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retail energy competition

Comments filed on Draft Maryland Retail Supplier Load Shaping RFP

In late March, we posted about the Maryland Public Service Commission’s request for comments on a draft “Retail Supplier Load Shaping RFP” in the Public Conference 44 proceeding. In early April, comments were filed by the Maryland Energy Administration, the Retail Energy Supply Association, Direct Energy Services, Inc., Staff of the Maryland Public Service Commission, Baltimore Gas and Electric Company/Potomac Electric Power Company/Delmarva Power & Light Company, the Maryland Office of People’s Counsel, and CleanChoice Energy, Inc.

Parties encouraged the Commission to adopt an RFP process to maximize supplier participation, protect trade secrets, provide suppliers flexibility in their load shaping pilot proposals, and allow expanded billing options to enable suppliers to bring innovative proposals to the table. Some parties specifically pointed to supplier consolidated billing and on-bill financing as important tools to pair with supplier time-of-use electricity supply offerings within the pilot. Commenting suppliers noted some key improvements to the RFP structure as compared to a prior retail supplier time-of-use pilot design. However, suppliers also recommended that the Commission add options for marketing support for the retail supplier load shaping pilot offering to help get the word out about the program and encourage customer participation.

Additional recommendations addressed promoting use of renewable energy, access to historical usage data, expanded opportunities for net metering customers, and modifications to other program criteria. Suppliers also raised concerns about certain requirements that may discourage some suppliers from submitting bids to participate in the pilot program. The Office of People’s Counsel commented on the importance of minimizing the costs to both participating and non-participating consumers, ensuring adequate consumer protections, incentives structures, billing, and other issues. All of the comments were filed on April 9, 2019, and as of this post, we are waiting for further action from the Commission in response to the comments.

If you have questions or would like more information about Maryland Retail Supplier Load Shaping RFP or other regulatory issues, please contact Eric Wallace or any of our mid-Atlantic energy 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.

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.

Dominion, Appalachian Power Dispute SCC Decision


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.

SCC Hearing Examiner Recommends Denial of Appalachian Power’s Renewable Tariff

wind turbines and solar arraysOn Wednesday, June 21, a Virginia State Corporation Commission (“Commission”) Hearing Examiner issued a report recommending denial of a renewable energy tariff (“Green Tariff”) filed by Appalachian Power Company (“APCo”). If accepted by the full Commission, the Hearing Examiner’s findings would be a victory for renewable energy developers and competitive energy suppliers operating in Virginia.

APCo’s application requested permission to offer a voluntary 100% renewable tariff to its customers. APCo proposed to repackage generation it was already purchasing via four power purchase agreements (“PPAs”), and then reallocate that energy to participating customers. Customers would pay an 18% premium in order to participate in the program.

The so-called Green Tariff would represent the first time a Virginia utility offered a 100% renewable tariff option for its customers. But, if approved, the tariff would also largely foreclose competition for renewable energy in Virginia and prevent customers from purchasing generation from competitive suppliers. Under current law, most customers are allowed to purchase renewable energy from third-parties only if their incumbent electric utility does not have an approved tariff for 100% renewable energy. See Va. Code Section 56-577(A)(5).

Environmental and renewable energy advocates, including our client, the Maryland-DC-Virginia Solar Energy Industries Association (“MDV-SEIA”), opposed APCo’s proposed Green Tariff. MDV-SEIA argued that the proposal is not in the public interest and should be rejected for several reasons. First, the per-MWh price of the Green Tariff is unreasonably high and not reflective of current prices for renewable energy. MDV-SEIA also noted that the Green Tariff does not contain any solar generation or any Virginia-based renewable resources of any kind. The four PPAs that form the basis of the Green Tariff represent wind and hydrologic energy located in Indiana and West Virginia. Moreover, the Green Tariff would not encourage the development of any new resources; all of the Green Tariff’s out-of-state facilities were placed into service between 7 and 15 years ago.

The Hearing Examiner largely agreed with the arguments raised by MDV-SEIA, finding that the “per MWh cost of the [proposed tariff] is significantly higher than the average cost for new wind power in the PJM region” and that the tariff rate would be “18% higher than APCo’s standard rate for service.” The Hearing Examiner also cited data, obtained by MDV-SEIA through a motion to compel, indicating that the Green Tariff price was significantly higher than other renewable energy recently added to APCo’s portfolio. Finally, the Examiner noted that the Green Tariff “has the potential to suppress or even curtail customer access to 100 percent renewable energy by precluding sales by [competitive renewable energy suppliers] while at the same time offering an incumbent utility alternative that is simply too costly for customers to bear.” The Hearing Examiner determined that the Green Tariff, if approved, would not support the clean energy objectives of the Commonwealth’s Energy Policy, found in Title 67 of the Code of Virginia.

The Hearing Examiner’s report and recommendation now goes to the full Commission, which can approve or reject it. The Commission is also currently considering a similar renewable tariff application filed by Dominion Energy Virginia (“Dominion”) in Case No. PUR-2017-00060. If approved, Dominion’s tariff would also severely limit energy choices for most of its customers.

Please contact one of our renewable energy lawyers or regulatory attorneys should you have questions about this case. The Commission case number for this matter is PUE-2016-00051.

UPDATE: Dominion appeals SCC decision in renewable energy case

wind turbines and solar arraysDominion Virgina Power has appealed a recent Virginia State Corporation Commission (Commission/SCC) decision in the renewable energy case to the Virginia Supreme Court. As we discussed in detail here, renewable generation suppliers recently won a major victory at the SCC. On April 26, 2017, Direct Energy Services, LLC (“Direct”) received a favorable ruling from the Commission that reaffirms the rights of competitive suppliers to sell renewable energy to retail customers in the Commonwealth. On May 25, 2017, however, Dominion Energy Virginia (“Dominion”) gave notice that it would appeal the decision to the Virginia Supreme Court.

The case was initiated when Direct filed a petition for declaratory judgment asking the Commission to clarify the meaning of several portions of Virginia’s retail choice statute, Virginia Code § 56-577. One part of the statute, Va. Code § 56-577 A 3, provides that large customers purchasing energy from competitive suppliers must provide “five years’ advance written notice” if they wish to go back to receiving service from their incumbent utility. But another part of the statute, Va. Code § 56-577 A 5, provides that all retail customers, regardless of their size, may purchase 100% renewable energy from competitive suppliers if their incumbent utility does not offer a 100% renewable energy tariff. Direct noted that this latter statutory provision does not include a five-year notice requirement.

The Commission entered an order on March 17, 2017, agreeing with Direct that customers who purchase 100% renewable energy pursuant to Va. Code § 56-577 A 5 are not required to comply with the five-year minimum notice requirement contained in Section A 3. On April 26, following a motion for reconsideration filed by Dominion, the Commission reaffirmed its decision and legal analysis.

On May 25, 2017, Dominion gave notice that it would appeal the matter to the Virginia Supreme Court. Under Virginia law, appeals of Commission orders are “of right,” and all appeals of SCC decisions must be heard by the Court. Virginia Supreme Court rules require Dominion to file its assignments of error within four months of the Commission’s final order.

Please contact one of our renewable energy lawyers or regulatory attorneys should you have questions about this case. The Commission case number for this matter is PUE-2016-00094.

SCC Order Reinforces Renewable Purchases by Large Customers

Dominion loses on legal claim intended to discourage renewable energy sales by competitive suppliers in Virginia

On April 26, 2017, the Virginia State Corporation Commission (“Commission”) entered an order that gives greater regulatory certainty to competitive electric service providers wishing to sell electricity to large retail customers in the Commonwealth.

wind turbines and solar arraysThe case was initiated by Direct Energy Services, LLC (“Direct”), a competitive supplier licensed to do business in Virginia. Virginia law allows competitive suppliers to sell electricity to retail customers only under certain circumstances. For example, competitive suppliers may sell electricity to large customers (i.e., those with annual demands over 5 MW). Competitive suppliers may also sell energy consisting of “100 percent renewable energy” to any retail customer if the customer’s monopoly electric utility does not offer an approved tariff consisting of exclusively renewable energy. (See Va. Code § 56-577 A 5.) But in most other situations, customers would be required to purchase power from their incumbent monopoly electric utilities.

Direct filed a petition for declaratory judgment asking the Commission to clarify the meaning of several portions of Virginia’s retail choice statute, Virginia Code § 56-577. One part of the statute, Va. Code § 56-577 A 3, provides that large customers purchasing energy from competitive suppliers must provide “five years’ advance written notice” if they wish to go back to receiving service from their incumbent utility. But, as mentioned above, another part of the statute, Va. Code § 56-577 A 5, provides that all retail customers, regardless of their size, may purchase 100% renewable energy from competitive suppliers if their incumbent utility does not offer a 100% renewable energy tariff. Notably, this statutory provision does not include a five-year notice requirement.

In particular, Direct sought clarification from the Commission that large customers purchasing energy from a competitive supplier under the renewable provision – Va. Code § 56-577 A 5 – would not be subject to the five-year notice provision.  Direct argued that it needed clarification on this issue before “expending considerable resources” that would be necessary to provide renewable energy service to Virginia customers. The company said that, if potential customers are subject to the five-year notice provision, customers may be discouraged from entering into electricity contracts with Direct, making it “virtually impossible for Direct to offer a 100% renewable energy product to Virginia businesses.”

The Commission entered an order on March 17, 2017, agreeing with Direct that if a large customer purchases 100% renewable energy pursuant to Va. Code § 56-577 A 5, the five-year minimum notice requirement contained in Section A 3 would not apply.

But Dominion Virginia Power (“Dominion”), Virginia’s largest investor-owned electric utility, filed a motion requesting that the Commission reconsider this decision and find instead that all large customers taking service from competitive suppliers would be subject to the five-year notice provision. Dominion argued that exempting “large customers from the five-year advance notice requirement would jeopardize [Dominion’s] ability to plan appropriately” and that “[Dominion’s] customers would ultimately suffer” if the utility were required to serve a large customer without adequate notice.

The Commission rejected Dominion’s arguments that the five-year notice provision applies to third-party power purchase agreements authorized under Section A 5. The Commission characterized Dominion’s claims as “policy arguments” that “are not part of the Commission’s analysis.” The Commission recognized that the General Assembly has chosen to “give special status to electric energy provided 100% from renewable energy” and also noted that it will decline to “add language to the statute that the General Assembly has not seen fit to include.”

Another important statutory question was left unresolved in this case, however: whether a competitive supplier selling energy to a retail customer under Section A 5 must provide 100% of a customer’s energy requirements in addition to providing 100% renewable energy. Virginia’s two largest electric utilities, Dominion and Appalachian Power, have argued that a competitive supplier must be able to offer both 100% renewable energy and be able to supply 100% of a customer’s energy requirements.  In 2016, a Commission Hearing Examiner analyzed the statute and concluded that, based on the plain language of the statute, competitive suppliers do not need to satisfy all of a customer’s energy needs, so long as they are providing 100% renewable energy. This finding, however, was not binding, and the underlying case was ultimately dismissed by the Commission.

Please contact one of our renewable energy lawyers or regulatory attorneys should you have questions about this case. The Commission case number for this matter is PUE-2016-00094.

Delaware Approves New Consumer Protection Rules for Comment

The Delaware Commission on November 1, 2016, approved for publication and comment new consumer protection rules that largely resemble the rules that were published in October and which we blogged about here.  We expect the newly-approved rules to appear in the December 1, 2016 Delaware Register, followed by a comment period. This marks the near-end of a proceeding that has lasted for more than four years.

The primary stakeholders in the proceeding had agreed to certain modifications to the version of the rules published in October, but two non-consensus issues remained for the Commission’s consideration. The two issues involved the length of the rescission period and issues pertaining to the customer lists that the utility, Delmarva Power, provides to licensed retail suppliers. The Commission ruled on those matters on November 1, and a written, formal order is expected at the Commission’s November 15 meeting.

The newly-approved rules are a total re-write of Delaware’s current rules. They include numerous protections for consumers and include rules for suppliers who want to sell electricity to Delaware customers.  The rules will require suppliers to provide specific information to customers during the marketing and enrollment processes to ensure that customers fully understand the electricity products they are considering. The rules also obligate suppliers to provide information to current customers during at certain times during the contractual relationship. Not only that, but the rules to into great detail concerning marketing channels such as door-to-door and telemarketing, as well as other matters.

Once published, there will be a comment period and we expect the rules to become final at some point in the first quarter of 2017. Our firm has represented the Retail Energy Supply Association in this proceeding. If you want further information on the proposed Delaware rules or have questions about retail energy competition and consumer protection, call one of our energy regulations lawyers.

Charlottesville Projects Add to Solar Energy Growth

Charlottesville Tomorrow has a nice piece on Riverbend Development’s plans to install a sizable solar panel array on one of its properties in the town. This follows on an installation earlier this year by the company on Starr Hill Brewery, nearby in Crozet, Virginia.

As we noted here, when we attended a ceremony in Charlottesville for the opening of a solar energy project within the Albemarle Public Schools, this area of the state is seeing a big interest in solar. Governor McAuliffe was on hand then and sent a very positive message to the whole Commonwealth that solar projects and the jobs they bring are good for Virginia.

If you want to know more about Power Purchase Agreements like those used in Albemarle County or about other opportunities for renewable and solar energy projects in Virginia, contact any of our Virginia energy lawyers.