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.