Virginia Energy Regulatory Updates (February 2023)

Below is our firm’s summary of notable energy regulatory activity at the Virginia State Corporation Commission (“SCC” or “Commission”) during February, 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:

  • Dominion files annual fuel procurement strategy report – Case No. PUR-2022-00064

On January 31, Dominion Energy Virginia (“Dominion”) filed its annual fuel procurement strategy report. The report explains the utility’s strategy for obtaining commodities such as coal, gas, biomass, and purchased power. The report states that Dominion uses a mix of fixed-price, spot-market, and futures contracts to mitigate fuel cost volatility. Dominion states that “each fuel type’s unique characteristics require different procurement strategies based on required volumes, potential price volatility, availability, transportation and storage constraints, and other specific supply concerns.”

In September, the SCC approved a 12.2% increase to Dominion’s fuel cost recovery rider. In its order, the SCC approved a settlement agreement signed by Dominion and the SCC Staff. Under the terms of the settlement, Dominion is allowed to recover approximately $1 billion of fuel costs over a three-year period.

Renewable energy, efficiency, and new energy infrastructure:

  • SCC Staff files analysis of Dominion Grid Transformation Plan update – Case No. PUR-2022-00140

On August 16, 2022, Dominion Energy Virginia (“Dominion”) filed an application to continue its cost recovery rider for previously approved grid transformation investments. The SCC approved ten grid transformation programs in 2021. Dominion states that three of the approved programs experienced cost overruns totaling approximately $700,000. On February 21, the SCC Staff filed direct testimony analyzing Dominion’s application. The Staff found Dominion’s cost overruns to be reasonable.

The SCC will hold an evidentiary hearing on March 23.

  • Dominion requests cost recovery for environmental projects at coal plants – Case No. PUR-2023-00005

On January 24, Dominion filed an application to update its cost recovery rider for environmental compliance expenses at its generation facilities. The application requests a total revenue requirement of $109 million for the coming rate year. Dominion’s application also requests approval to implement an additional project related to waste water discharges at the Mt. Storm coal plant in West Virginia. Dominion states that the Mt. Strom investment is necessary to comply with federal law and West Virginia regulations governing the temperature of waste water discharges. Dominion estimates that the water management project will total $22 million.

Dominion’s application, if approved, would add $0.08 to a typical residential customer’s monthly bill. The SCC will hold an evidentiary hearing on July 12. 

On February 13, the SCC published orders for notice and comment regarding proposals by three electric cooperatives to modify their community solar programs. The three cooperatives – Rappahannock Electric Cooperative, A&N Electric Cooperative, and the Northern Neck Electric Cooperative – are each seeking changes to their previously approved community solar tariffs. Each cooperative received approval to offer a community solar tariff in 2018 on a temporary basis. The cooperatives propose to make their community solar programs permanent and to modify the monthly charges for participating customers.

Interested parties may file written comments and/or request an evidentiary hearing on or before May 12. 

  • Interested parties submit comments regarding opportunities under the federal Infrastructure Investment and Jobs Act – Case No. PUR-2022-00180

On November 3, the SCC published an order seeking comments regarding the federal Infrastructure Investment and Jobs Act. The Act, enacted in 2021, provides financial assistance to support electric utility investments in advanced generation, transmission, and distribution technologies. The SCC directed the utilities to submit comments addressing potential “funding opportunities that may assist them in providing utility service in the Commonwealth, actions such utilities can take or have already taken to access such funding opportunities, including the status of any such funding applications, and Commission actions or proceedings that may assist or facilitate utilities’ access to these funding opportunities.”

Dominion Energy, Appalachian Power Company, Old Power, and Virginia’s electric cooperatives filed comments on January 5. In its comments, Dominion noted its efforts to pursue funding for rural broadband, grid modernization, and battery storage pilot programs. Appalachian Power also described potential funding for rural broadband and grid modernization. The SCC Staff and several other interested parties filed comments regarding the Act, including responses to comments filed by the utilities, on February 2.