56-601 - Natural gas conservation and ratemaking efficiency.
§ 56-601. Natural gas conservation and ratemaking efficiency.
A. Consistent with the objectives pertaining to energy issues set forth in §67-101 and the policy elements stated in § 67-102, it is in the publicinterest to authorize and encourage the adoption of natural gas conservationand ratemaking efficiency plans that promote the wise use of natural gas andnatural gas infrastructure through the development of alternative ratedesigns and other mechanisms that more closely align the interests of naturalgas utilities, their customers, and the Commonwealth generally, and improvethe efficiency of ratemaking to more closely reflect the dynamic nature ofthe natural gas market, the economy, and public policy regarding conservationand energy efficiency. Such alternative rate designs and other mechanismsshould, where feasible:
1. Provide utilities with better tools to work with customers to decrease theaverage customer's annual average weather-normalized consumption of naturalgas;
2. Provide reasonable assurance of a utility's ability to recover costs ofserving the public, including its cost-effective investments in conservationand energy efficiency as well as infrastructure needed to provide or maintainreliable service to the public;
3. Reward utilities for meeting or exceeding conservation and energyefficiency goals that may be established pursuant to the Virginia Energy Plan(§ 67-100 et seq.);
4. Provide customers with long-term, meaningful opportunities to moreefficiently consume natural gas and mitigate their expenditures for thenatural gas commodity, while ensuring that the rate design methodology usedto set a utility's revenue recovery is not inconsistent with suchconservation and energy efficiency goals;
5. Recognize the economic and environmental benefits of efficient use ofnatural gas; and
6. Preserve or enhance the utility bill savings that customers receive whenthey reduce their natural gas use.
B. Natural gas utilities are authorized pursuant to this chapter to filenatural gas conservation and ratemaking efficiency plans that implementalternative natural gas utility rate designs and other mechanisms, inaddition to or in conjunction with the cost of service methodology set forthin § 56-235.2 and performance-based regulation plans authorized by §56-235.6, that:
1. Replace existing utility rate designs or other mechanisms that promoteinefficient use of natural gas with rate designs or other mechanisms thatensure a utility's recovery of its authorized revenues is independent of theamount of customers' natural gas consumption;
2. Provide incentives for natural gas utilities to promote conservation andenergy efficiency by granting recovery of the costs associated withcost-effective conservation and energy efficiency programs; and
3. Reward utilities that meet or exceed conservation and energy efficiencygoals on a weather-normalized, annualized average customer basis through theimplementation of cost-effective conservation and energy efficiency programs.
C. This chapter shall be construed liberally to accomplish these purposes.
(2008, c. 639.)