Tel: 804.864.1100

Tel: 804.864.1100

renewable energy

SCC Order OKs new, but limited, APCo customer renewable tariff

On January 7, the State Corporation Commission (“SCC” or “Commission”) approved a request by Appalachian Power Company (“APCo”) to offer a 100% renewable energy tariff to its customers. The APCo proposal, designated Rider WWS, would include energy generated at several wind and hydroelectric facilities that are currently part of the utility’s generation portfolio. For residential customers taking service under the tariff and using 1,000 kilowatt hours per month, the monthly bill increase would be $4.25. Customers would also pay a “balancing” charge that is intended to ensure that non-participating customers are not affected by the tariff.

Several renewable energy and environmental advocates opposed APCo’s proposal. APCo and the intervening parties disagreed about whether the price of the tariff was based on current market prices for renewable energy and whether it is appropriate for APCo to sell energy that is already in its utility’s generation portfolio at a premium rate. Appalachian Voices, represented in the case by the Southern Environmental Law Center, argued that APCo’s proposal would “charge customers more than they currently pay for the privilege of claiming the output of certain resources already in APCo’s fleet.” Several parties noted that the rate customers would pay is tied to renewable energy credit (“REC”) market prices, as opposed to the actual cost of the underlying renewable energy. The Commission’s staff also questioned whether Rider WWS would constitute a renewable energy tariff at all, since the tariff price would be based on the cost of RECs – not on the price of renewable energy itself.

Finally, several parties noted that approval of the application would eliminate the rights of many APCo customers to shop for renewable energy. The effect on retail choice is due to Virginia’s unique regulatory structure. Virginia is, for the most part, a traditionally regulated jurisdiction. This means that incumbent electric utilities such as APCo hold state-protected monopolies on the sale of electricity in their service territories. Virginia law, however, provides a few exceptions under which customers can purchase electric generation from non-utility companies licensed by the SCC to sell retail electricity.

One of these exceptions is for 100% renewable energy purchases. The Code allows any Virginia customer – including residential customers – to purchase electricity “provided 100% from renewable energy” from non-utility suppliers. Pursuant to the statute, however, this option is only available if the customer’s incumbent electric utility does not offer an SCC-approved tariff for 100% renewable energy. Prior to the SCC’s decision in this case, no Virginia utility had an SCC-approved 100% renewable tariff in place. The Commission’s final order did not reference the tariff’s implications on retail choice.

The Commission’s final order also rejected the recommendation of the hearing examiner who conducted the evidentiary hearing. The hearing examiner recommended that the Commission deny the application because the proposal would result in “unjust and unreasonable” rates. The hearing examiner found that the evidence presented by APCo to support the application was “unsubstantiated” and based on outdated market prices for renewable energy.

Should you have any questions about this case, please contact one of our energy regulatory attorneys. The Code sections authorizing retail choice are discussed in our firm’s Virginia electric regulation guide.

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.

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.

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.

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.