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.