Below is our firm’s summary of notable energy regulatory activity at the Virginia State Corporation Commission (“SCC” or “Commission”) during December, 2023. Please contact attorneys Will Reisinger or Matt Gooch should you have any questions about these cases or Virginia’s energy market. ReisingerGooch PLC provides regulatory and transactional counsel to clean energy businesses, associations, and public interest organizations. The following is presented for informational purposes only and does not constitute legal advice.
Rate cases, oversight, and resource planning:
- SCC opens docket to consider performance standards for electric utilities – Case No. PUR-2023-00162
On December 12, 2023, the SCC opened a new proceeding to consider “standards and protocols” for potential adjustments to electric utility rates of return. The proceeding is pursuant to 2023 amendments to Va. Code § 56-585.1(A)(2)(c). The amendments authorize the SCC to increase or decrease a utility’s rate of return based on the utility’s performance. The statute, as amended, provides that “[t]he Commission may increase or decrease the utility’s combined rate of return for generation and distribution services by up to 50 basis points based on factors that may include reliability, generating plant performance, customer service, and operating efficiency of a utility.” The statute also provides that any adjustments to a utility’s rate of return “shall include consideration of nationally recognized standards determined by the Commission to be appropriate for such purposes.”
The procedural order states that “any interested person or entity may submit proposed standards and protocols for consideration” on or before April 1. The order also directs the SCC Staff to hold a virtual stakeholder meeting on May 23. The Staff is directed to file a Staff Report including proposed standards on or before August 1.
- Dominion files objections to SCC hearing examiner analysis of integrated resource plan; defends fossil fuel investment proposal – Case No. PUR-2023-00066.
On May 1, Dominion Energy Virginia filed its 2023 Integrated Resource Plan (“IRP”). The IRP is the utility’s plan to meet customer demand over the next 15 years. Dominion’s plan presents five alternative scenarios. All of Dominion’s alternative plans incorporate new combustion turbine gas plants, and four of the five alternatives incorporate small modular nuclear facilities. All alternatives assume that Virginia exits the Regional Greenhouse Gas Initiative in 2023.
The SCC held an evidentiary hearing on Dominion’s plan on September 19 and 20. The Hearing Examiner assigned to this case filed a report and recommendation on December 8. The examiner recommends that the SCC enter an order “finding the 2023 IRP is not reasonable and in the public interest.” The report cites Dominion’s decision to include 970MW of new gas resources in the utility’s “short-term action” plan despite “the Commonwealth’s current statutory presumption against new carbon-emitting generation unit approvals.” The examiner cited recent amendments to Va. Code § 56-585.1(A). The statute, among other things, requires utilities to demonstrate that they (1) satisfied certain statutory energy efficiency targets and (2) considered energy efficiency, demand side options, and other market alternatives before proposing new fossil generating facilities. The report includes several other recommendations regarding future resource planning.
The parties filed comments and objections to the examiner’s report on December 29. In its comments, Dominion argued that the examiner found the entire IRP to be unreasonable based on “one perceived deficiency.” Dominion also asserts that it provided sufficient evidence of reliability concerns to support the proposed gas investments. The other parties – including Clean Virginia, Appalachian Voices, and the Sierra Club – supported the examiner’s finding that the IRP as a whole is unreasonable. These parties, however, urged the SCC to identify several other deficiencies in Dominion’s plan, including Dominion’s consideration of energy efficiency, demand response, and environmental justice.
The examiner’s report is advisory only to the Commission. The SCC can approve or reject the findings and recommendations contained therein.
- Dominion files annual update regarding enrollment in time-of-use rate schedules – Case No. PUR-2019-00214
On March 24, 2023, Dominion filed an application to expand its previously approved time-of-use (“TOU”) rate schedule. The TOU rate schedule is a voluntary program that allows customers to pay lower per-kWh rates during “off-peak” and “super off-peak” hours. The “super off-peak” period (with the lowest per-kWh rates) is 12:00am-5:00am during all months. The rate schedule was approved as an “experimental” tariff in 2020 and limited to 10,000 customers. Dominion’s application requested approval to expand the tariff to 20,000 customers. Dominion stated that it reached the 10,000 customer cap in January 2022. Dominion also stated that expanding the cap “will lead to more data to better develop and inform a system-wide rate to be proposed in a future biennial review.” Dominion also notes that over 650,000 customers now have advanced metering infrastructure that would allow them to participate in the TOU program.
The SCC approved Dominion’s application on June 21. In its order, the SCC directed Dominion “to evaluate new communication strategies, in addition to monthly emails, to educate high baseline customers” who could save money on the TOU rate schedule. The SCC also required Dominion to file annual reports on or before December 31 each year to update the Commission on the utilization of the rate schedules.
Dominion filed its first annual report on December 31, 2023. Dominion states that “[t]he enrollment count has consistently remained around 10,000 customers in 2023.” Dominion also states that it will launch a marketing campaign for new customers ahead of the summer season.
Renewable energy, efficiency, and new energy infrastructure:
- Appalachian Power requests approval for additional energy efficiency investments – Case No. PUR-2023-00169
On November 30, 2023, Appalachian Power Company (“APCo”) filed a petition requesting approval to “continue and enhance” certain energy efficiency programs and for approval to offer two new residential efficiency programs. The petition also requests approval to continue recovering energy efficiency costs through a rate adjustment clause. APCo requests that the cost recovery rider include a “margin” or profit on program costs. The margin is equal to the utility’s rate of return of 9.5%. APCo states that it has achieved all incremental energy efficiency targets defined in Va. Code § 56-596.2.
The petition states that the energy efficiency rider, as adjusted, would increase the monthly bill of a residential customer using 1,000 kilowatt hours per month by approximately $1.29. The SCC published a procedural schedule for this case on December 19, 2023. The SCC will hold an evidentiary hearing on May 21.
- SCC Staff files direct testimony regarding Dominion Energy battery storage investments – Case No. PUR-2023-00162
On September 18, 2023, Dominion Energy Virginia filed an application for approval of additional battery storage resources pursuant to the 2018 Grid Transformation and Security Act (“GTSA”). The 2018 law states that such projects are “in the public interest.” The Commission has already approved three projects under the pilot program. Dominion states that the additional projects, if approved, “will bring the aggregate capacity of all Pilot Program projects approved by the Commission for the utility to 28.34 MW.” In its application, Dominion requests approval of “three projects for deployment of battery energy storage systems (“BESS”) as part of the Pilot Program: BESS-4: Evaluation of Two Co-Located Nonlithium-Ion Technologies; BESS-5: Outage Mitigation and Grid Support Through a Microgrid Capable BESS; and BESS-6: Long Duration Energy Storage in a Behind-the-Meter Application.”
The SCC Staff filed direct testimony analyzing Dominion’s filing on December 21. The Staff witness is generally supportive of the proposed investments, finding them likely to achieve the objectives of the GTSA.
The SCC will hold an evidentiary hearing on January 24. The Commission is accepting public comments filed on or before January 17.
- Dominion submits 2023 demand-side management update; files “Legal Memorandum” supporting “gross savings” metric to measure VCEA compliance – Case No. PUR-2023-00217
On December 11, 2023, Dominion Energy Virginia filed its 2023 demand-side management (“DSM”) update. Dominion’s application requests approval to continue cost recovery, through rate adjustment clauses, for previously approved DSM programs. Dominion also requests approval to offer several new programs, designated the “Phase XII” programs. The Phase XII offerings include incentives for homebuilders to construct energy efficiency buildings and incentives for consumers to install smart thermostats. Dominion proposes a cost cap of $102.4 million for Phase XII.
Dominion also proposes to measure its compliance with the Virginia Clean Economy Act (“VCEA”) energy savings targets based on a “gross savings” as opposed to a “net savings” metric. The VCEA, at Va. Code § 56-596.2, states that “each investor-owned incumbent electric utility shall implement energy efficiency programs and measures to achieve” annual energy savings targets identified in the statute. Measuring energy savings on a “net” as opposed to “gross” savings basis would mean that only savings attributable to utility efficiency programs count towards the VCEA targets. Dominion filed a “Legal Memorandum” addressing these issues on December 11. The memorandum argues that the General Assembly, when enacting the VCEA, intended the use of gross savings. Dominion also asserts that customers would be required “to pay for significantly more DSM Programs and measures over the next several years under a net savings scenario than they would [under a gross savings scenario].”
The SCC has not yet established a procedural order for this case.
- SCC Staff files direct testimony regarding Dominion’s 2023 VCEA RPS Development Plan – Case No. PUR-2023-00142
On October 3, Dominion Energy Virginia (“Dominion”) filed its latest Virginia Clean Economy Act (“VCEA”) compliance filing. The VCEA requires Dominion and Appalachian Power Company to comply with a mandatory renewable portfolio standard and to meet incremental renewable energy and energy storage investment targets. The utilities must file updates on progress towards the VCEA goals each year.
Dominion’s October 3 application requests approval of the Company’s current RPS development plan. The application also requests approval of 772 MW of new solar resources. This includes both proposed utility-owned projects and third-party owned facilities. The VCEA declares such projects to be “in the public interest,” but does not mandate SCC approval. Dominion also requests authority to recover all project costs through a rate adjustment clause. Dominion requests a total revenue requirement of approximately $136 million for the next rate year.
The SCC Staff filed the direct testimony of seven witnesses on December 7. The Staff’s testimony takes no position on whether Dominion’s proposed solar facilities are needed or in the public interest. The Staff recommends a slightly lower revenue requirement for the next rate year. Respondent Appalachian Voices also filed expert witness testimony on December 7. The Appalachian Voices witness recommends that Dominion be required to “seek out long-term purchase agreements for unbundled renewable energy certificates” for VCEA compliance. The witness also testifies that there “was no pressing need” under the VCEA procurement provisions, Va. Code § 56-585.5(D), for Dominion to propose all the new solar projects and power purchase agreements.
The SCC will hold an evidentiary hearing on the application on January 10, 2024.
- Dominion files petition to increase renewable portfolio standard rider – Case No. PUR-2023-00231
On December 8, Dominion, filed a petition to increase the rate adjustment clause for renewable portfolio standard (“RPS”) costs. The rider allows Dominion to recover its actual costs incurred to comply with the VCEA’s RPS. The RPS, codified in Va. Code § 56-585.5(C), requires Dominion and Appalachian Power to supply an increasing percentage of their electricity sales from clean energy sources. Dominion’s RPS Rider, Rider RPS, recovers costs associated with renewable energy certificate purchases.
The revised rider, if approved, would take effect on September 1, 2024. Dominion states that the updated rider would increase the typical residential customer’s monthly bill, based on 1,000 kWh per month, by $3.48 compared to the current Rider RPS.” The SCC has not yet established a procedural schedule for this case.
- Washington Gas Light proposes biogas supply project – Case No. PUR-2023-00220
On December 4, Washington Gas Light (“WGL”) filed an application for approval of a biogas supply infrastructure project and associated cost recovery rider. WGL proposes to construct and operate an 8-mile pipeline that would transport biogas from a landfill in Prince William County to WGL’s distribution system. WGL proposes to purchase the gas, which it characterizes as “renewable natural gas” (“RNG”). WGL states that the project “offers the prospect of significant anticipated environmental, reliability, and customer benefits, and the additional benefit of diversifying Washington Gas’s gas supply with Virginia-sourced RNG.” The application also estimates that the project “will facilitate an approximately 30% decrease in greenhouse gas emissions caused by the Prince William County Landfill Project.”
WGL estimates that the project will initially result in a small ($0.07 per month) bill increase for a typical residential gas customer. The application is filed pursuant to a 2022 statute, the Virginia Energy Instructure Act, codified at Va. Code § 56-625. The SCC has not yet scheduled a hearing on the application.