person" means any individual, corporation, partnership, association, company, business trust, joint venture or other private legal entity. "Pipeline safety standards" means all gas pipeline safety requirements established pursuant to § 56-257.2 . "Residential customer" means any person that purchases non-utility gas service for its own consumption at one or more metering points or nonmetered points of delivery located in the Commonwealth and who if served by a natural gas utility would be classified as a residential customer under the applicable natural gas utility's tariff.
2. A person, individually or together with its affiliated interests, other than the natural gas utility that holds the certificate to provide natural gas service in a particular territory or one of its affiliated interests, shall apply to the Commission for and obtain approval prior to providing non-utility gas service to:
   1. Two or more residential or commercial customers located one-half mile or less from any existing underground natural gas line operated by a utility under the jurisdiction of the Commission;
   2. More than 10 residential or two commercial customers located more than one-half mile but within one mile or less from any existing underground natural gas line operated by a utility under the jurisdiction of the Commission;
   3. More than 20 residential or five commercial customers located more than one mile but within three miles or less from any existing underground natural gas line operated by a utility under the jurisdiction of the Commission; or
   4. More than 50 residential or 10 commercial customers located more than three miles but no more than five miles from an existing underground natural gas line operated by a utility under the jurisdiction of the Commission.

      Approval of any application to provide non-utility gas service pursuant to this section shall be granted by the Commission only after opportunity for a hearing and after due notice to the natural gas utility that holds the certificate to provide service in the defined geographic area proposed to be served. The Commission shall approve an application to provide non-utility gas service upon finding that: (i) the natural gas utility that holds the certificate to provide natural gas service in the defined geographic area proposed to be served is not currently offering service to the area desired for non-utility gas service and is unable to extend natural gas utility service to the requested area within a reasonable period of time; and (ii) the provision of non-utility gas service in the defined geographic area proposed to be served, and to the estimated number of customers defined in the application, is in the public interest.

      Any order approving an application to provide non-utility gas service pursuant to this section shall define the geographic area to be covered and the maximum number of customers to whom the non-utility gas service provider can provide service before having to apply to the Commission for a revised order. The order approving an application to provide non-utility gas service shall also provide for compliance with all pipeline safety standards; however, nothing in the order shall authorize the Commission to exercise jurisdiction over the rates, charges, or services being offered in conjunction with non-utility gas service by a non-utility gas service provider. Further, except as provided in this section, approval of an application to provide non-utility gas service shall not infringe upon or diminish the rights of the natural gas utility that holds the certificate to provide natural gas service in the specified area.

      Any fully constructed and operational non-utility gas service system as of April 8, 2009, shall be exempt from the requirements of this subsection.

3. A non-utility gas service provider shall comply with the provisions of subsection B if any proposed new customers (i) are located in or are adjacent to a residential subdivision, commercial or mixed-use development, currently being provided non-utility gas service by that non-utility gas service provider and (ii) the number of such new customers, when added to the number of then existing customers of such non-utility gas service provider, individually or together with its affiliated interests, located in the adjacent residential subdivision, commercial or mixed-use development, would exceed the threshold number of customers for any of the geographical areas described in subsection B.
4. In any instance in which customers proposed to be served by a non-utility gas service provider, individually or together with its affiliated interests, are in the same residential subdivision, commercial or mixed-use development, or any phase thereof, and that residential subdivision, commercial or mixed use development, including all parts and phases thereof, straddles any of the distance thresholds set forth in subsection B, then all of the customers in all parts and phases of such residential subdivision, commercial or mixed-use development shall be deemed to be within the distance from the underground natural gas line operated by a utility under the jurisdiction of the Commission applicable to the customer located in such residential subdivision, commercial or mixed-use development that is located closest to such underground natural gas line operated by a utility under the jurisdiction of the Commission.
5. The distance threshold set forth in subsection B shall be measured in a linear manner and shall be based upon the underground natural gas lines operated by a utility under the jurisdiction of the Commission that are in existence at the time the non-utility gas service provider applies for Commission approval pursuant to subsection B, if applicable, or at the time the non-utility gas service provider applies for the initial local government approval necessary to construct its distribution lines required to serve the proposed new customers, whichever is earlier.
6. All non-utility gas service providers shall provide notice to the Commission of any and all non-utility gas service that is subject to pipeline safety standards and is being provided to two or more customers in the Commonwealth and shall provide notice of the construction of new non-utility gas service to the Commission no later than 30 days prior to commencing construction of such system. Any non-utility gas service provider that is required to provide such notice shall be subject to the jurisdiction of the Commission for the purpose of ensuring compliance with the pipeline safety standards and subject to any penalties that may be applicable under § 56-257.2 . Upon request of the Commission, the non-utility gas service provider shall provide, within 30 days of such request, documentation to show compliance with the requirements of the pipeline safety standards.
7. Any municipal corporation that provides municipally-owned gas service to residential or commercial customers located within an area where a natural gas utility holds a certificate to provide service, must have written authorization from that certificate holder to provide such service which authorization shall not be unreasonably withheld. The written authorization shall define the geographic area to be served by the municipally-owned gas service provider. If authorization is withheld, the natural gas utility shall provide a written justification for the decision to the municipally-owned gas service provider. Any decision to withhold authorization shall be subject to review by the Commission upon petition by a customer seeking natural gas service. Any natural gas utility that provides written permission to a municipal corporation to provide municipally-owned gas service within a territory where it holds a certificate shall provide a written copy of the authorization to the Commission.

   Notwithstanding the foregoing, a municipally-owned gas service provider shall not be required to obtain consent to i) provide natural gas service to facilities or property owned in whole or in part by the municipal corporation, or ii) install lines that serve only a single residential customer.

   A municipally-owned gas service provider which fails to comply with this subsection shall be subject to relief in a court having competent jurisdiction. Nothing herein shall authorize the Commission to impose penalties or fines on any municipal corporation.

   Any fully constructed and operational municipally-owned gas service system in place as of April 8, 2009, shall be exempt from the requirements of this subsection.

8. The Commission is authorized to promulgate any rules consistent with and necessary to implement this section other than subsection G.
9. The provision of non-utility gas service without complying with subsection B shall be punishable by a penalty of up to $500 per day to be imposed and collected by the Commission, in addition to any injunctive or other non-monetary penalties provided by law.

   (2009, c. 794.)

Editor's note. - Acts 2009, c. 794, cls. 3 and 4 were codified as the last paragraph in subsection B, and the last paragraph of subsection G, respectively, at the direction of the Virginia Code Commission.

Acts 2009, c. 794, cl. 2 provides: "That notwithstanding the provisions of subsection F of § 56-265.4:6 of the Code of Virginia, any person that owns or operates an existing system which is subject to pipeline safety standards and is providing non-utility gas service as of the effective date of this act [April 8, 2009], wherever located in the Commonwealth, shall notify the State Corporation Commission, by July 1, 2010, as to the location of all facilities within the Commonwealth for the aboveground or underground storage, transmission, or distribution, otherwise than in enclosed portable containers, of propane, propane-air mixtures, or other natural or manufactured gas by way of underground distribution lines forming a part of such system including a description of the capacity, size, construction materials and any modifications necessary to bring the facilities into compliance with pipeline safety standards for all components of such systems."

Acts 2009, c. 794, cl. 5 provides: "That all industrial parks located within the corporate limits of a city whose 2000 population is greater than 45,000 but less than 50,000 and any facility, as that term is defined in § 15.2-6400 of the Code of Virginia, consisting of an industrial park owned or developed prior to the enactment of this legislation by a Regional Industrial Facility Authority organized and existing under § 15.2-6400 , et seq., of the Code of Virginia, the members of which are such city and a county contiguous to such city, shall be exempt from the requirements of subsection G of § 56-265.4:6 of the Code of Virginia."

Acts 2009, c. 794, cl. 6 provides: "That for purposes of subsection C of § 56-265.4:6 of the Code of Virginia, all customers of the non-utility gas service provider existing as of the effective date of this act [April 8, 2009] shall be included in determining the total number of customers served."

Effective date. - This section is effective April 8, 2009.

§ 56-265.5. Effective date of certificates.

Certificates issued under the provisions of this chapter shall be effective from the date of issuance unless a different date be specified therein and shall remain in effect until terminated as herein provided.

(1950, p. 600.)

§ 56-265.6. Penalties for misrepresentations, violations of law, regulations or terms of certificates.

The Commission may, by its order duly entered after hearing, held after due notice to the holder of any such certificate and an opportunity to such holder to be heard, at which hearing it shall be proved that such holder has willfully made a misrepresentation of a ma