Tel: 804.864.1100

Tel: 804.864.1100

General Assembly

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.

Governor McAuliffe Conducts Clean Energy Signing Ceremony

Governor McAuliffe singing clean energy billsGreeneHurlocker attorneys Eric Hurlocker and Will Reisinger were among the invited guests attending the clean energy bill signing ceremony at the Governor’s mansion this morning. Governor McAuliffe signed eleven pieces of legislation passed by the 2017 General Assembly that will help promote further development of renewable energy in Virginia. The Governor noted that “Virginia is moving in the right direction, especially with the recent announcement of record growth in our solar industry, but there is still work to do.” The Governor also added that while there were only 17 MW of installed solar energy in Virginia at the beginning of 2014, the Commonwealth can now boast of over 1500 MW of solar generation that is either installed or under development today.

Among the legislation signed today was Senate Bill 1393 (Wagner), a community solar bill that will allow customers of Appalachian Power and Dominion to purchase 100% solar energy from new solar facilities located in Virginia. Customers will be permitted to voluntarily “subscribe” to a solar energy rate schedule. Currently, neither utility offers customers an option to purchase 100% solar energy.

Senate Bill 1395 (Wagner), also signed today, will expand the Virginia Department of Environmental Quality’s (“DEQ”) “permit-by-rule” (“PBR”) process to include larger renewable energy facilities. The PBR can often reduce the time and expense necessary to receive the state approvals required to begin construction and operation of a solar or wind facility. Senate Bill 1395 increases the facility size threshold, from 100 MW to 150 MW, which will allow more facilities to be permitted with fewer regulatory burdens from the state. Facilities receiving a PBR are exempted from State Corporation Commission review, so long as the project costs are not recovered from a utility’s ratepayers.

The Governor also signed House Bill 2390 (Kilgore), which will allow non-profit higher education institutions in Appalachian Power’s service territory to purchase 100% renewable energy from non-utility sellers. This bill is intended to address some of the economic challenges faced by colleges who wish to use renewable energy. House Bill 2390, by allowing non-profit colleges to purchase energy from third-party sellers, will permit these institutions to take advantage of federal tax benefits of renewable energy investments.

Please contact one of our renewable energy lawyers or regulatory attorneys should you have questions about these energy bills.

Get Your Lobby On! Virginia Clean Energy Lobby Days 2017

We’re big on advocating the expansion of development and use of renewable energy sources in Virginia and, as members of the Maryland-DC-Virginia Solar Energy Industry Association (MDV-SEIA), we show up on Clean Energy Lobby Day. CELD is an annual advocacy day which allows legislators and constituents to connect regarding energy policy under consideration by the General Assembly. It’s always a great time to talk with legislators and our industry partners.

This year, there will be two CELD opportunities at subcommittee meetings at the Capitol in Richmond: Thursday, January 26th, for the Senate Energy Subcommittee and Tuesday January 31st, for the House Energy Subcommittee. If you want more solar development, this might be a chance to make your opinion heard by the General Assembly. Come join us!

If you want to know more about MDV-SEIA, where GreeneHurlocker co-founder Eric Hurlocker serves on the Board, or about renewable energy development in Virginia, please call Eric or any of our Virginia energy lawyers.

Virginia’s Lawmakers Could Accelerate Renewable Energy Source Development

As the 2017 Regular Session of the Virginia General Assembly heats up, we are keeping a close eye on legislation that could support the development of additional solar energy in the wind turbines and solar arraysCommonwealth. As GreeneHurlocker attorney Will Reisinger recently noted in the Richmond Times-Dispatch, there is significant regulatory uncertainty in Virginia regarding the rights of utility customers to purchase solar energy. Reisinger told the Times-Dispatch that this legal and regulatory uncertainty “may be stifling the development of a lot of solar projects in Virginia.”

In particular, our attorneys will be reviewing the proposed legislation that emerges from the so-called “Rubin Group,” a group of energy stakeholders, including utilities and pro-solar advocates, that is moderated by Richmond lawyer and mediator Mark Rubin. The stakeholder group has been working for months to propose legislation that would encourage solar development, including investments by non-utility companies, while at the same time balancing the concerns of the utilities who must bear the costs to maintain the electric distribution system. Solar advocates generally want customers to have the freedom to purchase 100% solar energy – even if it is not offered by their incumbent electric utility. The utilities, meanwhile, are concerned that if more customers purchase solar generation from third-party solar suppliers, it could mean less revenue for maintenance of the electric grid.

Please contact one of our energy lawyers or regulatory attorneys should you have questions about the status of any energy legislation being considered by the General Assembly this year. Call it our sunny optimism, but we think solar energy has a bright future in Virginia!

Will Virginia’s “Rate Freeze Law” Stand? The $280 million (Per Year) Question.

The Supreme Court of Virginia Building, adjace...

The Supreme Court of Virginia Building, adjacent to Capitol Square in Richmond, Virginia (Photo credit: Wikipedia)

A group of industrial customers of Dominion Virginia Power (“Dominion”) recently asked the Supreme Court of Virginia to strike a controversial portion of the Virginia Electric Utility Regulation Act (“Regulation Act”). The group, the Virginia Committee for Fair Utility Rates (“Committee”), is challenging a 2015 amendment to the Regulation Act, Senate Bill 1349, which limits the state’s ability to regulate the electric rates of monopoly public utilities. The so-called “rate freeze law” prevents the State Corporation Commission (“SCC” or “Commission”) from reviewing or reducing the base rates of Dominion and Appalachian Power Company through at least 2022. If the Supreme Court strikes the law, it could mean a significant rate reduction for Dominion’s customers – to the tune of approximately $280 million per year. See our previous information about this topic here.

The rate freeze law is controversial because it prevents the Commission from reducing Dominion’s rates, even though the SCC has previously found that the monopoly utility’s rates are too high and are producing excess profits for Dominion’s shareholders. In its 2013 review of Dominion’s rates, the Commission found that Dominion’s current base rates are set at a level that will produce excess profits of approximately $280 million each year. The Committee’s appeal seeks to overturn the rate freeze law, which would presumably allow the SCC to lower Dominion’s rates substantially. The Committee has argued that if Dominion’s rates remain unchanged through 2022, Dominion’s shareholders will reap excess profits of “well over a billion dollars.”

The challenge was triggered by an SCC order late last year that applied the rate freeze law for the first time. In its Final Order in Dominion’s 2015 Biennial Review rate case, SCC Case No. PUE-2015-00027, a 2-1 majority of the Commission applied SB 1349 as written and declined to adjust Dominion’s base rates or set a new rate of return on equity for the company. Commissioner Dimitri, however, filed a dissenting opinion, stating that the rate freeze law violates Article IX of the Constitution of Virginia because it limits the SCC’s authority to regulate monopoly electric utilities such as Dominion.

The legal arguments advanced by the Committee are also based on Article IX of the Constitution of Virginia, which establishes the powers and duties of the SCC. Article IX, Section 2 provides that “Subject to such criteria and other requirements as may be prescribed by law, the Commission shall have the power and be charged with the duty of regulating the rates, charges, and services … of electric companies.” According to the Committee, therefore, the Commission’s authority to regulate electric rates is subject only to “criteria” and “other requirements” that may established by the General Assembly. By taking the authority to regulate electric rates away from the SCC, the Committee has argued, the rate freeze law runs afoul of Article IX.

Opening briefs in this case (Supreme Court Record No. 160453) are due June 3, and oral arguments are likely to be held during the Supreme Court’s fall term.

If you have any questions about any of the legal aspects of this case or its potential to affect the electric rates paid by Dominion’s customers, do not hesitate to contact one of GreeneHurlocker’s Virginia energy and regulatory attorneys.

Summary of DEQ’s Solar Permit By Rule (PBR) Requirement Small Solar Exemptions

We’ve examined in detail the Virginia Department of Environmental Quality (“DEQ”) changes to implement Virginia’s 2009 “Small Renewable Energy Projects” legislation (VA Code 10.1-1197.6). The statute moved authority from the State Corporation Commission (“SCC”) to DEQ over protection of natural resources (specifically wildlife and historic resources) with respect to renewable energy projects. Pursuant to the statute, DEQ has jurisdiction to approve PBR applications for solar projects with a rated capacity of 100 megawatts or less, while the SCC retains jurisdiction for projects with a rated capacity over 100 megawatts. DEQ’s regulations are set forth in 9 VAC 15-60 of the Virginia Administrative Code. The details are on our post here.

MDV-SEIA Sponsors Clean Energy Lobby Day Again

MDV-SEIA elogoOn February 9, 2016, the Maryland, DC, Virginia Solar Energy Industries Association (MDV-SEIA) and the Virginia Energy Efficiency Council will host Clean Energy Lobby Day (CELD) 2016. The event brings together the advanced energy businesses of Virginia with key legislators to advocate for clean technology bills and solar energy-friendly legislation. More than 100 business representatives from Virginia’s solar, wind and energy efficiency industries generally attend.

“GreeneHurlocker will be there and we hope you will join us in this incredible opportunity to make our voices heard,” said Eric Hurlocker, co-managing member of the firm and a Board member of MDV-SEIA. If you want to know more about MDV-SEIA or Clean Energy Day, contact Hurlocker or any of our Virginia energy lawyers.

Dominion Customers to Challenge Constitutionality of Electric Utility Regulation Act

A group of industrial customers of Dominion Virginia Power (“Dominion”) has recently taken steps to challenge the constitutionality of Virginia’s Electric Utility Regulation Act (“Regulation Act”) at the Supreme Court of Virginia. At issue is a 2015 amendment to the Regulation Act, Senate Bill 1349, which exempts Dominion and Appalachian Power Company from biennial base rate reviews through 2022. In effect, the legislation prevents the State Corporation Commission (“SCC” or “Commission”) from changing the utilities’ base rates until 2022 – even if the Commission determines that electric rates are too high and are producing excess profits for utility shareholders.

The potential constitutional challenge was triggered by an SCC order late last year that applied Senate Bill 1349 for the first time. In its Final Order in Dominion’s 2015 Biennial Review rate case, SCC Case No. PUE-2015-00027, a 2-1 majority of the Commission applied Senate Bill 1349 and declined to adjust Dominion’s base rates or set a new rate of return on equity for the company. Commissioner Dimitri, however, filed a dissenting opinion, arguing that Senate Bill 1349 violates Article IX of the Constitution of Virginia and therefore cannot prevent the SCC from adjusting Dominion’s base rates.

Following the Commission’s Final Order, the Virginia Committee for Fair Utility Rates (“Committee”), an association of large industrial customers, filed a Petition for Reconsideration at the SCC. The Committee’s Petition cited Commissioner Dimitri’s dissenting opinion and requested that the Commission find that Senate Bill 1349 is unconstitutional. On December 14, 2015, a 2-1 majority of the Commission denied the Committee’s motion. Commissioner Dimitri filed a second dissenting opinion, reiterating his finding that Senate Bill 1349 is unconstitutional. On December 22, 2015, the Committee filed a Notice of Appeal at the SCC, which preserves the Committee’s ability to file a formal appeal with the Supreme Court of Virginia.

The legal arguments advanced by the Committee are based on Article IX, Section 2 of the Constitution of Virginia, which establishes the powers and duties of the SCC. Article IX, Section 2 provides that “Subject to such criteria and other requirements as may be prescribed by law, the Commission shall have the power and be charged with the duty of regulating the rates, charges, and services … of electric companies.” According to the Committee, therefore, the Commission’s authority to regulate electric rates is subject only to “criteria” and “other requirements” that may established by the General Assembly.

The dissenting opinion argues that Senate Bill 1349 “does not establish criteria that the Commission must apply in regulating Dominion’s base rates” but instead “fixes [Dominion’s rates] and takes the base rate setting function away from the Commission.” The Committee has also argued that if Dominion’s rates remain unchanged through 2022, Dominion’s shareholders will reap excess profits of “well over a billion dollars.”

Appeals from the State Corporation Commission are “of right,” meaning that the Supreme Count cannot decline to hear properly filed appeals. In order to be heard by the Court, however, the Committee would have to file a formal “Petition for Appeal” within four months of the date of the Final Order in this case. If a Petition for Appeal is filed, oral arguments would likely be heard by the Court in its September, 2016 session.

If you have any additional questions about any of the legal aspects of this case or its potential to affect the electric rates paid by Dominion’s customers, do not hesitate to contact one of GreeneHurlocker’s Virginia energy and regulatory attorneys.

Sponsoring MDV-SEIA Clean Energy Lobby Day

GreeneHurlocker was pleased to be among the sponsors for the Virginia Advanced Energy Industries Coalition (VAEIC) and Maryland, DC, Virginia-Solar Energy Industries Association (MDV-SEIA) Clean Energy Lobby Day (CELD) 2015  Tuesday, February 3rd.

The day-long meeting was held at 200 S. 10th Street in Richmond, and brought together the advanced energy businesses of Virginia with key legislators to support and discuss clean technology bills for the upcoming General Assembly session. This year, organizers reported a record attendance from  business representatives , legislators, regulators and McAuliffe administration executives.

As a firm with a strong interest in the renewable energy sector, as well as our work in competitive markets throughout the Mid-Atlantic, we will be there again this year. Please make a point to say hello to our clean energy and utility regulation lawyers if you’re attending!

Renewable Energy Industry Legislation Activity in 2014 Virginia General Assembly

We watched a lot of bills arrive and die in the Virginia General Assembly session this past year (a session that still has yet to pass a budget for the state). Here is a brief look at a few initiatives impacting renewable energy development in Virginia that have been enacted or remain active for future sessions.

Senate Bill 653: Renewable Energy Property Grant Fund.

S.B 653 was intended to offset costs to install new renewable energy facilities by offering grants to cover a portion of these costs. This bill defines “renewable energy” as energy derived from sunlight, wind, falling water, biomass, waste, landfill gas, municipal solid waste, wave motion, tides or geothermal power, but does not include energy derived from coal, oil, natural gas, or nuclear power.  The idea was to establish a grant system through which the $10 million fund would allow individuals who placed new renewable energy property into service during a fiscal year 2016 to apply for a grant equal to 40 percent of the costs paid or incurred by the individual, not to exceed $2.5 million for any particular project.

The bill was passed by both the House and the Senate, but amended so that only 35 percent, rather than 40 percent, of the costs may be recovered through a grant. In addition, costs related to existing facilities that generated electricity within the 12 months preceding the date of a grant application would not be eligible and any renewable energy property paid for by ratepayers would also be ineligible. The provisions of act will not become effective unless it is reenacted by the General Assembly in 2015.

Senate Bill 418/House Bill 1239: Real and Personal Property Tax Exemptions for Solar Energy Equipment, Facilities and Devices.

These bills provide an exemption from local taxation for all certified solar energy equipment, facilities and devices. The exemption for solar photovoltaic systems would only apply to projects equaling 20 megawatts or less. It adds “solar energy equipment, facilities, or devices” to the definition of certified pollution control equipment and facilities, whether or not the property has been certified to the Virginia Department of Taxation by a state certifying authority if the property is owned or operated by a business and fits within the 20 megawatt cap. These bills also establish a separate tax classification for other solar energy equipment, facilities, or devices if they are certified by the Virginia Department of Environmental Quality.  Unlike the business-owned solar property, which is exempted by these bills, whether or not the separately classified individual-owned solar property is partially or fully tax exempt is up to the governing body of the individual’s county, city or town.

These bills were signed into law by Governor McAuliffe, taking effect January 1, 2015.

Senate Bill 514/House Bill 796: Postponed the Due Date for Quadrennial Updates to the Virginia Energy Plan.

Amending § 67-202 of the Code of Virginia, these bills postponed scheduled Virginia Energy Plan updates from July 1, 2014 to October 1, 2014. The plan then has to be updated every four years after the update this October. Updates to the plan must reassess goals for energy conservation based on progress toward the goals in the previous plan and lessons learned from attempts to meet those goals. These bills passed both houses and were signed into law by the Governor.

The 2010 Virginia Energy Plan aims to (1) expand both traditional and alternative energy generation, (2) increase the use of conservation and efficiency, and (3) educate the public about Virginia’s energy consumption and production, emphasizing how they affect our economy and teaching Virginians ways to energy more efficiently. Additionally, the plan strives to maximize the Commonwealth’s investments in clean energy research and development through the Universities Clean Energy Development and the Economic Stimulus Foundation. This law takes effect July 1, 2014.

Senate Bill 498/House Bill 822: Changed Virginia’s Renewable Energy Portfolio Standard Program.

These bills limit the ability of an electric utility participating in the renewable energy portfolio standard (“RPS”) program to bank excess renewable energy sales or renewable energy certificates (“RECs”) to achieve its annual RPS goals. A utility may use its excess renewable energy sales and RECs only in the five years following the renewable energy generation or the REC creation. This bill was approved by both houses and signed into law by the Governor.

The goal of these bills is to encourage utilities to continue to expand use of renewable generation to achieve current goals of the plan, but not to bank excess RECs in the short term when RPS goals are lower to use in later years when RPS goals increase, or may even become required. Companies are able to bank excess RECs for five years after their creation before they no longer count toward the utility’s RPS goal.

Virginia’s RPS goals are laid out in four stages, starting in 2010 and running through 2024. In each subsequent stage, the RPS goal increases by a specified percentage. This law takes effect July 1, 2014.

If you have questions about any of these laws and how they might impact your business, please contact the energy lawyers at GreeneHurlocker for more information.

Enhanced by Zemanta