Tel: 804.864.1100

Tel: 804.864.1100

Virginia

Legislative Post-Session Discussion in Harrisonburg

Chamber Post-Legislative Breakfast 2019On April 8, our Harrisonburg partner Jared Burden will join in sponsoring the Harrisonburg-Rockingham Chamber of Commerce and Shenandoah Valley Technology Council’s Post Legislative Breakfast with legislators and business leaders discussing the laws, budget actions and plans made at the recent General Assembly session. The discussion starts at 7:30 a.m. and we hope, if you’re interested, you’ll register with the Chamber here.

If you have questions about the event, contact the Chamber. If you want to know more about our Harrisonburg practices or need to discuss a legal issue, just get in touch with Jared, or any of our business 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.

Three Things an Entrepreneur Should Keep In Mind

Entrepreneurs are fascinating to me. They are tied to the mast by their own natures. They can’t do anything else but what they are doing. They have to create. Even when the most they get from friends, family, and the guy on the next bar seat is a cocked eyebrow, maybe even a yawn.

Most of the entrepreneurs I deal with have long come to terms with the way they are wired. To them, it’s just who they are.

As amazing as they are in their inspiration and knowledge base, they (like all of us) can often use a bit of perspective. As general corporate counsel, that’s a place I can make an impact. It’s my job to scan broadly to see the forest my client is walking through, and keep a closer eye for the falling tree that might hit him on the head.

While I am not a huge believer that something as complex as entrepreneurship can be reduced to lists, there are a few home truths that have emerged for me in doing this over and over again. It’s in the form of advice I could give any person looking to forge a business where there was nothing before.

THINK IN THE ALTERNATIVE.

An entrepreneur needs to be able to analyze a challenge along at least two separate tracks — Pro and Con, Option A and Option B, these assumptions and those assumptions. This is easy for a lawyer to say; it’s what we’re trained to do. (“I did not kill that man! But if I did, this is why I should get off.”) But you know what? We all need to do it from time to time, and someone starting a business from scratch really needs to do it.
Bill is the founder of a company that is developing a family of apps for use within the construction industry. He has always believed that the vertical he needs to focus on as the way into the industry is commercial banking. It’s the insight that got him into this venture and it’s what he’s always assumed would work best. But a friend who’s given good advice on this venture before is telling him that it’s the building trades, people on trucks like plumbers and roofers, who would adopt the product first and then evangelize it within the construction world. Bill’s intuition has done him well in life to this point, and he’s loath to step away from it now. In fact, not just “going with his gut” feels like a rejection of who he is. But Bill needs to be able to mentally take a moment and imagine a world where he’s wrong and his friend is right. He should play out both scenarios – from past first principles, through the present, and into the future. And he should do it without kicking and screaming. It’s a waste of energy.

You won’t lose yourself if you think in parallel. Your brain is big enough to keep control of the whole process and bring everything back in when it’s decision time.

EMBRACE THE LIKELIHOOD SOMEONE ELSE IS DOING THE SAME THING

I’ve sat across the table from several company founders who have given me the look of a deer in the beams of an approaching car when I’ve told them my cursory Google search has shown others are already operating in their space. In these cases the entrepreneurs have gotten so romanced with their own idea, and so deep into the feedback loop created by unexamined assumptions of uniqueness, that they’ve failed to consider that others are already there, or nearby.

There really are few new ideas under the sun. (And I plan to write a piece about why ideas, alone, are pretty worthless.) It only makes sense that in a world full of smart people who, receiving the same inputs and experiencing the same things as you, would hit on your idea.

A new company is the most compelling when it is the first to market to solve a pain – or, better put, the first to (i) solve the pain (ii) with a sustainable business model. It can also be pretty compelling when there are folks already doing what you do, but you have some special angle on it – which may be no more genius than really good branding or deep industry knowledge. You need to know which of these scenarios – commodity or non-commodity – apply to you before you can really have any business entering the marketplace. They are very different realities.

You can’t know any of this before you fall out of love with your idea for a brief moment and survey the landscape with a sharp and skeptical eye.

REALIZE THAT YOU ARE YOUR BEST PRODUCT.

You will probably abandon your original business concept. It’s natural, somewhat inevitable, and completely healthy. It’s not failure. It’s life. We didn’t get dating right the first time we tried it. When we finished a term paper in college it probably was about something different than when we wrote the first word of it. Reflective light technology revealed that Da Vinci first had Mona Lisa looking off to the side, without her half-smile.

The original idea is what gets you into the game. Without the original idea you wouldn’t have had the reason to start the journey. But it will almost certainly not be what your product or service actually turns out to be.

What will still be there is you. Which, to me, means that you are the real product.

Smart early-stage investors know it, or come to know it if they see enough deal flow. There are a lot of ideas, a million slices of the pie of industry – lots of places to do good work. Lots of opportunity. But there are only so many people really who have the persistence and character to think as clearly as spring water while at the same time wading chest-deep in muck. These people are pretty rare.

It’s rare because it’s hard. The born entrepreneur has a leg up, because he really has no choice but to work to become that person. He may not know that’s what he’s doing, but he’s doing it nonetheless.

If you would like more information on these entrepreneurial essentials or have an issue in business law, please contact me or any one of our Virginia corporate law attorneys.

Good Times and Great Fellowship in Harrisonburg

Thank you! Harrisonburg partner Jared Burden and the whole GreeneHurlocker firm are grateful for the great attendance of our business clients and colleagues at our “Top Five Risks When You Sign A Contract” session with our friend Tom Mendez of McGriff Insurance Services yesterday afternoon in our offices in the Smith House. And the after-party, our Open House celebrating the successes of our first year of our Harrisonburg office, was incredible fun and filled the art gallery downstairs. We are pleased to report that all those who attended shared our Holiday spirit and wishes for a prosperous New Year were frequent and heartfelt. We can’t wait for another time to get together, so watch for our next seminar announcement in the New Year. You can see the fun for yourself below.

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.

Client Alert: Dominion In the Market for Solar, Wind

On October 24, 2018, Dominion Energy Virginia (Dominion) announced and issued an RFP seeking 500 MW of solar and on-shore wind generation. Projects must be at least 5 MW. Interested bidders can propose to either sell Dominion the project development assets or sell energy to Dominion under a Power Purchase Agreement. Projects must be located in the Commonwealth of Virginia to be eligible.

The RFP schedule is as follows:

Intent to Bid forms due: This Friday, November 2, 2018
Proposals to sell development assets due: December 13, 2018
Proposals to sell energy (PPA) due: March 14, 2019
RFP concludes: Second Quarter 2019

Dominion has pledged to have 3,000 megawatts of new solar and/or wind energy under development or in operation by early 2022. Dominion also announced that it will issue formal RFPs on an annual basis until the 3,000 MW target is met.

If your company has questions or would like any additional information regarding the Dominion RFP, please contact one of our renewable energy attorneys or utility attorneys.

Simple Guide to Electric Regulation Now New and Improved

If you have been wondering about the effect of Virginia’s 2018 General Assembly session on electric regulation in Virginia, we have good news for you. The GreeneHurlocker Principles of Electric Utility Regulation in Virginia, the firm’s complete guide to the state’s electric regulation laws, has been revised to incorporate legislation enacted by the 2018 General Assembly and signed by Governor Northam.
“The statutes governing Virginia’s electric utilities, found in Title 56 of the Code of Virginia, are extremely complex, but we’ve done our best to explain these laws in plain English,” one of the firms energy lawyers, explains. The guidebook and its glossary of key terms is intended to be a reference tool for those who want to gain a better understanding of utility regulation and energy policy in Virginia. In 2018, the General Assembly made substantial changes to the rate setting portions of the law and added new incentives for utilities to invest in clean energy and grid transformation projects. The updated guidebook summarizes the major amendments made by the legislature earlier this year.
If you would like a copy of the guidebook, contact any of our energy lawyers, or download the complete document here.

So Pleased to Join the Last Dance

GreeneHurlocker was very proud to be a long-time supporter of the Deep Run Marathon Dance, which in its final year raised over $197,000.  Over the twelve-year run of the Dance, the passionate teenagers at Deep Run High School and community volunteers raised nearly $2.2 million for worthy local non-profits.

It is always a privilege for us to join in local causes that benefit the community. We’ve supported others in past years including the Rutlin Torah AcademyUnited Way, Commonwealth Catholic Charities’ undocumented youth project and CancerLINC. If you want to know more about our community involvement, contact any of our lawyers.

Here are a few photos we took last weekend:

Solar Plant Planned for Richmond

As we previously discussed here, last month it was announced that President Trump signed an executive order to impose a 30% tariff on imported solar cells and modules. While there are many critics of the tariff, one local Virginia businessman hopes the tariff will help lead to Virginia’s first solar panel manufacturing facility.

As reported in the Richmond Times Dispatch article, Charles Bush has transformed a 16,000 square foot former die plant off Midlothian Turnpike in South Richmond to a potential solar panel manufacturing facility. He hopes that as manufacturers look for solar panel manufacturing plants in the United States as a result of the tariff, his plant will be attractive given that its “ready to go.” Bush stated that as of now, the plant can produce 460 solar panels a day, but he hopes to double capacity within the first year of operation.

We look forward to following Mr. Bush’s facility and hope to see solar panel manufacturing in Virginia soon!

If you have any questions regarding the solar tariff or solar energy market, please contact one of our renewable energy lawyers.

Nutriati Keeps Moving Forward

Photo by RTD, Alexa Welch Edlund

We were excited to read the front page coverage about our client, Nutriati, who we have mentioned before, here and when they were selected for a ChamberRVA IMPACT Award, in yesterday’s Richmond Times Dispatch Metro Business section.

You can see and read about the strides the Company continues to take on the RTD website.  We wish the Nutriati Team continued success, and we’re looking forward to tasting those brownies someday soon.