On June 20, the Virginia State Corporation Commission (“SCC” or “Commission”) established a procedural schedule for the review of Dominion’s 100% renewable energy proposal, Rider TRG (SCC Case No. PUR-2019-00094.) Rider TRG, if approved, would be a voluntary option for residential and non-residential customers who want to purchase and use renewable energy. Rider TRG would reallocate the energy generated from several generation facilities that are either in Dominion’s rate base or from which Dominion currently purchases power.
Customers taking service under Rider TRG would pay a premium of 0.421 cents per kWh, which would increase a 1,000 kWh monthly bill by $4.21. For residential customers, this represents a 3.6% increase over standard service rates. Dominion states that the premium is a “proxy” for the 2018 market value of the renewable energy certificates (“RECs”) generated from facilities in the Rider TRG portfolio.
The generation for Rider TRG would be sourced from several solar, hydroelectric, and biomass facilities as well as from Dominion’s Virginia City coal plant in Wise County, Virginia. (Under Virginia law, the definition of “renewable energy” includes “the proportion of the thermal or electric energy from a facility that results from the co-firing of biomass.” See Va. Code § 56-576. Dominion estimates that the coal mixture burned at the Virginia City plant will consist of up to 10% wood waste by 2023.”)
Dominion asserts that Rider TRG, if approved, would constitute a 100% renewable option pursuant to Va. Code § 56-577 A 5. This statute provides that Dominion’s customers are permitted to shop for generation and purchase “electric energy provided 100 percent from renewable energy” from any competitive supplier, so long as Dominion does not offer an SCC-approved tariff consisting of 100% renewable energy. The Commission has previously found that RECs alone do not constitute the provision of “electric energy provided 100 percent from renewable energy” pursuant to Va. Code § 56-577 A 5. Instead, in order to qualify as a tariff for 100% renewable energy under this statute, a utility must actually allocate energy to customers.
If the SCC approves Rider TRG – and finds that it constitutes a 100% renewable energy tariff pursuant to this statute – Dominion customers would no longer have the option to shop for renewable generation from competitive suppliers.
Dominion’s application is also brought pursuant to Va. Code § 56-234, which provides that “it is the duty of every public utility to furnish reasonably adequate service and facilities at reasonable and just rates.” This statute states that public utilities must generally charge “uniform rates” to all similarly situated customers, but that the Commission may approve “voluntary rate or rate design tests or experiments … where [the Commission finds that] such experiments are necessary in order to acquire information which is or may be in furtherance of the public interest.”
In 2017, the Commission rejected one of Dominion’s previous renewable energy tariff proposals. The SCC denied Dominion’s proposed Rider CRG after finding that it would not result in just and reasonable rates. The Commission cited several problems with the application, including the uncertainty regarding the total rates that customers would pay. The SCC also objected to Dominion’s request to apply a “margin” equal to its rate of return of return to costs of renewable energy purchases. Finally, the Commission found that Rider CRG was not “necessary in order to acquire information which is or may be in furtherance of the public interest” pursuant to § 56-234 B.
The SCC will conduct an evidentiary hearing on Rider TRG on November 21. Interested parties may participate in this case as respondents by filing notices of participation on or before September 17.
Please contact one of our energy regulatory attorneys, Will Reisinger or Matt Gooch, should you have any questions about this case or Virginia’s renewable energy market. Keep up to date with other renewable energy and Virginia regulatory matters at ReisingerGooch.com.