Tel: 804.864.1100

Tel: 804.864.1100

The GreeneHurlocker Blog

Ideas Are Just That: Part 3

We’ve been sharing a series of blog posts and videos here and here about how an idea is just that: an idea, and how there are some basic, critical things a high-potential start-up technology company founder must do in order to make any idea worth having and building upon. As I said in my first post, the fact is, most ideas suck. So a founder needs to be sure this idea is worth making it the most important thing in her life for the next months or years.

My third suggestion for the immediate post-idea step is: Focus obsessively on creating a minimally viable product.

Don’t get caught up in the romance of the wonderfulness or inevitability of your idea, the greatness of your team, or the exuberant free feeling of having decided to jump in with both feet. The fact is, you haven’t yet accomplished the whole reason for doing this in the first place, which is selling something to people who want to buy what you have to sell. The excitement is going to wear off and then it’ll be time to get to work. If you don’t get to work immediately, you probably will have lost your opportunity.

It is all about speed.

Too many startups begin with an idea for a product that they think people want. When it isn’t resonating with customers, it is often because the founders never spoke to prospective customers and determined whether or not the product was interesting. When customers ultimately communicate, through their indifference, that they don’t care about the product, the startup fails.
The truly most important question you need to start asking yourself is the following. It’s the first thing you should ask yourself even before you swing your legs off the edge if the bed to get up on the first morning after to you come up with your great idea.

“Should this product be built?”

And then, soon thereafter, maybe before you brush your teeth, you need to ask “Can we build a sustainable business around your product?’
At this point it’s really only about two things: a first product that you know the world needs, and a plan for how first product can actually get customers. The team needs to be focused brutally on these things. Let the customers be your source of accountability.

The new company should be focused on quickly developing a minimally viable product and then learning as much as possible about its weaknesses and opportunities for improvement. Iteration upon iterations, pulling your hair out from anxiety that you’ll never get it right, near-all-nighters and lost weekends — all of that fun stuff. The point is to do all of this on the front end, quickly, and always being in dialogue with the customer, not stuck in an echo chamber of a founder team that may be overly enamored with the original concept.

When a founder focuses on figuring out the right thing to build—the thing customers want and will pay for—she need not spend months developing a prototype or waiting for a beta launch to change the company’s direction. Instead, she can adapt her plan incrementally, inch by inch, minute by minute, moving fast, boxing out the competition.

A couple of years ago I spent three days in the James Madison University’s Icehouse facility with about 24 entrepreneurs who had agreed to lock themselves in and spend that whole weekend developing companies based on pitches that they made on the first night. These people , for the most part, had never met each other. Groups coalesced around about eight ideas big and small. Through the weekend there was a compressed process of honing the original idea and creating a business plan and readying the product or service for the launch. I remember several of the teams were stumped by this question: Will customers want this? Only one of the groups spent the first night doing customer demand research – one group had thought to do this out of eight. That may be somewhat reflective about what real companies do when they go out into the real world. I hope not.

The founding team members need to relish being sponges for crucial information gleaned from the only people that matter: potential customers. This is never more true than at inception and in the earliest weeks and months.

Watch for our next post on “Ideas are just that.” Meanwhile, if you have any questions about startup steps or business law, just reach out to me or any of our Virginia business lawyers.

Ideas are Just That: Part 2

Jared Burden explains that the co-founders of a new tech business based on a great idea need to keep in mind several powerful elements of that relationship for it to have its best chance for growth and success.

Read his Ideas Are Just That: Part 1 post here. If you have comments or questions about this topic or any business law issue, please contact Jared or one of our Virginia business lawyers.

Client Conversations

Just prior to the holidays, we stopped by to see Randy Seitz, CEO of our long-term Harrisonburg client Blueline, to check in and get his opinion on what is important to his company in working with their law firm. This short video includes the things we talked about. Call or email me if you want more details.

Ideas are Just That: Part 1

That moment you realize you have an idea worth a business is a great moment. Sometimes it’s an epiphany on the road to Damascus. Sometimes it’s a slow dawning after a grind lasting several years. But however it happens, it’s time to sit back and go “huh.” It’s an achievement.

Most large corporations interested in continuing to exist generate ideas all of the time, as a matter of course. These ideas, generated by scientists or creatives, are noted, catalogued and vetted. With the promising ones, perhaps the inventor/employee fills out a patent disclosure form and a provisions patent application is filed.

But the rest of the ideas? They are just embodiments of the old adage that you have to kiss a lot of frogs before you find your prince or princess. You never get to the good ones unless you generate a lot of bad ones.

The fact is, most ideas suck.

I’m not writing to talk about bad ideas, though. I want to write about what high-potential start-up technology companies should first do with their good ideas.

Joseph Lassiter of Harvard Business School says a high-potential technology startup is one that plans to hit the $50 million per year mark in new product/service sales within 5 years.”
A new one-off auto battery retail store down the road, no matter how impressive the owners are, is not a high potential technology startup. But, the company that holes up in a garage in an industrial park developing an electricity storage product that is based on an idea that came out of a major university technology transfer office and could disrupt the solar energy marketplace probably is one. It almost certainly wants to sell its products to every big or small solar energy producer anywhere in the world and will do whatever it takes to get there.

Ideas are just that: Ideas. Even the ones that are good are worthless – at least on the day they’re are created. You can’t patent an idea, you can’t trademark an idea, you can’t copyright an idea, and your idea by itself doesn’t make a very valuable trade secret.

We tend to focus on ideas, on genius and creativity, the light bulb, the “Eureka” moment. But let’s be honest. There’s very little more poignant than the unfulfilled “Idea Person,” the person who thinks she could have been a contender in business if she’d just had the time/just had the money/just had the team to fulfill all of the dreams in her head. You have to do something with an idea, and chances are our “Idea Person” just didn’t stick with it – if only to get to the liberating point of understanding that the idea was not, really, in fact a contender.

I’ll be posting a series of blogs laying out five top things a high potential technology founder needs to do immediately if she wants to deliver on all of the high potential her idea might possess. I’ll be addressing the founder as “you.”

Number 1: Decide if you want a co-founder.

The direction here may have something to do with just how big is your idea. If this is the big idea, and if your high potential idea means someone has to develop the app and someone has to sell the product and someone has to be able to do the magic that quants can do with Excel, and this is all starting from scratch, then maybe you don’t want to start off alone.
This very first decision – whether to go it alone or bring one or more trusted folks into the founder’s tent – ties in completely to what resources you have available to you.

When founding a company, there are three basic assets you can make use of: human capital, social capital, and financial capital.

  • Human capital means knowledge derived from formal education and the skills derived from prior experience. A founder with a great amount of human capital can reduce the chances he will get blindsided by something he really should have known could happen. Some call it “wisdom.” I believe you can have a lot of wisdom even when you’re 24 if you’ve studied a lot and worked a lot and kept your eyes open. And there are loads of people my age (which is older than that) who are don’t have wisdom. Point is, if you don’t have it, your human capital is less than optimal, and you may want access to it from someone else.
  • Social capital means the benefits that come from your place in information and communication networks. A startup must project itself outward, whether it’s to hire people, raise money, sell, or any number of other things. If you are an industry insider, or if you just know a lot of people, or you just love networking events, then you might have a lot of social capital. If you’re someone who just doesn’t get out much, then maybe your own social capital is, shall we say, lacking.
  • Financial capital means, well, I think we know what that means. For a founder, if you have “screw-you money,” if you can quit your job and pay for all of the costs of the new company until its projected time to become successful or not, then that’s a blessing. It’s a fairly rare blessing.

A major reason you co-found is to make up for the kind, or kinds, of capital you lack.

One researcher’s long-term study found that solo founders accounted for less than 20% percent of technology startups.
If you are a person with an idea, a sober-minded business plan might lead you to the conclusion that you need one or more cofounders if you are going to create a real business, and you might already know who they are. Or you might need to go looking. Either way, there’s someone close to coming up with the same idea in Portland, so best to get moving.

I’ll follow up soon with the 2nd action a founder needs to take after deciding to make a go of their great idea. Meanwhile, if you have any questions about the content of this article or on any business startup issue, please contact me or any of our business lawyers.

Classification of Employees under the IRS Guidelines

In our last post, we discussed analysis of the employer/independent contractor relationship through the lens of the Fair Labor Standards Act (“FLSA”). Employers who hire individuals as independent contractors – because it seems less often the case that an independent contractor is errantly classified as an employee – should keep in mind that the Internal Revenue Service (“IRS”) has its own set of standards for classifying employees for tax purposes. Thus, any analysis of employee classification under the FLSA should be, likewise, scrutinized through the lens of the IRS guidelines, of which there are many.

As a general rule, an individual is an independent contractor if the payer has the right to control or direct only the result of the work, not what will be done and how it will be done: think of relationships with vendors and others who are retained for services but perform work without input from the payer. Whether a worker is an independent contractor or employee depends upon the circumstances of the parties’ relationship, with particular focus upon behavioral, financial, and other relationship-based factors (i.e. Are there written contracts or benefits? Does the relationship have a set term/duration?)

Businesses must evaluate the above factors when analyzing whether a worker is an employee or independent contractor. Many employers find especially challenging the common situation where some factors indicate that an individual is an employee, while other factors indicate that the individual is an independent contractor. Further complicating the issue, IRS guidelines make clear that there is not one factor in particular that unequivocally dictates the outcome of such analysis. Factors that are of great interest in one relationship may have no relevance to other employer/employee or payer/independent contractor relationships.

Fortunately, the IRS’s website provides additional guidance concerning the three largest categories of classification factors. To better determine how to properly classify a worker, consider these three categories – Behavioral Control, Financial Control and Relationship of the Parties.

  • Behavioral Control: A worker is an employee when the business has the right to direct and control the work performed by the worker, even if that right is not exercised. Behavioral control categories are:
    • Type of instructions given, such as when and where to work, what tools to use or where to purchase supplies and services. Receiving instructions in these examples may indicate a worker is an employee.
    • More detailed instructions may indicate that the worker is an employee. Less detailed instructions demonstrate less control, making it more likely that the individual is an independent contractor.
    • Evaluation systems to measure the details of how the work is done suggests that a worker is an employee. However, evaluation systems measuring just the end result point to either an independent contractor or an employee.
    • Training a worker on how to perform a job — or periodic or on-going training about procedures and methods — is viable evidence that the worker is an employee. Independent contractors ordinarily implement their own methods of performing work. (More detail is available here).
  • Financial Control: Does the business have a right to direct or control the financial and business aspects of the worker’s job? Consider:
    • The employer’s (or putative employer) investment in the equipment the worker uses in working for someone else. This can lead to an inference that a worker is an employee.
    • Independent contractors more often incur unreimbursed expenses than employees.
    • If there exists an opportunity for profit or loss, it can be indicative of an independent contractor relationship.
    • Independent contractors are generally free to seek out business opportunities, whereas employees may be restrained in some way from working simultaneously to provide the same services for other clients/employers.
    • An employee is generally guaranteed a regular wage amount for an hourly, weekly, or other period of time even when supplemented by a commission. However, independent contractors are most often paid for the job by a flat fee. (More detail available here)
  • Relationship: The type of relationship depends upon how the worker and business perceive their interaction with one another. This includes:
    • Written contracts can cut both ways in an employee/independent contractor analysis under IRS guidelines. However, the most critical point for any employer to understand is that a contract stating a worker is an employee or an independent contractor is not dispositive on the issue of worker classification. If a relationship appears to be employer/employee driven (more control and direction over areas beyond the results of the work) despite being categorized on paper as an independent contractor relationship, the facts will rule the day.
    • Businesses generally do not grant benefits such as vacation, health insurance, sick pay, pensions, etc., to independent contractors. Therefore, the presence of such benefits militates strongly for a conclusion that an employer/employee relationship exists.
    • The longevity of the relationship is also a crucial factor. A relationship that is somehow limited in duration may contribute to a conclusion that a worker is an independent contractor. However, if the relationship’s temporal scope is not defined, it is more likely suggestive of an employer/employee relationship. Other facts that suggest the intent of the parties in the initial phases of the relationship may influence analysis of this factor.
    • If the worker performs services that are vital to the regular function of the business or a critical component of its work, this factor may lead to a conclusion that a worker is an employee of the business. (More detail available here).

The keys are to look at the entire relationship, consider the degree or extent of the right to direct and control, and finally, to document each of the factors used in coming up with the determination.

In addition, the IRS also applies a 20-factor-test that can be utilized to aid in the differentiation of employees from independent contractors. The factors include:

  1. the employer’s right to require the worker’s compliance with instructions;
  2. the employer’s training requirements;
  3. the integration of the worker’s services into the employer’s business;
  4. the worker’s personal rendering of services;
  5. the employer’s hiring, supervision, and payment of assistants;
  6. a continuing relationship between the employer and the worker;
  7. the employer’s setting of hours;
  8. the employer’s requirement of full-time service;
  9. performance of work on the employer’s premises;
  10. the worker’s performance of services in a sequence set by the employer;
  11. the employer’s requirement that the worker submit oral or written reports;
  12. payments on an hourly, weekly, or monthly basis;
  13. the employer’s payment of business or travel expenses;
  14. the employer’s furnishing of materials or tools;
  15. lack of significant investment in the facilities by the worker;
  16. lack of realization of loss or profit by the worker;
  17. lack of work for multiple firms by the worker;
  18. lack of availability of the worker’s services to the general public;
  19. the employer’s right to discharge the worker; and
  20. the worker’s right to terminate her or his services.

Consequences of Treating an Employee as an Independent Contractor

Misclassification of employees can have serious consequences. If you classify an employee as an independent contractor and you have no reasonable basis for doing so, you may be held liable for employment taxes for that worker, as applicable relief provisions, generally, do not apply to “unreasonable” misclassification.

With the assistance of legal counsel and their tax or accounting professionals, employers should, periodically, examine employees’ classifications and duties to determine whether employees and independent contractors are properly classified. If you have questions about the content of this article or wish to discuss any employment law issue, please contact Laura Musick or any of our employment lawyers.

Employer Basics: FLSA Classification of Employees

There is seldom a bad time for employers to reevaluate employee classifications. While some occasions are less optimal than others, for example, reevaluation upon an employer’s receipt of a complaint from the United States Department of Labor (“DOL”), employers should carve out time each year to scrutinize changes in employee assignments and relationships, along with other factors that impact classification.

The Fair Labor Standards Act (“FLSA”) offers minimum wage and overtime pay protections to almost all workers in the United States. Assuming for the purposes of our discussion that an employer is subject to the FLSA, there are certain factors that necessarily impact the independent contractor versus employee-employer analysis. At base, “In the application of the FLSA an employee, as distinguished from a person who is engaged in a business of his or her own, is one who, as a matter of economic reality, follows the usual path of an employee and is dependent on the business which he or she serves.”1

The critical determination is, perhaps based upon the most nebulous standards – as the U.S. Supreme Court has, time and again, indicated that no single rule, test or standard, alone, dictates classification. Rather, the current standard applied by the Court looks, on the whole, at the “total activity or situation.”2 Factors included in this analysis are:

    • The extent to which the services rendered are an integral part of the principal’s business.
    • The permanency of the relationship.
    • The amount of the alleged contractor’s investment in facilities and equipment.
    • The nature and degree of control by the principal.
    • The alleged contractor’s opportunities for profit and loss.
    • The amount of initiative, judgment, or foresight in open market competition with others required for the success of the claimed independent contractor.
    • The degree of independent business organization and operation.3

The Court adds clarity by highlighting certain factors which are immaterial in determining whether there is an employment relationship.4 For example, the place where work is performed, the absence of a formal employment agreement, or whether an alleged independent contractor is licensed by State/local government are not considered to have a bearing on determinations as to whether there is an employment relationship.5 Additionally, the Supreme Court has held that the time or mode of pay does not control the determination of employee status.6 What happens next in the analysis is (typically) an evaluation of the relationship in which courts will consider the above-factors, while taking into account the industry, the nature of the work, and other situation-based considerations. Because these situations are routinely fact-intensive, it is worthwhile for employers to revisit classifications when making changes in their workforce.

Despite the oft-repeated refrain, “everyone in our industry classifies workers this way”, common industry practice is insufficient to excuse employer misclassification of employees – whether or not willful. Employers should be especially careful about taking cues from their competition. Simply because other employers in your industry classify employees as independent contractors, does not make it accurate. Equally unpersuasive in misclassification cases is an employee’s “agreement” to be misclassified, whether informally or via written employment agreement – even if the employment contract specifically defines an employee’s relationship to the employer as that of an independent contractor. Employers should also be aware that while an employee may be an independent contractor pursuant to state law or Internal Revenue Service standards, the FLSA may still create an employer/employee relationship where, for tax purposes or under state law, the analysis produces a different result.

What do you risk by failing to properly classify your employees? Employees may file complaints with the Wage and Hour Division of the DOL. Employees may also file private lawsuits to recover back pay, and liquidated damages, in addition to court and attorneys’ fees. The Wage and Hour Division of the DOL is also empowered bring its own enforcement actions. A two-year statute of limitations applies to actions to recover back pay. However, if a violation is “willful”, a three-year statute of limitations may apply.

The takeaway: Employers should make time before the end of the year to reevaluate their employee relationships and policies. Should you have any questions about this article or labor and employment law, please contact one of our employment lawyers.


1 “Fact Sheet 13: Employment Relationship Under the Fair Labor Standards Act (FLSA)”, https://www.dol.gov/whd/regs/compliance/whdfs13.htm (last accessed 9/12/2019).
2 Id.
3 Id.
4 Id.
5 Id.
6 Id.

Delaware Green Power Product Reports Due at the End of September

September 30, 2019 is the due date for competitive suppliers offering “Green Power Products” to file their annual compliance reports with the Delaware Public Service Commission. The Report Form is available on the Commission’s website on the Renewable Portfolio Standard and Green Power Products page.

Competitive suppliers are no longer responsible for compliance with Delaware’s Renewable Portfolio Standard, after that obligation was transferred to Delmarva Power & Light Company in 2012. However, competitive suppliers that offer “green” or renewable energy products in Delaware must file a compliance report with the Public Service Commission detailing the renewable energy credits used to meet the marketed green power percentages for their electricity sales.

The current Green Power Product requirements are found in Section 13 of the Delaware Public Service Commission’s Rules for Certification and regulation of Electric Suppliers, 26 Del. Admin. C. § 3001. These rules were promulgated in Regulation Docket 49 and approved in Order No. 9020 on February 2, 2017. See 20 DE Reg. 827.

If you have questions about Delaware’s Green Power Product reporting requirements or other requirements applicable to competitive electricity suppliers operating in Delaware, please contact Eric Wallace or any of GreeneHurlocker’s energy and regulatory lawyers.

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.

VA SCC Grants Injunction, Orders Dominion to Move Customers

wind turbines and solar arraysThe Virginia Commission has entered an Order on Enrollments granting motions for injunctive relief filed by Calpine Energy Solutions, LLC and Direct Energy Business, LLC. In the Order, the Commission directed Dominion Energy Virginia to “immediately resume processing enrollment requests under Section A 5 for customers who wish to purchase from Direct Energy or Calpine.”

Under Va. Code Section 56-577 A 5 (“Section A 5”), a customer shall be permitted to purchase “electric energy provided 100 percent from renewable energy” from a competitive service provider (“CSP”) if the utility has not filed an approved 100% renewable tariff. To date, Dominion does not have an approved 100% renewable tariff, and several nonresidential customers, with multiple accounts, have signed contracts with Calpine and Direct, two CSPs, to take retail service under Section A 5.

In July, Dominion filed petitions for declaratory judgment asking the Commission to determine that Calpine and Direct had not demonstrated that they were providing “electric energy provided 100 percent from renewable energy” to their customers as required by Section A 5. Calpine and Direct are disputing Dominion’s allegations as well as Dominion’s proposed standard for providing service under Section A 5. In the interim, however, Dominion had refused to process pending and future enrollments until the case was decided.

On July 22, 2019, Calpine and Direct filed for injunctive relief, asking the Commission to require Dominion to process their respective customers’ enrollments – thereby allowing the customers to switch to Calpine and Direct – while the cases are pending.

The Commission held a hearing on the injunction on August 7 and held an expedited hearing on the merits of the cases on August 20, 2019.

In a footnote to the order, the Commission held that Calpine and Direct had satisfied the elements needed for the issuance of an injunction, including: (a) absent the instant order, Calpine and Direct Energy will suffer irreparable harm; (b) Calpine and Direct have no adequate remedy at law; and (c) the Commission is satisfied of Calpine’s and Direct Energy’s equity. The Commission also noted that “A temporary injunction allows a court to preserve the status quo between the parties while litigation is ongoing.”

Our firm is representing Calpine in the proceedings.

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