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.