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Retail Electric Competition

Calpine and Direct Energy Win Again, Continue to Provide Renewable Energy in Virginia

The Virginia State Corporation Commission (the “Commission”) denied Dominion Energy Virginia’s (“Dominion”) July 16, 2019 petitions for declaratory judgment in Case Numbers PUR-2019-00117 and PUR-2019-00118 by Final Order on September 18, 2019. Dominion’s petitions sought to have the Commission standardize “around the clock,” “control of renewable capacity” requirements for competitive service providers (“CSPs”) to serve customers under Virginia Code § 56-577 A 5 (“Section A 5”). That section provides a statutory right to customers of all classes to purchase “electric energy provided 100 percent from renewable energy” from a CSP unless the utility has its own 100% renewable energy tariff. Dominion’s application for a 100% renewable energy tariff is pending before the Commission, and Dominion had refused to process enrollments submitted by Calpine Energy Solutions, LLC (“Calpine”) and Direct Energy Business, LLC (“Direct Energy”) under Section A 5 in the interim and initiated these cases at the Commission.

The Commission previously granted Calpine’s and Direct Energy’s requests for injunctive relief, requiring Dominion to process enrollments while these cases are pending. We blogged about that here.

Dominion’s petitions took aim at Calpine and Direct Energy, seeking a determination that CSPs seeking to serve under Section A 5 must establish that they can supply customers with electric energy provided 100 percent from renewable energy on an “around the clock” basis and that the CSPs must have “control” over “renewable capacity.” The Commission flatly rejected Dominion’s positions and declared that both Calpine and Direct Energy provided information to reasonably establish that they have contracted for sufficient renewable energy to match renewable supply with a participating customer’s load on a monthly basis, which is consistent with Section A 5 and Commission precedent.

Regarding Commission precedent, the Commission refused to adopt Dominion’s interpretation of a prior order approving Appalachian Power Company’s Rider WWS (“Rider WWS Order”), which Dominion believes requires a CSP to have “control of sufficient renewable generation resources, including renewable capacity and associated renewable energy, to enable it to serve the full load requirements of the customers it intends to serve.” The Commission’s refused to provide the requested declaration, explaining that the Rider WWS Order did not require “’renewable capacity,’ nor did it define ‘full load requirements’ to mean (as argued by Dominion) ‘full load at all times’ or ‘full load requirements around the clock.’” Significantly, the Commission’s Final Order makes clear: “Nothing in [the Rider WWS Order], however, found that [Appalachian Power Company’s] proposal was the only way to comply with Section A 5.”

The crux of the Commission’s decision relied upon its close reading of Section A 5. “The plain language of Section A 5 also says ‘energy,’ not ‘capacity.’” In acknowledging this critical distinction, the Commission put a finer point on Dominion’s efforts to muddy the waters between “energy” and “capacity” requirements, despite the fact that Section A 5 requires customers to purchase renewable electric “energy” – not “capacity.” In the same way, the Commission examined closely Dominion’s request for more stringent matching standards, noting several times that in other proceedings, Dominion has taken positions inconsistent with those it takes in its petitions for declaratory judgment: “There is nothing in the plain language of Section A 5, however, that mandates Dominion’s “100% of the time” (i.e., “around the clock”) requirement.”

The Commission also scrutinized Dominion’s proposal from a consumer protection perspective, finding that Dominion’s “100% of the time” standard would adversely affect a customer’s right to purchase renewable energy – essentially, upending the entire aim of Section A 5. Dominion’s argument would read certain renewable generating sources (e.g., wind or solar) out of the statute because of their intermittency regardless of the amount of nameplate capacity or peak load served. Finally, the Commission evaluated Dominion’s proposed standard with special focus on the fact that Virginia’s existing monthly matching standard is already one of the most stringent in the country for states with renewable energy markets, as other states generally require customer load and renewable supply to be matched on a yearly basis.

The Commission declined to accept Dominion’s proposed language that would adopt a new standard for Section A 5, presented for the first time at the hearing on August 20, 2019. The Commission reasoned that to do so would contravene the Commission’s past rejection of “capacity,” “peak demand,” or “100% of the time” requirements – including the Commission’s rejection of Dominion’s past requests (notably in the Rider WWS proceeding) for “around the clock” supply of renewable energy pursuant to Section A 5. Similarly, the Commission held that Dominion’s proposal at the hearing regarding what Dominion believes the current law should reflect “improperly goes beyond the specific relief requested in the Petitions for Declaratory Judgment… [and] does not reflect current Commission precedent and is otherwise procedurally improper.”

The Conclusion in the Commission’s Final Order makes clear that:

  • Commission precedent permits a CSP to match customer load with renewable supply on a monthly basis and does not requires CSPs to provide “renewable capacity”;
  • Direct Energy and Calpine have satisfactorily demonstrated that they can supply their customers with electric energy provided 100 percent from renewable energy on a monthly matching basis;
  • Direct Energy and Calpine are required to continue providing information as directed in the Final Order – regarding each CSP’s customer load and wholesale generation contracts, in accordance with Section A 5, the Commission’s Rules Governing Retail Access to Competitive Energy Services, as well as Dominion’s Competitive Service Provider Coordination Tariff; and
  • Even if Dominion’s new proposal were procedurally appropriate, which it is not, the Commission further finds that: (1) the plain language of Section A 5 does not mandate – as a matter of law – adoption of Dominion’s proffered standard; and (2) matching customer load with renewable supply on a monthly basis represents a reasonable standard under Section A 5, and Dominion’s proposed standard is not necessary in order to implement Section A 5 in a reasonable manner,

GreeneHurlocker represents Calpine in these proceedings.
If you have questions about this case or electric service in general, please contact one of GreeneHurlocker’s energy and regulatory lawyers.

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 any of our Virginia energy lawyers.

Delaware Adopts New Consumer Protection Rules for Electricity Sales

The Delaware Public Service Commission has approved new Electric Supplier Rules for final publication in the April 1, 2017 edition of the Delaware Register. The rules will become canstockphoto17677884effective April 11, 2017.

The new rules replace Delaware’s existing Electric Supplier Rules and introduce numerous provisions that affect virtually everything that retail suppliers do – including not only obtaining a license but also marketing electricity and enrolling new customers.  In fashioning the new rules, the stakeholders looked primarily to Maryland’s and Pennsylvania’s recently-revised rules, and then tailored them to Delaware.  Retail suppliers will be required to make additional upfront disclosures in marketing and contract documents, and provide specific training for their agents. The rules directly address telemarketing and door-to-door sales and add requirements that do not exist today. As an example, for door-to-door sales, a supplier will be required to obtain a wet or electronic signature and also to perform a third-party verification. The rules also have a new definition and requirements for third-party verifications.

Our firm was very involved in negotiating the new rules and arguing non-consensus items before the Commission. If you’re a retail supplier eyeing Delaware as a new service territory, or if you’re already serving in Delaware, please feel free to call our energy lawyers with any questions.

 

Delaware Arguments Are Covered at EnergyChoiceMatters.com

We’re grateful for the coverage EnergyChoiceMatters.com put out yesterday about the staff-suggested changes to proposed Delaware rules that the Retail Energy Suppliers Association and the Division of Public Advocate (DPA) worked out earlier this year. We think are these changes in the proposed rules are market killers because of their supplier and consumer requirements. You can read their complete coverage here. The Delaware Commission posted pictures of the meeting here.

If you have any questions or concerns about the Delaware rules or any energy regulation matter in the mid-Atlantic, simply contact one of our energy lawyers.

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.

MA Legislators Pass Compromise on Net-Metering, Reimbursement Rates

The Massachusetts State-house in Boston, Massa...

The Massachusetts State-house in Boston, Massachusetts (Photo credit: Wikipedia)

This week, the Massachusetts legislature reached an end to the solar impasse that existed in the Commonwealth, when the Massachusetts House of Representatives and Senate struck a deal regarding the net metering cap and reimbursement rates.  Specifically, the legislation will:

  • Lift the cap on solar net metering by three percent (3%) for both public and private solar projects; and
  • Decrease the reimbursement rate paid by utilities to most solar energy producers by 40%.  (This decrease in rates, however, does not apply to government and municipality owned projects, residential and small commercial projects – which will all still receive the full retail rate.)

The legislation also authorizes distribution companies to submit to the Massachusetts Department of Energy Resources (“DOER”) proposals for a “monthly minimum reliability contribution” to be included on electric bills for solar-producing customers.  DOER then has the authority to approve a monthly minimum reliability contribution that meets certain enumerated factors.  The bill explains that any such contributions “shall ensure that all distribution company customers contribute to the fixed costs of ensuring the reliability, proper maintenance and safety of the electric distribution system.”  DOER is prohibited, however, from approving a proposal for a monthly minimum reliability contribution, until after the aggregate nameplate capacity of installed solar generating facilities in Massachusetts is equal to or greater than 1,600 MW.  DOER was given the authority by the legislature to exempt or modify any such contributions for low-income ratepayers.

While the legislation serves as a temporary solution to the net metering problem in Massachusetts, stakeholders, however, predict the cap will likely be reached by the end of 2016.

The attorneys at GreeneHurlocker will continue to monitor the legislative landscape in Massachusetts as many of our clients are currently pursuing solar projects in the Commonwealth of Massachusetts.If you have any questions about this legislation or other isses related to renewable energy and regulation, contact any of our solar energy lawyers.

Revised Consumer Protection Rules Advancing in Maryland

In early October, 2015, the Maryland Public Service Commission approved for publication in the Maryland Register revised consumer protection rules applicable to the marketing and sale of electricity and natural gas by licensed retail suppliers. The Commission’s approval comes after more than a year of stakeholder working group meetings as well as legislative-style hearings that occurred in February, September, and October 2015.  GreeneHurlocker’s lawyers have been involved in these proceedings since day one, and we have previously blogged about them here and here.

Among the many new provisions, the revised Rules require utilities to process a customer’s request to switch electricity providers within three business days, and they require retail suppliers to make additional up-front pricing disclosures in the contracts they offer to prospective customers. The revised Rules also include entire new sections relating to retail suppliers’ relationships with their agents who solicit customers on their behalf.

It is anticipated that the revised Rules will be published in the Maryland Register by the end of 2015 although there is no definite timetable.  Once published, interested persons will have 30 days to submit comments to the Commission. After that, the Commission will hold a hearing to vote on whether the revised Rules should be approved and, if approved, they will appear in the Maryland Register as final.  The Commission stated at its October 2015 meeting that the revised Rules will become effective once they are final, and any utility or retail supplier that cannot comply will be expected to seek a waiver from the Commission.

Our firm is participating in these Maryland proceedings, representing the Retail Energy Supply Association.

New Consumer Protection Regulations Progress

A few months ago we blogged about the Maryland Public Service Commission’s review of proposed revisions to the Maryland consumer protection regulations. These regulations govern the interplay between retail electricity and natural gas suppliers and potential and current customers. The Commission had set a hearing in June. After the filing of a new set of revised regulations, the Commission postponed the hearing until September 10-11. The “new and improved” revised regulations address, among many other issues, how and when a supplier must notify their customers of price changes, how quickly a customer may switch service between their utility and/or suppliers, and various issues impacting marketing and enrollments.

The District of Columbia Public Service Commission is reviewing its consumer protection regulations, called the Consumer Bill of Rights (CBORs). Recently, the Commission took comments on proposed revisions, and hosted a “technical conference” to discuss the stakeholders’ proposals. Stakeholders have been encouraged to discuss various issues going forward and try to reach consensus. It is anticipated that there will be a stakeholder filing in September, and the Commission at that point can issue another set of revised rules for comment or, if it so chooses, adopt the version currently before it.

Our firm is participating in both the Maryland and DC proceedings, representing the Retail Energy Supply Association.

Virginia Commission Schedules Dominion Solar Facility Application

English: Virginia State Corporation Commission...

On Friday February 20th, the Virginia State Corporation Commission (SCC) issued a procedural schedule to review Dominion Virginia Power’s application seeking SCC approval to construct a 20 MW solar electric generating facility in Fauquier County, Virginia.  In addition to seeking approval to construct the facility, Dominion is also seeking approval of a rider to recover the costs of the solar facility, including the distribution facilities necessary to interconnect the facility to the Dominion electric system.

The SCC has set a hearing for this matter on July 16, 2015.  Any parties interested in participating in this proceeding must file a notice of participation with the SCC on or before May 4, 2015.

Our firm has been following this matter since its announcement, and if you have any questions or would like to discuss, please contact any of our renewable energy or utility regulation lawyers.

 

 

Energy Regulators Reviewing Consumer Protection Rules

In restructured energy markets,consumer protection regulations are being hotly contested. Many of these markets are in the northeast, and suppliers and customers in them are subject to key rules under which suppliers must operate  when marketing their products and enrolling customers. Public service commissions in Maryland, Delaware and the District of Columbia are reviewing their respective rules and have allowed stakeholders to submit comments.

We’re watching these debates on rules with interest for our clients in the energy industry. The salient issues are outlined in this post at LinkedIn:  https://lnkd.in/dvDTWCn.

If you have questions or concerns about this process or about energy market regulation in the Mid-Atlantic, please contact one of our utility regulation lawyers.