Only one notable SCC filing for week of Oct 7 - 11, 2019

Dominion files motion seeking to fast track review of controversial renewable energy tariff – Case No. PUR-2019-00094

 

On October 8, Dominion filed a motion seeking to accelerate the SCC’s review of its proposed 100% renewable energy proposal, Rider TRG. Dominion’s motion seeks to remove the hearing examiner and have the case heard by the full Commission instead. This would reduce the time necessary for the SCC to enter a final order in this case. Dominion claims that its motion is filed “for purposes of judicial economy and in furtherance of the public interest.” This procedural change may also allow Dominion to receive approval of Rider TRG before the 2020 General Assembly session, where renewable energy market issues are expected to be debated.

 

Rider TRG would reallocate the energy generated from several renewable energy facilities that are either in Dominion’s rate base or from which Dominion currently purchases power. Rider TRG customers would pay a premium of 0.421 cents per megawatt-hour to purchase this energy, which would increase a 1,000 kWh monthly bill by $4.21. The generation for Rider TRG would be sourced from solar, hydroelectric, and biomass generation facilities as well as from Dominion’s Virginia City coal plant. (Dominion estimates that the coal mixture burned at this plant will consist of 90% coal and 10% biomass wood waste by 2023.) If the SCC approves Rider TRG – and finds that it constitutes a 100% renewable energy tariff pursuant to Va. Code § 56-577 A 5 – Dominion customers would no longer have the option to purchase renewable generation from competitive suppliers.

 

Several parties, including renewable energy advocates, competitive service providers, and environmental advocates have intervened in this case. These parties are expected to oppose the application because it would eliminate customer choice for renewable energy; because it would not support the development of any resources not already in Dominion’s portfolio; and because it would force customers to subsidize Dominion’s Virginia City coal plant and carbon-intensive biomass plants. Attorney General Mark Herring intervened in this case on July 2, but has not yet indicated whether his office will take a position in this case on behalf of consumers.

Responses to Dominion’s motion are due on October 17. Parties will file direct testimony on October 17. An evidentiary hearing is scheduled for November 21.

SCC activity from Sept 30th - Oct 4, 2019

Electric cases

 (1) SCC enters procedural schedule for review of Dominion’s updated grid transformation plan – Case No. PUR-2019-00094

 On September 30, Dominion filed a request for approval of an updated grid transformation spending plan. The plan proposes additional investments in several areas, including advanced metering infrastructure (“AMI”), cyber security, “grid hardening,” and customer data exchange platforms designed to facilitate new rate structures such as time-varying rates. Dominion also states that its grid hardening and grid technology spending will improve reliability while allowing the utility to incorporate more customer-owned solar generation and electric vehicle load.

 Dominion proposes to invest $600 million over the next three years, including $517 million in capital costs and $83 million in operations and maintenance expenses. Dominion’s application is filed pursuant to Va. Code § 56-585.1 A 6, which allows the utility to recover grid transformation spending through a rate rider called a rate adjustment clause (“RAC”). Dominion’s application does not state whether the utility will seek to recover the grid transformation spending through a new rate increase or through existing base rates. The SCC recently published a report stating that – based on unaudited information submitted by Dominion’s accountants – that Dominion’s base rates produced excess revenues of $277 million during 2018.

 Interested parties may participate in this case by filing a notice of participation on or before November 12, 2019. A public hearing will be held on January 28, 2020.

(2) Dominion files rebuttal testimony regarding its request for approval of a new solar power purchase agreement – Case No. PUR-2019-00133

Dominion is requesting SCC approval to enter into a PPA with a third-party generator to purchase the output from a 20 MW solar facility in Westmoreland County. Dominion’s application notes that the General Assembly, pursuant to the 2018 Grid Transformation and Security Act, found that it is “in the public interest” for utilities to construct or purchase up to 5,000 MW of new solar and wind generation by 2028. Dominion states that it will recover the costs of the PPA through its base rates and fuel clause. The Commission has previously expressed its preference for Dominion to enter into PPAs for renewable energy as opposed to building and owning generation. (See Case No. PUR-2018-00135).

The SCC Staff filed rebuttal testimony stating that the evidence submitted by Dominion would support a finding of prudence. The Staff found, among other things, that the PPA would support the Commonwealth’s goal of having utilities purchase or construct at least 5,000 MW of new wind and solar generation by 2028. The Staff also found that the solar purchase could result in fuel cost savings and may help the Commonwealth comply with the Regional Greenhouse Gas Initiative emissions limitations. There are two major disputes between Dominion and the Staff, however. The first disagreement concerns whether the solar PPA is needed to serve any forecasted capacity needs. Dominion asserts that it is needed due to capacity deficits forecasted by the company’s 2018 Integrated Resource Plan. Staff also disagrees with Dominion’s proposed methodology for allocating the costs of the PPA to customers. Dominion is proposing to allocate costs of the PPA based on forecasted energy, capacity, and REC values as opposed to actual observed market prices. A hearing on the application will be held on October 8.

SCC Staff files testimony regarding Appalachian Power’s 2019 Integrated Resource Plan – Case No. PUR-2019-00058

On May 1, 2019, Appalachian Power Company (“APCo”) filed its first Integrated Resource Plan (“IRP”) since the enactment of 2018 Senate Bill 966, the Grid Transformation and Security Act.  An IRP is not a commitment to pursue any particular resource or course of action, but represents a utility’s plan for meeting customer demand over the next 15 years. The State Corporation Commission (“SCC”) must review the utility’s IRP and determine whether the plan is “reasonable and in the public interest.”  The IRP includes a Preferred Plan, which forecasts utility scale solar additions of 450 MW by 2023 and 1,500 MW by 2033. APCo’s IRP includes only 10 MW of battery storage over the entire planning period. APCo does not model or discuss renewable energy paired with battery storage as a resource at all.

The SCC Staff criticized APCo for failing to model third-party renewable energy purchases, noting that “wind and solar PPAs represent a reasonable resource that is price competitive to Company-owned projects, and as such, it is likely that the costs of the Company’s portfolios presented in its IRP are overstated.” Staff also recommended that APCo be directed, in future IRPs, to include customer bill impacts associated with the investments in the IRP plans. Staff finds APCo’s load forecast to be reasonable, but is “wary of the assumptions underlying the Company’s forecast of its wind and solar capacity factors, natural gas prices, and power market prices.”

An evidentiary hearing is scheduled for November 5, and comments are due by October 29.

Parties conduct discovery and prepare testimony regarding Dominion’s “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 reallocate the energy generated from several renewable energy facilities that are either in Dominion’s rate base or from which Dominion currently purchases power. Rider TRG customers would pay a premium of 0.421 cents per megawatt-hour to purchase this energy, 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, hydroelectric, and biomass generation facilities as well as from Dominion’s Virginia City coal plant. (Dominion estimates that the coal mixture burned at this plant will consist of 90% coal and 10% biomass wood waste by 2023.) Dominion asserts that Rider TRG, if approved, would constitute a 100% renewable option under Va. Code § 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 purchase renewable generation from competitive suppliers.

Several parties, including renewable energy advocates, competitive service providers, and environmental advocates have intervened in this case. These parties are expected to oppose the application because it would eliminate customer choice for renewable energy; because it would not support the development of any resources not already in Dominion’s portfolio; and because it would force customers to subsidize Dominion’s Virginia City coal plant. Attorney General Mark Herring intervened in this case on July 2, but has not yet indicated whether his office will take a position on behalf of consumers.

Parties will file direct testimony on October 17. An evidentiary hearing is scheduled for November 21.

Natural gas cases

(1) SCC Staff and Sierra Club file briefs opposing Roanoke Gas efforts to recover 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.” The Staff previously testified that while demand for gas has risen in other areas of the Commonwealth, demand in Roanoke Gas’s service territory “has remained relatively stable.” Sierra Club argued that there is no need for the MVP capacity, pointing out the surplus of capacity available to the on the highest-demand days in recent years. For this reason, Sierra Club argued that customers should not be charged for any MVP-related construction or spending by Roanoke Gas. There is no deadline for the SCC to enter a final order on the rate increase request.

SCC updates from the week of Sept 23rd, 2019

Electric cases

(1) Hearing transcript posted regarding Dominion’s request for 17% increase in its allowed profit level – Case No. PUR-2019-00050

On September 10 and 11, the SCC held an evidentiary hearing 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%. The SCC Staff called Dominion’s proposed ROE excessive, finding that current market conditions support a return of 8.6%. The SCC 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 Attorney General’s expert witness testified that Dominion’s required return should be between 7.6% and 8.8%. 36 members of the Virginia General Assembly filed a letter supporting the testimony filed by the Attorney General’s expert witness.

The hearing transcript is now available on the online docket for this case. The parties will file post-hearing briefs on October 18. The SCC must enter a final order on or before November 30, 2019.

(2) SCC Staff files testimony regarding Dominion’s request for approval of solar power purchase agreement – Case No. PUR-2019-00133

Dominion is requesting SCC approval to enter into a PPA with a third-party generator to purchase the output of a 20 MW solar facility in Westmoreland County. Dominion’s application notes that the General Assembly, pursuant to the 2018 Grid Transformation and Security Act, found that it is “in the public interest” for utilities to construct or purchase up to 5,000 MW of new solar and wind generation by 2028. Dominion states that it will recover the costs of the PPA through its base rates and fuel clause. The Commission has previously expressed its preference for Dominion to enter into PPAs for renewable energy as opposed to building and owning generation. (See Case No. PUR-2018-00135).

 On September 24, the SCC Staff filed testimony stating that the evidence submitted by Dominion would support a finding of prudence. The Staff found, among other things, that the PPA would support the Commonwealth’s goal of having purchase or construct at least 5,000 MW of new wind and solar generation by 2028. The Staff also found that the solar purchase could result in fuel cost savings and may help the Commonwealth comply with the Regional Greenhouse Gas Initiative emissions limitations. A hearing on the application will be held on October 8.

 (3) Dominion reaffirms its objections to the SCC’s disallowance of expenditures at retired coal plants – Case No. PUR-2018-00195

 

In late 2018, Dominion applied for SCC approval for a RAC to recover the costs for new coal ash ponds and treatment facilities. On August 5, the SCC entered a Final Order approving most of the request, but disallowing $18.4 million of investments made at Chesterfield Units 3 and 4. These coal 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, the Commission found, it was not reasonable to make continued investments in units that Dominion should have known would soon be retired. 

 In its decision, the SCC relied in part on Va. Code § 56-585.1 D. This statute provides that the SCC has the authority to determine the “reasonableness and prudence” of any cost sought to be recovered pursuant to a proceeding brought under Va. Code § 56-585.1, including environmental RAC proceedings. On August 23, Dominion filed a Petition for Reconsideration of this disallowance. Dominion claims that the SCC’s decision “is inconsistent with the historic application of any prudence standard and otherwise contrary to the principle of reasonable discretion being afforded to utility decision-making.”

 On September 17, Sierra Club and the Attorney General’s Division of Consumer Counsel filed responses in opposition to Dominion’s Petition. Both Sierra Club and the Attorney General provided support for the legality and prudence of the SCC’s decision. On September 24, Dominion filed a response to the Attorney General and Sierra Club arguing that the SCC did not have the authority under to disallow the disputed costs under § 56-585.1 D. Dominion also noted that, in every case where the SCC has relied on § 56-585.1 D to rule against Dominion’s expenditures, “the General Assembly has promptly amended relevant statutes to limit the scope of Subsection D.” If the SCC affirms its final order, Dominion may appeal the decision to the Virginia Supreme Court. Regardless of whether Dominion prevails, all of Dominion’s attorneys’ fees and litigation expenses in this case (including costs associated with an appeal) will be paid for by Dominion’s ratepayers.

  

(4) SCC Staff recommends rejection of Dominion’s proposal to market low-quality RECs – Case No. PUR-2019-00081

 Dominion is requesting SCC approval to offer a new, lower-cost renewable energy credit (“REC”) purchase option to its customers. Under the proposed rate schedule, designated Rider REC, customers could purchase lower-quality 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.” There does not appear to be any vintage requirement for the RECs of the associated generation facilities.

 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].” The regional chapter of the Solar Energy Industries Association filed a letter arguing 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.

 On September 24, the SCC Staff filed a report stating that that it “does not recommend that the Commission approve Dominion's proposed Rider REC as it is currently designed.” The Staff noted that, based on the proposal, customers could unknowingly purchase “RECs from sources that are decades old, and potentially more than a century old [and that] customers could end up paying what would constitute an excessive price.” Staff recommended, if the SCC is inclined to approved Rider REC, that Dominion should be required to include “[a] disclaimer clearly stating the RECs purchased under the tariff may come from sources anywhere within the continental U.S. with a vintage that could potentially date back to the year 1900. In addition, this disclaimer should provide a list of the expected generation sources of the RECs customers would be purchasing such as biomass, land-fill gas, etc.” (emphasis original). There is no deadline for the SCC to enter a final order.

 (5) SCC hearing examiner recommends approval of Dominion’s proposed market-based rate schedule – PUR-2018-00192

 On September 25, a hearing examiner recommended approval of Dominion’s request for approval of a revised market-based rate (“MBR”) tariff. The MBR tariff is designed to allow customers the option to buy energy based on PJM wholesale market prices. Dominion says the revised tariff would be an attractive alternative to purchasing energy from a competitive service provider (“CSP”). Dominion states that the revised MBR tariff contains several improvements over the existing MBR tariff, approved in 2016, that will allow more customers to participate. The new tariff also contains features that could encourage customers to reduce energy usage during peak hours.

 Dominion and the Commission Staff entered into a partial settlement regarding disputed issues in the case. Microsoft and Direct Energy, however, did not sign onto this stipulation. Microsoft and Direct Energy challenged several aspects of the proposed tariff, including the minimum charge. Direct Energy argued that the MBR is not actually a “tariff,” since the rate option does not provide any set rates. The hearing examiner’s report and recommendation includes findings on several of the disputed issues and recommends approval of the tariff. Regarding the minimum charge, the hearing examiner recommended that the minimum charges imposed by Dominion should only recover the costs of distribution facilities constructed to serve new customers. Parties may file comments on our before October 16. 

 (6) SCC sets procedural schedule regarding Appalachian Power’s broadband pilot program – Case No. PUR-2019-00145

 On September 6, Appalachian Power (“APCo”) filed a petition requesting permission to provide broadband service in Grayson County, Virginia. 2019 legislation, codified in Va. Code § 56-585.1:9, authorizes APCo to offer broadband services in areas without a broadband provider. APCo provides two different scenarios, with annual costs between $1.5 and $2.5 million. APCo states that the program will benefit its customers because it will use the fiber infrastructure to improve the quality and reliability of electric service in Grayson County and provide a communications platform for grid improvements, including installation of advanced metering infrastructure. The broadband service costs could be recovered through APCo’s base rates or a rate adjustment clause for “grid transformation” investments; however, the statute prevents APCo from recovering broadband service costs before July 1, 2020. An evidentiary hearing will be held on January 24, 2020. Interested parties may participate in this case by filing a notice of participation on or before November 20.

 

 

(7) Appalachian Power files request to decrease its fuel rateCase No. PUR-2019-00157

 On September 27, Appalachian Power (“APCo”) filed a request to decrease its fuel rate from 2.547 to 2.300 cents per kWh. The proposed fuel rate – called the fuel factor – is designed to recover APCo’s costs to procure fuel between November 1, 2019, and October 31, 2020. The reduction would reduce the typical bill of a residential customer using 1,000 kWh per month by 2.6%, or roughly $2.80. The SCC has not yet established a procedural schedule for this case.

Natural gas cases

SCC approves Atmos SAVE application – Case No. PUR-2019-00054

On September 24 the SCC approved a required by Atmos Natural Gas 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. Atmos intends to spend approximately $107 million on SAVE programs over the next 14 years. 

 

Notable SCC filings from Sept 16-20, 2019

Electric cases

 (1) SCC dismisses Dominion’s request to impose additional conditions on renewable energy sales – Case Nos. PUR-2019-00117 and PUR-2019-00118

 

On September 18, the SCC entered a final order denying Dominion’s attempts to impose new requirements on competitive renewable energy suppliers. Dominion filed requests for declaratory judgment alleging that Direct Energy and Calpine Energy Solutions, two competitive service providers (“CSPs”), were not providing full renewable energy service to their customers. Dominion’s argument was based on a claim that these CSPs do not have “control” of sufficient renewable energy resources in order to provide “24/7” or “around the clock” service. Direct Energy and Calpine are serving 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 requested approval of what it characterizes as a 100% renewable tariff, which is currently pending before the SCC. This tariff includes energy generated at several facilities that are currently in Dominion’s portfolio, including solar, hydroelectric, and biomass facilities as well as the Virginia City coal plant.) 

 The SCC rejected Dominion’s arguments, stating that it “continues to find” that it is reasonable for a CSP to match customer load with renewable energy on a monthly basis. The SCC also stated that Dominion’s proposed standard, if accepted, “would represent the most stringent matching requirement of any renewable energy market in the country.” Finally, the Commission noted that Dominion was not able to settle on any single definition of “100% renewable energy”; instead, its attorneys and witnesses advanced more than 10 different proposed standards throughout the course of the proceeding.

 

(2) SCC finds Dominion’s IRP update filing to be “legally sufficient” – Case No. PUR-2019-00141

 

On August 30, Dominion filed its 2019 IRP update. The purpose of IRP “update” filings is to notify the Commission of any major changes in the utility’s planning that occur between the years when full IRPs are filed. Dominion stated that its objective in its 2019 IRP update “is to provide a discussion of significant events requiring a major revision to the [2018 IRP].” Dominion also notes that it recently “committed to an 80% reduction in greenhouse gas emissions by 2050.” The Company also put forth a five-year plan that includes development of offshore wind, a new pumped hydroelectric storage facility, additional solar photovoltaic resources, and distribution system modernization.” Nonetheless, the IRP update still includes 2,400 MW of new gas-fired combustion turbine generating facilities between 2019 and 2044. Nor does the IRP update address Dominion Energy’s continued investment in the Atlantic Coast Pipeline, which will supply existing and new natural gas generation facilities.

 On September 20, in a two-page order, the SCC found the filing to be “legally sufficient.” The SCC, however, noted that its finding “does not express approval of the magnitude or specifics of Dominion's future spending plans, the costs of which will significantly impact millions of residential and business customers in the monthly bills they must pay for power.”

 

(3) Sierra Club and Attorney General file Responses in Opposition to Dominion’s petition for reconsideration regarding disallowance of coal plant expenditures – Case No. PUR-2018-00195

 

In late 2018, Dominion applied for SCC approval for a RAC to recover the costs for new coal ash ponds and treatment facilities. On August 5, the SCC entered a Final Order approving most of the request, but disallowing $18.4 million of investments made at Chesterfield Units 3 and 4. These coal 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, the Commission found, it was not reasonable to make continued investments in units that Dominion should have known would soon be retired. 

 On August 23, Dominion filed a Petition for Reconsideration of this disallowance. Dominion claims that the SCC’s decision “is inconsistent with the historic application of any prudence standard and otherwise contrary to the principle of reasonable discretion being afforded to utility decision-making.” In its decision, the SCC relied in part on Va. Code § 56-585.1 D. This statute provides that the SCC has the authority to determine the “reasonableness and prudence” of any cost sought to be recovered pursuant to a proceeding brought under Va. Code § 56-585.1, including environmental RAC proceedings.

 On September 17, Sierra Club and the Attorney General’s Division of Consumer Counsel filed responses in opposition to Dominion’s Petition. The Attorney General noted that a utility always bears the burden to prove that its spending is reasonable before recovering costs from customers. The Attorney General argued that Dominion advances an “illogical argument that would thwart the Commission’s ability to protect ratepayers from imprudent utility expenditures.” The Attorney General also argued (after noting that the statute only allows utilities to charge ratepayers for expenses that are “necessary”) that “common sense dictates that environmental compliance [incurred] to keep an electric generation facility in operation are not ‘necessary’ if the prudent course of action is instead to avoid the capital expense and simply retire the units.”  Dominion may file a reply to the responses by September 24.

 

(4) Virginia solar developer files testimony criticizing Appalachian Power’s 2019 Integrated Resource Plan – Case No. PUR-2019-00058

 On May 1, 2019, Appalachian Power Company (“APCo”) filed its first Integrated Resource Plan (“IRP”) since the enactment of 2018 Senate Bill 966, the Grid Transformation and Security Act.  An IRP is not a commitment to pursue any particular resource or course of action, but represents a utility’s plan for meeting customer demand over the next 15 years. The State Corporation Commission (“SCC”) must review the utility’s IRP and determine whether the plan is “reasonable and in the public interest.”  The IRP includes a Preferred Plan, which forecasts utility scale solar additions of 450 MW by 2023 and 1,500 MW by 2033. APCo’s IRP includes only 10 MW of battery storage over the entire planning period. APCo does not model or discuss renewable energy paired with battery storage as a resource at all.

 On September 18, a Charlottesville based solar developer, Sun Tribe Solar, filed direct testimony criticizing APCo’s failure to model solar plus storage resources during the 2019-2033 planning period. Sun Tribe Solar cited the rapid development of this technology and the fact that other utilities are utilizing solar plus storage as an alternative to gas peakers. Sun Tribe Solar also recommended that APCo invest in more solar in the near term because of the coming reductions in federal investment tax credit benefits. Finally, Sun Tribe Solar urged the Commission to require APCo, in future IRPs, to demonstrate how the utility is complying with the Code’s requirement to “utilize goods or services sourced” from Virginia businesses in all renewable energy construction or procurement activities.  An evidentiary hearing is scheduled for November 5, and comments are due by October 29.

 

Natural gas cases

 (1) Hearing Examiner files report and recommendation regarding Washington Gas Light base rate increase request – Case No. PUR-2019-00080

 On September 16, an SCC hearing examiner filed a report and recommendation regarding numerous disputed issues in Washington Gas Light’s (“WGL”) request for a base rate increase. WGL is requesting a rate increase of roughly $33 million, including a 10.3% rate of return on equity.

 

(2) SCC Staff recommends licensure of new competitive gas provider – Case No. PUR-2019-00135

On September 16, the SCC Staff filed a report recommending licensure of a new competitive gas provider, Nordic Energy Services. Unlike electric generation service, natural gas supply service is deregulated in Virginia. The SCC maintains a listing of all competitive service providers licensed to sell electricity and/or natural gas in Virginia

 

(3) Procedural schedule established for Washington Gas SAVE application – Case No. PUR-2019-00142

Washington Gas Light (“WGL”) 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. WGL wants to increase the authorized spending on its SAVE plan and incorporate additional programs.

 

 

 

Notable SCC filings from Sept 4-13, 2019

Electric cases

(1) Hearing held regarding Dominion’s request for 17% increase in profit level – Case No. PUR-2019-00050

 On September 10 and 11, the SCC held an evidentiary hearing 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%. The SCC Staff calls Dominion’s proposed ROE excessive and found that current market conditions support a return of 8.6%. The SCC 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 Attorney General’s expert witness testified that Dominion’s required return should be between 7.6% and 8.8%. 36 members of the Virginia General Assembly filed a letter supporting the testimony filed by the Attorney General’s expert witness.

 

Dominion argued that the proposal would have a minimal effect on customer bills, and asserted that the increased ROE would have “no impact” on customers’ base rates. The SCC Staff called this assertion “fundamentally untrue” and noted that the ROE set in this case would determine whether consumers are entitled to refunds or rate cuts following Dominion’s 2021 triennial review.  The parties will file post-hearing briefs on October 18.

 

(2) Appalachian Power files request for broadband pilot program – Case No. PUR-2019-00145

 On September 6, Appalachian Power (“APCo”) filed a petition requesting permission to provide broadband service in Grayson County, Virginia. 2019 legislation, codified in Va. Code § 56-585.1:9, authorizes APCo to offer broadband services in areas without a broadband provider. APCo provides two different scenarios, with annual costs between $1.5 and $2.5 million. The broadband service costs could be recovered through APCo’s base rates or a rate adjustment clause for “grid transformation” investments; however, the statute prevents APCo from recovering broadband service costs before July 1, 2020. The SCC has not yet established a procedural schedule for this case.

 

(3) SCC approves APCo’s voluntary rate schedule for EV owners – Case No. PUR-2019-00067

 

On September 12, the SCC approved APCo’s proposed voluntary rate schedule for residential customers who own electric vehicles. Residential customers will charge their EVs under this new rate schedule, which provides lower prices during off-peak hours. Customers would need to have smart meters and charging stations that are designed to use power during off-peak hours. 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 and may defer the need for new generation, such as peaking resources. The SCC approved the rate schedule for four years on an experimental basis.

 

(4) Briefing schedule established regarding Dominion petition for reconsideration in coal plant environmental rider case – Case No. PUR-2018-00195

 

In late 2018, Dominion applied for SCC approval for a RAC to recover the costs for new coal ash ponds and treatment facilities. On August 5, the SCC entered a Final Order approving most of the request, but disallowing $18.4 million of investments made at Chesterfield Units 3 and 4. These coal 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, the Commission found, it was not reasonable to make continued investments in units that Dominion should have known would soon be retired. 

 On August 23, Dominion filed a Petition for Reconsideration of this disallowance. Dominion argued that “the Commission’s finding of imprudence … is against the great weight of the evidence in this proceeding … which clearly establishes that the costs for which the Company seeks recovery in this proceeding were both necessary and prudent.” Dominion also claims that the SCC’s decision “is inconsistent with the historic application of any prudence standard and otherwise contrary to the principle of reasonable discretion being afforded to utility decision-making.” In its decision, the SCC relied in part on Va. Code § 56-585.1 D. This statute provides that the SCC has the authority to determine the “reasonableness and prudence” of any cost sought to be recovered pursuant to a proceeding brought under Va. Code § 56-585.1, including environmental RAC proceedings. Dominion, however, argued that the SCC’s reliance on this statute to disallow costs “is an open legal question.”

Respondents may file a response to Dominion’s petition on or before September 17, and

 

Dominion may reply to the responses by September 24.

 (5) Costco withdraws appeal of aggregation decision – Case No. PUR-2018-00088

 

On September 5, Costco withdrew its notice of appeal of the Commission’s rejection of its aggregation petition. Costco requested SCC approval to aggregate the demand from several stores in Dominion’s service territory in order to reach the 5MW threshold required to shop for generation from a competitive supplier. The Commission has previously rejected several other aggregation requests, citing the potential for fixed costs to be shifted to other customer classes. Appeals of SCC decisions are “of right,” meaning parties have an automatic right to appeal all SCC decisions to the Virginia Supreme Court. Costco did not provide any explanation of why it was withdrawing it appeal.

 

(6) Parties file post-hearing briefs regarding Dominion’s proposed market-based rate schedule – PUR-2018-00192

 

On July 25, the SCC held an evidentiary hearing regarding Dominion’s request for approval of a revised market-based rate (“MBR”) tariff. The MBR tariff is designed to allow customers the option to buy energy based on PJM wholesale market prices. Dominion says the revised tariff would be an attractive alternative to purchasing energy from a competitive service provider (“CSP”). Dominion states that the revised MBR tariff contains several improvements over the existing MBR tariff, approved in 2016, that will allow more customers to participate. The new tariff also contains features that could encourage customers to reduce energy usage during peak hours.

 

Dominion and the Commission Staff entered into a partial settlement regarding disputed issues in the case. Microsoft and Direct Energy, however, did not sign onto this stipulation. Microsoft and Direct Energy challenged several aspects of the proposed tariff, including the minimum charge. Direct Energy argued that the MBR is not actually a “tariff,” since the rate option does not provide any set rates. There is no deadline for the SCC to enter a final order.

 

Natural gas cases

(1) Procedural schedule established for Columbia Gas SAVE application – Case No. PUR-2019-00132

Columbia Gas of Virginia 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. Columbia Gas wants to increase the authorized spending on its SAVE plan and incorporate additional programs. The SCC has not established a hearing schedule; comments on the proposal are due on October 7.

(2) SCC approves Roanoke Gas request to update its SAVE Rider – Case No. PUR-2019-00080

On September 11, the SCC approved Roanoke Gas’s request 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. Roanoke Gas sought permission to increase spending under the program and to undertake new projects. 

 

 

Notable SCC utility filings week of Aug 23 - 27

Electric cases

 (1) Hearing transcript posted in debate between Dominion and competitive suppliers regarding renewable energy sales – Case Nos. PUR-2019-00117 and PUR-2019-00118

 Dominion has filed requests for 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 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.)

On August 22, the SCC entered an Order requiring Dominion “to immediately resume processing enrollment requests under Section A 5 for customers who wish to purchase” renewable energy from the CSPs. The SCC’s Order, however, did not rule on the merits of Dominion’s Petitions. A final ruling on whether or not Dominion’s proposed conditions should be imposed on CSPs is still pending. The transcript from the August 20 hearing is now posted online. 

 (2) Dominion files direct testimony supporting approval of battery storage pilot program – Case No. PUR-2019-00124

 Dominion has requested approval to implement three battery storage projects, including one storage project at an existing utility scale solar facility. Dominion proposes to deploy two 2 MW batteries at existing substations and a 10 MW system at the company’s Scott solar facility. The total cost of the facilities is approximately $33 million. The 2018 Grid Transformation and Security Act directed the SCC to conduct a battery storage pilot program, and for Dominion to file an application proposing new storage resources. The legislation also provided that the costs of the battery storage pilot program shall be recovered through Dominion’s rates. This means that customers will not see a separate rate adjustment clause rider on their electric bills. The SCC will hold an evidentiary hearing on January 14, 2020. Interested parties may intervene on or before October 15.

 (3) SCC establishes new rulemaking to evaluate changes to net metering regulations – Case No. PUR-2019-00119

 

The SCC has established a rulemaking docket to consider changes to Virginia’s net metering regulations for customers of cooperative utilities. The SCC noted that in 2019, the General Assembly amended the net metering statute for customers of Virginia’s electric cooperatives. These amendments added new Code sections to “(1) introduce new caps on participation in net metering by customers of electric cooperatives; (2) authorize electric cooperatives to vote to increase these caps up to a cumulative total of seven percent of their system peak; (3) permit third-party partial requirements power purchase agreements for those retail customers and nonjurisdictional customers of an electric cooperative that are exempt from federal income taxation; and (4) establish registration requirements for third-party partial requirements power purchase agreements, including a self-certification system whereby such providers would be added to a registry maintained by the Commission's Division of Public Utility Regulation.”

The SCC is permitted by law promulgate regulations when necessary to implement utility laws passed by the General Assembly. The Commission’s order establishing the proceeding included draft rules; interested parties may comment on the draft rules or request a hearing on or before October 11.

 (4) Dominion continues to propose 10 new gas plants in update to its Integrated Resource Plan – Case No. PUR-2019-00141

 On August 30, Dominion filed its 2019 IRP update. The purpose of IRP “update” filings is to notify the Commission of any major changes in the utility’s planning that occur between the years when full IRPs are filed. Dominion stated that its objective in its 2019 IRP update “is to provide a discussion of significant events requiring a major revision to the [2018 IRP].” Dominion notes that “the regulation of electric sector carbon dioxide emissions remains the most significant uncertainty,” but Dominion believes that carbon regulation is now “imminent.” Dominion also notes that it recently “committed to an 80% reduction in greenhouse gas emissions by 2050” and also put forth a five-year plan that includes development of offshore wind, a new pumped hydroelectric storage facility, additional solar photovoltaic resources, and distribution system modernization.” Nonetheless, the IRP update still includes 2,400 MW of new gas-fired combustion turbine generating facilities between 2019 and 2044. The IRP update does not address Dominion Energy’s continued investment in the Atlantic Coast Pipeline, which Dominion Energy has said will supply existing and new natural gas generation facilities.

Natural gas cases

 (1) Dominion seeks approval of new affiliate agreement for natural gas and fuel oil purchases – Case No. PUR-2019-00137

 Dominion is seeking SCC approval of a revised fuel procurement agreement between two subsidiaries of Dominion Energy. The two affiliated companies buy and sell natural gas and fuel oil and manage Dominion’s fuel procurement activities. Dominion is requesting approval of the agreement under Virginia’s Affiliates Act (Chapter 4 of Title 56). The Affiliates Act requires the SCC to approve agreements between regulated utilities and affiliated companies.

 

 (2) Hearing transcript posted from Roanoke Gas rate case hearing – 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, and Sierra Club has argued that investments in new MVP-related infrastructure are imprudent.

 

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.” The transcript from the August 14 evidentiary hearing is now posted online.

  

(3) SCC approves VNG request to update its SAVE Rider – Case No. PUR-2019-00095

 On August 29, the SCC approved Virginia Natural Gas’s (“VNG”) request 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.

Notable SCC filings for week of August 19-23, 2019

Electric cases

 

(1) SCC grants suppliers’ motion in dispute over renewable energy sales – Case Nos. PUR-2019-00117 and PUR-2019-00118

Dominion has filed requests for 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 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 CSPs promptly filed a motion requesting the SCC to compel Dominion to resume processing enrollments while this case is pending.

 The SCC held a hearing on the merits of these cases on August 20. The respondents, including the CSPs and other interested parties, all argued that Dominion is seeking to impose a “real time” or “around-the-block” supply standard, which the SCC has repeatedly rejected. On August 22, the SCC entered an Order requiring Dominion “to immediately resume processing enrollment requests under Section A 5 for customers who wish to purchase” renewable energy from the CSPs. The SCC’s Order, however, did not rule on the merits of Dominion’s Petitions. A final ruling on whether or not Dominion’s proposed conditions should be imposed on CSPs is still pending.

 

(2) Dominion files petition for reconsideration regarding coal plant environmental rider case – Case No. PUR-2018-00195

 In late 2018, Dominion applied for SCC approval for a RAC to recover the costs for new coal ash ponds and treatment facilities. On August 5, the SCC entered a Final Order approving most of the request, but disallowing $18.4 million of investments made at Chesterfield Units 3 and 4. 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, the Commission found, it was not reasonable to make continued investments in units that Dominion should have known would soon be retired.

 On August 23, Dominion filed a Petition for Reconsideration of this disallowance. Dominion argued that “the Commission’s finding of imprudence … is against the great weight of the evidence in this proceeding … which clearly establishes that the costs for which the Company seeks recovery in this proceeding were both necessary and prudent.” Dominion also claims that the SCC’s decision “is inconsistent with the historic application of any prudence standard and otherwise contrary to the principle of reasonable discretion being afforded to utility decision-making.” In its decision, the SCC relied in part on Va. Code § 56-585.1 D. This statute provides that the SCC has the authority to determine the “reasonableness and prudence” of any cost sought to be recovered pursuant to a proceeding brought under Va. Code § 56-585.1, including environmental RAC proceedings. Dominion, however, argued that the SCC’s reliance on this statute to disallow costs “is an open legal question.”

 The Commission could either grant the Petition for Reconsideration and further explain its reasoning for disallowing the investments at Chesterfield 3 and 4, or the SCC could ignore the Petition altogether. Dominion has the right to appeal the Final Order to the Virginia Supreme Court by filing a notice of appeal on or before September 4.

 

 

(3) SCC extends time period for reviewing Atlantic Coast Pipeline LLC-Dominion Energy Virginia affiliate transaction – Case No. PUR-2019-00106

 Dominion Energy Virginia and Atlantic Coast Pipeline LLC (“ACP LLC”) are requesting SCC approval of a water withdrawal agreement under Virginia’s Affiliates Act (Chapter 4 of Title 56). ACP LLC wants permission to withdraw water from a quarry owned by Dominion Energy at Dominion’s Bath County hydroelectric facility. Dominion states that “the water is needed to conduct testing relative to the tightness, pressure, and integrity of the Pipeline during construction.” ACP LLC proposes to pay Dominion for the water at a rate that is equivalent to the residential per-gallon rate in the surrounding area. The Affiliates Act requires the SCC to approve all agreements between regulated utilities and affiliated companies. ACP LLC is comprised of subsidiaries of three energy companies: Dominion Energy, Duke Energy, Southern Company Gas, and Piedmont Natural Gas. A subsidiary of Dominion Energy holds a 48% stake in ACP LLC.

Dominion asserts that the agreement is “is in the public interest because it will facilitate the construction, operation and maintenance of the Pipeline and related facilities … which will help to meet the need for additional sources of natural gas supply for the Company’s natural gas-fired power stations throughout its service territory, as well as other unaffiliated end-users.”

 The Affiliates Act requires the SCC to act on applications within 60 days of filing, but allows the SCC to extend this time period by up to 30 days. Dominion’s application was filed on June 28; the SCC must complete its review of this application by September 28. The SCC previously declined to exercise jurisdiction under the Affiliates Act over natural gas contracts between Dominion and ACP LLC. (See Case No. PUR-2017-00061).

 

(4) SCC establishes procedural schedule for review of Dominion request for approval of solar power purchase agreement – Case No. PUR-2019-00133

 Dominion is requesting SCC approval to enter into a PPA with a third-party generator to purchase the output of a 20 MW solar facility in Westmoreland County. Dominion’s application notes that the General Assembly, pursuant to the 2018 Grid Transformation and Security Act, found that it is “in the public interest” for utilities to construct or purchase up to 5,000 MW of new solar and wind generation by 2028. Dominion states that it will recover the costs of the PPA through its base rates and fuel clause. The Commission has previously expressed its preference for Dominion to enter into PPAs for renewable energy as opposed to building and owning generation. (See Case No. PUR-2018-00135). A hearing on the application will be held on October 8. Interested parties may intervene or file comments on this case on or before September 11, 2019.

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.

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.