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.