The Virginia State Corporation Commission (the “SCC”) issued a Final Order on October 20, 2015 (the “Order”) denying Dominion Virginia Power’s (“Dominion”) application to construct and operate a 20 megawatt utility-scale solar electric generating facility near the town of Remington in Fauquier County, Virginia (the “Facility”). In Dominion’s application, Dominion proposed to construct the Facility on a 280-acre parcel of land owned by Dominion, located across from Dominion’s existing natural gas-fired Remington Power Station. In addition, Dominion requested SCC approval of a rate adjustment clause to recover costs associated with the Facility.
Section 56-585.1(A)(6) of the Code of Virginia requires a utility seeking SCC approval to construct a generating facility to demonstrate that in its selection process it has “considered and weighted alternative options, including third-party market alternatives.” Furthermore, Virginia law requires the SCC to consider the extent to which such proposed facility is “likely to result in unreasonable increases in rates paid by consumers.”
In its Order, the SCC held that Dominion did not demonstrate that it considered and weighed alternative options, including third-party market alternatives, during the selection process for the Facility, as is required by Virginia law. The SCC went on to hold that Dominion had not established that the costs of the Facility to be paid by consumers “would be reasonable or prudent.” The SCC cited testimony from MDV-SEIA, the Mid-Atlantic Renewable Energy Coalition and the Virginia Sierra Club that a request for proposal process (which Dominion did not conduct) “could have provided evidence as to whether lower-cost alternatives exist to provide this renewable power.”
The SCC explained that Dominion may refile an application that meets all statutory requirements, including the requirements regarding third-party market alternatives and establishing the reasonableness and prudence of any costs proposed for recovery from consumers. GreeneHurlocker represented MDV-SEIA in the SCC proceeding. If you have questions or need information about the Order or MDV-SEIA, please contact one of our Virginia energy lawyers.