Below is our firm’s summary of notable energy regulatory activity at the Virginia State Corporation Commission (“SCC” or “Commission”) during December, 2024. 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 approves smaller base rate increase for Appalachian Power Company; requires new consumer assistance programs – Case No. PUR-2024-00024
On March 28, Appalachian Power Company (“APCo”) filed its 2024 biennial review application. Under Va. Code § 56-585.1, et seq., a biennial review is a base rate case in which the SCC reviews the utility’s earnings during the previous two calendar years. The law allows the SCC to increase or decrease the utility’s base rates or modify any of the utility’s terms and conditions of service. The statute applicable to this case directs the SCC to review APCo’s reported earnings for the 2023 calendar year and determine whether any adjustments are warranted.
In its initial application, APCo sought an annual base rate increase of approximately $95 million. The utility later reduced its request to approximately $64 million due to errors in its initial filing. The utility stated that a rate increase is necessary due to several factors, including higher vegetation management expenses, carrying costs on deferred fuel balances, and increased operations and maintenance expenses. APCo also requested an increase to its current authorized profit level, or rate of return on common equity. If the rate increase was approved, Appalachian’s residential customers using 1,000 kWh in a month would have experienced a $6.75 monthly bill increase. The total monthly bill for such customers would likely exceed $178.
The SCC held an evidentiary hearing between September 10 and September 14. On November 20, the SCC published a final order approving a smaller base rate increase of $9.7 million per year. The order includes findings on a number of disputed issues in the case. The SCC also recognized the significant number of disconnections for non-payment in APCo’s service territory. The order directs the company to work with the Virginia Poverty Law Center to develop a plan to reduce service disconnections and to develop a “pilot program” whereby customers are offered longer, more flexible repayment plan options. APCo published new tariffs and rate schedules implementing the Commission’s directives on December 11.
Renewable energy, energy efficiency, and, electrification programs:
- Solar advocates urge SCC to reconsider order establishing shared solar regulations – Case No. PUR-2024-00122
On August 12, the SCC published an order proposing revisions to the regulations governing Dominion Energy Virginia’s (“Dominion”) shared solar program. The SCC’s order was published pursuant to 2024 amendments to the shared solar statute. The 2024 amendments, among other things, established a shared solar program for Appalachian Power Company. The legislation also directed the Commission to recalculate the “minimum bill” that participating customers must pay to the utility each month. The legislation allows the SCC to expand the capacity of Dominion’s shared solar program by an additional 150MW.
Interested parties filed comments regarding the SCC’s draft regulations on September 26. Several solar advocates, including the Solar Energy Industries Association, filed comments encouraging the SCC to consider the environmental benefits provided by shared solar facilities when setting the minimum bill. The solar advocates also requested that the SCC clarify when it will authorize the additional 150 MW of capacity for the Dominion program.
On November 25, the SCC published an order adopting final regulations. On December 12, several solar advocates filed a petition urging the SCC to reconsider aspects of its order. The petition for reconsideration requests that the SCC modify its order to ensure that the shared solar minimum bill is effective for both utilities sooner. The SCC’s order states that it will initiate proceedings to establish the minimum bill within 30 days after the conclusion of each utility’s net metering proceedings. The solar advocates also requested that the Commission address an apparent “scrivener’s error” in the final regulations.
Transmission and new energy infrastructure:
- SCC holds technical conference to evaluate impacts of data centers and other large users; invites post-conference comments – Case No. PUR-2024-00144
On October 2, the Commission announced that it will hold a technical conference on December 16 to evaluate the impacts of data centers and other large energy users. In its scheduling order, the Commission stated that it “is interested in potential frameworks that would facilitate service [to these customers] in a manner that, among other things, reasonably addresses the risks and issues attendant to this new load type, is just and reasonable to both current and future customers, and is permissible under current Virginia statutory law.”
The order references several potential regulatory changes, including amendments to utility line extension policies, the direct assignment of transmission costs, or a new tariff with a minimum contract length and collateral provisions to protect the utility’s other customers. The December 16 technical conference included representatives from the data center industry as well as consumer and environmental advocates. The conference included discussion during three panels. Following the conference, the SCC published an order inviting any interested parties to submit post-conference comments on or before January 17, 2025.
- Fairfax homeowners ask SCC to deny Dominion data center transmission project – Case No. PUR-2024-00135
On July 26, 2024, Dominion filed an application for a certificate of public convenience and necessity (“CPCN”) to undertake a transmission and distribution project necessary to interconnect a prospective data center customer on the border between Fairfax County and Alexandria. Dominion proposes to construct a new substation and approximately 1-mile of high-voltage transmission towers in order to serve the data center’s requested 176MW of load.
On December 13, several homeowners’ associations filed direct testimony urging the Commission to deny the CPCN. The associations cited the SCC’s duty to avoid or “reasonably minimize” adverse impacts to residents and the environment when siting transmission lines. The associations noted that, unlike other transmission projects, this one would be sited within 60 to 80 feet of residential communities. The associations also filed expert witness testimony of a former SCC Staff member who argued that the project is only needed to serve the data center and, accordingly, the project costs should be assigned to the customer requesting service.
The SCC will hold an evidentiary hearing on the application on January 21.
- SCC schedules hearing regarding Dominion Energy Virginia petition for small modular nuclear reactor rate rider – PUR-2024-00205
On November 1, Dominion Energy Virginia (“Dominion”) filed a petition requesting authority to begin recovering costs associated with small modular nuclear reactor (“SMR”) development. The petition was filed pursuant to 2024 legislation, codified at Code § 56-585.1:14, that allows Dominion to petition the Commission for approval of a rate adjustment clause to recover “SMR project development costs.” Dominion requests approval to recover costs incurred between July 1, 2024, and August 31, 2026. Dominion calls this “Phase I” of its SMR project development. Dominion states that Phase I includes preliminary activities necessary to determine the feasibility of deploying an SMR at the utility’s existing North Anna nuclear site. Dominion seeks to recover approximately $17.2 million of such costs through Rider SMR between September 1, 2025, through August 31, 2026. Dominion states that the initial phase of the rate adjustment clause (designated “Rider SMR”), if approved, would increase the monthly bill of a residential customer using 1,000 kilowatt-hours per month by $0.29.
The SCC published a procedural order on December 2. The SCC will hold an evidentiary hearing on May 27, 2025. Interested parties may intervene in this case by filing a notice of participation on or before February 21.
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