Tel: 804.864.1100

Tel: 804.864.1100

Tag Archive: Virginia

We’re Back at TomTom to Support Renewable Energy

On Wednesday, April 10, the TomTom Festival and Summit will hold its Renewable Energy Day in Charlottesville, Virginia, during the six day-long series of panels, speakers, podcasts, performances, parties and other notable goings about art, community, food, music, creative and entrepreneurial ecosystems, and innovation. We’re proud to be a sponsor again, and we are focused on the 9 AM panel “The Economic Development Opportunity of Renewable Energy.”

Many of our lawyers will be attending, and our partners Eric Hurlocker, Brian Greene and Jared Burden will be in Charlottesville to welcome you personally and to talk to you about the work we’re doing in renewable energy development and regulation. In addition, we would be glad to have the opportunity to introduce you to our OPENgc services for companies that currently operate without inside general counsel. If you don’t see us at the panel or breaks, come on to the exhibit area where we will try to answer your questions and send you home with a few small gifts.

If you are interested in knowing more about our TomTom sponsorship, the renewable energy industry or have a legal issue that you need to discuss, please feel free to contact Eric Hurlocker, Brian Greene, Jared Burden or any of our Virginia energy lawyers and business lawyers.

SCC Order OKs new, but limited, APCo customer renewable tariff

On January 7, the State Corporation Commission (“SCC” or “Commission”) approved a request by Appalachian Power Company (“APCo”) to offer a 100% renewable energy tariff to its customers. The APCo proposal, designated Rider WWS, would include energy generated at several wind and hydroelectric facilities that are currently part of the utility’s generation portfolio. For residential customers taking service under the tariff and using 1,000 kilowatt hours per month, the monthly bill increase would be $4.25. Customers would also pay a “balancing” charge that is intended to ensure that non-participating customers are not affected by the tariff.

Several renewable energy and environmental advocates opposed APCo’s proposal. APCo and the intervening parties disagreed about whether the price of the tariff was based on current market prices for renewable energy and whether it is appropriate for APCo to sell energy that is already in its utility’s generation portfolio at a premium rate. Appalachian Voices, represented in the case by the Southern Environmental Law Center, argued that APCo’s proposal would “charge customers more than they currently pay for the privilege of claiming the output of certain resources already in APCo’s fleet.” Several parties noted that the rate customers would pay is tied to renewable energy credit (“REC”) market prices, as opposed to the actual cost of the underlying renewable energy. The Commission’s staff also questioned whether Rider WWS would constitute a renewable energy tariff at all, since the tariff price would be based on the cost of RECs – not on the price of renewable energy itself.

Finally, several parties noted that approval of the application would eliminate the rights of many APCo customers to shop for renewable energy. The effect on retail choice is due to Virginia’s unique regulatory structure. Virginia is, for the most part, a traditionally regulated jurisdiction. This means that incumbent electric utilities such as APCo hold state-protected monopolies on the sale of electricity in their service territories. Virginia law, however, provides a few exceptions under which customers can purchase electric generation from non-utility companies licensed by the SCC to sell retail electricity.

One of these exceptions is for 100% renewable energy purchases. The Code allows any Virginia customer – including residential customers – to purchase electricity “provided 100% from renewable energy” from non-utility suppliers. Pursuant to the statute, however, this option is only available if the customer’s incumbent electric utility does not offer an SCC-approved tariff for 100% renewable energy. Prior to the SCC’s decision in this case, no Virginia utility had an SCC-approved 100% renewable tariff in place. The Commission’s final order did not reference the tariff’s implications on retail choice.

The Commission’s final order also rejected the recommendation of the hearing examiner who conducted the evidentiary hearing. The hearing examiner recommended that the Commission deny the application because the proposal would result in “unjust and unreasonable” rates. The hearing examiner found that the evidence presented by APCo to support the application was “unsubstantiated” and based on outdated market prices for renewable energy.

Should you have any questions about this case, please contact one of our energy regulatory attorneys. The Code sections authorizing retail choice are discussed in our firm’s Virginia electric regulation guide.

SCC: Dominion Must Refile Its 2018 IRP

On Friday, December 7, the Virginia State Corporation Commission (“SCC” or “Commission”) entered an order directing Dominion Energy Virginia (“Dominion”) to revise and refile its 2018 Integrated Resource Plan (“IRP”). This order is significant in that the SCC has never rejected an IRP, or required a utility to refile its plan. We discuss several takeaways from this order below.

What is an IRP?

An IRP is a utility’s plan to meet customer demand and service obligations over a 15-year planning horizon. The IRP statute, Va. Code Section 56-599, directs utilities to evaluate various options to meet forecasted demand, including building new generation; entering into power purchase agreements with third parties; purchasing energy from the PJM market; and investing in energy efficiency resources. The statute directs the Commission to review the utility’s plan and to “make a determination … as to whether [the IRP] is reasonable and is in the public interest.” It is important to note that an IRP is not binding on the Commission or the utility in any way. The Commission states that approval of an IRP does not create any presumption that any particular resources are prudent.

Before determining whether Dominion’s 2018 plan is “reasonable,” however, the Commission wants more information. In particular, the SCC wants Dominion to update several aspects of the modeling used to generate the plan. Dominion was directed to provide these new modeling results within 90 days of the order.

“True Least Cost Plan”

First, the SCC wants Dominion to provide what it calls a “true least cost plan” that will “serve as a benchmark against which to measure the costs of all other alternative plans.” The Commission wants to know what Dominion’s modeling software would select if it were permitted to choose the least-cost resources to meet the company’s forecasted demand. The Commission’s order asserts that Dominion – instead of letting the model choose the lowest-cost resources mix – actually “forced” certain resources into the IRP. The Commission referenced Dominion’s offshore wind demonstration project as a resource that was “forced” into Dominion’s alternative plans.

“SB 966 Plan”

Second, the Commission wants Dominion to file a plan that incorporates all of what the SCC calls the Senate Bill 966 (“SB 966”) “mandates.” This legislation declared that it is “in the public interest” for Virginia utilities to construct or acquire up to 5,500 MW of new renewable energy resources. The legislation also referenced certain distribution and transmission undergrounding priorities. (Note that the Commission, in this and other orders, characterizes the priorities outlined by the General Assembly as “mandates.” The use of this term, however, is misleading when applied to renewable energy. SB 966, while declaring such renewable energy projects to be “in the public interest,” does not require utilities to make these investments, nor does it require the Commission to approve them.)

By requiring both a “Least Cost Plan” and a “SB 966 Plan,” the Commission wants to estimate the incremental costs of the SB 966 investments. The SCC may want to include this estimate in its final order on Dominion’s IRP. Moreover, the Commission may choose to include this analysis in one of the written reports provided Governor and the General Assembly regarding the implementation of Virginia’s electric regulation statutes.

Anticipated load growth

Next, the SCC directed Dominion to utilize the PJM load forecast for the Dominion Zone, which has a 15-year growth rate of 0.8%, versus Dominion’s 1.4%. At the evidentiary hearing, the Commission Staff and environmental advocates argued that Dominion’s internal load growth was too high, thus overstating the for need for new generation.

Solar capacity factors

The Commission also directed Dominion to update its modeling to use a 23% capacity factor for its solar facilities. A generation plant’s capacity factor represents the amount of time it is available and generating electricity. Dominion’s IRP assumes that new solar resources will achieve capacity factors of 26%, in part due to the use of single-axis tracking facilities which follow the sun, resulting in greater production. But the Commission noted that Dominion’s “existing [solar] resources have experienced actual capacity factors of approximately 20% on average over the last five years.” Therefore, the SCC split the difference between the actual, observed capacity factors and those forecasted by Dominion. The solar industry supported Dominion’s capacity factor projections, finding them to be achievable.

Pipeline and fuel costs

Finally, the Commission’s order does not address the proposed Atlantic Coast Pipeline (“ACP”), which would be constructed by affiliates of Dominion and may serve some of the company’s gas generation facilities. The SCC previously declined to review the ACP fuel supply contracts under the Virginia Affiliates Act, a statute which directs the Commission to approve any contracts entered into between public utilities and their affiliates.

The Commission did direct Dominion, in a footnote, to “include a reasonable estimate of fuel transportation costs … associated with natural gas generation facilities.” This could be an indication that the Commission does not believe Dominion’s forecasted gas costs are reasonable. Elsewhere in its order, however, the Commission seemed to express concern that “[Dominion’s] modeling was not permitted to select highly-efficient natural gas-fired combined-cycle facilities” and as a result Dominion’s modeling “forces in higher-cost resources [while] excluding other lower-cost resources [which] results in a more expensive plan.”

The SCC’s Order and other documents for this case are available online in Docket No. PUR-2018-00065. GreeneHurlocker represented the Solar Energy Industries Association in the evidentiary hearing at the SCC.

Should you have any questions about this case, please contact one of our energy regulatory attorneys.

SCC Approves New Large Customer Renewable Energy Tariff

wind turbines and solar arraysThe Virginia State Corporation Commission (“SCC” or “Commission”) just approved a new tariff that will give customers of Dominion Energy Virginia (“Dominion”) an additional option to purchase renewable energy. On November 6, 2018, the SCC entered a Final Order approving Dominion’s application to offer a voluntary tariff designated “Rate Schedule RG.” The tariff is available to large, non-residential customers who agree to purchase the output, including all environmental attributes, from particular renewable energy facilities.

Participating customers may request to purchase the output from specific types of generation resources, such as solar and wind energy facilities. Dominion would either construct a new renewable facility or enter into a contract with a third-party generator to obtain the renewable energy necessary to serve the customer. Schedule RG, therefore, presents an opportunity for customers to choose the type of renewable energy they want to purchase. For example, a customer could request that Dominion enter into a contract with a particular generator. Or the customer could request the utility to build a new renewable facility on the customer’s premises or in a particular geographic location. The minimum facility size is 1 MW in nameplate capacity.

Participation in Schedule RG is capped at 50 customers. The tariff is also designed to ensure that non-participating customers do not subsidize any of the costs associated with Schedule RG. For example, Dominion may not place any of the Schedule RG facility costs in its rate base or the cost of service charged to non-participating customers.

The financial transactions supporting Schedule RG are complex. Participating customers would stay on their existing tariff and continue to pay all existing utility riders. At the same time, however, customers would pay a fixed price to purchase the renewable energy and would receive a “Schedule RG Credit” that is based on the wholesale price of energy and the capacity of the facility. In this way, the Schedule RG arrangement is like a financial “swap.” That is, participating customers would agree to pay a pre-determined renewable energy contract price, but would also receive the market price for the energy, which would be sold by Dominion in the PJM wholesale market. Thus, Schedule RG is designed to approximate the actual market cost of renewable energy from particular generating facilities.

Several parties intervened in the case, including Walmart and two renewable and advanced energy trade associations. While several parties offered comments on the proposal, no party to the case opposed Schedule RG.

The SCC approved the application subject to several reporting requirements. The SCC also held that Schedule RG will expire after three years if no customers participate.

Finally, it is important to note that Schedule RG was not approved under Va. Code § 56-577 A 5 and would not constitute a 100% renewable energy tariff under this statutory provision. As we explained in our Regulatory Guide, this Code section authorizes any Virginia customer to purchase electricity “provided 100% from renewable energy” from non-utility suppliers, so long as the customer’s incumbent electric utility does not offer an SCC-approved tariff for 100% renewable energy. Therefore, if Dominion received approval to offer a 100% renewable energy tariff pursuant to Va. Code § 56-577 A 5, Dominion customers would lose their existing rights to shop for such energy.

Currently, no Virginia utility offers an SCC-approved 100% renewable energy tariff. Dominion and Appalachian Power have both applied for approval to offer such tariffs, which thus far have been rejected. In the last three years, the SCC has rejected two 100% renewable tariffs proposed by Appalachian Power and one proposed by Dominion. Dominion currently has one application pending, which would be available to residential and small commercial customers.

The SCC’s Final Order in Schedule RG, Case No. PUR-2017-00163, is available here. If you have any questions about Schedule RG or other renewable energy options offered by Virginia utilities, please contact one of our energy regulatory attorneys.

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.

Legal Debrief On Virginia’s Energy Future After SB 966

Obstacles and Opportunities for Clean Energy Development
June 20, 2018 – 10:00 a.m. – 11:30 a.m.
Virginia Bar Association VBA on Main professional space at 1111 East Main Street, Suite 905, Richmond, 23219

wind turbines and solar arraysEric Hurlocker of GreeneHurlocker is assembling a panel of experts to discuss and debate the implementation of the 2018 Virginia General Assembly’s SB 966, including the opportunities for renewable energy development and the legal obstacles to implementation.

On Wednesday, June 20, all are invited to our free look into the changes in regulatory environment and legal issues brought on by the recent session of the General Assembly. Joining us will be Will Cleveland, Staff Attorney, Southern Environmental Law Center; Matt Gooch, Assistant Attorney General, Office of the Virginia Attorney General; and Francis Hodsoll, co-founder, SolUnesco. Please RSVP for this free event here.

We’ll start at 10:00 a.m. with an introduction and background regarding Virginia’s laws regulating electric utilities and overview of 2018 Senate Bill 966. At 10:30 a.m. our panel will discuss whether SB 966 will advance or impede competition for renewable energy; whether it will be subject to challenge under the dormant commerce clause; and whether additional policy changes are necessary to advance renewable development in Virginia.

Each participant will receive a copy of the recently revised Guide to Electric Utility Regulation in Virginia. 1.5 hours Virginia CLE pending.

If you have any questions about this debrief, please contact Eric, or any of the other Virginia regulatory lawyers at GreeneHurlocker.

Solar and Wind Take Center Stage at the 2018 Virginia Energy Conference

wind turbines and solar arraysRenewable energy development, driven by rising corporate demand, was a central theme of Wednesday’s 2018 Virginia Energy Conference, hosted by the Virginia Chamber of Commerce. Garret Bean, Vice President of Development for sPower and one of the keynote speakers at the conference, discussed his company’s proposed 500-megawatt facility in Spotsylvania County, which will serve corporate customers in Virginia. Microsoft announced that it will purchase 315 MW of energy from sPower’s 500 MW project as part of its sustainability goal of 60 percent renewable energy by early 2020. In addition to Microsoft, major global companies including Google, Apple, Facebook, and Walmart have joined together to commit to 100% renewable power as a part of the RE100 initiative.

In his keynote, Bean explained that rapid data center development in Virginia, sustaining 70 percent of the world’s internet traffic, coupled with customer demand for cloud services powered by clean energy sources, presents a significant opportunity for growth in Virginia’s renewable energy sector. However, with the growth of renewable energy, developers are facing siting, permitting, and interconnection challenges that will have to be overcome.

Delegate Terry Kilgore, Senator Frank Wagner, and Secretary of Natural Resources Matt Strickler also discussed the opportunities and challenges of Virginia’s renewable energy industry. Senator Wagner voiced concerns about Virginia’s proposed regulations to link to the Regional Greenhouse Gas Initiative (RGGI) and participate in its regional greenhouse gas emissions cap-and-trade program. However, with the passage of SB 966 this session, paving the way for 5,000 megawatts of solar and wind energy in Virginia, and Governor Northam’s announcement that the Virginia Department of Mines, Minerals and Energy has posted a Request for Proposals for contracts to help strengthen Virginia’s offshore wind supply chain and service industry, the future for Virginia’s renewable energy industry is looking bright.

If you have questions about Virginia’s renewable energy industry, legislation, or regulatory structure, please contact one of GreeneHurlocker’s energy and regulatory lawyers.

Dominion Proposes Significant New Solar and Gas-Fired Generation

On May 1, Dominion Energy Virginia (“Dominion”) filed its 2018 Integrated Resource Plan (“IRP”) at the State Corporation Commission (“SCC”). In Virginia, an IRP is a utility’s proposal for meeting customer demand over the next 15 years. An IRP is a planning document and does not represent a commitment to pursue any particular course of action. Instead, it is the utility’s best assessment, at a particular point in time, regarding which resources it will deploy over the planning horizon.

The SCC must review Dominion’s IRP and decide whether the plan is “reasonable and in the public interest.” Generally, interested parties are able to present arguments and testimony regarding the reasonableness of the plan.

Dominion’s 2018 filing includes five alternative scenarios. The key variable in the alternative plans is carbon regulation. For example, the IRP includes different modeling based on whether a carbon tax is imposed at the federal or state level, or whether the Commonwealth joins the Regional Greenhouse Gas Initiative.

In each alternative plan, Dominion proposes to add at least 4,700 MW of new solar capacity in the next 15 years. Dominion also proposes to add between 3,700 and 5,200 MW of new gas-fired generation. Dominion suggests that these new gas facilities will be used as “peaking resources,” which run when necessary during periods of increased demand, such as on hot summer days when there is greater need for air conditioning. The also IRP assumes that Dominion’s peak demand will increase 1.4% each year.

The IRP indicates that the proposed Atlantic Coast Pipeline (“ACP”) will be a supply source for the new gas facilities. Dominion states that it has already signed an agreement to “secure firm transportation services on the Atlantic Coast Pipeline.” Dominion’s parent company, Dominion Energy, is one of the developers of the ACP.

Finally, the IRP assumes that Dominion’s four nuclear reactors will receive federal approval to remain operational throughout the planning period. However, Dominion says that it will “pause material development activities for North Anna 3,” a third nuclear reactor that the company was planning to construct at its nuclear facility in central Virginia.

The IRP notes that Senate Bill 966, which was enacted by General Assembly earlier this year, will become effective on July 1 of this year. This legislation is intended to encourage investments in renewable energy and “grid transformation” projects. The legislation requires Dominion to propose at least $870 million in energy efficiency programs over the next 10 years.

Dominion states that it “has begun the initial planning associated with a transformational grid modernization effort.” These “grid transformation” efforts will include investments in smart meter technology, distribution substation automation, “replacing aging infrastructure,” and an “enhanced customer information platform” to allow customers to manage their energy consumption. Although the IRP notes that Senate Bill 966 requires the company to propose $870 million in efficiency programs over the next 10 years, the IRP does not identify what type investments might be made.

We expect the SCC will enter an order for notice and hearing in the coming weeks. The SCC’s order will include deadlines for intervention, expert witness testimony submissions, and a date for the evidentiary hearing.

If you have any questions about Dominion’s IRP, or other electric energy matters, please contact one of GreenHurlockler’s renewable energy or regulatory lawyers.

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:

Last Chance to Don Those Dancing Shoes, Deep Run!

For over a decade, the madness of March includes the Deep Run Marathon Dance. GreeneHurlocker has been a steady supporter of this great event, which will be held for the final time March 16 and March 17, at Deep Run High School.  The Marathon Dance benefits the charities of our local community, and since it began, Deep Run High School students, of all grades, have raised about two million dollars for local charities.  The event has become the second largest high school dance marathon in the country is run and put together by the help of the student committee. Watch their video about the 2018 effort on the Facebook page.

Stay tuned for pictures and updates from this year’s Marathon Dance.#DRMD18