Tel: 804.864.1100

Tel: 804.864.1100

energy lawyer

We’re Back at TomTom to Support Renewable Energy

On Wednesday, April 10, the TomTom Festival and Summit will hold its Renewable Energy Day in Charlottesville, Virginia, during the six day-long series of panels, speakers, podcasts, performances, parties and other notable goings about art, community, food, music, creative and entrepreneurial ecosystems, and innovation. We’re proud to be a sponsor again, and we are focused on the 9 AM panel “The Economic Development Opportunity of Renewable Energy.”

Many of our lawyers will be attending, and our partners Eric Hurlocker, Brian Greene and Jared Burden will be in Charlottesville to welcome you personally and to talk to you about the work we’re doing in renewable energy development and regulation. In addition, we would be glad to have the opportunity to introduce you to our OPENgc services for companies that currently operate without inside general counsel. If you don’t see us at the panel or breaks, come on to the exhibit area where we will try to answer your questions and send you home with a few small gifts.

If you are interested in knowing more about our TomTom sponsorship, the renewable energy industry or have a legal issue that you need to discuss, please feel free to contact Eric Hurlocker, Brian Greene, Jared Burden or any of our Virginia energy lawyers and business lawyers.

Maryland PSC Requests Comments on New RFP for Retail Suppliers

The Maryland Public Service Commission issued a Notice of Opportunity to Comment seeking comments on a new “Retail Supplier Load Shaping RFP.” The Commission want to consider “programs designed to demonstrate the ability to shape residential load profiles using innovative business models.” Comments on the RFP, a copy of which is attached to the Notice, are due April 9, 2019.

The RFP states that:

“The primary goal of this RFP is to identify pilots that demonstrate an ability to shape customer load profiles through load shifting, peak shaving, and energy efficiency. Applicants can propose any mechanism for load shaping such as sending appropriate price signals (real time rates), using technology to control usage (controllable thermostats), payment of rebates or behavioral modification treatments. A secondary goal is to test whether load shaping can lower customer bills or reduce the customers’ overall effective rate for electricity by avoiding energy usage during high cost periods. Customer satisfaction will be surveyed at the pilot’s conclusion.”

There’s some background here. In early 2017, the Commission established Public Conference 44 with various working groups. Three working groups involved areas where the retail supply market could be improved or could expand to provide additional services to Maryland customers. One of those working groups involved rate design issues and sought to develop TOU pilot programs. The Commission approved TOU programs for the utilities, which are now being marketed to customers. The Commission also approved an RFP to establish retail supplier programs. However, and the Commission in November 2018 issued a letter order holding that the bids received were not compliant and directed the utilities to reject them.

The Commission has now proposed changes to the prior RFP and has issued the current Notice to elicit more involvement from retail suppliers in a rate design program. The Commission seems determined to engage the retail supplier community in this effort, stating that, “[a]s Maryland moves forward with grid modernization, the retail supply community can play an important role in supporting policy goals, including more active efforts to shape load profiles.”

If you have questions or would like more information about community solar projects or other regulatory issues, contact Brian Greene or any of our mid-Atlantic energy lawyers.

Maryland Solar Groups Seek Community Solar Utility Consolidated Billing

On March 20th, the Climate Access Fund and Solar United Neighbors of Maryland filed a petition asking the Maryland Public Service Commission to require Maryland utilities to provide consolidated billing for subscriber organizations participating in Maryland’s Community Solar Pilot Program. The petitioners want utilities to include community solar subscription charges on customer bills. Today, subscriber organizations have to separately bill community solar subscribers. The stated objective of the petition is to make consolidated billing available for low and moderate income customers, helping to improve the economics of participating in the program. Two alternatives are proposed in the petition: (1) consolidated billing for all subscriber organizations or (2) consolidated billing for low and moderate income-focused community solar projects only.

We will be on the lookout for a response from the Commission and opportunities to comment on the community solar consolidated billing proposal. If you would like to review the filing, a copy of the petition is available on the Maryland Public Service Commission’s website: Mail Log # 224384.

For more information about Maryland’s Community Solar Pilot Program, check out our previous blog posts:

Maryland Proposes Community Solar Pilot Program Regulations
Community Solar Growing in Mid-Atlantic
Continued Progress for Community Solar in Maryland

If you have questions or would like more information about community solar projects or other regulatory issues, contact Eric Wallace or any of our mid-Atlantic energy lawyers.

Virginia Commission Denies Walmart’s Request to Shop for Electricity

On February 25, 2019, the Virginia State Corporation Commission entered a Final Order denying Walmart’s petitions seeking permission under Va. Code § 56-577(A)(4) (“Section A 4”) to aggregate or combine the demands of certain electricity accounts. Walmart had filed a petition to aggregate 120 accounts in the Dominion service territory and 44 accounts in the Appalachian Power service territories. Had the petitions been approved, Walmart intended to enter into a contract to purchase electricity from its affiliate, Texas Retail Energy, but would remain as a distribution customers of the utilities. But, the Commission denied both petitions.

Under § 56-577(A)(4), nonresidential customers can aggregate their load to hit the 5 MW floor needed to switch electricity supply from the customer’s utility to a competitive service provider (“CSP”). Section A 4 requires the customers to seek Commission approval to aggregate. A company like Walmart must seek permission because the Code treats non-contiguous sites that are under 5 MW as separate customers. The Commission may approve the petition if it finds that: (1) “neither such customers’ incumbent electric utility nor retail customers of such utility that do not choose to obtain electric energy from alternate suppliers will be adversely affected in a manner contrary to the public interest by granting such petition,” and (2) “approval of such petition is consistent with the public interest.”

In the Final Order, the Commission found that remaining customers would be adversely affected in a manner contrary to the public interest. The Commission cited to alleged costs that would be shifted to remaining customers attributable to the loss of Walmart’s load. The Commission also cited to the alleged bill impacts that the utilities presented in the cases which purported to show the increases to an average residential customer’s monthly bills in the event Walmart was allowed to shop. The Commission also cited to the potential for lower earned returns for the utilities and found that the potential for load growth in a utility service territory did not matter.

The Commission determined that “the harm to customers who do not, or cannot, switch to a CSP is contrary to the public interest.” The Commission noted that the vast majority of Dominion and APCo customers have no ability to shop for solely lower prices. The Commission discussed that since 2007, the average Dominion and APCo residential customer has seen monthly bills increase by $48 (73%) and $26 (29%), respectively, and that with the mandates in Senate Bill 966, passed in 2018, more increases are likely to come.

Of course, there were numerous arguments presented by Walmart and other parties in the proceedings that addressed and countered the Commission’s findings summarized above.

The Commission concluded that if Walmart believes the current statutory structure results in rates that are too high, or that the public policy of Virginia should be to institute retail choice on a far more extensive scale than required under current law, “its potential for recourse may be found through the legislative process.” That process would begin with the 2020 legislative session because the 2019 sessions ended on Sunday, February 24 — the day before the Commission entered the Final Order.

The case numbers are PUR-2017-00173 (Dominion) and PUR-2017-00174 (APCo). Follow those links to see all the documents, including the Final Order, filed in each case. If you have questions about these cases, electricity purchases or rates, or need legal counsel regarding electricity regulation, please contact one of our Virginia regulatory lawyers.

SCC: Dominion Must Refile Its 2018 IRP

On Friday, December 7, the Virginia State Corporation Commission (“SCC” or “Commission”) entered an order directing Dominion Energy Virginia (“Dominion”) to revise and refile its 2018 Integrated Resource Plan (“IRP”). This order is significant in that the SCC has never rejected an IRP, or required a utility to refile its plan. We discuss several takeaways from this order below.

What is an IRP?

An IRP is a utility’s plan to meet customer demand and service obligations over a 15-year planning horizon. The IRP statute, Va. Code Section 56-599, directs utilities to evaluate various options to meet forecasted demand, including building new generation; entering into power purchase agreements with third parties; purchasing energy from the PJM market; and investing in energy efficiency resources. The statute directs the Commission to review the utility’s plan and to “make a determination … as to whether [the IRP] is reasonable and is in the public interest.” It is important to note that an IRP is not binding on the Commission or the utility in any way. The Commission states that approval of an IRP does not create any presumption that any particular resources are prudent.

Before determining whether Dominion’s 2018 plan is “reasonable,” however, the Commission wants more information. In particular, the SCC wants Dominion to update several aspects of the modeling used to generate the plan. Dominion was directed to provide these new modeling results within 90 days of the order.

“True Least Cost Plan”

First, the SCC wants Dominion to provide what it calls a “true least cost plan” that will “serve as a benchmark against which to measure the costs of all other alternative plans.” The Commission wants to know what Dominion’s modeling software would select if it were permitted to choose the least-cost resources to meet the company’s forecasted demand. The Commission’s order asserts that Dominion – instead of letting the model choose the lowest-cost resources mix – actually “forced” certain resources into the IRP. The Commission referenced Dominion’s offshore wind demonstration project as a resource that was “forced” into Dominion’s alternative plans.

“SB 966 Plan”

Second, the Commission wants Dominion to file a plan that incorporates all of what the SCC calls the Senate Bill 966 (“SB 966”) “mandates.” This legislation declared that it is “in the public interest” for Virginia utilities to construct or acquire up to 5,500 MW of new renewable energy resources. The legislation also referenced certain distribution and transmission undergrounding priorities. (Note that the Commission, in this and other orders, characterizes the priorities outlined by the General Assembly as “mandates.” The use of this term, however, is misleading when applied to renewable energy. SB 966, while declaring such renewable energy projects to be “in the public interest,” does not require utilities to make these investments, nor does it require the Commission to approve them.)

By requiring both a “Least Cost Plan” and a “SB 966 Plan,” the Commission wants to estimate the incremental costs of the SB 966 investments. The SCC may want to include this estimate in its final order on Dominion’s IRP. Moreover, the Commission may choose to include this analysis in one of the written reports provided Governor and the General Assembly regarding the implementation of Virginia’s electric regulation statutes.

Anticipated load growth

Next, the SCC directed Dominion to utilize the PJM load forecast for the Dominion Zone, which has a 15-year growth rate of 0.8%, versus Dominion’s 1.4%. At the evidentiary hearing, the Commission Staff and environmental advocates argued that Dominion’s internal load growth was too high, thus overstating the for need for new generation.

Solar capacity factors

The Commission also directed Dominion to update its modeling to use a 23% capacity factor for its solar facilities. A generation plant’s capacity factor represents the amount of time it is available and generating electricity. Dominion’s IRP assumes that new solar resources will achieve capacity factors of 26%, in part due to the use of single-axis tracking facilities which follow the sun, resulting in greater production. But the Commission noted that Dominion’s “existing [solar] resources have experienced actual capacity factors of approximately 20% on average over the last five years.” Therefore, the SCC split the difference between the actual, observed capacity factors and those forecasted by Dominion. The solar industry supported Dominion’s capacity factor projections, finding them to be achievable.

Pipeline and fuel costs

Finally, the Commission’s order does not address the proposed Atlantic Coast Pipeline (“ACP”), which would be constructed by affiliates of Dominion and may serve some of the company’s gas generation facilities. The SCC previously declined to review the ACP fuel supply contracts under the Virginia Affiliates Act, a statute which directs the Commission to approve any contracts entered into between public utilities and their affiliates.

The Commission did direct Dominion, in a footnote, to “include a reasonable estimate of fuel transportation costs … associated with natural gas generation facilities.” This could be an indication that the Commission does not believe Dominion’s forecasted gas costs are reasonable. Elsewhere in its order, however, the Commission seemed to express concern that “[Dominion’s] modeling was not permitted to select highly-efficient natural gas-fired combined-cycle facilities” and as a result Dominion’s modeling “forces in higher-cost resources [while] excluding other lower-cost resources [which] results in a more expensive plan.”

The SCC’s Order and other documents for this case are available online in Docket No. PUR-2018-00065. GreeneHurlocker represented the Solar Energy Industries Association in the evidentiary hearing at the SCC.

Should you have any questions about this case, please contact one of our energy regulatory attorneys.

Renewable Energy Down South

Later today, we will be heading to Atlanta for the Southeast Renewable Energy conference being held at the Westin Atlanta Perimeter Hotel. We’re going to this networking event where the entire southeast renewable energy community gathers to get the latest insights into the market and to meet key players as well as clients and colleagues.

In the sessions on Thursday and Friday, we hope to learn about the key trends impacting renewable energy project development, finance and investment; meet with utility procurement managers; and engage in networking with the decision-makers who are driving the industry forward. If you are planning to attend, please look for me and let’s talk about renewable energy in Virginia and the Mid-Atlantic.

If you have questions about or issues in renewable energy, just contact any of our renewable energy lawyers.

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.

We Shed Some Light on Solar PPAs in Fairfax

We were pleased to be involved in the Sierra Club’s presentation organized for local governments in the Northern Virginia area last month, as we detailed here. Afterward, the Sierra Club said:

“This briefing was sponsored by the Great Falls Group and held at the Fairfax County Government Center to educate the participants on the budget-neutral tools of solar Power Purchase Agreements (PPA) and Energy Savings Performance Contracts (ESPC). Presentation and handout information is available on the GFG website and the video recording is here.

Debra Jacobson had a lot of positive feedback from this event. There will be an article on this event for the next GFG Cascade.”

Here are a few pictures of the audience at the Government Center and Eric Hurlocker opening the panel.

If you want to know more about this meeting, Power Purchase Agreements, Energy Savings Performance contracts, or other issues in the renewable energy field, contact any of our energy lawyers.

Heading North for the Sierra Club

I am excited to have been invited by the Great Falls Group of the Sierra Club to join in the “Clean Energy Financing Workshop for Local Governments” that will be held this Friday (September 7) from noon to 1:30 p.m. at the Fairfax County Government Center. I’ll be talking about one of our favorite topics: solar power purchase agreements (SPPA), an accessible way for financing renewable energy projects that local governments can use.

This brown bag lunch event is free, but registration is required as space is limited. If you can’t make it on Friday, I understand you can register as a virtual attendee and get access to the video after the session. Maybe I will see you there. If we miss each other, I can answer any questions about this topic or renewable energy development here, or just contact one of our renewable energy lawyers.