                                 CODE OF VIRGINIA

DEFINITIONS (§ 56-610)

As used in this chapter, unless the context requires otherwise:		&#8220;Affected
customer&#8221; means any customer of a natural gas utility receiving service at
a premises served by eligible system expansion infrastructure. Any customer
receiving natural gas service for which the natural gas utility has received the
entire amount required to cover the cost of the eligible system expansion
infrastructure as a contribution in aid to construction shall not be considered
an affected customer.		&#8220;Eligible expansion investment&#8221; means that
portion of the total capital investment made by a natural gas utility in
constructing eligible system expansion infrastructure that is in excess of those
costs that would be considered economic under a natural gas utility&#8217;s
economic test, net of any contributions in aid of construction, up to the
maximum level of investment per affected customer specified in a system
expansion plan.		&#8220;Eligible system expansion infrastructure&#8221; means
natural gas main pipelines and associated facilities, including service lines,
meters, and other pertinent facilities, that are constructed and operated by a
natural gas utility to deliver natural gas service to affected customers located
in an unserved area.		&#8220;Eligible system expansion infrastructure
costs&#8221; includes:

1. Return on investment. In calculating the return on investment, the Commission
shall use the natural gas utility&#8217;s weighted average cost of capital,
including the cost of debt and equity, based on its regulatory capital structure
used in determining the natural gas utility&#8217;s base rates in effect during
the construction period of the eligible system expansion, applied to eligible
expansion investment. The investment, as adjusted for the reserve for
depreciation and accumulated deferred income taxes, shall be multiplied by the
weighted average cost of capital to determine the return on investment;

2. A revenue conversion factor, which factor, including income taxes and an
allowance for bad debt expense, shall be applied to the required operating
income resulting from the eligible system infrastructure expansion costs;

3. Education and outreach expense. Such expense shall include costs for
education and outreach for increasing program awareness;

4. Depreciation, the calculation of which by the Commission shall be based on
the natural gas utility&#8217;s current depreciation rates applied to eligible
expansion investment; and

5. Property taxes attributable to eligible expansion investment.
			&#8220;Natural gas utility&#8221; means any investor-owned public service
company engaged in the business of furnishing natural gas service to the
public.			&#8220;System expansion plan&#8221; means a plan filed by a natural
gas utility that identifies the level of eligible system expansion
infrastructure costs that are projected to be incurred over the term of the plan
and provides the calculation of a system expansion rider.			&#8220;System
expansion rider&#8221; means a recovery mechanism that will allow for recovery
of the eligible system expansion infrastructure costs from affected customers,
through a separate mechanism from the customer rates established in a rate case
using the cost-of-service methodology set forth in &#xA7; 56-235.2 or a
performance-based regulation plan authorized by &#xA7; 56-235.6. A system
expansion rider shall be designed to recover eligible system expansion
infrastructure costs.

HISTORY: 2015, cc. 28, 231.