SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 25, 1999
Virginia Electric and Power Company
(Exact name of registrant as specified in its charter)
Virginia 1-2255 54-0418825
(State or other jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
701 E. Cary Street, Richmond, Virginia 23219-3932
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (804) 771-3000
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 5. OTHER EVENTS
On March 25, 1999, the Governor of Virginia signed into law legislation
establishing a detailed plan to restructure the electric utility industry in
Virginia. The major elements of the bill include:
o Phase-in of retail customer choice beginning in 2002 with
full retail customer choice by 2004; the schedule is to be
determined by the Virginia Commission, which has the
authority to accelerate or delay implementation under
certain conditions; however, the phase-in of retail customer
choice may not be delayed beyond January 1, 2005;
o No mandatory divestiture of generating assets;
o Deregulation of generation in 2002;
o Capped base rates from January 1, 2001 to July 1, 2007;
o Recovery of net stranded costs through capped rates or a
wires charge paid by those customers opting, while capped
rates are in effect, to purchase energy from a competitive
supplier;
o Consumer protection safeguards;
o Establishment of default service beginning January 1, 2004;
and
o Creation of a Legislative Transition Task Force to oversee
the implementation of the statute.
Under this legislation, our base rates would remain unchanged until
July 2007 although recovery of generation-related costs would continue to be
provided through the capped rates. In the absence of the capped rates, we would
be exposed, on a pre-tax basis, to approximately $3.2 billion of potential
losses related to long-term power purchase commitments and an additional $0.5
billion of potential losses in generation-related regulatory assets.
As discussed in our annual report filed on Form 10-K for the year ended
December 31, 1998, our financial statements reflect regulatory assets and
liabilities under cost-based rate regulation in accordance with Statement of
Financial Accounting Standards No. 71 (SFAS No. 71), Accounting for the Effects
of Certain Types of Regulation. Rate-regulated companies are required to write
off regulatory assets against current earnings whenever changes in facts and
circumstances result in those assets no longer satisfying criteria for
recognition as defined by SFAS No. 71. The legislation's deregulation of
generation is an event that requires discontinuation of SFAS No. 71 for our
generation operations. Our transmission and distribution operations continue to
meet the criteria for recognition of regulatory assets and liabilities as
defined by SFAS No. 71.
In order to measure the amount of regulatory assets to be written off,
we evaluated to what extent recovery of regulatory assets would be provided
through cost-based rates or a rate recovery mechanism during the transition
period. Emerging Issues Task Force Issue No. 97-4, "Deregulation of the Pricing
of Electricity Issues Related to the Application of FASB Statements No. 71,
Accounting for the Effects of Certain Types of Regulation, and No. 101,
Regulated Enterprises - Accounting for the Discontinuance of Application of FASB
Statement No. 71" (EITF 97-4), provides guidance about writing off regulatory
assets when SFAS No. 71 is discontinued for only a portion of a utility's
operations. The provisions of the Virginia legislation provide an opportunity to
recover generation-related costs, including certain regulatory assets, through
capped rates prior to July 2007. Under EITF 97-4 such generation-related
regulatory assets will continue to be recognized until they are recovered
through capped rates. Generation-related assets and liabilities that will not be
recovered through the capped rates will be written off in the first quarter of
1999, resulting in an estimated after-tax charge to earnings of $251 million. In
addition, cost-based recovery of fuel expenses continues until July 2007.
Also, as discussed in our 1998 Form 10-K, the events or changes in
circumstances that cause discontinuance of SFAS No. 71, and write-off of
regulatory assets, also require a review of utility plant assets and long-term
power purchase contracts for possible impairment. This review is based on
estimates of possible future market prices, load growth, competition and many
other assumptions. We evaluated our generation assets in accordance with the
provisions of SFAS No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of. These evaluations included the
effects of nuclear decommissioning and other currently identified environmental
expenditures. Based on these analyses which are highly dependent on the
underlying assumptions, no plant write-downs are appropriate at this time.
We reviewed our long-term power purchase commitments for potential loss
in accordance with SFAS No. 5, Accounting for Contingencies, and Accounting
Research Bulletin No. 43, Chapter 4, Inventory Pricing. Based on our projection
of possible future market prices for wholesale electricity, the results of the
analyses of our long-term power purchase contracts indicated no loss recognition
is appropriate at this time. Other projections of possible future market prices
indicated a possible loss of $500 million. In the absence of capped rates as
provided by the legislation, the potential exposure related to our power
purchase contracts would be approximately $3.2 billion.
We have taken significant recent write-offs of generation-related
regulatory assets and are subject to a base rate freeze at reduced revenue
levels until July 2007. In addition, we remain subject to numerous risks
including, among others, exposure to long-term power purchase commitment losses,
environmental contingencies, changes in tax laws, decommissioning costs,
inflation, increased capital costs, and recovery of certain other items. We
believe the stable rates that are provided until July 2007 by the legislation
present a reasonable opportunity to recover a substantial portion of our
potentially stranded costs as more fully described in our 1998 Form 10-K. See
Competition--Exposure to Potentially Stranded Costs, Item 7, Management's
Discussion and Analysis of Financial Condition and Results of Operations.
This report contains 'forward-looking statements' as defined by the
Private Securities Litigation Reform Act of 1995. Forward-looking statements are
inherently uncertain and subject to risks as they involve the use of estimates,
projections, goals, assumptions and uncertainties that could cause actual
results or outcomes to differ materially from those expressed in the
forward-looking statements. Some of these factors are described above and others
are discussed in our Form 10-K. See Item 7, Management's Discussion and Analysis
of Financial Condition and Results of Operations.
The full text of the final legislation is filed herewith as Exhibit 99
to this Form 8-K.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Exhibit 99 - VIRGINIA ACTS OF ASSEMBLY -VIRGINIA ELECTRIC
UTILITY RESTRUCTURING ACT
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned hereunto duly authorized.
VIRGINIA ELECTRIC AND POWER COMPANY
By: /S/John A. Shaw
-----------------------------------
John A. Shaw
Senior Vice President, Chief
Financial Officer and Treasurer
March 29, 1999
Exhibit 99
VIRGINIA ACTS OF ASSEMBLY -- CHAPTER
An Act to amend the Code of Virginia by adding in Title 56 a chapter numbered
23, consisting of sections numbered 56-576 through 56-595, relating to the
Virginia Electric Utility Restructuring Act.
[S 1269]
Approved
Be it enacted by the General Assembly of Virginia:
1. That the Code of Virginia is amended by adding in Title 56 a chapter numbered
23, consisting of sections numbered 56-576 through 56-595, as follows:
CHAPTER 23.
VIRGINIA ELECTRIC UTILITY RESTRUCTURING ACT.
ss.56-576. Definitions.
As used in this chapter:
"Affiliate" means any person that controls, is controlled by, or is under common
control with an electric utility.
"Aggregator" means a person licensed by the Commission that purchases or
arranges for the purchase of electric energy as an agent or intermediary for
sale to, or on behalf of, two or more retail customers.
"Commission" means the State Corporation Commission.
"Cooperative" means a utility formed under or subject to Chapter 9 (ss. 56-209
et seq.) of this title.
"Covered entity" means a provider in the Commonwealth of an electric service not
subject to competition but shall not include default service providers.
"Covered transaction" means an acquisition, merger, or consolidation of, or
other transaction involving stock, securities, voting interests or assets by
which one or more persons obtains control of a covered entity.
"Customer choice" means the opportunity for a retail customer in the
Commonwealth to purchase electric energy from any supplier licensed and seeking
to sell electric energy to that customer.
"Distribute," "distributing" or "distribution of" electric energy means the
transfer of electric energy through a retail distribution system to a retail
customer.
"Distributor" means a person owning, controlling, or operating a retail
distribution system to provide electric energy directly to retail customers.
"Electric utility" means any person that generates, transmits, or distributes
electric energy for use by retail customers in the Commonwealth, including any
investor-owned electric utility, cooperative electric utility, or electric
utility owned or operated by a municipality.
"Generate," "generating," or "generation of" electric energy means the
production of electric energy.
"Generator" means a person owning, controlling, or operating a facility that
produces electric energy for sale.
"Incumbent electric utility" means each electric utility in the Commonwealth
that, prior to July 1, 1999, supplied electric energy to retail customers
located in an exclusive service territory established by the Commission.
"Independent system operator" means a person that may receive or has received,
by transfer pursuant to this chapter, any ownership or control of, or any
responsibility to operate, all or part of the transmission systems in the
Commonwealth.
"Market power" means the ability to impose on customers a significant and
nontransitory price increase on a product or service in a market above the price
level which would prevail in a competitive market.
"Municipality" means a city, county, town, authority or other political
subdivision of the Commonwealth.
"Period of transition to customer choice" means the period beginning on January
1, 2002, and ending on January 1, 2004, unless otherwise extended by the
Commission pursuant to this chapter, during which the Commission and all
electric utilities authorized to do business in the Commonwealth shall implement
customer choice for retail customers in the Commonwealth.
"Person" means any individual, corporation, partnership, association, company,
business, trust, joint venture, or other private legal entity, and the
Commonwealth or any municipality.
"Retail customer" means any person that purchases retail electric energy for its
own consumption at one or more metering points or nonmetered points of delivery
located in the Commonwealth.
"Retail electric energy" means electric energy sold for ultimate consumption to
a retail customer.
"Supplier" means any generator, distributor, aggregator, broker, marketer, or
other person who offers to sell or sells electric energy to retail customers and
is licensed by the Commission to do so, but it does not mean a generator that
produces electric energy exclusively for its own consumption or the consumption
of an affiliate.
"Supply" or "supplying" electric energy means the sale of or the offer to sell
electric energy to a retail customer.
"Transmission of," "transmit," or "transmitting" electric energy means the
transfer of electric energy through the Commonwealth's interconnected
transmission grid from a generator to either a distributor or a retail customer.
"Transmission system" means those facilities and equipment that are required to
provide for the transmission of electric energy.
ss.56-577. Schedule for transition to retail competition; Commission authority.
A. The transition to retail competition for the purchase and sale of electric
energy shall be implemented as follows:
1. On or before January 1, 2001, each incumbent electric utility owning,
operating, controlling, or having an entitlement to transmission capacity shall
join or establish a regional transmission entity, which entity may be an
independent system operator, to which such utility shall transfer the management
and control of its transmission system, subject to the provisions of ss.56-579.
2. On and after January 1, 2002, retail customers of electric energy within the
Commonwealth shall be permitted to purchase energy from any supplier of electric
energy licensed to sell retail electric energy within the Commonwealth during
and after the period of transition to retail competition, subject to the
following:
a. The Commission shall establish a phase-in schedule for customers by class,
and by percentages of class, to ensure that by January 1, 2004, all retail
customers are permitted to purchase electric energy from any supplier of
electric energy licensed to sell retail electric energy within the Commonwealth.
b. The Commission shall also ensure that residential and small business retail
customers are permitted to select suppliers in proportions at least equal to
that of other customer classes permitted to select suppliers during the period
of transition to retail competition.
3. On and after January 1, 2002, the generation of electric energy shall no
longer be subject to regulation under this title, except as specified in this
chapter.
4. On and after January 1, 2004, all retail customers of electric energy within
the Commonwealth, regardless of customer class, shall be permitted to purchase
electric energy from any supplier of electric energy licensed to sell retail
electric energy within the Commonwealth.
B. The Commission may delay or accelerate the implementation of any of the
provisions of this section, subject to the following:
1. Any such delay or acceleration shall be based on considerations of
reliability, safety, communications or market power; and
2. Any such delay shall be limited to the period of time required to resolve the
issues necessitating the delay, but in no event shall any such delay extend the
implementation of customer choice for all customers beyond January 1, 2005.
The Commission shall, within a reasonable time, report to the General Assembly,
or any legislative entity monitoring the restructuring of Virginia's electric
industry, any such delays and the reasons therefor.
C. Except as may be otherwise provided in this chapter, prior to and during the
period of transition to retail competition, the Commission may conduct pilot
programs encompassing retail customer choice of electric energy suppliers,
consistent with its authority otherwise provided in this title and the
provisions of this chapter.
D. The Commission shall promulgate such rules and regulations as may be
necessary to implement the provisions of this section.
ss.56-578. Nondiscriminatory access to transmission and distribution system.
A. All distributors shall have the obligation to connect any retail customer,
including those using distributed generation, located within its service
territory to those facilities of the distributor that are used for delivery of
retail electric energy, subject to Commission rules and regulations and approved
tariff provisions relating to connection of service.
B. Except as otherwise provided in this chapter, every distributor shall provide
distribution service within its service territory on a basis which is just,
reasonable, and not unduly discriminatory to suppliers of electric energy,
including distributed generation, as the Commission may determine. The
distribution services provided to each supplier of electric energy shall be
comparable in quality to those provided by the distribution utility to itself or
to any affiliate. The Commission shall establish rates, terms and conditions for
distribution service under Chapter 10 (ss.56-232 et seq.) of this title.
C. The Commission shall establish interconnection standards to ensure
transmission and distribution safety and reliability, which standards shall not
be inconsistent with nationally recognized standards acceptable to the
Commission. In adopting standards pursuant to this subsection, the Commission
shall seek to prevent barriers to new technology and shall not make compliance
unduly burdensome and expensive. The Commission shall determine questions about
the ability of specific equipment to meet interconnection standards.
D. The Commission shall consider developing expedited permitting processes for
small generation facilities of fifty megawatts or less. The Commission shall
also consider developing a standardized permitting process and interconnection
arrangements for those power systems less than 500 kilowatts which have
demonstrated approval from a nationally recognized testing laboratory acceptable
to the Commission.
E. Upon the separation and deregulation of the generation function and services
of incumbent electric utilities, the Commission shall retain jurisdiction over
utilities' electric transmission function and services, to the extent not
preempted by federal law. Nothing in this section shall impair the Commission's
authority under ss.ss.56-46.1, 56-46.2, and 56-265.2 with respect to the
construction of electric transmission facilities.
F. If the Commission determines that increases in the capacity of the
transmission systems in the Commonwealth, or modifications in how such systems
are planned, operated, maintained, used, financed or priced, will promote the
efficient development of competition in the sale of electric energy, the
Commission may, to the extent not preempted by federal law, require one or more
persons having any ownership or control of, or responsibility to operate, all or
part of such transmission systems to:
1. Expand the capacity of transmission systems;
2. File applications and tariffs with the Federal Energy Regulatory Commission
(FERC) which (i) make transmission systems capacity available to retail sellers
or buyers of electric energy under terms and conditions described by the
Commission, and (ii) require owners of generation capacity located in the
Commonwealth to bear an appropriate share of the cost of transmission
facilities, to the extent such cost is attributable to such generation capacity;
3. Enter into a contract with, or provide information to, a regional
transmission entity; or
4. Take such other actions as the Commission determines to be necessary to carry
out the purposes of this chapter.
G. If the Commission determines, after notice and opportunity for hearing, that
a person has or will have, as a result of such person's control of electric
generating capacity or energy within a transmission constrained area, market
power over the sale of electric generating capacity or energy to retail
customers located within the Commonwealth, the Commission may, to the extent not
preempted by federal law and to the extent that the Commission determines market
power is not adequately mitigated by rules and practices of the applicable
regional transmission entity having responsibility for management and control of
transmission assets within the Commonwealth, adjust such person's rates for such
electric generating capacity or energy, only within such
transmission-constrained area and only to the extent necessary to protect retail
customers from such market power. Such rates shall remain regulated until the
Commission, after notice and opportunity for hearing, determines that the market
power has been mitigated.
ss.56-579. Regional transmission entities.
A. As set forth in ss.56-577, on or before January 1, 2001, each incumbent
electric utility owning, operating, controlling, or having an entitlement to
transmission capacity shall join or establish a regional transmission entity
(RTE) to which such utility shall transfer the management and control of its
transmission assets, subject to the following:
1. No such incumbent electric utility shall transfer to any person any ownership
or control of, or any responsibility to operate, any portion of any transmission
system located in the Commonwealth without obtaining the prior approval of the
Commission, as hereinafter provided.
2. The Commission shall develop rules and regulations under which any such
incumbent electric utility owning, operating, controlling, or having an
entitlement to transmission capacity within the Commonwealth, may transfer all
or part of such control, ownership or responsibility to an RTE, upon such terms
and conditions that the Commission determines will:
a. Promote:
(1) Practices for the reliable planning, operating, maintaining, and upgrading
of the transmission systems and any necessary additions thereto; and
(2) Policies for the pricing and access for service over such systems, which are
safe, reliable, efficient, not unduly discriminatory and consistent with the
orderly development of competition in the Commonwealth;
b. Be consistent with lawful requirements of the Federal Energy Regulatory
Commission;
c. Be effectuated on terms that fairly compensate the transferor;
d. Generally promote the public interest, and are consistent with (i) ensuring
the successful development of interstate regional transmission entities and (ii)
meeting the transmission needs of electric generation suppliers both within and
without this Commonwealth.
B. The Commission shall also adopt rules and regulations, with appropriate
public input, establishing elements of regional transmission entity structures
essential to the public interest, which elements shall be applied by the
Commission in determining whether to authorize transfer of ownership or control
from an incumbent electric utility to a regional transmission entity.
C. The Commission shall, to the fullest extent permitted under federal law,
participate in any and all proceedings concerning regional transmission entities
furnishing transmission services within the Commonwealth, before the Federal
Energy Regulatory Commission. Such participation may include such intervention
as is permitted state utility regulators under FERC rules and procedures.
D. Nothing in this section shall be deemed to abrogate or modify:
1. The Commission's authority over transmission line or facility construction,
enlargement or acquisition within this Commonwealth, as set forth in Chapter
10.1 (ss.56-265.1 et seq.) of this title;
2. The laws of this Commonwealth concerning the exercise of the right of eminent
domain by a public service corporation pursuant to the provisions of Article 5
(ss.56-257 et seq.) of Chapter 10 of this title; however, on and after January
1, 2002, the right of eminent domain may not be exercised in conjunction with
the construction or enlargement of any utility facility whose purpose is the
generation of electric energy; or
3. The Commission's authority over retail electric energy sold to retail
customers within the Commonwealth by licensed suppliers of electric service,
including necessary reserve requirements, all as specified in ss.56-587.
E. For purposes of this section, transmission capacity shall not include
capacity that is primarily operated in a distribution function, as determined by
the Commission, taking into consideration any binding federal precedents.
F. On or after January 1, 2002, the Commission shall report to the Legislative
Transition Task Force its assessment of the success in the practices and
policies of the RTE facilitating the orderly development of competition in the
Commonwealth.
ss.56-580. Transmission and distribution of electric energy.
A. The Commission shall continue to regulate pursuant to this title the
distribution of retail electric energy to retail customers in the Commonwealth
and, to the extent not prohibited by federal law, the transmission of electric
energy in the Commonwealth.
B. The Commission shall continue to regulate, to the extent not prohibited by
federal law, the reliability, quality and maintenance by transmitters and
distributors of their transmission and retail distribution systems.
C. The Commission shall develop codes of conduct governing the conduct of
incumbent electric utilities and affiliates thereof when any such affiliates
provide, or control any entity that provides, generation, distribution or
transmission services, to the extent necessary to prevent impairment of
competition.
D. The Commission may permit the construction and operation of electrical
generating facilities upon a finding that such generating facility and
associated facilities including transmission lines and equipment (i) will have
no material adverse effect upon reliability of electric service provided by any
regulated public utility and (ii) 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 ss.56-46.1.
E. Nothing in this section shall impair the distribution service territorial
rights of incumbent electric utilities, and incumbent electric utilities shall
continue to provide distribution services within their exclusive service
territories as established by the Commission. Nothing in this chapter shall
impair the Commission's existing authority over the provision of electric
distribution services to retail customers in the Commonwealth including, but not
limited to, the authority contained in Chapters 10 (ss.56-232 et seq.) and 10.1
(ss.56-265.1 et seq.) of this title.
F. Nothing in this chapter shall impair the exclusive territorial rights of an
electric utility owned or operated by a municipality as of July 1, 1999, nor
shall any provision of this chapter apply to any such electric utility unless
(i) that municipality elects to have this chapter apply to that utility or (ii)
that utility, directly or indirectly, sells, offers to sell or seeks to sell
electric energy to any retail customer outside the geographic area that was
served by such municipality as of July 1, 1999.
ss.56-581. Regulation of rates subject to Commission's jurisdiction.
A. Subject to the provisions of ss.56-582, the Commission shall regulate the
rates for the transmission of electric energy, to the extent not prohibited by
federal law, and for the distribution of electric energy to such retail
customers on an unbundled basis, but, subject to the provisions of this chapter
after the date of customer choice, the Commission no longer shall regulate rates
and services for the generation component of retail electric energy sold to
retail customers.
B. No later than September 1, 1999, and annually thereafter, the Commission
shall submit a report to the General Assembly evaluating the advantages and
disadvantages of competition for metering, billing and other services which have
not been made subject to competition, and making recommendations as to when, and
for whom, such other services should be made subject to competition.
C. Beginning July 1, 1999, and thereafter, no cooperative that was a member of a
power supply cooperative on January 1, 1999, shall be obligated to file any rate
rider as a consequence of an increase or decrease in the rates, other than fuel
costs, of its wholesale supplier, nor must any adjustment be made to such
cooperative's rates as a consequence thereof.
D. Except for the provision of default services under ss.56-585 or emergency
services in ss.56-586, nothing in this chapter shall authorize the Commission to
regulate the rates or charges for electric service to the Commonwealth and its
municipalities.
ss.56-582. Rate caps.
A. The Commission shall establish capped rates, effective January 1, 2001, and
expiring on July 1, 2007, for each service territory of every incumbent utility
as follows:
1. Capped rates shall be established for customers purchasing bundled electric
transmission, distribution and generation services from an incumbent electric
utility.
2. Capped rates for electric generation services, only, shall also be
established for the purpose of effecting customer choice for those retail
customers authorized under this chapter to purchase generation services from a
supplier other than the incumbent utility during this period.
3. The capped rates established under this section shall be the rates in effect
for each incumbent utility as of the effective date of this chapter, or rates
subsequently placed into effect pursuant to a rate application filed by an
incumbent electric utility with the Commission prior to January 1, 2001, and
subsequently approved by the Commission, and made by an incumbent electric
utility that is not currently bound by a rate case settlement adopted by the
Commission that extends in its application beyond January 1, 2002. The
Commission shall act upon such applications prior to commencement of the period
of transition to customer choice, and capped rates determined pursuant to such
applications shall become effective on January 1, 2001. Such rate application
and the Commission's approval shall give due consideration, on a forward-looking
basis, to the justness and reasonableness of rates to be effective for a period
of time ending as late as July 1, 2007. The capped rates established under this
section, which include rates, tariffs, electric service contracts, and rate
programs (including experimental rates, regardless of whether they otherwise
would expire), shall be such rates, tariffs, contracts, and programs of each
incumbent electric utility, provided that experimental rates and rate programs
may be closed to new customers upon application to the Commission.
B. The Commission may adjust such capped rates in connection with (i) utilities'
recovery of fuel costs pursuant to ss.56-249.6, (ii) any changes in the taxation
by the Commonwealth of incumbent electric utility revenues, (iii) any financial
distress of the utility beyond its control, (iv) respect to cooperatives that
were not members of a power supply cooperative on January 1, 1999, and as long
as they do not become members, their cost of purchased wholesale power, and (v)
respect to cooperatives that were members of a power supply cooperative on
January 1, 1999, their recovery of fuel costs, through the wholesale power cost
adjustment clauses of their tariffs pursuant to ss.56-226. Notwithstanding the
provisions of ss.56-249.6, the Commission may authorize tariffs that include
incentives designed to encourage an incumbent electric utility to reduce its
fuel costs by permitting retention of a portion of cost savings resulting from
fuel cost reductions or by other methods determined by the Commission to be fair
and reasonable to the utility and its customers.
C. A utility may petition the Commission to terminate the capped rates to all
customers anytime after January 1, 2004, and such capped rates may be terminated
upon the Commission finding of an effectively competitive market for generation
services within the service territory of that utility. If the capped rates are
continued after January 1, 2004, an incumbent electric utility which is not, as
of the effective date of this chapter, bound by a rate case settlement adopted
by the Commission that extends in its application beyond January 1, 2002, may
petition the Commission for approval of a one-time change in the nongeneration
components of such rates.
D. Until the expiration or termination of capped rates as provided in this
section, the incumbent electric utility, consistent with the functional
separation plan implemented under ss.56-590, shall make electric service
available at capped rates established under this section to any customer in the
incumbent electric utility's service territory, including any customer that,
until the expiration or termination of capped rates, requests such service after
a period of utilizing service from another supplier.
E. During the period when capped rates are in effect for an incumbent electric
utility, such utility may file with the Commission a plan describing the method
used by such utility to assure full funding of its nuclear decommissioning
obligation and specifying the amount of the revenues collected under either the
capped rates, as provided in this section, or the wires charges, as provided in
ss.56-583, that are dedicated to funding such nuclear decommissioning obligation
under the plan. The Commission shall approve the plan upon a finding that the
plan is not contrary to the public interest.
ss.56-583. Wires charges.
A. To provide the opportunity for competition and consistent with ss.56-584, the
Commission shall establish wires charges for each incumbent electric utility,
effective upon the commencement of customer choice, which shall be the sum (i)
of the difference between the incumbent utilities' capped unbundled rates for
generation and projected market prices for generation, as determined by the
Commission, and (ii) any transition costs incurred by the incumbent electric
utility determined by the Commission to be just and reasonable; however, the sum
of such wires charges, the unbundled charge for transmission and ancillary
services, the applicable distribution rates established by the Commission and
the above projected market prices for generation shall not exceed the capped
rates established under ss. 56-582.A.1 applicable to such incumbent electric
utility. The Commission shall adjust such wires charges not more frequently than
annually and shall seek to coordinate adjustments of wires charges with any
adjustments of capped rates pursuant to ss.56-582.
B. Customers that choose suppliers of electric energy, other than the incumbent
utility, or are subject to default service, prior to the expiration of the
period for capped rates, as provided for in ss.56-582, shall pay a wires charge
determined pursuant to subsection A based upon actual usage of electricity
distributed by the incumbent utility to the customer during the period from the
time it chooses a supplier of electric energy other than the incumbent electric
utility, until capped rates expire or are terminated, as provided in ss.56-582.
C. The Commission shall permit any customer, at its option, to pay the wires
charges owed to an incumbent electric utility on an accelerated or deferred
basis upon a finding that such method is not (i) prejudicial to the incumbent
electric utility or its ratepayers or (ii) inconsistent with the development of
effective competition, provided, however, that all deferred wires charges shall
be paid in full by July 1, 2007. D. A supplier of retail electric energy may pay
any or all of the wires charge owed by any customer to an incumbent electric
utility. The supplier may not only pay such wires charge on behalf of any
customer, but also contract with any customer to finance such payments. Further,
on request of a supplier, the incumbent electric utility shall enter into a
contract allowing such supplier to pay such wires charge on an accelerated or
deferred basis. Such contract shall contain terms and conditions, specified in
rules and regulations promulgated by the Commission to implement the provisions
of this subsection, that fully compensate the incumbent electric utility for
such wires charge, including reasonable compensation for the time value of
money.
ss.56-584. Stranded costs.
Just and reasonable net stranded costs, to the extent that they exceed zero
value in total for the incumbent electric utility, shall be recoverable by each
incumbent electric utility provided each incumbent electric utility shall only
recover its just and reasonable net stranded costs through either capped rates
as provided in ss.56-582 or wires charges as provided in ss.56-583. To the
extent not preempted by federal law, the establishment by the Commission of
wires charges for any distribution cooperative shall be conditioned upon such
cooperative entering into binding commitments by which it will pay to any power
supply cooperative of which such distribution cooperative is or was a member, as
compensation for such power supply cooperative's stranded costs, all or part of
the proceeds of such wires charges, as determined by the Commission.
ss.56-585. Default service.
A. The Commission shall, after notice and opportunity for hearing, (i) determine
the components of default service and (ii) establish one or more programs making
such services available to retail customers requiring them commencing with the
date of customer choice for all retail customers established pursuant to
ss.56-577. For purposes of this chapter, "default service" means service made
available under this section to retail customers who (i) do not affirmatively
select a supplier, (ii) are unable to obtain service from an alternative
supplier, or (iii) have contracted with an alternative supplier who fails to
perform.
B. The Commission shall designate the providers of default service. In doing so,
the Commission:
1. Shall take into account the characteristics and qualifications of prospective
providers, including cost, experience, safety, reliability, corporate structure,
access to electric energy resources necessary to serve customers requiring such
services, and other factors deemed necessary to protect the public interest;
2. May, upon a finding that the public interest will be served, designate one or
more willing providers to provide one or more components of such services, in
one or more regions of the Commonwealth, to one or more classes of customers;
and
3. In the absence of a finding under subdivision 2, may require an incumbent
electric utility or distribution utility to provide one or more components of
such services, or to form an affiliate to do so, in one or more regions of the
Commonwealth, at rates which are fairly compensatory to the utility and which
reflect any cost of energy prudently procured, including energy procured from
the competitive market; however, the Commission may not require an incumbent
electric utility or distribution utility, or affiliate thereof, to provide any
such services outside the territory in which such utility provides service.
C. The Commission shall, after notice and opportunity for hearing, determine the
rates, terms and conditions for such services consistent with the provisions of
subdivision B 3 and Chapter 10 (ss.56-232 et seq.) of this title and shall
establish such requirements for providers and customers as it finds necessary to
promote the reliable and economic provision of such services and to prevent the
inefficient use of such services. The Commission may use any rate method that
promotes the public interest and may establish different rates, terms and
conditions for different classes of customers.
D. On or before July 1, 2004, and annually thereafter, the Commission shall
determine, after notice and opportunity for hearing, whether there is a
sufficient degree of competition such that the elimination of default service
for particular customers, particular classes of customers or particular
geographic areas of the Commonwealth will not be contrary to the public
interest. The Commission shall report its findings and recommendations
concerning modification or termination of default service to the General
Assembly and to the Legislative Transition Task Force, not later than December
1, 2004, and annually thereafter.
E. A distribution electric cooperative, or one or more affiliates thereof, shall
have the obligation and right to be the supplier of default services in its
certificated service territory. If a distribution electric cooperative, or one
or more affiliates thereof, elects or seeks to be a default supplier of another
electric utility, then the Commission shall designate the default supplier for
that distribution electric cooperative, or any affiliate thereof, pursuant to
subsection B.
ss. 56-586. Emergency service provider.
On and after January 1, 2001, if any supplier fails to fulfill an obligation,
resulting in the failure of retail electric energy to be delivered into the
control area serving the supplier's retail customer, the entity fulfilling the
control area function, or, if applicable, the regional transmission entity or
other entity as designated by the Commission, shall be responsible for charging
the defaulting supplier for the full cost of replacement energy, including the
cost of energy, the cost incurred by others as a result of the default, and the
assessment of penalties as may be approved either by the Commission, to the
extent not precluded by federal law, or by the Federal Energy Regulatory
Commission. The Commission, as part of the rules established under ss.56-587,
shall determine the circumstances under which failures to deliver electricity
will result in the revocation of the supplier's license.
ss.56-587. Licensure of retail electric energy suppliers.
A. As a condition of doing business in the Commonwealth each person seeking to
sell, offering to sell, or selling electric energy to any retail customer in the
Commonwealth, on and after January 1, 2002, shall obtain a license from the
Commission to do so. A license shall not be required solely for the leasing or
financing of property used in the sale of electricity to any retail customer in
the Commonwealth.
The license shall authorize that person to engage in the activities authorized
by such license until the license expires or is otherwise terminated, suspended
or revoked.
B. As a condition of obtaining, retaining and renewing any license issued
pursuant to this section, a person shall satisfy such reasonable and
nondiscriminatory requirements as may be specified by the Commission, which may
include requirements that such person (i) demonstrate, in a manner satisfactory
to the Commission, financial responsibility; (ii) post a bond as deemed adequate
by the Commission to ensure that financial responsibility; (iii) pay an annual
license fee to be determined by the Commission; and (iv) pay all taxes and fees
lawfully imposed by the Commonwealth or by any municipality or other political
subdivision of the Commonwealth. In addition, as a condition of obtaining,
retaining and renewing any license pursuant to this section, a person shall
satisfy such reasonable and nondiscriminatory requirements as may be specified
by the Commission, including but not limited to requirements that such person
demonstrate (i) technical capabilities as the Commission may deem appropriate;
(ii) access to generation and generation reserves; and (iii) adherence to
minimum market conduct standards. Any license issued by the Commission pursuant
to this section may be conditioned upon the licensee furnishing to the
Commission prior to the provision of electric energy to consumers proof of
adequate access to generation and generation reserves.
C. 1. The Commission shall establish a reasonable period within which any retail
customer may cancel, without penalty or cost, any contract entered into with a
supplier licensed pursuant to this section.
2. The Commission may adopt other rules and regulations governing the
requirements for obtaining, retaining, and renewing a license to supply electric
energy to retail customers, and may, as appropriate, refuse to issue a license
to, or suspend, revoke, or refuse to renew the license of, any person that does
not meet those requirements.
D. Notwithstanding the provisions of ss.13.1-620, a public service company may,
through an affiliate or subsidiary, conduct one or more of the following
businesses, even if such business is not related to or incidental to its stated
business as a public service company: (i) become licensed as a retail electric
energy supplier pursuant to this section, or for purposes of participation in an
approved pilot program encompassing retail customer choice of electric energy
suppliers; (ii) become licensed as an aggregator pursuant to ss.56-588, or for
purposes of participation in an approved pilot program encompassing retail
customer choice of electric energy suppliers; or (iii) own, manage or control
any plant or equipment or any part of a plant or equipment used for the
generation of electric energy.
ss.56-588. Licensing of aggregators.
A. As a condition of doing business in the Commonwealth, each person seeking to
aggregate electric energy within this Commonwealth on and after January 1, 2002,
shall obtain a license from the Commission to do so. The license shall authorize
that person to act as an aggregator until the license expires or is otherwise
terminated, suspended or revoked. Licensing pursuant to this section, however,
shall not relieve any person seeking to act as a supplier of electric energy
from their obligation to obtain a license as a supplier pursuant to ss.56-587.
B. As a condition of obtaining, retaining and renewing any license issued
pursuant to this section, a person shall satisfy such reasonable and
nondiscriminatory requirements as may be specified by the Commission, which may
include requirements that such person (i) provide background information; (ii)
demonstrate, in a manner satisfactory to the Commission, financial
responsibility; (iii) post a bond as deemed adequate by the Commission to ensure
that financial responsibility; (iv) pay an annual license fee to be determined
by the Commission; and (v) pay all taxes and fees lawfully imposed by the
Commonwealth or by any municipality or other political subdivision of the
Commonwealth. In addition, as a condition of obtaining, retaining and renewing
any license pursuant to this section, a person shall satisfy such reasonable and
nondiscriminatory requirements as may be specified by the Commission, including,
but not limited to, requirements that such person demonstrate technical
capabilities as the Commission may deem appropriate. Any license issued by the
Commission pursuant to this section may be conditioned upon the licensee, if
acting as a supplier, furnishing to the Commission prior to the provision of
electricity to consumers proof of adequate access to generation and generation
reserves.
C. In establishing aggregator licensing schemes and requirements applicable to
the same, the Commission may differentiate between (i) those aggregators
representing retail customers only, (ii) those aggregators representing
suppliers only, and (iii) those aggregators representing both retail customers
and suppliers.
D. 1. The Commission shall establish a reasonable period within which any retail
customer may cancel, without penalty or cost, any contract entered into with a
supplier licensed pursuant to this section.
2. The Commission may adopt other rules and regulations governing the
requirements for obtaining, retaining, and renewing a license to aggregate
electric energy to retail customers, and may, as appropriate, refuse to issue a
license to, or suspend, revoke, or refuse to renew the license of, any person
that does not meet those requirements.
ss.56-589. Municipal and state aggregation.
A. Counties, cities and towns (hereafter "municipalities") and other political
subdivisions of the Commonwealth may, at their election and upon authorization
by majority votes of their governing bodies, aggregate electrical energy and
demand requirements for the purpose of negotiating the purchase of electrical
energy requirements from any licensed supplier within this Commonwealth, as
follows:
1. Any municipality or other political subdivision of the Commonwealth
may aggregate the electric energy load of residential, commercial and industrial
retail customers within its boundaries on a voluntary, opt-in basis in which
each such customer must affirmatively select such municipality or other
political subdivision as its aggregator. The municipality or other political
subdivision may not earn a profit but must recover the actual costs incurred in
such aggregation.
2. Any municipality or other political subdivision of the Commonwealth may
aggregate the electric energy load of its governmental buildings, facilities and
any other governmental operations requiring the consumption of electric energy.
3. Two or more municipalities or other political subdivisions within this
Commonwealth may aggregate the electric energy load of their governmental
buildings, facilities and any other governmental operations requiring the
consumption of electric energy.
B. The Commonwealth, at its election, may aggregate the electric energy load of
its governmental buildings, facilities, and any other government operations
requiring the consumption of electric energy for the purpose of negotiating the
purchase of electricity from any licensed supplier within this Commonwealth.
ss.56-590. Divestiture, functional separation and other corporate relationships.
A. The Commission shall not require any incumbent electric utility to divest
itself of any generation, transmission or distribution assets pursuant to any
provision of this chapter.
B. 1. The Commission shall, however, direct the functional separation of
generation, retail transmission and distribution of all incumbent electric
utilities in connection with the provisions of this chapter to be completed by
January 1, 2002.
2. By January 1, 2001, each incumbent electric utility shall submit to the
Commission a plan for such functional separation which may be accomplished
through the creation of affiliates, or through such other means as may be
acceptable to the Commission.
3. Consistent with this chapter, the Commission may impose conditions, as the
public interest requires, upon its approval of the incumbent electric utility's
plan for functional separation, including requirements that (i) the incumbent
electric utility's generation assets or their equivalent remain available for
electric service during the capped rate period as provided in ss.56-582 and, if
applicable, during any period the incumbent electric utility serves as a default
provider as provided for in ss.56-585, and (ii) the incumbent electric utility
receive Commission approval for the sale, transfer or other disposition of
generation assets during the capped rate period and, if applicable, during any
period the incumbent electric utility serves as a default provider.
C. The Commission shall, to the extent necessary to promote effective
competition in the Commonwealth, promulgate rules and regulations to carry out
the provisions of this section, which rules and regulations shall include
provisions:
1. Prohibiting cost-shifting or cross-subsidies between functionally separate
units;
2. Prohibiting functionally separate units from engaging in anticompetitive
behavior or self-dealing;
3. Prohibiting affiliated entities from engaging in discriminatory behavior
towards nonaffiliated units; and
4. Establishing codes of conduct detailing permissible relations between
functionally separate units.
D. Neither a covered entity nor an affiliate thereof may be a party to a covered
transaction without the prior approval of the Commission. Any such person
proposing to be a party to such transaction shall file an application with the
Commission. The Commission shall approve or disapprove such transaction within
sixty days after the filing of a completed application; however, the sixty-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 such initial or extended period. The Commission shall
approve such application if it finds, after notice and opportunity for hearing,
that the transaction will comply with the requirements of subsection E, and may,
as a part of its approval, establish such conditions or limitations on such
transaction as it finds necessary to ensure compliance with subsection E.
E. A transaction described in subsection D shall not:
1. Substantially lessen competition among the actual or prospective providers of
noncompetitive electric service or of a service which is, or is likely to
become, a competitive electric service; or
2. Jeopardize or impair the safety or reliability of electric service in the
Commonwealth, or the provision of any noncompetitive electric service at just
and reasonable rates.
F. Nothing in this chapter shall be deemed to abrogate or modify the
Commission's authority under Chapter 3 (ss.56-55 et seq.), 4 (ss.56-76 et seq.)
or 5 (ss.56-88 et seq.) of this title. However, any person subject to the
requirements of subsection D that is also subject to the requirements of Chapter
5 of this title may be exempted from compliance with the requirements of Chapter
5 of this title.
ss.56-591. Application of antitrust laws.
Nothing in this chapter shall be construed to exempt or immunize from punishment
or prosecution, conduct violative of federal antitrust laws, or the antitrust
laws of this Commonwealth.
ss.56-592. Consumer education and protection; Commission report to Legislative
Task Force.
A. The Commission shall develop a consumer education program designed to provide
the following information to retail customers during the period of transition to
retail competition and thereafter:
1. Opportunities and options in choosing (i) suppliers and aggregators of
electric energy and (ii) any other service made competitive pursuant to this
chapter;
2. Marketing and billing information suppliers and aggregators of electric
energy will be required to furnish retail customers;
3. Retail customers' rights and obligations concerning the purchase of electric
energy and related services; and
4. Such other information as the Commission may deem necessary and appropriate
in the public interest.
B. The Commission shall complete the development of the consumer education
program described in subsection A, and report its findings and recommendations
to the Legislative Transition Task Force on or before December 1, 1999, and as
frequently thereafter as may be required by the Task Force concerning:
1. The scope of such recommended program consistent with the requirements of
subsection A;
2. Materials and media required to effectuate any such program;
3. State agency and nongovernmental entity participation;
4. Program duration;
5. Funding requirements and mechanisms for any such program; and
6. Such other findings and recommendations the Commission deems appropriate in
the public interest.
C. The Commission shall develop regulations governing marketing practices by
public service companies, licensed suppliers, aggregators or any other providers
of services made competitive by this chapter, including regulations to prevent
unauthorized switching of suppliers, unauthorized charges, and improper
solicitation activities. The Commission shall also establish standards for
marketing information to be furnished by licensed suppliers, aggregators or any
other providers of services made competitive by this chapter during the period
of transition to retail competition, and thereafter, which information shall
include standards concerning:
1. Pricing and other key contract terms and conditions;
2. To the extent feasible, fuel mix and emissions data on at least an annualized
basis;
3. Customer's rights of cancellation following execution of any contract;
4. Toll-free telephone number for customer assistance; and
5. Such other and further marketing information as the Commission may deem
necessary and appropriate in the public interest.
D. The Commission shall also establish standards for billing information to be
furnished by public service companies, suppliers, aggregators or any other
providers of services made competitive by this chapter during the period of
transition to retail competition, and thereafter. Such billing information
standards shall require that billing formation:
1. Distinguishes between charges for regulated services and unregulated
services;
2. Itemizes any and all nonbypassable wires charges;
3. Is presented in a format that complies with standards to be established by
the Commission;
4. Discloses, to the extent feasible, fuel mix and emissions data on at least an
annualized basis; and
5. Includes such other billing information as the Commission deems necessary and
appropriate in the public interest.
E. The Commission shall establish or maintain a complaint bureau for the purpose
of receiving, reviewing and investigating complaints by retail customers against
public service companies, licensed suppliers, aggregators and other providers of
any services made competitive under this chapter. 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 this
chapter and to enjoin or punish any violations thereof pursuant to its authority
under this chapter, this title, and under 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.
F. The Commission shall establish reasonable limits on customer security
deposits required by public service companies, suppliers, aggregators or any
other persons providing competitive services pursuant to this chapter.
ss.56-593. Retail customers' private right of action; marketing practices.
A. No entity subject to this chapter shall use any deception, fraud, false
pretense, misrepresentation, or any deceptive or unfair practices in providing,
distributing or marketing electric service.
B. Any person who suffers loss (i) as the result of marketing practices,
including telemarketing practices, engaged in by any public service company,
licensed supplier, aggregator or any other provider of any service made
competitive under this chapter, and in violation of subsection C of ss.56-592,
including any rule or regulation adopted by the Commission pursuant thereto, or
(ii) as the result of any violation of subsection A, 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.
2. Upon referral from the Commission, the Attorney General, the attorney for the
Commonwealth, or the attorney for any city, county, or town may cause an action
to be brought in the appropriate circuit court for relief of violations within
the scope of (i) subsection C of ss.56-592, including any rule or regulation
adopted by the Commission pursuant thereto or (ii) subsection A.
C. Notwithstanding any other provision of law to the contrary, in addition to
any damages awarded, such person, or any governmental agency initiating such
action, also may be awarded reasonable attorney's fees and court costs.
D. Any action pursuant to this section shall be commenced within two years after
its accrual. The cause of action shall accrue as provided in ss.8.01-230.
However, if the Commission initiates proceedings, or any other governmental
agency files suit for the purpose of enforcing subsection A or the provisions of
subsection C of ss.56-592, the time during which such proceeding or governmental
suit and all appeals therefrom is pending shall not be counted as any part of
the period within which an action under this section shall be brought.
E. 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 subsection A or
subsection C of ss.56-592, 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.
F. In any case arising under this section, no liability shall be imposed upon
any licensed supplier, aggregator or any other provider of any service made
competitive under this chapter, who shows by a preponderance of the evidence
that (i) the act or practice alleged to be in violation of subsection A or
subsection C of ss.56-592 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 C to individuals aggrieved as a result of an
unintentional violation of subsection A or subsection C of ss. 56-592.
ss.56-594. Net energy metering provisions.
A. The Commission shall establish by regulation a program, to begin no later
than July 1, 2000, which affords eligible customer-generators the opportunity to
participate in net energy metering. The regulations may include, but need not be
limited to, requirements for (i) retail sellers; (ii) owners and/or operators of
distribution or transmission facilities; (iii) providers of default service;
(iv) eligible customer-generators; or (v) any combination of the foregoing, as
the Commission determines will facilitate the provision of net energy metering,
provided that the Commission determines that such requirements do not adversely
affect the public interest.
B. For the purpose of this section:
"Eligible customer-generator" means a customer that owns and operates an
electrical generating facility that (i) has a capacity of not more than ten
kilowatts for residential customers and twenty-five kilowatts for nonresidential
customers; (ii) uses as its total source of fuel solar, wind, or hydro energy;
(iii) is located on the customer's premises; (iv) is interconnected and operated
in parallel with an electric company's transmission and distribution facilities;
and (v) is intended primarily to offset all or part of the customer's own
electricity requirements.
"Net energy metering" means measuring the difference, over the net metering
period, between (i) electricity supplied to an eligible customer-generator from
the electric grid and (ii) the electricity generated and fed back to the
electric grid by the eligible customer-generator.
"Net metering period" means the twelve-month period following the date of final
interconnection of the eligible customer-generator's system with an electric
service provider, and each twelve-month period thereafter.
C. The Commission's regulations shall ensure that the metering equipment
installed for net metering shall be capable of measuring the flow of electricity
in two directions, and shall allocate fairly the cost of such equipment and any
necessary interconnection. An eligible customer-generator's solar, wind or hydro
electrical generating system shall meet all applicable safety and performance
standards established by the National Electrical Code, the Institute of
Electrical and Electronics Engineers, and accredited testing laboratories such
as Underwriters Laboratories. Beyond the requirements set forth in this section,
a customer-generator whose solar, wind or hydro electrical generating system
meets those standards and rules shall bear the reasonable cost, if any, as
determined by the Commission, to (i) install additional controls, (ii) perform
or pay for additional tests, or (iii) purchase additional liability insurance.
D. The Commission shall establish minimum requirements for contracts to be
entered into by the parties to net metering arrangements. Such requirements
shall protect the customer-generator against discrimination by virtue of its
status as a customer-generator. Where electricity generated by the
customer-generator over the net metering period exceeds the electricity consumed
by the customer-generator, the customer-generator shall not be compensated for
the excess electricity unless the entity contracting to receive such electric
energy and the customer-generator enter into a power purchase agreement for such
excess electricity. The net metering standard contract or tariff shall be
available to eligible customer-generators on a first-come, first-served basis in
each electric distribution company's Virginia service area until the rated
generating capacity owned and operated by eligible customer-generators in the
state reaches 0.1 percent of each electric distribution company's adjusted
Virginia peak-load forecast for the previous year.
ss.56-595. Legislative Transition Task Force established.
A. The Legislative Transition Task Force is hereby established to work
collaboratively with the Commission in conjunction with the phase-in of retail
competition within the Commonwealth.
B. The Task Force shall consist of ten members, with six members from the House
of Delegates and four members from the Senate. Appointments shall be made and
vacancies filled by the Speaker of the House of Delegates in accordance with the
principles of Rule 16 of the House of Delegates and the Senate Committee on
Privileges and Elections, as appropriate.
C. The Task Force members shall be appointed to begin service on and after July
1, 1999, and shall continue to serve until July 1, 2005. They shall (i) monitor
the work of the Virginia State Corporation Commission in implementing this
chapter, receiving such reports as the Commission may be required to make
pursuant thereto, including reviews, analysis, and impact on consumers of
electric utility restructuring programs of other states; (ii) determine whether,
and on what basis, incumbent electric utilities should be permitted to discount
capped generation rates established pursuant to ss. 56-582; (iii) after the
commencement of customer choice, monitor, with the assistance of the Commission,
the Office of the Attorney General, incumbent electric utilities, suppliers, and
retail customers, whether the recovery of stranded costs, as provided in
ss.56-584, has resulted or is likely to result in the overrecovery or
underrecovery of just and reasonable net stranded costs; (iv) examine utility
worker protection during the transition to retail competition; generation,
transmission and distribution systems reliability concerns; energy assistance
programs for low-income households; renewable energy programs; and energy
efficiency programs; and (v) annually report to the Governor and each session of
the General Assembly during their tenure concerning the progress of each stage
of the phase-in of retail competition, offering such recommendations as may be
appropriate for legislative and administrative consideration in order to
maintain the Commonwealth's position as a low-cost electricity market and
ensuring that residential customers and small business customers benefit from
competition.
D. There shall be established a Consumer Advisory Board effective July 1, 1999.
The Consumer Advisory Board shall consist of seventeen members. The Senate
Privileges and Elections Committee shall appoint six members. The Speaker of the
House of Delegates shall appoint six members. The Governor shall appoint five
members. Appointed members shall be from all classes of consumers and with
geographical representation. The Consumer Advisory Board shall assist the
Legislative Transition Task Force in its work as prescribed in this section, and
on other issues as may be directed by the Legislative Transition Task Force.
