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2012 SESSION

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HB 559 Natural gas utilities; qualified projects.

Introduced by: Daniel W. Marshall, III | all patrons    ...    notes | add to my profiles

SUMMARY AS PASSED HOUSE: (all summaries)

Natural gas utility infrastructure.  Permits a natural gas utility to construct the necessary facilities of a qualifying project and to recover the eligible infrastructure development costs necessary to develop the eligible infrastructure for designated projects in future rates. Eligible infrastructure development costs include planning, development, and construction costs and, if applicable, an allowance for funds used during construction, in addition to a return on investment, a revenue conversion factor, depreciation, and property taxes. A qualifying project is an economic development project requiring natural gas service as to which the natural gas utility has made a good faith determination that (i) it is located in an area where adequate natural gas infrastructure is not available; (ii) eligible infrastructure will provide opportunities for increased natural gas usage and economic development benefits in the area of the eligible infrastructure in addition to those provided by the subject project; (iii) either the developer or occupant of the proposed project shall provide, prior to the initiation of service, a binding commitment to the natural gas utility regarding capacity needed for a period of at least five years from the date gas is made available, which commitment covers a level of service no less than 50 percent of the capacity of the gas facilities to serve such project, or the natural gas utility receives a financial guaranty from the developer or state or local government in the amount of at least 50 percent of the estimated investment to be made by the natural gas utility in the proposed project; (iv) the natural gas utility has negotiated with the project's developer or occupant in an attempt to reach agreement on a commitment for the entire aid to construction otherwise required to cover the cost of the necessary eligible infrastructure; and (v) the projected non-gas revenues from the proposed project will not be sufficient to cover the cost of service associated with the necessary eligible infrastructure after accounting for any aid to construction contributed by the developer of the project or the person that will occupy the proposed project. Natural gas utilities are required to account for the actual monthly eligible infrastructure development costs incurred on the cumulative investment in eligible infrastructure in excess of any aid to construction contributed by the developer of the project or the person that will occupy the proposed project as a deferred cost until new base rates and charges that incorporate eligible infrastructure development costs become effective for the utility. Transportation and storage quantities of contracts entered into by a natural gas utility for the acquisition of upstream pipeline capacity to meet the reasonably anticipated service requirements of a qualifying project and other service requirements to be served through the eligible infrastructure shall be deemed prudent and reasonable. This bill is identical to SB 511.


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