Administrative Code

Virginia Administrative Code
Title 20. Public Utilities and Telecommunications
Agency 5. State Corporation Commission
8/3/2020

Chapter 203. Regulations Governing the Separation of Regulated and Unregulated Businesses of Utility Consumer Services Cooperatives and Utility Aggregation Cooperatives

20VAC5-203-10. Applicability and scope.

These regulations are promulgated pursuant to the provisions of Chapter 9.1 (§ 56-231.15 et seq.) of Title 56 of the Code of Virginia, and apply to Utility Consumer Services Cooperatives and Utility Aggregation Cooperatives subject to the provisions thereof. Section 56-231.34:1, applicable to Utility Consumer Services Cooperatives, and § 56-231.50:1, applicable to Utility Aggregation Cooperatives, address relations between cooperatives engaged in regulated utility services and their affiliates that are engaged in businesses that are not regulated utility services.

These statutory provisions direct the Virginia State Corporation Commission to promulgate regulations governing the conduct of cooperatives for the purpose of promoting effective and fair competition between such cooperatives' affiliates and other persons engaged in the same or similar businesses that are not regulated utility services. Additionally, these statutes direct the Virginia State Corporation Commission to establish codes of conduct detailing permissible relationships between such cooperatives and their affiliates. In establishing these codes, the commission is directed to address, among other things, the sharing of customer information between such cooperatives and affiliates; affiliate use of cooperative name, logo or trademarks; and sharing of vehicles, office space and employees by such cooperatives and affiliates.

These regulations are in addition to and do not limit the applicability of other provisions of the Code of Virginia and the Virginia Administrative Code, including, but not limited to, Chapter 4 (§ 56-76 et seq.) of Title 56 of the Code of Virginia, and Chapter 311 (20VAC5-311-10 et seq.) of Title 20 of the Virginia Administrative Code.

Statutory Authority

§§ 12.1-13, 56-231.34:1 and 56-231.50:1 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 16, Issue 23, eff. July 1, 2000.

20VAC5-203-20. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"Affiliate" shall have the meanings set forth in §§ 56-231.15 and 56-231.38 of the Code of Virginia.

"Commission" means the Virginia State Corporation Commission.

"Competing supplier" means any supplier of the same or similar types of goods or services that are offered, or intended to be offered, for sale by a nonregulated affiliate of a cooperative.

"Cooperative" shall have the meanings set forth in §§ 56-231.15 and 56-231.38 of the Code of Virginia.

"Nonregulated affiliate" means any affiliate of a cooperative engaged in businesses that are not regulated utility services.

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

Statutory Authority

§§ 12.1-13, 56-231.34:1 and 56-231.50:1 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 16, Issue 23, eff. July 1, 2000.

20VAC5-203-30. Relations between cooperatives and affiliates thereof not engaged in regulated utility services.

A. The following practices are prohibited:

1. Cost shifting or cross subsidies between a cooperative and its nonregulated affiliates;

2. Anticompetitive behavior or self-dealing between a cooperative and its nonregulated affiliates; and

3. Discriminatory behavior by a cooperative toward competing suppliers.

B. A cooperative shall include with each application seeking approval of affiliate contracts or arrangements filed with the commission pursuant to Chapter 4 (§ 56-76 et seq.) of Title 56 of the Code of Virginia:

1. A listing and description of internal controls that prevent the practices enumerated in subsection A of this section; and

2. A listing and description of internal controls effecting the Codes of Conduct set forth in 20VAC5-203-40.

Statutory Authority

§§ 12.1-13, 56-231.34:1 and 56-231.50:1 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 16, Issue 23, eff. July 1, 2000.

20VAC5-203-40. Codes of conduct governing cooperatives and affiliates thereof not engaged in regulated utility services.

Except as otherwise provided in any commission order or regulation, any cooperative subject to the provisions of this chapter shall be governed by the following codes of conduct when transacting business within this Commonwealth with a nonregulated affiliate.

1. A cooperative shall not give any preference related to the provision of its regulated electric service to a nonregulated affiliate over the interest of any competing supplier.

2. A cooperative shall be prohibited from providing sales leads, customer lists and other customer information to its nonregulated affiliate unless:

a. Such disclosure is authorized by the customer or other entity whose information is to be disclosed; and

b. Such information is made available to competing suppliers upon the same price, terms and conditions.

3. Joint promotions, advertising and marketing shall be prohibited between a cooperative and its nonregulated affiliate unless made available to competing suppliers upon the same price, terms and conditions.

4. A cooperative's name, logo or trademark may be used by a nonregulated affiliate provided such use is not misleading. A disclaimer that clearly and conspicuously discloses that the nonregulated affiliate is not the same company as the cooperative shall accompany any such use. Such disclaimers shall not be required, however, on company vehicles, clothing, trinkets, writing instruments, or similar promotional materials. Upon complaint of any competing supplier or other interested person, or upon motion of the Attorney General or the commission staff, or upon its own motion, the commission may, after notice and an opportunity for hearing, make a determination whether any such usage is misleading, and if so, take appropriate corrective actions.

5. Employees of the cooperative may provide services to nonregulated affiliates provided the provision of such services is not anticompetitive or discriminatory.

6. A cooperative shall document each occasion that one of its employees transfers to a nonregulated affiliate and each occasion that an employee of one of its nonregulated affiliates transfers to the cooperative. Upon staff's request, such information shall be filed with the commission that identifies each such occasion. Such information shall include a listing of each employee transferred and a brief description of each associated position and responsibility.

7. A cooperative and its nonregulated affiliates may share the use of vehicles, equipment and office space provided the provision of such services is not anticompetitive or discriminatory.

8. A cooperative shall not condition the provision of any services on the purchase of any other service or product from any of its nonregulated affiliates.

9. Neither a cooperative nor any of its nonregulated affiliates shall:

a. Suggest that the quality of regulated utility services provided to a customer by the cooperative will be any different if the customer purchases goods or services from the cooperative's nonregulated affiliates.

b. Suggest that the goods and services provided by any of the nonregulated affiliates are being provided by the cooperative rather than the nonregulated affiliates.

Statutory Authority

§§ 12.1-13, 56-231.34:1 and 56-231.50:1 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 16, Issue 23, eff. July 1, 2000.

20VAC5-203-50. Requests for waiver.

Any request for a waiver of any of the provisions in this chapter shall be considered by the commission on a case-by-case basis and may be granted upon such terms and conditions as the commission may impose.

Statutory Authority

§§ 12.1-13, 56-231.34:1 and 56-231.50:1 of the Code of Virginia.

Historical Notes

Derived from Virginia Register Volume 16, Issue 23, eff. July 1, 2000.



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