City of Richmond v. Va. Elec. & Power Co.
292 Va. 70
| Va. | 2016Background
- VEPCO operates a gas-fired electric generation station in the City of Richmond; the City assessed local natural-gas consumption taxes under Code § 58.1-3814(H) for multiple periods (2001–2013) and issued a large combined assessment.
- VEPCO applied for correction locally; the City denied relief and the Tax Commissioner affirmed; VEPCO appealed to the circuit court contesting applicability of the tax.
- The tax applies to consumers of natural gas provided by “pipeline distribution companies,” which Code § 58.1-2600(A) defines (in relevant part) as entities transmitting natural gas to a purchaser "for purposes of furnishing heat or light." Code § 58.1-3814(J) imports that definition.
- VEPCO’s position: it consumes gas solely to generate electricity (power); any heat is incidental, so its use falls outside the statutory phrase "for purposes of furnishing heat or light."
- The circuit court found as fact that VEPCO consumes gas to generate electricity (heat incidental) and concluded the statute’s omission of the word "power" shows the legislature did not intend to tax gas used solely to produce electricity; it ruled for VEPCO.
- The Supreme Court of Virginia affirmed, holding that "power" in related statutory language denotes electricity and that the omission of "power" from the pipeline-distribution-company definition excludes gas consumed solely to produce electricity from the local tax.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Code § 58.1-3814(H) permits local tax on natural gas consumed solely to generate electricity | City: plain meaning of "heat or light" includes heat produced by combustion to run turbines; statutory text controls | VEPCO: gas is consumed to produce electricity, not to furnish heat or light; any heat is incidental; statute excludes power | Court: statute must be read in context; omission of "power" in pipeline-distribution-company definition shows legislature did not intend to tax gas used solely to produce electricity; VEPCO prevails |
| Whether courts must limit interpretation to § 58.1-3814(H) text or consider related definitions in § 58.1-2600(A) | City: only § 58.1-3814(H) text controls; cross-references should not import other § language | VEPCO/majority: definitions are linked; statutes must be read harmoniously—words used elsewhere inform meaning | Court: must interpret statutory parts together; cross-reference to § 58.1-2600(A) is proper and dispositive |
| Whether "power" in related statute is redundant with "heat"/"light" or denotes electricity | City: no separate meaning needed; plain text covers combustion heat | VEPCO: "power" means electricity and was intentionally omitted from definition of pipeline distribution companies | Court: "power" must have independent meaning (electricity); omission is meaningful; supports VEPCO |
| Whether factual finding that VEPCO consumes gas to produce electricity (not to furnish heat or light) is supported | City: contested | VEPCO: trial evidence showed combustion used to create pressure/turn turbines; heat incidental | Concurrence: factual finding supported by record; appellate court defers unless plainly wrong |
Key Cases Cited
- Palace Laundry, Inc. v. Chesterfield County, 276 Va. 494, 666 S.E.2d 371 (tax determinations presumed valid; challenger bears burden)
- City of Lynchburg v. English Constr. Co., 277 Va. 574, 675 S.E.2d 197 (tax statutes construed strongly in taxpayer's favor; interpret statute as whole)
- Kiser v. A.W. Chesterton Co., 285 Va. 12, 736 S.E.2d 910 (presume General Assembly chose words with care)
- Lynchburg Div. of Soc. Servs. v. Cook, 276 Va. 465, 666 S.E.2d 361 (every part of statute presumed to have effect)
- Zinone v. Lee's Crossing Homeowners Ass'n, 282 Va. 330, 714 S.E.2d 922 (different language in similar contexts presumed intentional)