OFFERED FOR CONSIDERATION 2/12/2026
SENATE BILL NO. 691
AMENDMENT IN THE NATURE OF A SUBSTITUTE
(Proposed by the Senate Committee on Commerce and Labor
on ________________)
(Patron Prior to Substitute—Senator Suetterlein)
A BILL to direct the State Corporation Commission to consider certain requirements in the biennial rate review for a Phase I Utility.
Be it enacted by the General Assembly of Virginia:
1. § 1. A. That in conducting its 2026 review of the rates , terms , and conditions for the provision of generation and distribution service s by a Phase I Utility (the utility) , as that term is defined in subdivision A 1 of § 56-585.1 of the Code of Virginia, pursuant to § 56-585.8 of the Code of Virginia the State Corporation Commission (the Commission) shall consider the requirements described in t his act .
B . To avoid unnecessary costs for customers, i n determining a fair rate of return on common equity pursuant to subsection E of § 56-585.8 of the Code of Virginia, the Commission may adopt the lowest rate of return on common equity within a cost of equity range that the Commission finds to be fair and reasonable. The Commission may disallow recovery from ratepayers of costs associated with the cost of capital expert testimony or consulting services that rely on methodologies or assumptions that the Commission has previously found to be unrea sonable. The Commission shall conduct quantitative analys e s evaluating alternative combinations of return on equity and capital structure and the resulting effects on customer rates and shall identify the combination that produces the lowest costs for customers .
C. In determining a fair rate of return on common equity , the Commission shall also consider the affordability of the utility's existing rates for service, the relative levels of regulatory risk faced by the utility, and the most recent rates of return approved for the utility's operations by other regulatory agencies with jurisdiction over the utility's operations outside of the Commonwealth. In assessing the affordability of the utility ' s existing rates, the Commission shall consider, among other factors, (i) the number of residential customer service disconnections for nonpayment during the last five years and (ii) the percentage of change in the utility ' s total residential customer per-kilowatt-hour rates during the utility ' s prior two rate review periods as compared to the percentage of change in the Consumer Price Index, as published by the Bureau of Labor Statistics of the U.S. Department of Labor , during such period s . In assessing the relative level of regulatory risk faced by the utility, the Commission shall consider, among other factors, the securitization of costs and the proportion of the utility ' s total annual revenues that are projected to be recovered through riders or rate adjustment clauses during the upcoming biennial review period.