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Tag Archive: Dominion Resources

SCC Sets Procedural Schedule for Dominion Grid Application

On July 24, 2018, Dominion Energy Virginia (“Dominion”) filed a Grid Transformation Plan with the Virginia State Corporation Commission (“Commission” or “SCC”). The SCC has entered a procedural schedule for this case and set an evidentiary hearing for November 15, 2018.

Dominion’s grid plan proposes to invest approximately $816 million in projects designed “to enhance the reliability, resiliency and security of the electric distribution grid.” Dominion also states that the plan will “facilitate the integration of distributed energy resources, such as solar or battery storage, into the system.” Dominion proposes to make the $816 million in investments over a three-year period, between 2019 and 2021. In particular, the utility wants to install approximately 1.4 million smart meters throughout its service territory between 2019 and 2021. There is more about the request here.

The filing also outlines the utility’s longer-term grid transformation priorities. Over 10 years, Dominion proposes to invest over $3.1 billion in grid transformation investments. These investments would include additional smart meters and other “advanced metering infrastructure” as well as reliability improvements and “grid hardening” projects. Dominion’s plan includes proposals to replace certain aging distribution facilities and increase the company’s physical and cyber security capabilities.

The application is filed pursuant to recently enacted legislation, Senate Bill 966, passed by the General Assembly and signed by Governor Northam earlier this year. Dominion’s petition requests the SCC to find that the plan is “reasonable and prudent.” The legislation provides that “grid transformation projects” are “in the public interest.” However, the law does not require the Commission to approve any of the proposed investments.

Dominion does not request cost recovery in its filing or explain whether the spending plan would result in rate increases for customers. This case has been docketed as Case Number PUR-2018-00100. Interested parties have until September 11, 2018, to intervene in this case.

If you want to know more about how this filing may affect energy markets in Virginia or have a legal issue in the energy field, please contact any of our renewable energy lawyers.

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 greenlights Dominion plan to build 20 MW solar facility in Fauquier County

sunset-solar-squareOn Wednesday, February 1, the Virginia State Corporation Commission approved an application filed by Dominion Virginia Power to construct and operate a 20 MW solar generating facility near the town of Remington, in Fauquier County. Virginia. Dominion will sell the output of the facility to the Commonwealth of Virginia under a 25-year power purchase agreement. Dominion estimates that the total cost of the project will be $46 million. The terms of the agreement, however, including the price that the state agreed to pay for the energy, are confidential and were not disclosed to the Commission.

The SCC rejected Dominion’s first application to build and operate the Remington facility in 2015. In the 2015 case, Dominion sought to increase customer rates in order to pay for the Remington project, which would have provided power to all of the company’s retail customers. But the Commission rejected Dominion’s application after finding that the company had not complied with a Virginia statute requiring it to consider third-party alternatives. Specifically, Virginia law requires utilities, when proposing to build new generation facilities, to demonstrate that they considered whether the same energy could have been obtained for a lower price from non-utility companies.

The Commission’s final order on Wednesday, however, found that this law should not apply to Dominion’s new application because the Commonwealth of Virginia is the sole purchaser of the energy. The Commission noted that the Commonwealth is a “non-jurisdictional retail electric customer” and thus “the rates and charges it pays generally fall outside of the Commission’s regulatory authority.” The Commission also explained that Dominion will “recover its costs exclusively through contracts negotiated with the Commonwealth” and not “through any Virginia jurisdictional retail electric rates established by the Commission.”

The Commission admitted that it had “not reviewed or evaluated the terms of the Commonwealth’s contract with Dominion, including the financial terms of [the] arrangement.” Therefore, it is unclear at what price the Commonwealth agreed to purchase the Remington energy, or whether solar energy could have been obtained from another seller at a lower cost to taxpayers.

Dominion has announced plans to build at least 400 MW of solar energy in Virginia by 2020. And, as we have discussed previously, several bills currently under consideration by the General Assembly could further accelerate the development of solar energy in Virginia. The Virginia Department of Environmental Quality reports that there are seven other solar facilities at least 20 MW in size that have been permitted by the state and in various stages of construction.

Please contact one of our energy lawyers or regulatory attorneys should you have questions about this solar project or other renewable energy initiatives in Virginia.

On Time Delivery for Dominion Isle of Wight Solar Project

We saw the recent news that Dominion Virginia Power’s Isle of Wight solar array project delivered on time. The Woodland Solar development (19 MW) becomes one of the largest of its kind in the state. In December, Dominion brought three projects on line, including Woodland.

Dominon Virginia Power Isle of Wight solar array

Dominion Virginia Power Isle of Wight solar array

While Virginia continues to lag behind other states in solar energy development, we’ve noted that this year the General Assembly may be poised to try and change that by putting into law some better incentives for producers and developers.  We applaud Dominion for its commitment to integrating renewable sources into its power grid, and we are hopeful that other energy companies will also bring their investment to the state. It will take a diverse group of providers to effectively increase our use of solar power in the Commonwealth.

If you have questions about renewable energy and solar power development or need more information on the Dominion projects, please contact one of our Virginia energy lawyers.

Virginia Commission Rejects Customers’ Challenge to Virginia’s “Rate Freeze Law”

On July 1, 2016, a 2-1 majority of the SCC rejected a legal challenge to SB 1349, the so-called “electric rate freeze law,” which prevents the Commission from reducing the base rates of Dominion Virginia Power (“Dominion”) and Appalachian Power Company (“APCo”) until 2023 and 2021, respectively. A group of large industrial customers of APCo brought the challenge, alleging that the law violates the Virginia Constitution because it prevents the Commission from regulating the rates of Virginia’s largest investor-owned electric utilities for several years. Dominion and APCo are both monopolies, meaning that businesses and individuals in their service territories have no choice but to purchase power from the two utilities. As we have previously written, this issue is worth approximately $280 million per year for Dominion’s customers alone.

The legal challenge was based on Article IX of the Constitution of Virginia, which establishes the powers and duties of the SCC. Article IX, Section 2 provides that “Subject to such criteria and other requirements as may be prescribed by law, the Commission shall have the power and be charged with the duty of regulating the rates, charges, and services … of electric companies.” According to the industrial group, therefore, the Commission’s authority to regulate electric rates is subject only to “criteria” and “other requirements” that may established by the General Assembly. By taking the authority to regulate electric rates away from the SCC altogether, the group argued, the rate freeze law violates Article IX. The challengers also noted that SB 1349 freezes rates at an excessively high level, which will likely result in excess profits of hundreds of millions – or billions – of dollars for utility shareholders at the expense of Virginia citizens and businesses.

The SCC majority, however, wrote that “the question presented in this case is not whether SB 1349 represents good policy; it is whether SB 1349 violates the constitution.” The majority reasoned that the law does not run afoul of Article IX because SB 1349, by delaying rate reviews, merely establishes “requirements” or “criteria” regarding rate setting. Commissioner Dimitri dissented, writing that “rather than prescribing criteria and other requirements that the Commission must apply in setting base rates, [SB 1349] removes the Commission’s constitutional power and duty to regulate those rates.” IN support of his dissent, Commissioner Dimitri cited Professor A.E. Dick Howard, a chief drafter of the 1971 revisions to the Virginia Constitution, who has written that the General Assembly “may not itself fix the rates of a particular [utility] company.”  Dimitri also wrote that “the majority embraces plenary power of the General Assembly in all rate regulation matters, by stretching ‘criteria’ to mean complete regulation of rates, including prohibition of Commission regulation of rates.”

Commissioner Dimitri noted that the Commission Staff had estimated that Dominion’s rates are currently designed to produce excess revenues of approximately $300 million per year and that “Dominion’s [excess profits] have the potential to reach well over a billion dollars, at customer expense,” during the rate freeze period.

Attorney General Mark Herring, who is charged by statute with representing the interests of ratepayers before the SCC, instead sided with Dominion and APCo. The Attorney General, while conceding that the General Assembly could not set electric rates, sought to parse the difference between “setting rates” and “freezing rates.” The Attorney General argued that SB 1349 is lawful because it “does not set the rate,” but merely “freezes” rates previously set by the Commission.

Commissioner Dimitri pointed out that the Attorney General had, in recent cases before the Commission, argued that Dominion’s and APCo’s rates are currently too high, and producing excess profits for utility shareholders. Dimitri also noted that the Attorney General’s decision to side with Dominion and APCo is contrary to a 2015 Attorney General legal opinion, in which Herring wrote that the General Assembly may not pass laws that “contravene the [Commission’s] fundamental power and duty to regulate the ‘rates, charges, and services … of railroad, telephone, gas, and electric companies.”

The challengers have until August 1, 2016, to decide whether to appeal the decision to the Virginia Supreme Court. If the Supreme Court strikes SB 1349, the decision could allow the SCC to reduce Dominion’s and APCo’s rates by hundreds of millions of dollars per year.

Will Virginia’s “Rate Freeze Law” Stand? The $280 million (Per Year) Question.

The Supreme Court of Virginia Building, adjace...

The Supreme Court of Virginia Building, adjacent to Capitol Square in Richmond, Virginia (Photo credit: Wikipedia)

A group of industrial customers of Dominion Virginia Power (“Dominion”) recently asked the Supreme Court of Virginia to strike a controversial portion of the Virginia Electric Utility Regulation Act (“Regulation Act”). The group, the Virginia Committee for Fair Utility Rates (“Committee”), is challenging a 2015 amendment to the Regulation Act, Senate Bill 1349, which limits the state’s ability to regulate the electric rates of monopoly public utilities. The so-called “rate freeze law” prevents the State Corporation Commission (“SCC” or “Commission”) from reviewing or reducing the base rates of Dominion and Appalachian Power Company through at least 2022. If the Supreme Court strikes the law, it could mean a significant rate reduction for Dominion’s customers – to the tune of approximately $280 million per year. See our previous information about this topic here.

The rate freeze law is controversial because it prevents the Commission from reducing Dominion’s rates, even though the SCC has previously found that the monopoly utility’s rates are too high and are producing excess profits for Dominion’s shareholders. In its 2013 review of Dominion’s rates, the Commission found that Dominion’s current base rates are set at a level that will produce excess profits of approximately $280 million each year. The Committee’s appeal seeks to overturn the rate freeze law, which would presumably allow the SCC to lower Dominion’s rates substantially. The Committee has argued that if Dominion’s rates remain unchanged through 2022, Dominion’s shareholders will reap excess profits of “well over a billion dollars.”

The challenge was triggered by an SCC order late last year that applied the rate freeze law for the first time. In its Final Order in Dominion’s 2015 Biennial Review rate case, SCC Case No. PUE-2015-00027, a 2-1 majority of the Commission applied SB 1349 as written and declined to adjust Dominion’s base rates or set a new rate of return on equity for the company. Commissioner Dimitri, however, filed a dissenting opinion, stating that the rate freeze law violates Article IX of the Constitution of Virginia because it limits the SCC’s authority to regulate monopoly electric utilities such as Dominion.

The legal arguments advanced by the Committee are also based on Article IX of the Constitution of Virginia, which establishes the powers and duties of the SCC. Article IX, Section 2 provides that “Subject to such criteria and other requirements as may be prescribed by law, the Commission shall have the power and be charged with the duty of regulating the rates, charges, and services … of electric companies.” According to the Committee, therefore, the Commission’s authority to regulate electric rates is subject only to “criteria” and “other requirements” that may established by the General Assembly. By taking the authority to regulate electric rates away from the SCC, the Committee has argued, the rate freeze law runs afoul of Article IX.

Opening briefs in this case (Supreme Court Record No. 160453) are due June 3, and oral arguments are likely to be held during the Supreme Court’s fall term.

If you have any questions about any of the legal aspects of this case or its potential to affect the electric rates paid by Dominion’s customers, do not hesitate to contact one of GreeneHurlocker’s Virginia energy and regulatory attorneys.

Dominion Buying Gas Distributor Questar

Dominion Resources Inc. (“Dominion”) announced Monday, February 1, 2016, that it plans to purchase Utah-based Questar Corporation (“Questar”), a natural gas distributor, for approximately $4.4 billion in an all-cash deal.  Purchasing Questar will expand Dominion’s customer base to customers in Western states.  With Questar’s acquisition, Dominion would serve approximately 2.5 million electric customers and 2.3 million gas customers in seven states.  In addition, Dominion would operate more than 15,000 miles of natural gas transmission, gathering and storage pipelines.

The acquisition is set to close by the end of 2016, pending approval from Questar’s shareholders, the Federal Trade Commission, and, if needed, the Utah Public Service Commission and the Wyoming Public Service Commission.  The companies indicated they will also give information about the transaction to the Idaho Public Utilities Commission. After closing, Questar will remain headquartered in Salt Lake City, Utah, operating as a unit of Dominion.

If you have questions about the Dominion acquisition or utilities regulation in Virginia or the mid-Atlantic, please contact one of our energy lawyers.

Eric Hurlocker and the Virginia Legal Considerations Panel

Eric Hurlocker will be on the “Top Ten Legal Considerations – Virginia” panel at the 2016 Clean Energy CLE, February 3, in Raleigh, NC. Presented by the NC Sustainable Energy Association, the meeting will be held at the Doubletree Raleigh-Durham, a Hilton property just off I-40. Registration for the approximately 140 available spots is brisk, so grab yours right now at the online registration. Scheduled to appear with Eric are William H. Chambliss, Virginia Corporation Commission General Counsel, and Horace Payne of Dominion Virginia Power. Attorney attendees will receive 5 credit hours of North Carolina and South
Carolina general CLE. CLE credit has been applied for with the Georgia and Virginia state bars.

Dominion Customers to Challenge Constitutionality of Electric Utility Regulation Act

A group of industrial customers of Dominion Virginia Power (“Dominion”) has recently taken steps to challenge the constitutionality of Virginia’s Electric Utility Regulation Act (“Regulation Act”) at the Supreme Court of Virginia. At issue is a 2015 amendment to the Regulation Act, Senate Bill 1349, which exempts Dominion and Appalachian Power Company from biennial base rate reviews through 2022. In effect, the legislation prevents the State Corporation Commission (“SCC” or “Commission”) from changing the utilities’ base rates until 2022 – even if the Commission determines that electric rates are too high and are producing excess profits for utility shareholders.

The potential constitutional challenge was triggered by an SCC order late last year that applied Senate Bill 1349 for the first time. In its Final Order in Dominion’s 2015 Biennial Review rate case, SCC Case No. PUE-2015-00027, a 2-1 majority of the Commission applied Senate Bill 1349 and declined to adjust Dominion’s base rates or set a new rate of return on equity for the company. Commissioner Dimitri, however, filed a dissenting opinion, arguing that Senate Bill 1349 violates Article IX of the Constitution of Virginia and therefore cannot prevent the SCC from adjusting Dominion’s base rates.

Following the Commission’s Final Order, the Virginia Committee for Fair Utility Rates (“Committee”), an association of large industrial customers, filed a Petition for Reconsideration at the SCC. The Committee’s Petition cited Commissioner Dimitri’s dissenting opinion and requested that the Commission find that Senate Bill 1349 is unconstitutional. On December 14, 2015, a 2-1 majority of the Commission denied the Committee’s motion. Commissioner Dimitri filed a second dissenting opinion, reiterating his finding that Senate Bill 1349 is unconstitutional. On December 22, 2015, the Committee filed a Notice of Appeal at the SCC, which preserves the Committee’s ability to file a formal appeal with the Supreme Court of Virginia.

The legal arguments advanced by the Committee are based on Article IX, Section 2 of the Constitution of Virginia, which establishes the powers and duties of the SCC. Article IX, Section 2 provides that “Subject to such criteria and other requirements as may be prescribed by law, the Commission shall have the power and be charged with the duty of regulating the rates, charges, and services … of electric companies.” According to the Committee, therefore, the Commission’s authority to regulate electric rates is subject only to “criteria” and “other requirements” that may established by the General Assembly.

The dissenting opinion argues that Senate Bill 1349 “does not establish criteria that the Commission must apply in regulating Dominion’s base rates” but instead “fixes [Dominion’s rates] and takes the base rate setting function away from the Commission.” The Committee has also argued that if Dominion’s rates remain unchanged through 2022, Dominion’s shareholders will reap excess profits of “well over a billion dollars.”

Appeals from the State Corporation Commission are “of right,” meaning that the Supreme Count cannot decline to hear properly filed appeals. In order to be heard by the Court, however, the Committee would have to file a formal “Petition for Appeal” within four months of the date of the Final Order in this case. If a Petition for Appeal is filed, oral arguments would likely be heard by the Court in its September, 2016 session.

If you have any additional questions about any of the legal aspects of this case or its potential to affect the electric rates paid by Dominion’s customers, do not hesitate to contact one of GreeneHurlocker’s Virginia energy and regulatory attorneys.

Reminder: Next week is deadline to participate in Dominion’s CPCN case

As we previously discussed here, any person or entity who wishes to participate as a respondent in Dominion Virginia Power’s (“Dominion”) application for approval and certificates of public convenience and necessity to construct and operate three utility scale solar electric generating facilities must file a notice of participation on or before January 12, 2016 with the Virginia State Corporation Commission (“SCC”).  In addition, any interested party wishing to comment on Dominion’s application must file comments with the SCC on or before March 15, 2016.  A public hearing will be convened on March 22, 2016.

You can read more about Dominion’s application for approval and certificates of public convenience and necessity here. And if you have any questions about this deadline, the proposed construction or solar energy legal issues in general, please feel free to contact any one of our Virginia solar energy lawyers.