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SCC will meet about reasonableness of proposed renewable energy tariff

Commission Sets date for hearing on reasonableness of new renewable energy tariff proposal

On April 28, 2016, Appalachian Power Company filed an application with the Virginia State Corporation Commission asking for approval of a voluntary tariff that the Company says would allow customers to purchase “electric energy provided 100 percent from renewable energy.” APCo’s application requests approval to implement a voluntary program that would allow customers to pay a special rate to ensure that their energy needs can be met “from energy generated exclusively from renewable resources.” APCo does not currently have a tariff offering that provides energy generated exclusively from renewable energy sources.

APCo’s proposal would reallocate to participating customers the renewable energy produced by several of APCo’s current generation suppliers.  APCo proposes to “assign to [participating customers] the output of its renewable generators that are currently under long-term Purchased Power Agreements” with the Company. The facilities, consisting of four wind farms in Illinois and Indiana and one hydroelectric generating facility in West Virginia, have a combined nameplate capacity of 423 MW. Customers that choose to participate in APCo’s renewable tariff would in effect be paying a special rate to purchase renewable energy that all APCo customers are already purchasing, from generation facilities that are already embedded in APCo’s current portfolio. Participating customers, however, would no longer pay the base rate and fuel charges associated with APCo’s non-renewable generating plants.

APCo’s filing could also affect customers’ ability to purchase renewable energy from third-party sellers.  Currently, APCo’s customers are permitted to purchase 100% renewable energy from third-parties pursuant to Section 56-577 A 5 of the Code of Virginia. But this code section allows customers to purchase renewable energy from non-utility sellers only if APCo does not offer a Commission-approved tariff consisting of 100% renewable energy. If APCo’s tariff is approved and considered by the SCC to be a true renewable energy offering, customers may lose the right to purchase renewable energy from third-party, non-utility companies.   

The SCC has scheduled a formal hearing to be held in Richmond on November 15, 2016. At the hearing, the SCC will consider testimony and comments from interested parties to determine whether the program is in the public interest and should be approved. Any interested party may intervene in the case by filing a notice of participation by July 21. The case is docketed as SCC Case No. PUE-2016-00051.

If you have questions or concerns about the proposal, the SCC or renewable energy regulation in Virginia, please contact one of our Virginia energy lawyers.