Notable SCC Utility Filings from Aug 12, 2019 - Aug 16, 2019

(1) Respondents file legal briefs regarding meaning of “100 percent renewable energy” in retail access statute – Case Nos. PUR-2019-00117 and PUR-2019-00118

 Dominion has filed requests for declaratory judgments alleging that Direct Energy and Calpine Energy Solutions, two competitive service providers (“CSPs”), are not providing full renewable energy service to their customers. Dominion’s argument is based on a claim that these CSPs do not have “control” of sufficient renewable energy resources in order to provide lawful renewable energy service. Dominion’s pleadings do not define “control” or the standards that Dominion believes should be imposed on competitive suppliers. Direct Energy and Calpine are attempting to serve customers pursuant to Va. Code § 56-577 A 5, which allows CSPs to provide 100% renewable energy service to customers if the incumbent utility does not offer an approved 100% renewable energy tariff. (Dominion has filed a request for approval of what it characterizes as a 100% renewable tariff, which is currently pending before the SCC. The CSPs have alleged that Dominion’s pleadings in this case are part of an effort to “run out the clock,” to prevent customers from enrolling with CSPs before Dominion’s tariff is approved and forecloses customer choice for renewable energy.)

 The respondents filed legal briefs on August 16. The respondents, including the CSPs and other interested parties, all argued that Dominion is requesting an unreasonable “real time” or “around-the-block” supply standard that the SCC has never endorsed. The SCC has previously found that, for purposes of Section A 5, it is reasonable for a CSP to match customer usage with renewable energy on a monthly basis. A hearing on the briefs will be held on August 20.

 

 

(2) Solar advocates file comments opposing Dominion’s request to market low-quality RECs – Case No. PUR-2019-00081

 Dominion is requesting SCC approval to market a new, lower-cost renewable energy credit (“REC”) purchase option to its customers. Under the proposed rate schedule, designated Rider REC, customers could purchase such RECs to match up to 100% of their energy usage by paying a premium of 0.10 cents/kWh. The RECs may be associated with any “renewable energy” resource, as that term is defined in Va. Code § 56-576. The new REC rate schedule would allow Dominion to sell RECs “without the requirement of meeting certain Green-e certification requirements, such as criteria related to the age or length of time a renewable generation source has been in service.” This means, for example, Dominion could market RECs that are produced from facilities more than 15 years old. There does not appear to be any vintage requirement for the RECs either. According to Dominion, “[this] lower cost Rider REC option aims to build on the success of the long-standing Green Power Program by broadening the geographic boundaries and available renewable energy supply options from which RECs will be procured on customers’ behalf.” One public commenter characterized Rider REC as “the dregs of the renewable energy category, the stuff that isn’t good enough for [Dominion’s existing REC tariff].”

 On August 15, several parties, including the Maryland-DC-Delaware Virginia Solar Energy Industries Association (“MDV-SEIA”), filed comments in opposition the proposal. MDV-SEIA argued that Rider REC would not support the development of any new renewable energy resources and cautioned that customers might mistakenly believe that, by paying the Rider REC premium, they would be doing something good for the environment. A Charlottesville solar developer, Sun Tribe Solar, also expressed concerns with the proposal and urged the Commission, if it approves the rate schedule, to require Dominion to fully disclose the age and source of the RECs being sold under the program. There is no deadline for the Commission to approve or reject Rider REC.

 

 

(3) SCC approves new Dominion fuel rider – Case No. PUR-2019-00070

 On August 15, the SCC approved Dominion’s request to adjust its fuel recovery rider. The SCC approved a reduction to the current fuel rider, from 2.83 cents per kWh to 2.32 cents per kWh. In Virginia, fuel costs (including purchased power expenses) are recovered through the fuel rider with no rate of return applied. Dominion stated that the reduction in the fuel rate was due primarily to the addition of the “highly efficient” Greensville natural gas plant, which came online in December, 2018. Other contributing factors cited by Dominion include revised commodity price forecasts, the addition of new solar generation resources to its portfolio, and the retirement of several coal units. A typical residential customer using 1,000 kWh per month should see a monthly bill reduction of $2.84. 

  

(4) Hearing Examiner files recommendation regarding Dominion’s proposal to recover additional costs of undergrounding – Case No. PUR-2019-00046

 Dominion requested cost recovery for an additional 246 miles of undergrounding at an estimated cost of $500,000 per mile. The revenue requirement for the next phase of Dominion’s Strategic Undergrounding Program (“SUP”) is $51 million and will result in a $1.33 monthly charge for a residential customer using 1,000 kWh per month.

 The hearing examiner rejected Dominion’s argument that the revenue requirement should be calculated using a higher rate of return of 10.75%, as opposed to Dominion’s current rate of return of 9.2%. (Dominion is requesting, in another case, that the SCC increase its rate of return to 10.75%.) The Hearing Examiner also recommended that Dominion file regular reliability updates so the Commission can assess whether, and to what extent, the undergrounding program is increasing reliability. The SCC originally rejected Dominion’s SUP in 2015, finding that the proposed spending was not justified. Subsequently, the General Assembly passed legislation requiring the Commission to approve future undergrounding programs. As a result, the SCC must authorize rate increases for undergrounding regardless of whether the programs will provide benefits to customers.

 

Summary of Virginia SCC filings: August 5 - 9, 2019

Electric cases

 (1) SCC enters final order regarding Dominion’s coal plant environmental rider case – Case No. PUR-2018-00195

 Dominion applied for SCC approval for a new RAC to recover the costs for new coal ash ponds and treatment facilities. Dominion is requesting recovery of $302 million in capital expenditures, $247 million of which is for investments made at Chesterfield units 3-6. The Attorney General filed expert witness testimony stating that most, if not all, of the spending on the Chesterfield units was imprudent due to the likely retirement dates of the facilities. Sierra Club filed similar testimony, arguing that Dominion should have known that the Chesterfield units were uneconomic and likely to be retired in the near future. Instead of expanding facilities to handle future waste, Dominion’s focus should have been on closing the existing coal ash ponds.

 On August 5, the SCC entered a final order approving most of the request, but disallowing $18.4 million worth of investments made at Chesterfield Units 3 and 4. These units are now retired and “are not being used to serve customers.” The Commission noted that Dominion decided to make these investments in June of 2015, recently after the Clean Power Plan carbon regulation was announced; therefore it was not reasonable to make continued investments in units that Dominion should have known would soon be retired. In contrast to Units 3 and 4, the Commission did not disallow the investments made in Units 5 and 6, finding that these units are still being used to serve customers.

 

(2) SCC holds hearing on injunction requests from competitive service providers – Case Nos. PUR-2019-00117 and PUR-2019-00118

 Dominion has filed requests for a declaratory judgment alleging that Direct Energy and Calpine Energy Solutions, two competitive service providers (“CSPs”), are not providing full renewable energy service to their customers. Dominion’s argument is based on a claim that these CSPs do not have “control” of sufficient renewable energy resources in order to provide lawful renewable energy service. Dominion’s pleadings do not define “control” or the standards that Dominion believes should be imposed on competitive suppliers. Direct Energy and Calpine are attempting to serve customers pursuant to Va. Code § 56-577 A 5, which allows CSPs to provide 100% renewable energy service to customers if the incumbent utility does not offer an approved 100% renewable energy tariff. (Dominion has filed a request for approval of a 100% renewable tariff, which is currently pending before the SCC. The CSPs have alleged that Dominion’s pleadings in this case are part of an effort to “run out the clock,” to prevent customers from enrolling with CSPs before Dominion’s tariff is approved and forecloses this option.) The SCC has requested the parties to file legal briefs on these issues on August 16.

 

While this case is pending, Dominion is refusing to enroll customers of Direct Energy and Calpine. The two CSPs filed motions for injunctions asking the SCC to compel Dominion to enroll customers. A hearing on the injunctions was held on August 7.

 

Natural gas cases

(1) SCC Staff files report regarding VNG request to update its SAVE Rider – Case No.PUR-2019-00095

Virginia Natural Gas (“VNG”) is seeking SCC approval to update its Steps to Advance Virginia’s Energy Plan (“SAVE”) rider. The SAVE statute, § 56-603, allows gas distribution companies to seek rider recovery for costs to replace aging infrastructure, increase safety and efficiency, and decrease emissions. On August 6, the SCC Staff filed a Report including accounting recommendations.

 

(2) SCC approves Roanoke Gas request to incur debt and issue securities – Case No. PUR-2019-00100

On August 8, the SCC approved a request by Roanoke Gas to incur up to $40 million in short term debt and issue up to $100 million in securities. Roanoke Gas says this is necessary to finance capital spending forecasted over the next five years.

 

 

SCC Weekly Energy Activity 7.29.2019 - 8.3.2019

Electric cases

 

(1) Kentucky Utilities files request for 21.4% rate increase – Case No. PUR-2019-00060

Kentucky Utilities, doing business as Old Dominion Power, (“KU/ODP”) is requesting a $12.7 million increase in revenues, which would increase a typical residential customer’s bill by 21.4%. KU/ODP is an investor-owned utility serving about 30,000 customers in Scott, Lee, and Wise Counties in far southwest Virginia. KU/ODP says it needs a base rate increase due to increased environmental regulatory costs. The utility also says that lower electricity sales means it is not recovering its authorized rate of return. KU/ODP, unlike Dominion and Appalachian Power Company, is regulated under Chapter 10 of Title 56 of the Code of Virginia. Because KU/ODP is not subject to the ratemaking laws found in Chapter 23 of Title 56, the SCC will be permitted to set the utility’s rates and its rate of return at levels the Commission finds to be just and reasonable.

A public hearing is scheduled for October 2 in Norton, Virginia. The SCC will hold an evidentiary hearing on January 22, 2020.

 

(2) SCC Staff files Staff Report regarding APCo’s pending Electric Vehicle tariff – Case No. PUR-2019-00067

 

APCo is requesting approval of a new voluntary rate schedule for residential customers who own electric vehicles. The new rate schedule would allow residential customers to charge their EVs using charging stations that consume power during off-peak hours. Customers would need to have both smart meters and charging stations in order to participate. APCo estimates that a typical EV owner could save $86.51 per year under this rate schedule, as opposed to charging his or her EV under normal residential rates. APCo argues that this rate schedule is in the public interest because it would support EV use while potentially deferring the need for new generation, such as peaking resources.

 

Sierra Club and the Southern Environmental Law Center filed comments that were generally supportive of the proposed tariff. The SCC Staff filed its Staff Report on July 31. The Staff Report does not recommend approval or denial of the tariff, but suggested that the SCC may mwsh to approve the EV tariff on an experimental, four-year basis. There is no deadline for the SCC to enter a final order.

 

(3) Dominion files response to injunction motions from competitive service providers – Case Nos. PUR-2019-00117 and PUR-2019-00118

 Dominion has filed a request for a declaratory judgment alleging that Direct Energy and Calpine Energy Solutions, two competitive service providers (“CSPs”), are not providing full renewable energy service to their customers. Dominion claims that the CSPs do not control sufficient renewable energy resources or capacity to provide actual renewable energy service. Direct Energy and Calpine are attempting to serve customers pursuant to Va. Code 56-577 A 5, which allows CSPs to provide 100% renewable energy service to customers if the incumbent utility does not offer an approved 100% renewable energy tariff. (Dominion has filed a request for approval of a 100% renewable tariff, which is currently pending before the SCC). Dominion alleges that, under the CSPs’ interpretation of the statute, CSPs would be able to serve customers “merely by entering into financial transactions whereby they purchase renewable energy generated, for example, only during the night by excess wind or run-of-river hydro generation.”

 While this case is pending, Dominion is refusing to enroll customers of Direct Energy and Calpine. The two CSPs filed motions for injunctions asking the SCC to compel Dominion to enroll customers.

 Several parties have intervened in the case as interested parties. Replies to Dominion’s responsive pleading are due on August 6. The SCC will hold oral arguments on the motions for injunction on August 7.

 

(4) SCC Staff files testimony regarding Dominion’s request for 17% increase in profit level – Case No. PUR-2019-00050

 On August 2, the SCC Staff filed testimony regarding Dominion’s request to increase its rate of return on common equity (“ROE”). Dominion wants to increase its current ROE (i.e., the allowed shareholder profit level) by 17%, from the current 9.2% to 10.75%. Staff calls Dominion’s proposed ROE excessive and found that current market conditions support a return of 8.6%. After applying the peer group formula found in the statute, Staff recommended that the SCC authorize a return of 8.75%-8.97%. Staff’s recommended return is below the ROEs recommended by VPLC, the Attorney General, and the Navy due to Staff’s inclusion of South Carolina Gas & Electric in the peer group.

Staff calculated that the 155 basis points increase requested by Dominion would result in a $147 million increase to Dominion’s total revenue requirement (including both base rates and riders). The difference between Staff’s recommended ROE floor (8.75%) and Dominion’s requested ROE (10.75%) equates to a $190 million difference in revenue requirement.

Dominion will file rebuttal testimony on August 16. The SCC will hold an evidentiary hearing on September 10.

 

Natural gas cases

 

(1) Roanoke Gas and SCC Staff dispute recovery of MVP-related costs in rate case – Case No. PUR-2018-00013

 Roanoke Gas, a gas distribution company with 61,000 customers in western Virginia, is seeking a $10.5 million rate increase. One issue in dispute concerns the utility’s proposal to recover a portion of MVP-related costs from its general ratepayers. An affiliate of Roanoke Gas owns a 1% stake in the Mountain Valley Pipeline project. Roanoke Gas has already entered into a 20-year purchase agreement with MVP. The SCC Staff has questioned the need for the capacity provided by the MVP.

Roanoke Gas is also requesting to recover additional attorneys’ fees and rate case expenses from customers due to this issue, “given [the] additional expense that the Company anticipates incurring related to litigating the Staff’s unprecedented and unsupported recommendation to disallow the Company’s expenses related to the MVP.” Comments are due on August 13. Public witness testimony will be allowed at evidentiary hearing will on August 14.

 

 

Virginia SCC updates for week of June 17, 2019

SCC establishes procedural schedule for Dominion’s generation rider update proceedings – Case Nos. PUR-2019-00085, PUR-2019-00086, PUR-2019-00087, PUR-2019-00088, PUR-2019-00089

The SCC has established procedural schedules for the annual “true up” cases for several of Dominion’s generation riders, called rate adjustment clauses (“RACs”). The SCC resets the rates for each rider on an annual basis to ensure that all of the utility’s costs (including its rate of return) are recovered. Dominion is requesting that the SCC apply an increased rate of return on common equity (“ROE”) on its generation RACs going forward. Dominion proposes to apply an ROE of 10.75% to costs recovered through each RAC. Dominion’s existing base ROE is 9.2%. All things being equal, a higher ROE increases the utility’s revenue requirement and thus customer rates. 

For several riders, including the RACs for the Bear Garden and Warren County gas plants and the Virginia City coal plant in Wise County, Dominion is also requesting a 100 basis points (1.0%) ROE bonus. These ROE bonuses were authorized by the 2007 Re-Regulation Act. For these facilities, Dominion is seeking an ROE of 11.75%. The SCC will conduct evidentiary hearings on these cases between November and January. Dominion’s request for a 10.75% ROE (which will apply to RACs and will also be used to measure base rate earnings in Dominion’s 2021 earnings review) is being considered in Case No. PUR-2019-00050.

 Appalachian Voices files testimony regarding Dominion’s pipeline capacity in fuel factor proceeding – Case No. PUR-2019-00070

 On June 19, Appalachian Voices filed the direct testimony of a gas industry expert in Dominion’s pending fuel factor proceeding. In fuel factor cases, the SCC reviews the reasonableness of a utility’s actual and forecasted fuel expenses. The witness addressed Dominion’s use of its existing natural gas pipeline capacity. The witness testified regarding changes Dominion has made in the past year to increase the utilization of its existing pipeline contracts, such as releasing a portion of its contracted capacity when such capacity is not needed. According to Appalachian Voices, these changes in Dominion’s business practices benefit ratepayers. Appalachian Voices also testified that only a small portion of Dominion’s natural gas contract capacity is used for customers other than power plants. For these and other reasons, the Appalachian Voices expert witness testified that Dominion has sufficient capacity to serve its existing power generation fleet as well as any new generation that may be needed to meet customer demand. An evidentiary hearing will be held on July 30.

 SCC sets procedural schedule for review of Dominion 100% renewable energy tariff application – Case No. PUR-2019-00094

 On June 20, the SCC entered a procedural schedule for the review of Dominion’s 100% renewable energy proposal, Rider TRG. Rider TRG would be a voluntary option for customers with less than 5 MW of demand. Dominion states that its proposed tariff “is modeled after APCo’s [wind energy rider] in structure and operation, and satisfies the basic principles for approval under Subdivision A 5.” Rider TRG would reallocate the renewable energy generated from several renewable energy facilities that are either in Dominion’s rate base or from which Dominion purchases power. Rider TRG customers would pay a premium of 0.421 cents per megawatt-hour, which would increase a 1,000 kWh monthly bill by $4.21. The premium is a “proxy” for the 2018 market value of RECs generated from the TRG portfolio.

 The generation for Rider TRG would be sourced from solar, hydro, and biomass generation facilities as well as from Dominion’s Wise County coal plant. (Dominion estimates that the coal mixture burned at the Wise County plant will consist of up to 10% wood waste by 2023.) Dominion asserts that Rider TRG, if approved, would constitute a 100% renewable option under Code Section 56-577 A 5. If the SCC approves Rider TRG – and finds that it constitutes a 100% renewable energy tariff pursuant to this Code Section – Dominion customers would no longer have the option to shop for generation from competitive suppliers. An evidentiary hearing is scheduled for November 21. Notices of participation are due on September 17. 

 

 

Key Virginia SCC Utility Filings for the week of Jan 13, 2019

(1) SCC rejects majority of Dominion Grid Transformation Plan proposal – Case No. PUR-2018-00100

 On January 16, the SCC entered a final order on Dominion’s Grid Transformation Plan filing. The Commission rejected the majority of Dominion’s proposed $3 billion plan, finding that Dominion had not proven these investments to be reasonable and prudent. The SCC, for example, held that Dominion’s proposed spending in the following areas was imprudent: (1) AMI deployment, (2) grid hardening, and (3) investments intended to support emerging technologies and facilitate the integration of distributed energy resources. The SCC agreed with environmental and ratepayer advocates that Dominion had not established that the benefits of this spending would outweigh the costs. The Commission, however, did approve about $900 million in spending related to cyber and physical security investments. It is not yet clear how or when the approved costs will be recovered from ratepayers; the statute permits utilities to recover grid transformation investment costs in several ways.

 (2) Dominion files testimony opposing Kroger’s and Harris Teeter’s request to purchase energy from a competitive service provider – PUR-2018-00150 and PUR-2018-00151

 On January 16, Dominion filed the direct testimony of two witnesses asking the SCC to prohibit two customers – Kroger and Harris Teeter – from combining the demand from multiple store accounts in order to purchase generation from a non-utility company. Dominion claims that allowing these customers to shop will harm shareholders and result in fixed costs being shifted to other customer classes. Kroger and Harris Teeter have argued that their request to shop would have a de minimis impact on Dominion’s revenues and total peak load. The companies claim that their request is “in the public interest” because shopping will enable them to reduce their energy costs and better manage energy usage. The companies also argue that shopping customers, by reducing Dominion’s peak load, help to mitigate the need for Dominion to build new gas “peaking” resources. (For background: Virginia law allows customers, in certain circumstances, to combine the demands of multiple accounts in order to reach the statutory demand threshold of 5 megawatts required for shopping. The SCC must find such requests to be “consistent with the public interest.” Shopping customers purchase the generation component of electricity from a competitive supplier, but continue to purchase distribution services from their incumbent utility.)

 (3) Procedural schedule set for WGL request to extend and amend conservation and efficiency programs – Case No. PUR-2018-00193

 Washington Gas Light (“WGL”) has requested SCC approval to extend and amend its SCC-approved conservation and ratemaking efficiency plan (“CARE Plan”). WGL has proposed to extend several existing programs and add new programs, including weatherization assistance for low-income customers. The proposed CARE plan has three-year budget of $8.5 million. The proposed plan would result in a  $4.12 monthly charge for a typical residential customer. The SCC has set a procedural schedule for this case. March 12 is the deadline for parties to intervene in the case and request an evidentiary hearing. Any interested party may also file comments on the application on or before March 12.

SCC energy regulatory update for January 7-11, 2019


(1)    SCC approves APCo 100% renewable energy tariff – Case No. PUR-2017-00179

 The SCC has approved APCo’s 100% renewable energy tariff, designated Rider WWS. Rider WWS would repackage the generation from several wind and hydroelectric facilities and make this energy available to customers at a premium of $0.00425 per kWh. Once APCo’s tariff is in place, customers will lose their current rights to shop for renewable generation from non-utility companies. Several renewable energy and environmental advocates asked the SCC to deny the application, arguing that the rates are unreasonable and not tied to market prices for renewable energy. The hearing examiner assigned to the case found the rates to be “unjust and unreasonable” and recommended that the SCC deny the application.

 (2)    Dominion’s withdraws 100% renewable energy tariff for small and medium-sized customers – Case No. PUR-2017-00157

 On January 10, Dominion withdrew its 100% renewable tariff application, Rider CRG-S. Dominion stated that it intended to re-file its application following the SCC’s guidance in the APCo decision. The hearing examiner who conducted the Rider CRG-S proceeding recommended approval of the application, but with two caveats: (1) that there should be no rate of return margin applied, and (2) that the rate should reflect monthly, as opposed to hourly, balancing. “Balancing” refers to the time period over which a customer’s kWh usage must be matched with renewable energy generation. Dominion proposed balancing customer demand on an hourly basis, while environmental advocates and the hearing examiner favored monthly balancing.

 (3)    Hearing Examiner’s Report in Walmart aggregation case – Case Nos. PUR-2017-00173 and PUR-2017-00174

 On January 11, a hearing examiner entered a report and recommendation regarding Walmart’s request to aggregate the demand of multiple accounts in order to leave the Dominion and APCo system. The hearing examiner did not issue a firm recommendation for the SCC to approve or reject the application, but made several findings. For background, Virginia law allows customers, in certain circumstances, to combine the demands of multiple accounts in order to reach the statutory threshold required for shopping. The SCC must find such requests to be “consistent with the public interest.” Walmart claimed that it wants to shop in order to pursue renewable energy goals. The hearing examiner found that “Walmart’s [renewable energy] goals appear to be consistent with the energy objectives established in the Commonwealth’s Energy Plan.” The hearing examiner also found that neither Dominion nor APCo would be harmed if Walmart left the system, but that the likely cost impact of Walmart’s decision to leave utility service would be $0.05 per month for APCo customers using 1,000 kWh per month and $0.13 for Dominion customers. The hearing examiner’s findings and recommendations are not binding on the commissioners. There is no deadline for the Commission to enter a final order.  

 (4)    Procedural schedule set for APCo Grid Transformation Plan filing – Case No. PUR-2018-00198

The SCC has entered a procedural schedule for this case and set an evidentiary hearing for April 23, 2019. APCo’s grid transformation filing proposes a total investment of approximately $415 million and includes “measures to facilitate the integration of distributed energy resources and measures to enhance physical electric distribution grid reliability and security.” The filing does not address how or when costs will be recovered from customers. An evidentiary hearing will be held on April 23, 2019. The deadline to intervene as a formal party is February 7. Comments may be filed by any non party on or before June April 16..

(5)    Procedural schedule set for Dominion coal ash RAC application – Case No. PUR-2018-00195

The SCC has set a procedural schedule for reviewing Dominion’s recent environmental rate adjustment clause filing. Dominion has applied for SCC approval of a RAC to recover the costs of new coal ash ponds and treatment facilities. Dominion says these investments are necessary to comply with the federal CCR rule and “in order to continue operating the coal-fired generating units at Chesterfield, Clover, and Mt. Storm.” The monthly bill impact of the new rider would be $2.15 of a residential customer using 1,000 kWh per month. Dominion is requesting recovery of $302 million in capital expenditures, $247 million of which is for the Chesterfield units. An evidentiary hearing will be held on June 11, 2019. The deadline to intervene as a formal party is March 12. Comments may be filed by any non party on or before June 4.

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1)      Have fun but use your good judgement.

 2)      Because you are responsible, you have earned privileges.  Lack of responsibility loses them.

 3)      Lack of judgement in one area means I assume there is a lack of judgement in others.

 4)      Not meeting curfew is a big deal but not texting me back when I check in is a way bigger deal.

 5)      If I catch you riding with an impaired driver, all hell will break loose (see rule #1)

 6)      If you text me, I will come pick you up, no questions asked…

 7)      I get to meet whoever you are dating.

 8)      You can always blame something on me, it is easier than explaining.

SCC Week of June 10, 2019

(1) Walmart files Notice of Appeal in aggregation dockets – Case Nos. PUR-2017-00173 and PUR-2017-00174

On June 10, Walmart a filed notice of appeal of the Commission’s denial of its aggregation petitions. The SCC denied Walmart’s request to aggregate demand from its stores in Dominion’s and APCo’s territory in order to shop for generation from the competitive market. In Virginia, non-residential customers can request SCC permission to aggregate demand from multiple accounts in order to reach the 5 MW threshold required for shopping. Walmart wanted the option to shop for generation in order to save money and meet its corporate sustainability goals.

Appeals of SCC decisions are “of right,” meaning that the Virginia Supreme Court must hear the case. Walmart must file its grounds for appeal and assignments of error at the Supreme Court by September 30. Oral arguments are likely to be held in the spring of 2020.

 

(2) SCC holds evidentiary hearing regarding Dominion coal plant investments – Case No. PUR-2018-00195

Dominion has applied for SCC approval of a RAC to recover the costs for new coal ash ponds and treatment facilities at several coal facilities. Dominion says these investments were necessary to comply with federal environmental regulations and “in order to continue operating the [units].” The monthly bill impact of the new rider would be $2.15 for a residential customer using 1,000 kWh per month. Dominion is requesting recovery of $302 million in capital expenditures, $247 million of which is for the Chesterfield units.

An evidentiary hearing was held on June 11 and 12. The Attorney General’s expert witness testified that most, if not all, of the spending on the Chesterfield units was imprudent due to the likely retirement dates of the facilities. Sierra Club’s witness also testified that Dominion should have known that the Chesterfield units were uneconomic and likely to be retired in the near future. The commissioners also questioned Dominion’s attorney about representations made to the General Assembly in 2015. Specifically, Commissioner Christie noted that while Dominion was saying one thing to the General Assembly in order to justify a base rate freeze (i.e., that Dominion’s coal plants were in serious risk of early retirement), the utility was doing another (i.e., making substantial investments in the same units). 

 

(3) SCC rejects APCo’s attempt to revoke the license of a competitive service provider – Case No. PUR-2018-00134

 

On June 11, the SCC rejected APCo’s attempt to revoke the operating license of Collegiate Clean Energy (“CCE”), a competitive supplier licensed to sell retail energy in APCo’s service territory. APCo claimed that although CCE was providing sufficient renewable energy to match its customers’ demand, CCE did not obtain sufficient renewable-energy-backed capacity. The SCC rejected APCo’s attempt to add a capacity requirement to the retail access rules. The SCC also noted that CCE was “meeting or exceeding” the standards the Commission applies to APCo’s own renewable tariff: “[W]e further find that Collegiate is meeting or exceeding the standard applied to [APCo’s wind energy tariff] to the extent that Collegiate is: (1) providing "renewable energy" as defined by statute; and (2) matching renewable generation with customer load on an hourly basis.” APCo may appeal the decision to the Virginia Supreme Court by filing a notice of participation within 30 days.

 

(4) Microsoft and Direct Energy file testimony regarding Dominion’s new market-base rate schedule – Case No. PUR-2018-00192

 

Dominion has filed a request for approval of a revised market-based rate (“MBR”) tariff. The tariff would be available for GS-3 customers whose demand reached 5 MW at least once during the current and previous 11 months. Dominion states that the revised MBR tariff contains several improvements over the existing MBR tariff, approved in 2016. First, the revised tariff is designed to be applicable to more customers. For example, the current MBR tariff is only available to customers with high load factors (at least 85%) who have been Dominion customers for at least 12 months. The new MBR tariff removes the load factor limitation altogether, and customers are only required to take service from Dominion for one month before enrolling. Additionally, the existing tariff requires customers to reach 5 MW in demand three times during a 12-month period; the revised MBR tariff requires only one such peak.

The tariff also includes changes to generation demand and transmission billing components that are designed to be more attractive to potential customers. For example, under the existing tariff, the generation demand charge is based on the higher of the customer’s maximum demand during a billing month, or the customer’s contribution to Dominion’s zonal capacity obligation, which is the average of the 5 coincident peaks during the previous year. Under the new tariff, the generation demand bill will be based solely on the customer’s 5 coincident peaks. This would allow customers to reduce generation charges to the extend they can reduce usage during peak hours.

Microsoft and Direct Energy filed respondent testimony on June 11. The respondents generally support the revised tariff, but noted concerns about the proposed minimum customer charge; the margin charge that Dominion may recover; and the proposed term and renewal processes. Advanced Energy Economy and the Advanced Energy Buyers Group filed comments that were generally supportive of the proposed tariff. A hearing is scheduled for July 25.

 

 

(5) Southwest Virginia coal company withdraws request to shop for energy from the competitive market – Case No. PUR-2019-00030

 

Paramount Contura, a coal mining company with Virginia operations based in Norton, withdrew its request for SCC permission to aggregate the demand from multiple accounts in order to shop for generation from the competitive market. Virginia law allows non-residential customers to seek SCC permission to aggregate their demand in order to shop. Paramount’s decision to withdraw its request is likely due to the SCC’s rejection of several petitions in Dominion’s service territory. The SCC has approved one aggregation petition for a customer in Dominion’s service territory, but has rejected several other petitions. In rejecting these petitions, the SCC claims that allowing more shopping will result in cost shifting and higher rates for non-shopping customers.

The hearing examiner granted Paramount’s request to withdraw its petition “without prejudice,” meaning that the company can refile its request at a future date.

 

 

(6) Hearing Examiner files report and recommendation regarding New Albertsons aggregation petition – Case No. PUR-2018-00164

 

On June 10, a Commission hearing examiner entered a report and recommendation regarding New Albertsons’ request to aggregate the demand from stores in Dominion’s service territory. New Albertsons sought permission to aggregate the demand of its stores in order to reach the 5 MW threshold required to shop for generation from the competitive market. New Albertsons argued that Dominion’s rates have become excessive and uncompetitive. Dominion asserted that allowing New Albertsons to shop could result in cost shifting, requiring residential customers using 1,000 kWh per month to pay an extra 3 cents per month. Unlike most cases, the hearing examiner did not make a recommendation regarding whether the application should be approved; the examiner merely summarized the evidence in the record.

Thus far, the Commission has approved one aggregation petition, for Reynolds Metals, and has rejected petitions by Walmart and Costco. Several other companies, including Target, Cox Communications, Kroger, and Harris Teeter have also requested permission to aggregate. The Commission’s orders have stated that customers should seek relief at the General Assembly if they want more energy choices.