CODE OF CONDUCT GOVERNING
THE RELATIONSHIPS BETWEEN
DOMINION NORTH CAROLINA POWER, ITS AFFILIATES AND THE NONPUBLIC
UTILITY OPERATIONS OF VIRGINIA ELECTRIC AND POWER COMPANY
I.
Definitions
For purposes of this Code of Conduct, the terms listed below shall have the following
definitions:
Affiliate: DRI, or any company or subsidiary, ten percent (10%) or more of the
outstanding voting securities (and/or other measures of ownership and/or controlling
interest) of which are owned, controlled, or held with power to vote, directly or indirectly,
by DRI, and is thus affiliated with NC Power.
Commission: The North Carolina Utilities Commission or NCUC.
Confidential Systems Operation Information: Information concerning electric
generation, transmission, distribution, or other similar information that pertains to
Electric Services provided by NC Power and is not public information.
Consolidated Natural Gas Company (CNG): A wholly-owned subsidiary corporation
of DRI.
Customer: Any North Carolina retail electric customer of NC Power.
Customer Information: Any and all Customer specific information obtained and/or
held by NC Power.
Dominion North Carolina Power (NC Power): The business name in North Carolina
of Virginia Electric and Power Company. As used in this Code of Conduct, the term
“NC Power” means the business and operations of Virginia Electric and Power
Company as a regulated North Carolina public utility, and references to NC Power's
operations, revenues, costs, accounts, other financial matters, and other items shall
mean those items as they affect such business and operations. The term “NC Power”
does not encompass the Nonpublic Utility Operations engaged in by Virginia Electric
and Power Company.
Dominion Resources, Inc. (DRI): The parent corporation of NC Power and CNG.
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Dominion Resources Services (DRS): An Affiliate of NC Power that provides
goods and services, such as legal, accounting, human resources, billing, and the like,
to NC Power, its Affiliates, and the Nonpublic Utility Operations.
Dominion Virginia Power (Virginia Power): The business name in Virginia of
Virginia Electric and Power Company.
Electric Services: Commission-regulated electric energy sales, generation,
transmission, distribution and/or delivery, and other related services, including, but not
limited to, metering and billing.
Fuel and Purchased Power Supply Services: All fuel for generating electric power
and purchased power obtained by NC Power from external sources for the purpose of
providing Electric Services.
Fully Distributed Costs: All direct and indirect costs, including overheads and an
appropriate cost of capital, incurred in providing the goods and services in question.
Natural Gas Services: Natural gas sales and natural gas transportation, and other
related services, including, but not limited to, metering and billing.
Nonpublic Utility Operations: All business operations engaged in by Virginia
Electric and Power Company involving the sale of goods or services not subject to
public utility regulation at the state or federal level.
Similarly Situated: Possessing comparable characteristics, such as time of use,
manner of use, customer class, load factor, and relevant Standard Industrial
Classification.
Virginia Electric and Power Company (VEPCO): A wholly-owned subsidiary
corporation of DRI that engages in, among other business operations, public utility
operations, as defined in N.C.G.S. § 62-3(23), within the state of North Carolina (under
the business name Dominion North Carolina Power).
II.
Standards of Conduct
This Code of Conduct establishes the minimum guidelines and rules that apply to the
relationships and transactions involving, individually or in any combination, NC Power,
one or more of its Affiliates, and/or one or more of the Nonpublic Utility Operations, to
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the extent such relationships and transactions affect NC Power’s operations or cost of
utility service. This Code of Conduct will become applicable on the date that it is
approved by the Commission. While this Code of Conduct provides the standards to
which NC Power is currently expected to adhere, the Commission retains the authority
to require NC Power to adopt different and/or further standards, if found appropriate,
under circumstances including, but not limited to, those set forth in Section I of this
Code.
A.
GENERAL STANDARDS
1.
NC Power shall not show any preference to customers of any of its
Affiliates or any of the Nonpublic Utility Operations, or to requests for
service from any of its Affiliates or any of the Nonpublic Utility
Operations, as compared to non-Affiliated entities and their customers.
2.
Cross-subsidies between NC Power and one or more of its Affiliates, or
NC Power and one or more of the Nonpublic Utility Operations, are
prohibited.
3.
(a)
NC Power shall operate independently of its Affiliates (except for
sharing of services under Section II.D.3 of this Code of Conduct).
NC Power and each of its Affiliates shall maintain separate
books and records. NC Power and each of its Affiliates shall
conduct business from physically separate offices. For purposes
of this standard, the term “physically separate offices” shall mean
completely enclosed offices separated by permanent walls and
wooden or metal latching doors, and, wherever reasonably
possible, offices located, in descending order of preference, in
separate buildings, separate floors of the same building, or wellseparated areas of a floor of a building.
(b)
Notwithstanding standard 3(a) above, NC Power and one or more
of its Affiliates may share offices to the extent necessary to
perform those shared corporate functions permitted under
Section II.D.3 of this Code of Conduct.
(c)
Notwithstanding standard 3(a) above, NC Power and one or more
of its Affiliates may share offices and be relieved of the obligation
to operate independently if essential to enable NC Power to
provide Electric Services to its Customers. If such Affiliate
provides goods or services to a competitive market or to another
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Affiliate which participates in a competitive market, however, then
NC Power shall file with the Commission advance notice of the
sharing of offices and/or non-independent operation, for the
purpose of providing the Commission the opportunity to evaluate
the appropriateness of such arrangement.
(d)
For purposes of facilitating the Commission’s monitoring of
standard 3(c) above, NC Power shall file a listing with the
Commission of each Affiliate with which it shares offices and/or
operates non-independently. This listing shall be filed each year
with the Annual Report of Affiliated Transactions required by
Regulatory Condition (6) of the Order Approving Merger in
Docket No. E-22, Sub 380, issued October 18, 1999. This listing
shall include the following information:
(i)
(ii)
(iii)
(iv)
Name of the Affiliate;
Description of the Affiliate’s business operations;
Description of the nature of the Affiliate’s interrelationship
with NC Power; and
Names of all other Affiliates to whom the Affiliate provides
goods and/or services.
(e)
The Nonpublic Utility Operations shall maintain separate records from
those of NC Power’s public utility operations to ensure appropriate cost
allocations and any requirements of arm’s length transactions.
4.
In an effort to prevent the use of Confidential Systems Operation
Information in an anticompetitive or inappropriate manner, the disclosure
of Confidential Systems Operation Information shall be governed as
follows:
(a)
Confidential Systems Operation Information shall not be
disclosed by NC Power to an Affiliate or a Nonpublic Utility
Operation unless it is disclosed to all competing non-Affiliates
contemporaneously and in the same manner. The Commission
reserves the right to require NC Power to adopt specific
disclosure procedures, if found to be necessary and appropriate
by the Commission. Disclosure to non-Affiliates is not required
when disclosure to Affiliates or Nonpublic Utility Operations is:
(i)
essential to enable NC Power to provide Electric Services
to its Customers;
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(ii)
(iii)
(iv)
required by a state or federal regulatory agency or a state
or federal court having jurisdiction over the disclosure of
such information;
made to DRS or a successor service company pursuant
to a service agreement filed with the Commission
pursuant to G.S. 62-153; or
made to an Affiliate (other than DRS or a successor
service company under (iii) above) in accordance with an
agreement filed with the Commission pursuant to G.S. 62153. For any such agreement filed on or after April 16,
2001, such agreement shall specifically describe the
types of Confidential Systems Operation Information to be
disclosed to the Affiliate.
(b)
Any Confidential Systems Operation Information disclosed
pursuant to standard 4(a) above shall be disclosed only to (1)
those DRS employees or (2) those Affiliate employees
performing the functions which necessitate the disclosure of that
information. Such information shall be stored in a manner such
that only those employees utilizing the information shall have
access to it, and shall not be disclosed by those employees or
others to other Affiliates. Every effort must be made to prevent
the use of such information in anticompetitive or otherwise
inappropriate ways.
(c)
For purposes of facilitating the Commission’s monitoring of
standard 4(a) above, NC Power shall file, on July 1, 2001, a
report listing each type of Confidential Systems Operation
Information disclosed to an Affiliate or Nonpublic Utility Operation
pursuant to standard 4(a). A similar report shall be filed
semiannually thereafter for the previous six-month period. When
filing such reports, NC Power may assert, on a case-by-case
basis, that certain information contained therein constitutes a
trade secret and should be treated as confidential under North
Carolina’s Public Records Act. Except in the case of information
disclosed pursuant to exceptions (ii) and (iii), and for filings made
after April 16, 2001 pursuant to exception (iv) above, and
information disclosed on an electronic bulletin board, this listing
shall include the following information:
(i)
The type of the Confidential Systems Operation
Information disclosed;
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(ii)
(iii)
(iv)
(v)
(vi)
5.
The name(s) of the Affiliate(s) to whom it is being or has
been disclosed;
The reason(s) for the disclosure;
Whether the Information has been disclosed to nonAffiliates, and if not, why not;
The manner in which the Information was disclosed to
Affiliates, Nonpublic Utility Operations, and non-Affiliates;
Whether the disclosure is a one-time occurrence or an
ongoing process.
(a)
Upon request, NC Power shall provide electric Customer
Information to one or more of its Affiliates and/or one or more of
the Nonpublic Utility Operations under the same terms and
conditions that such information is provided to non-Affiliates.
(b)
Customer Information shall not be disclosed to any person or
company without the Customer’s consent, and then only to the
extent specified by the Customer. If the Customer allows or
directs NC Power to provide Customer Information to an Affiliate
or a Nonpublic Utility Operation, then NC Power shall ask the
Customer if he or she would like the Customer Information to be
provided to one or more non-Affiliates. If the Customer directs
NC Power to provide Customer Information to one or more nonAffiliates, the Customer Information shall be disclosed to all
entities designated by the Customer contemporaneously and in
the same manner.
(c)
Sections II.A.5(a), 5(b), and 5(e) herein shall be permanently
posted on NC Power’s website.
(d)
NC Power shall establish guidelines for its employees to follow
with regard to complying with this Section II.A.5. The
Commission reserves the right to require NC Power to adopt
other specific procedures, if found to be necessary and
appropriate by the Commission.
(e)
Notwithstanding the prohibitions established by this Section II.A.5,
NC Power may disclose Customer Information to DRS or a
successor service company without Customer consent and
without making the information available to any other person or
company in order to allow the service company to perform for NC
Power those services allowable pursuant to Section II.D of this
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Code of Conduct. Such Customer Information shall only be
disclosed to those service company employees performing those
services and shall be stored in such a manner that only the
service company employees that perform those services and
employees in the service company who are responsible for
responding to Customer inquiries concerning those services may
access the information.
B.
C.
NONDISCRIMINATION AND INFORMATION STANDARDS
1.
To the extent that NC Power processes requests for Electric Services
for an Affiliate or a Nonpublic Utility Operation, such requests shall be
processed in the same timely manner as requests from non-Affiliated
entities are processed. NC Power shall apply the provisions of its tariffs
equally to Affiliates, Nonpublic Utility Operations, and non-Affiliates.
2.
NC Power will not represent to any Customer that any Affiliate and/or any
Nonpublic Utility Operation will receive any preference from NC Power
relative to providing Electric Services over any non-Affiliated service
provider, nor will NC Power provide its Affiliates and/or the Nonpublic
Utility Operations with any preference over non-Affiliates in provision of
Electric Services.
3.
NC Power shall not condition or otherwise tie the provision or terms of
any Electric Services to the purchasing of any goods or services from an
Affiliate or a Nonpublic Utility Operation.
4.
When any NC Power employee or representative provides information
to a Customer about services available from an Affiliate and/or a
Nonpublic Utility Operation, the employee or representative must advise
the Customer that such services may also be available from nonAffiliated suppliers.
MARKETING STANDARDS
1.
NC Power may engage in joint sales, joint sales calls, joint proposals,
and/or joint advertising with one or more of its Affiliates and/or one or
more of the Nonpublic Utility Operations, subject to any conditions or
restrictions that the Commission may hereafter establish, provided NC
Power agrees to engage in similar activities with non-Affiliates under the
same terms and conditions. NC Power shall post certain information
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regarding any joint marketing programs/calls on its internet web site at
least 14 days prior to commencing a joint marketing arrangement and
the information shall remain posted on the web site for the duration of the
arrangement. The information disclosed on the web site shall include a
description and terms for the joint marketing arrangement. Posting of the
terms for the joint marketing arrangement shall include a notice by NC
Power that it is willing to engage in joint marketing on the same terms
with non-Affiliates. NC Power is not required to post any information that
is deemed to be competitively sensitive; however, at a minimum, notice
of the joint marketing arrangement and a general description thereof
shall be posted.
2.
(a)
(b)
None of the Affiliates may use (1) NC Power’s name and/or logo
in any communications, or (2) Virginia Power’s or VEPCO’s
name and/or logo in any communications targeted at NC Power’s
North Carolina service territory, unless a disclaimer is included
that states the following:
(i)
“[Affiliate] is not the same company as [NC Power/Virginia
Power/VEPCO], and [Affiliate] has separate management
and separate employees;”
(ii)
“[Affiliate] is not regulated by the North Carolina Utilities
Commission or in any way sanctioned by the
Commission;”
(iii)
“purchasers of products or services from [Affiliate] will
receive no preference or special treatment from [NC
Power/Virginia Power/VEPCO];” and
(iv)
“a customer does not have to buy products or services
from [Affiliate] in order to continue to receive the same
safe and reliable electric service from [NC Power/Virginia
Power/VEPCO].”
None of the Nonpublic Utility Operations may use (1) NC Power’s
name and/or logo in any communications, or (2) Virginia Power’s
or VEPCO’s name and/or logo in any communications targeted
at NC Power’s North Carolina service territory, unless a
disclaimer is included that states the following:
(i)
“[Nonpublic Utility Operation] is not part of the regulated
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services offered by [NC Power/Virginia Power/VEPCO]
and is not in any way sanctioned by the North Carolina
Utilities Commission;”
3.
D.
(ii)
“purchasers of products or services from [Nonpublic Utility
Operation] will receive no preference or special treatment
from [NC Power/Virginia Power/VEPCO];” and
(iii)
“a customer does not have to buy products or services
from [Nonpublic Utility Operation] in order to continue to
receive the same safe and reliable electric service from
[NC Power/Virginia Power/VEPCO].”
(c)
The required disclaimer must be sized and displayed in a way
that is commensurate with the name and/or logo so that the
disclaimer is no smaller than the larger of one-half the size of the
type that first displays the name and logo or the predominant type
used in the communication.
(d)
The standards of Section II.C.2(b) of this Code of Conduct shall
not apply to a Nonpublic Utility Operation's use of NC Power's,
Virginia Power's or VEPCO's vehicles and other equipment,
unless such use is found unreasonable by the Commission.
No personnel or representatives of NC Power, an Affiliate, or a
Nonpublic Utility Operation shall indicate or give the appearance to
another party that (1) the Affiliate or the Nonpublic Utility Operation
speaks on behalf of NC Power, or (2) any advantage with regard to
Electric Services exists as the result of that party dealing with an Affiliate
or a Nonpublic Utility Operation as compared with a non-Affiliate.
COST ALLOCATION AND TRANSFER PRICING STANDARDS
1.
With regard to the transfer prices charged for goods and services,
including personnel, exchanged between NC Power, one or more of its
Affiliates, and one or more of the Nonpublic Utility Operations, to the
extent such prices affect NC Power’s operations or cost of utility service,
the following conditions shall apply:
(a)
For untariffed goods and/or services provided by NC Power to an
Affiliate and/or a Nonpublic Utility Operation, the transfer price
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paid to NC Power shall be the higher of market value or NC
Power’s Fully Distributed Cost.
(b)
For goods and/or services provided by an Affiliate and/or a
Nonpublic Utility Operation to NC Power, the transfer price paid
by NC Power shall be the lower of market value or the Affiliate’s
and/or the Nonpublic Utility Operation’s Fully Distributed Cost. If
NC Power does not engage in competitive solicitation and
instead obtains the goods and/or services from an Affiliate and/or
a Nonpublic Utility Operation, NC Power shall implement
adequate safeguards to ensure that the transfer price it pays is
the lower of market value or the Affiliate’s and/or the Nonpublic
Utility Operation’s Fully Distributed Cost.
(c)
For tariffed goods and/or services provided by NC Power to an
Affiliate and/or a Nonpublic Utility Operation, NC Power shall
provide these goods and services at the same prices and terms
that are made available to Similarly Situated Customers under
the applicable tariff.
2.
All permitted transactions between NC Power and one or more of its
Affiliates or one or more of the Nonpublic Utility Operations shall be
recorded and accounted for in accordance with the cost allocation
manuals required to be filed with the Commission pursuant to the Order
Approving Merger in Docket No. E-22, Sub 380, dated October 18,
1999.
3.
To the extent that NC Power, its Affiliates, and/or the Nonpublic Utility
Operations receive corporate services and functions from DRS (or a
successor service company), these services and functions may be
provided to NC Power and to one or more of its Affiliates and/or the
Nonpublic Utility Operations on a joint basis. Such shared services shall
be those permitted pursuant to the Commission’s January __, 2001
Order in Docket No. E-22, Sub 385. Charges for such shared services
shall be allocated in accordance with the DRS cost allocation manual
filed with the Commission pursuant to the Order Approving Merger in
Docket No. E-22, Sub 380 dated October 18, 1999, subject to any
changes to those allocations found appropriate by the Commission.
4.
NC Power shall obtain prior approval from the Commission of any
arrangements with an Affiliate or a Nonpublic Utility Operation to engage
in joint purchases or leases.
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E.
F.
5.
Any costs NC Power incurs in assembling, compiling, preparing and/or
furnishing requested Confidential Systems Operation Information or
Customer Information for or to an Affiliate, a Nonpublic Utility Operation,
or a non-Affiliate shall be recovered from the requesting party pursuant
to this Section II.D.
6.
Any technology or trade secrets developed by NC Power shall not be
transferred to any of its Affiliates and/or any of the Nonpublic Utility
Operations without just compensation from the transferee and the filing
of notice with the Public Staff and Commission at least 60 days prior to
the transfer. In cases where NC Power believes that extraordinary
circumstances cause the 60-day notice requirement to result in a serious
and significant disadvantage to itself, the Affiliate, or the Nonpublic Utility
Operation, NC Power may request a waiver of said notice requirement,
subject to approval by the Commission. In no case, however, shall the
notice requested by NC Power be less than 10 business days.
7.
NC Power shall receive compensation from its Affiliates and the
Nonpublic Utility Operations for intangible benefits, if appropriate.
REGULATORY OVERSIGHT
1.
The State’s existing requirements under N.C.G.S. 62-153 for reporting
of Affiliate transactions shall apply.
2.
The books and records of NC Power, its Affiliates, and the Nonpublic
Utility Operations shall be open for examination by the Commission, its
staff, and the Public Staff consistent with the provisions of N.C.G.S. 6234, 62-37, and 62-51.
3.
If an Affiliate or a Nonpublic Utility Operation supplies any Natural Gas
Services or other Fuel and Purchased Power Supply Services used by
NC Power to supply electricity, NC Power shall file a report with the
Commission in its annual fuel case demonstrating that each such
acquisition was prudent and the price was reasonable.
COMPLAINT PROCEDURE - NC Power shall establish complaint procedures
to resolve potential complaints that arise due to the relationship of NC Power
with its Affiliates and/or the Nonpublic Utility Operations. These complaint
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procedures do not affect a complainant’s right to file a formal complaint with or
otherwise address questions to the Commission. The complaint procedures
shall provide for the following:
1.
Verbal and written complaints shall be referred to a designated
representative of NC Power.
2.
The designated representative shall provide written notification to the
complainant within 15 days that the complaint has been received.
3.
NC Power shall investigate the complaint and communicate the results
of the investigation to the complainant within 60 days of receiving the
complaint.
4.
NC Power shall maintain a log of complaints and related records for
inspection by the Commission, its staff and/or the Public Staff.
5.
If the complainant states to NC Power that he or she is not satisfied with
NC Power’s resolution of the complaint, NC Power shall inform the
Commission, its staff and the Public Staff of the complaint.
G.
UTILITY BILLING FORMAT - To the extent NC Power includes on a
Customer’s electricity bill charges for unregulated services, such charges shall
be separated from all regulated Electric Services charges. Each such bill shall
contain language in bold print stating that the Customer’s electric service will not
be terminated for failure to pay for unregulated services.
H.
ENERGY SOURCE COMPETITION – NC Power shall continue to compete
against all energy providers to serve those retail customer energy needs that
can be legally and profitably served by both electricity and other energy sources.
I.
REVISIONS TO THIS CODE OF CONDUCT - If appropriate, this Code of
Conduct will be modified if there is a change in the organizational structure of
NC Power, its Affiliates, and/or the Nonpublic Utility Operations; if there are
changes in the structure of the electric industry; or if other changes occur that
warrant modification of this Code.
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