56-231.39 - Organization and purpose. - Virginia Statutes

§ 56-231.39. Organization and purpose.

A. Subject to § 56-231.50:1, any utility consumer service cooperative orutility aggregation cooperative may form a cooperative in accordance withthis article, either stock or nonstock, not for pecuniary profit, with theexception of for-profit affiliates, for the purpose of purchasing, generatingor transmitting energy products and services for sale or resale, operating orparticipating in an independent system operator, regional transmissionentity, regional power exchange, or both, and any other lawful purpose,consistent with sound business principles and prudent management practices;(i) provided, however, that within the certificated service territory of anymember distribution cooperative that existed as of January 1, 1999, no suchcooperative shall, prior to July 1, 2000, undertake or initiate any newprogram (a) to buy or maintain an inventory of HVACR equipment or householdappliances, (b) to install or service any such equipment or householdappliances for customers, unless such service is not provided by thecooperative but by a third party individual, firm or corporation licensed toperform such service, (c) to sell HVACR equipment or household appliances tocustomers who are metered and billed on residential rates, (d) to sell HVACRequipment to customers other than those metered and billed on residentialrates except where such sale is an incidental part of providing other energyservices or providing traditional cooperative activities, (e) to sell ordistribute propane or fuel oil; sell, install or service propane or fuel oilequipment; or maintain or buy an inventory of propane or fuel oil equipmentfor resale, or (f) to serve as a coordinator of nonelectric energy servicesor provide engineering consulting services except when such energy orengineering services are an incidental part of a marketing effort to provideother energy or engineering services or as a part of providing services thatare traditional cooperative activities; (ii) provided further, thatnotwithstanding clause (i), such cooperative may, within the certificatedservice territory of a specific distribution cooperative that existed as ofJanuary 1, 1999, and then only to the extent that such specific distributioncooperative could lawfully do so, engage in any of the activities enumeratedin clause (i) that (a) have received State Corporation Commission approvalprior to February 1, 1998, (b) such cooperative is ordered or required toundertake by any jurisdictional court or regulatory authority, (c) werelawfully undertaken prior to February 1, 1998, (d) are specifically permittedby statute, or (e) are undertaken by any other regulated public servicecompany or its unregulated affiliate within such distribution cooperative'scertificated service territory; and (iii) also provided that such cooperativeor its affiliate may not undertake such activities as are prohibited byclause (i) within the certificated service territory of another publicservice company unless such activities are undertaken by such public servicecompany or its unregulated affiliate within the certificated serviceterritory of a specific distribution cooperative existing as of January 1,1999, and the certificated service territories of the public service companyand the specific distribution cooperative overlap. In addition, suchcooperative may establish one or more subsidiaries to engage in any otherbusiness activities not prohibited by law. Notwithstanding the foregoing, nosuch subsidiary may engage in any business activities that the cooperativesare prohibited from engaging in under this section. For purposes ofdetermining whether a cooperative is formed not for pecuniary profit, theestablishment of one or more affiliates thereof on a for-profit basis shallnot disqualify such entity from being formed as a cooperative pursuant tothis article.

B. Nothing in this article shall be construed to authorize a cooperativeformed pursuant to this article, or any affiliate thereof, to engage, withinany political subdivision of the Commonwealth on a not-for-profit basis, inthe sale of products, the provision of services, or other business activity,except for electric power services and traditional cooperative activities.However, if such business activities are not currently provided by any personother than a cooperative formed under or subject to this chapter or itsaffiliate and the Commission determines that no such other person is likely,within a reasonable time, to effectively provide such products and servicesin such political subdivision, an affiliate of a cooperative may provide suchproducts or services on a not-for-profit basis. The Commission shall alsopermit an affiliate of a cooperative formed under or subject to this chapterto provide such products or services on a not-for-profit basis upon a findingthat the affiliate will not receive the benefit of any federal income taxexemption that is not available to persons other than cooperatives and willnot receive the benefit of any federally guaranteed or subsidized financingthat is not available to persons other than cooperatives; and providedfurther, that nothing in this subsection shall prohibit the continuedoperation of any business activities of any not-for-profit cooperative oraffiliate formed, operating, and actively providing products or services tocustomers on or before July 1, 1999.

(1999, c. 874; 2000, cc. 964, 989.)