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Author Archive: Will Reisinger

SCC Approves New Large Customer Renewable Energy Tariff

wind turbines and solar arraysThe Virginia State Corporation Commission (“SCC” or “Commission”) just approved a new tariff that will give customers of Dominion Energy Virginia (“Dominion”) an additional option to purchase renewable energy. On November 6, 2018, the SCC entered a Final Order approving Dominion’s application to offer a voluntary tariff designated “Rate Schedule RG.” The tariff is available to large, non-residential customers who agree to purchase the output, including all environmental attributes, from particular renewable energy facilities.

Participating customers may request to purchase the output from specific types of generation resources, such as solar and wind energy facilities. Dominion would either construct a new renewable facility or enter into a contract with a third-party generator to obtain the renewable energy necessary to serve the customer. Schedule RG, therefore, presents an opportunity for customers to choose the type of renewable energy they want to purchase. For example, a customer could request that Dominion enter into a contract with a particular generator. Or the customer could request the utility to build a new renewable facility on the customer’s premises or in a particular geographic location. The minimum facility size is 1 MW in nameplate capacity.

Participation in Schedule RG is capped at 50 customers. The tariff is also designed to ensure that non-participating customers do not subsidize any of the costs associated with Schedule RG. For example, Dominion may not place any of the Schedule RG facility costs in its rate base or the cost of service charged to non-participating customers.

The financial transactions supporting Schedule RG are complex. Participating customers would stay on their existing tariff and continue to pay all existing utility riders. At the same time, however, customers would pay a fixed price to purchase the renewable energy and would receive a “Schedule RG Credit” that is based on the wholesale price of energy and the capacity of the facility. In this way, the Schedule RG arrangement is like a financial “swap.” That is, participating customers would agree to pay a pre-determined renewable energy contract price, but would also receive the market price for the energy, which would be sold by Dominion in the PJM wholesale market. Thus, Schedule RG is designed to approximate the actual market cost of renewable energy from particular generating facilities.

Several parties intervened in the case, including Walmart and two renewable and advanced energy trade associations. While several parties offered comments on the proposal, no party to the case opposed Schedule RG.

The SCC approved the application subject to several reporting requirements. The SCC also held that Schedule RG will expire after three years if no customers participate.

Finally, it is important to note that Schedule RG was not approved under Va. Code § 56-577 A 5 and would not constitute a 100% renewable energy tariff under this statutory provision. As we explained in our Regulatory Guide, this Code section authorizes any Virginia customer to purchase electricity “provided 100% from renewable energy” from non-utility suppliers, so long as the customer’s incumbent electric utility does not offer an SCC-approved tariff for 100% renewable energy. Therefore, if Dominion received approval to offer a 100% renewable energy tariff pursuant to Va. Code § 56-577 A 5, Dominion customers would lose their existing rights to shop for such energy.

Currently, no Virginia utility offers an SCC-approved 100% renewable energy tariff. Dominion and Appalachian Power have both applied for approval to offer such tariffs, which thus far have been rejected. In the last three years, the SCC has rejected two 100% renewable tariffs proposed by Appalachian Power and one proposed by Dominion. Dominion currently has one application pending, which would be available to residential and small commercial customers.

The SCC’s Final Order in Schedule RG, Case No. PUR-2017-00163, is available here. If you have any questions about Schedule RG or other renewable energy options offered by Virginia utilities, please contact one of our energy regulatory attorneys.

SCC Approves First Renewable Energy Projects

offshore wind projectOn Friday, November 2, the Virginia State Corporation Commission (“SCC” or “Commission”) approved the first major renewable energy investments by Dominion Energy Virginia (“Dominion”) following the passage of Senate Bill 966 (“SB 966”), the sweeping utility overhaul legislation enacted in March. SB 966 provides that it is “in the public interest” for Dominion and Appalachian Power Company to purchase or construct up to 5,000 MW of new wind and solar energy resources. The legislation specifically states that a wind demonstration project located off Virginia’s coast would be “in the public interest.”

The SCC approved a 12 MW, $300 million offshore wind demonstration project proposed by Dominion, which will be constructed 27 miles off the coast of Virginia Beach. While finding the project to be prudent, the SCC’s Final Order strongly suggests that the application would have been rejected absent legislation deeming such projects to be “in the public interest” as a matter of law.

The Commission’s Final Order stated that the wind proposal “would not be deemed prudent [under this Commission’s] long history of utility regulation or under any common application of the term.” The SCC noted that the offshore wind project, which will be constructed by a Danish energy developer, was not subject to competitive bidding and that the energy costs will be “26 times greater than purchasing energy from the market” and “13.8 times greater than the cost of new solar facilities.” Finally, the Commission found that the project is not needed for Dominion to ensure reliability or meet any forecasted demand. Nonetheless, the Commission concluded that, “as a matter of law,” the Commission’s “factual analysis” of the reasonableness of the project is “subordinate [to] the legislative intent and public policy clearly set forth [by the 2018 amendments.”

The Commission also approved Dominion’s request to purchase 80 MW of solar energy via a power purchase agreement (“PPA”) with a non-utility company, Cypress Creek Renewables. The Commission noted that, unlike the offshore wind project, Dominion customers would be protected from financial and performance risks of the project since the utility is purchasing the energy from private developers.

The Final Order in the offshore wind matter (Case No. PUR-2018-00121) is available here and the Final Order in the solar PPA matter (Case No. PUR-2018-00135) is available here. Please contact one of our energy regulatory attorneys if you have questions about either of these cases.

Client Alert: Dominion In the Market for Solar, Wind

On October 24, 2018, Dominion Energy Virginia (Dominion) announced and issued an RFP seeking 500 MW of solar and on-shore wind generation. Projects must be at least 5 MW. Interested bidders can propose to either sell Dominion the project development assets or sell energy to Dominion under a Power Purchase Agreement. Projects must be located in the Commonwealth of Virginia to be eligible.

The RFP schedule is as follows:

Intent to Bid forms due: This Friday, November 2, 2018
Proposals to sell development assets due: December 13, 2018
Proposals to sell energy (PPA) due: March 14, 2019
RFP concludes: Second Quarter 2019

Dominion has pledged to have 3,000 megawatts of new solar and/or wind energy under development or in operation by early 2022. Dominion also announced that it will issue formal RFPs on an annual basis until the 3,000 MW target is met.

If your company has questions or would like any additional information regarding the Dominion RFP, please contact one of our renewable energy attorneys or utility attorneys.

SCC Sets Procedural Schedule for Dominion Grid Application

On July 24, 2018, Dominion Energy Virginia (“Dominion”) filed a Grid Transformation Plan with the Virginia State Corporation Commission (“Commission” or “SCC”). The SCC has entered a procedural schedule for this case and set an evidentiary hearing for November 15, 2018.

Dominion’s grid plan proposes to invest approximately $816 million in projects designed “to enhance the reliability, resiliency and security of the electric distribution grid.” Dominion also states that the plan will “facilitate the integration of distributed energy resources, such as solar or battery storage, into the system.” Dominion proposes to make the $816 million in investments over a three-year period, between 2019 and 2021. In particular, the utility wants to install approximately 1.4 million smart meters throughout its service territory between 2019 and 2021. There is more about the request here.

The filing also outlines the utility’s longer-term grid transformation priorities. Over 10 years, Dominion proposes to invest over $3.1 billion in grid transformation investments. These investments would include additional smart meters and other “advanced metering infrastructure” as well as reliability improvements and “grid hardening” projects. Dominion’s plan includes proposals to replace certain aging distribution facilities and increase the company’s physical and cyber security capabilities.

The application is filed pursuant to recently enacted legislation, Senate Bill 966, passed by the General Assembly and signed by Governor Northam earlier this year. Dominion’s petition requests the SCC to find that the plan is “reasonable and prudent.” The legislation provides that “grid transformation projects” are “in the public interest.” However, the law does not require the Commission to approve any of the proposed investments.

Dominion does not request cost recovery in its filing or explain whether the spending plan would result in rate increases for customers. This case has been docketed as Case Number PUR-2018-00100. Interested parties have until September 11, 2018, to intervene in this case.

If you want to know more about how this filing may affect energy markets in Virginia or have a legal issue in the energy field, please contact any of our renewable energy lawyers.

Legal Debrief On Virginia’s Energy Future After SB 966

Obstacles and Opportunities for Clean Energy Development
June 20, 2018 – 10:00 a.m. – 11:30 a.m.
Virginia Bar Association VBA on Main professional space at 1111 East Main Street, Suite 905, Richmond, 23219

wind turbines and solar arraysEric Hurlocker and Will Reisinger of GreeneHurlocker are assembling a panel of experts to discuss and debate the implementation of the 2018 Virginia General Assembly’s SB 966, including the opportunities for renewable energy development and the legal obstacles to implementation.

On Wednesday, June 20, all are invited to our free look into the changes in regulatory environment and legal issues brought on by the recent session of the General Assembly. Joining us will be Will Cleveland, Staff Attorney, Southern Environmental Law Center; Matt Gooch, Assistant Attorney General, Office of the Virginia Attorney General; and Francis Hodsoll, co-founder, SolUnesco. Please RSVP for this free event here.

We’ll start at 10:00 a.m. with an introduction and background regarding Virginia’s laws regulating electric utilities and overview of 2018 Senate Bill 966. At 10:30 a.m. our panel will discuss whether SB 966 will advance or impede competition for renewable energy; whether it will be subject to challenge under the dormant commerce clause; and whether additional policy changes are necessary to advance renewable development in Virginia. The panel will be moderated by Will Reisinger.

Each participant will receive a copy of the recently revised Guide to Electric Utility Regulation in Virginia. 1.5 hours Virginia CLE pending.

If you have any questions about this debrief, please contact Eric, Will or any of the other Virginia regulatory lawyers at GreeneHurlocker.

Dominion Proposes Significant New Solar and Gas-Fired Generation

On May 1, Dominion Energy Virginia (“Dominion”) filed its 2018 Integrated Resource Plan (“IRP”) at the State Corporation Commission (“SCC”). In Virginia, an IRP is a utility’s proposal for meeting customer demand over the next 15 years. An IRP is a planning document and does not represent a commitment to pursue any particular course of action. Instead, it is the utility’s best assessment, at a particular point in time, regarding which resources it will deploy over the planning horizon.

The SCC must review Dominion’s IRP and decide whether the plan is “reasonable and in the public interest.” Generally, interested parties are able to present arguments and testimony regarding the reasonableness of the plan.

Dominion’s 2018 filing includes five alternative scenarios. The key variable in the alternative plans is carbon regulation. For example, the IRP includes different modeling based on whether a carbon tax is imposed at the federal or state level, or whether the Commonwealth joins the Regional Greenhouse Gas Initiative.

In each alternative plan, Dominion proposes to add at least 4,700 MW of new solar capacity in the next 15 years. Dominion also proposes to add between 3,700 and 5,200 MW of new gas-fired generation. Dominion suggests that these new gas facilities will be used as “peaking resources,” which run when necessary during periods of increased demand, such as on hot summer days when there is greater need for air conditioning. The also IRP assumes that Dominion’s peak demand will increase 1.4% each year.

The IRP indicates that the proposed Atlantic Coast Pipeline (“ACP”) will be a supply source for the new gas facilities. Dominion states that it has already signed an agreement to “secure firm transportation services on the Atlantic Coast Pipeline.” Dominion’s parent company, Dominion Energy, is one of the developers of the ACP.

Finally, the IRP assumes that Dominion’s four nuclear reactors will receive federal approval to remain operational throughout the planning period. However, Dominion says that it will “pause material development activities for North Anna 3,” a third nuclear reactor that the company was planning to construct at its nuclear facility in central Virginia.

The IRP notes that Senate Bill 966, which was enacted by General Assembly earlier this year, will become effective on July 1 of this year. This legislation is intended to encourage investments in renewable energy and “grid transformation” projects. The legislation requires Dominion to propose at least $870 million in energy efficiency programs over the next 10 years.

Dominion states that it “has begun the initial planning associated with a transformational grid modernization effort.” These “grid transformation” efforts will include investments in smart meter technology, distribution substation automation, “replacing aging infrastructure,” and an “enhanced customer information platform” to allow customers to manage their energy consumption. Although the IRP notes that Senate Bill 966 requires the company to propose $870 million in efficiency programs over the next 10 years, the IRP does not identify what type investments might be made.

We expect the SCC will enter an order for notice and hearing in the coming weeks. The SCC’s order will include deadlines for intervention, expert witness testimony submissions, and a date for the evidentiary hearing.

If you have any questions about Dominion’s IRP, or other electric energy matters, please contact one of GreenHurlockler’s renewable energy or regulatory lawyers.

Panelist Reisinger and Solar Energy in Virginia

Will Reisinger and other panelists for the rginia Renewable Energy Alliance LEAD conferenceWill Reisinger was a panelist at the Virginia Renewable Energy Alliance’s Leadership in Energy Advancement and Development conference on April 26 at the McGuireWoods law firm in Richmond. The panel discussed the status of Virginia’s energy market and recent legislation intended to encourage solar energy development. Will highlighted some of the opportunities for expanded renewable energy investments in Virginia, as well as several remaining legal and regulatory obstacles.

If you would like to know more about the state of solar energy in Virginia or the legislative environment, contact Will or any of our GreeneHurlocker energy lawyers.

Dominion, Appalachian Power Dispute SCC Decision

SCC CASE UPDATE:

Last week we told you about an important State Corporation Commission (“SCC” or “Commission”) decision that could expand access to competitive electric supply in Virginia. The SCC approved a request filed by a group of manufacturing customers to combine their demands for purposes of shopping for competitive electric supply. The SCC found that their request was “in the public interest.” The SCC approved the customers’ application over the objections of both Dominion Energy Virginia (“Dominion”) and Appalachian Power Company (“APCo”). Dominion argued that allowing the companies to shop for competitive electric supply would “erode a significant portion of the utility’s jurisdictional customer base.”

Both utilities are now appealing the decision to the Virginia Supreme Court. Dominion filed a notice of appeal with the SCC on March 21, while APCo filed its notice on March 15. The utilities have not yet filed their assignments of error (i.e., their grounds for appealing the decision).

Appeals from the SCC are “of right,” meaning the Supreme Court is required to hear any case that’s properly appealed.  While the Court can overturn any of the Commission’s findings, the Court usually gives deference to the SCC. The Court has frequently said that SCC decisions are “entitled to the respect due judgments of a tribunal informed by experience” and that Commission orders won’t be disturbed if “based upon the application of the correct principles of law.”

We’ll keep you updated on the status of this important case. If you want to talk about this case, the SCC’s role, or energy law and regulation, just call any of our energy lawyers.

SCC Decision Expands Access to Competitive Electric Supply

transmission towers for electricityWhile many political observers were focused on Senate Bill 966, the omnibus utility legislation that was just passed by the General Assembly, the Virginia State Corporation Commission (“Commission” or “SCC”) recently issued an important decision affecting customers’ rights to purchase energy from competitive suppliers.

On February 21, 2018, in Case No. PUR-2017-00109, the Commission approved the first ever “customer aggregation” petition under § 56-577 A 4 of the Code of Virginia. As explained in detail below, this section of the Code allows customers to aggregate their demand for the purposes of satisfying the 5 MW demand threshold required to purchase generation from non-utility companies.

In most circumstances, Virginia’s incumbent electric utilities, including Dominion Energy Virginia (“Dominion”), have a monopoly on the sale of electricity in their service territories. Customers must purchase energy from their utility. Virginia law, however, provides two exceptions to the utilities’ monopoly rights. (Under these two exceptions, customers may purchase generation from non-utility suppliers. But shopping customers must still pay for the utility’s distribution services.)

First, under Va. Code § 56-577 A 5, customers may purchase “100 percent renewable energy” from competitive suppliers if  the customer’s monopoly electric utility does not offer an SCC-approved 100% renewable energy tariff. No utility currently offers an SCC-approved 100% renewable tariff.

Second, Va. Code § 56-577 A 3 law allows large customers with annual demands over 5 MW to purchase generation from competitive suppliers. Importantly, the law also allows a group of customers to “aggregate” their demands in order to reach the 5 MW threshold. The statute treats large customers with multiple meter locations as different customers but allows them to aggregate to meet the 5 MW threshold. Once aggregated, the group will be treated as a “single, individual customer” under the law. Before allowing an aggregation, however, the Commission must find that the requested aggregation would be “consistent with the public interest.”

SCC Case No. PUR-2017-00109 was the first test of this statutory provision – that is, the first time a group of customers sought to combine their demands in order to reach the 5 MW threshold. In this case, Reynolds Group Holdings, Inc. (“Reynolds”), a metals and packaging manufacturer, petitioned the SCC for approval to aggregate six of its retail accounts in Dominion’s service territory.

Dominion and Appalachian Power Company (“APCo”) intervened in the case and opposed the petition. Dominion argued that allowing customers to aggregate their demand “would unreasonably expand the scope of retail access [and would] have the potential effect of eroding a significant portion of the utility’s jurisdictional customer base.” Dominion also suggested that the General Assembly – despite authorizing customer shopping and aggregation – intended to allow retail choice “only in limited circumstances.”

But the SCC, relying on the plain language of Va. Code § 56-577 A 4, rejected Dominion’s and APCo’s arguments and approved the petition. Dominion and APCo have until March 23, 2018, to appeal the decision to the Virginia Supreme Court.

The SCC is also currently considering additional aggregation requests filed by over 160 Walmart customer accounts in Case Nos. PUR-2017-00173 and PUR-2017-00174. (In both of these cases, GreeneHurlocker is representing competitive suppliers who are supporting approval of Walmart’s aggregation requests.)

Should you have any questions about customer aggregation or competitive supply options in Virginia, please contact one our regulatory attorneys.

Additionally, GreeneHurlocker recently published Principles of Electric Utility Regulation in Virginia, which provides a plain-English explanation of Virginia’s electric utility laws, including the statutes affecting retail choice.

Electric Utility Regulation Plain and Simple

As the 2018 General Assembly heats up, we expect energy issues to be front and center once again. That’s one of the reasons we just published Principles of Electric Utility Regulation in Virginia, a guidebook designed to provide a plain-English explanation of some of the state laws regulating Virginia’s two largest monopoly electric utilities.

Do you have questions about the role of the State Corporation Commission in setting rates? Wonder why you’re not getting a refund from your electric utility this year? Curious about whether energy companies are incentivized to invest in clean energy? This booklet answers these questions and provides a starting place for exploring Virginia’s complex regulatory system.

We hope this document will be a useful tool for legislators and their staff, the media, and all citizens who want to gain a better understanding of energy policy in Virginia. The link at the top will get you the electronic version immediately. If you would prefer your copy be a printed one, just contact Will Reisinger or any of our Virginia energy lawyers.